Two UK government ministers, Anne-Marie Trevelyan and Tom Tugendhat, have urged the Prime Minister Rishi Sunak to significantly raise defence spending to at least 2.5 per cent of Gross Domestic Product (GDP), up from the current level of just over 2 per cent.
This appeal comes amid growing concerns from Conservative MPs and military experts regarding Chancellor Jeremy Hunt's recent spring budget, which failed to include additional defence funding.
The ministers' call reflects the urgency of responding to what Defence Secretary Grant Shapps has described as a “prewar world”.
Ms Trevelyan, a Foreign Office Minister and former defence minister, alongside Mr Tugendhat, the Security Minister and an experienced soldier, made their case in an online article unexpectedly not approved by Downing Street.
Posted on Ms Trevelyan's LinkedIn page, the article argues for the UK to lead by enhancing its defence and security budget beyond the current spending, highlighting the initial efforts made by former defence secretary Ben Wallace and former prime minister Boris Johnson.
They emphasised that while previous efforts remedied funding shortfalls, growth in defence spending is now critically needed.
The ministers outlined key investment areas, including the UK's nuclear deterrent, expansion of the Royal Navy, additional weapons and ammunition, and faster development of new fighter jets.
They stressed the investment would not only protect the UK's future economic security but also promote growth in the nation's defence industrial base.
“The sad truth is that the world is no longer benign,” they said.
“Protecting ourselves requires investment. And effective investment means that our industrial complex must grow and strengthen at much greater pace than at present.
“We cannot turn on the complex platforms and weapons which ensure military advantage overnight. We must start that growth now, invest at pace to support our allies and stay ahead of our adversaries.”
The context of this call includes significant increases in defence budgets by global powers such as China and Russia, with China announcing a 7.2 per cent rise in its defence budget to $230 billion (£179 billion), and Russia dedicating 40 per cent of its expenditure to defence and security.
In a Sunday Times interview, Mr Sunak defended his record on funding the military.
“I would just point to our record here as chancellor when I oversaw the largest increase in the defence budget since the end of the Cold War with a £24 billion uplift,” he said.
“The whole point is, we recognised that the world that we’re living in was becoming more dangerous, and we had to invest more to protect the country against that.”
Meanwhile, the UK's defence budget has increased by 28 per cent over the last decade, from £43 billion to £55 billion.
Ms Trevelyan and Mr Tugendhat's appeal for increased defence spending highlights the strategic necessity for Europe to secure its borders, especially as the US pivots towards addressing the challenge posed by China.
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Virtual banks explained
What is a virtual bank?
The Hong Kong Monetary Authority defines it as a bank that delivers services through the internet or other electronic channels instead of physical branches. That means not only facilitating payments but accepting deposits and making loans, just like traditional ones. Other terms used interchangeably include digital or digital-only banks or neobanks. By contrast, so-called digital wallets or e-wallets such as Apple Pay, PayPal or Google Pay usually serve as intermediaries between a consumer’s traditional account or credit card and a merchant, usually via a smartphone or computer.
What’s the draw in Asia?
Hundreds of millions of people under-served by traditional institutions, for one thing. In China, India and elsewhere, digital wallets such as Alipay, WeChat Pay and Paytm have already become ubiquitous, offering millions of people an easy way to store and spend their money via mobile phone. Indonesia, Vietnam and the Philippines are also among the world’s biggest under-banked countries; together they have almost half a billion people.
Is Hong Kong short of banks?
No, but the city is among the most cash-reliant major economies, leaving room for newcomers to disrupt the entrenched industry. Ant Financial, an Alibaba Group Holding affiliate that runs Alipay and MYBank, and Tencent Holdings, the company behind WeBank and WeChat Pay, are among the owners of the eight ventures licensed to create virtual banks in Hong Kong, with operations expected to start as early as the end of the year.
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