Funding Britain’s rearmament: The need for a ‘consent budget’

The Memorandum | No. 41.2026

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For the first time in a generation, the United Kingdom’s (UK) political class agrees that the British Armed Forces need to grow. What it has not agreed upon is how to pay for that growth, or how to keep the public paying for it over a decade rather than a single spending review. The debate so far has been almost entirely about levers: borrowing, taxation, and spending cuts. It has barely been about consent.

That is a mistake. Every past British rearmament that survived, from the shadow factories of the 1930s to the Cold War buildup of the 1980s, paired money with a deliberate effort to keep the country onside. Where that effort was skipped, the funding proved fragile.

The scale now under discussion is not small. A credible warfighting posture is not what has been discussed by any of the major political parties – although it has by defence think tanks. Meeting the UK’s North Atlantic Treaty Organisation (NATO) commitment and basic self-defence needs would require an army of around 100,000-110,000 regulars, a Royal Navy of 24-26 escorts and nine or ten attack submarines, and a Royal Air Force (RAF) of 12-14 fast-jet squadrons.

This would take core defence spending to roughly 4.3%-4.4% of Gross Domestic Product (GDP) by the mid-2030s, or around £115-£130 billion per year in 2026 prices. That figure sits well above the 3.5% NATO core pledge that Britain has already signed up to for 2035; itself a lower target that the Office for Budget Responsibility (OBR) costs at roughly £40 billion a year in additional spending.

John Healey, Chancellor of the Exchequer, resigned as Secretary of State for Defence in June 2026 specifically because His Majesty’s (HM) Treasury would not fund even that smaller ambition. The dispute preceded a change of government; Andy Burnham, Prime Minister, has since adopted a fiscal framework requiring day-to-day spending to be matched by revenue within three years, with debt falling as a share of GDP by 2029-2030.

This is not a comfortable fiscal moment to make the case for more spending. Public sector net debt stood at 94.9% of GDP in mid-2026, close to levels last seen in the early 1960s, and the OBR’s ‘Fiscal Risks and Sustainability’ report from July 2026 found that in almost all of its modelled scenarios, debt moves onto an unsustainable path from the 2040s onward. Simply stabilising debt at its current level would require a permanent fiscal tightening equivalent to the entire education budget. Any credible funding plan for rearmament has to work within that constraint – not pretend that it does not exist.

The public will pay, but only one way

Polling suggests the difficulty is not the principle of spending more on defence, but the mechanism chosen to fund it. YouGov tested 12 ways of raising the money in mid-2026; only three commanded net public support. A rise in the additional rate of income tax scored 30 points of net support: the strongest of any option tested, at 56% in favour against 26% opposed. Raising the higher rate of income tax and trimming out-of-work benefits both scored narrow positive margins.

Everything else tested – cutting the National Health Service (NHS), the schools budget, the state pension, or disability spending – scored deeply negatively, and increased borrowing specifically for defence was opposed by 52% of respondents. The lesson here is blunt: the public will pay, but only if the burden visibly falls on the wealthiest, and only if the protected services stay protected.

No single lever closes a funding gap of this size, so a workable package has to draw on several streams at once. An additional and higher rate income tax rise could raise £8-£12 billion per year. A targeted wealth tax on households worth more than £100 million would affect only around 1,000 households, having been modelled at roughly £10 billion in 2026.

Disciplined growth caps on unprotected departmental budgets and one-off ‘defence bonds’ – i.e., war bonds – to front-load capital investment in shipyards and munitions plants could supply the rest of the required funding. Indeed, defence bonds are already under serious discussion in Whitehall, championed by Andy Haldane, an adviser to Burnham, and raised by the Liberal Democrats in Parliament 25 times in 2026 thus far. Individually, none of these levers are sufficient. Together, and sequenced across three phases running to the mid-2030s, they are.

The harder half of the problem

Getting the sums to add up on paper is the easy part. The harder part is making the package survive contact with an electorate that Focaldata finds is one of the most polarised on this issue of any it has tested, even before such a scale of ambition is on the table. A government that raises taxes for defence without first securing durable consent is setting up exactly the reversal risk that should worry it most.

This is where the debate needs to change: public consent should be treated as a costed line item, not left to the Ministry of Defence’s (MOD) press office. Four measures deserve a place on the balance sheet.

First is a funded recruitment-legitimacy programme. Muslims, for example, make up only around 0.5% of the UK’s regular forces against roughly 6.5% of the population, and government-linked reporting found only around 30 recruits from over 2,000 applications by British-born Muslims completed training between 2016 and 2018. Faster security vetting, guaranteed provision for religious observance, and recruitment campaigns fronted by serving minority personnel would help to ease a personnel shortage and demonstrate that armed forces expansion is a national project, not a sectional one.

The second measure is an honest public information campaign grounded in the OBR’s own findings rather than governmental spin, fronted by credible non-partisan messengers such as serving personnel and veterans rather than ministers. Richard Hughes, Chairman of the OBR, has already told a public briefing that ‘the UK cannot afford the array of promises that are displayed to the public if you leave those unchanged, based on a reasonable assumption about growth rates in the economy and in tax revenues’. That argument deserves a wider audience than a select committee hearing.

Third is a British equivalent of Sweden’s household preparedness brochure ‘In case of crisis or war’, sent most recently to 5.2 million homes in 2024. This would convert abstract anxiety into practical agency for a cost of low tens of millions of pounds.

The fourth measure, most durable of all, is a statutory cross-party funding lock, modelled on the aid-spending law. That would raise the political cost of any future government trying to unwind the settlement.

Conclusion

The UK has repeatedly announced ambitious defence spending increases without sustaining the follow-through needed to fund them beyond a single spending review. The Defence Investment Plan allocated £15 billion over four years largely through departmental reprioritisation – a proof of concept for one funding lever at moderate scale, not a template that scales on its own. Scaling that mechanism, alongside the tax measures above and a properly funded consent effort, is achievable.

What is not achievable is a rearmament programme funded by stealth, sustained by hope, and abandoned at the next election. The persuasion budget is a rounding error against the military programme it protects. It may also be the difference between a rearmament that lasts and one that does not.

Nicolas Groffman is a lawyer and defence consultant. He studied Chinese at the University of Cambridge; founded Harligan Ltd., a cross-border advisory firm; and is General Counsel of Fitzroy Exports.

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