UK will spend 3% of GDP on defence by 2034, says defence secretary
Britain spending 3 per cent of GDP on defence by 2034 is a firm commitment, John Healey has promised.
The government has previously set out its 'ambition to reach 3 per cent in the next parliament', after meeting its pledge to ratchet up defence spending to 2.5 per cent of GDP by April 2027.
But the defence secretary has promised a ' certain decade of rising defence spending', according to The Times, and said there was 'no doubt' the UK would meet its target.
Mr Healey told the newspaper: 'It allows us to plan for the long term. It allows us to deal with the pressures.'
The government is looking at the roles, capabilities and reforms required by the UK armed forces as part of its strategic defence review.
It will explore 'deliverable and affordable' solutions 'within the resources available to defence within the trajectory of 2.5 per cent'.
When he announced the targets earlier this year, prime minister Sir Keir Starmer said: 'In an ever more dangerous world, increasing the resilience of our country so we can protect the British people, resist future shocks and bolster British interests, is vital.'
The new defence money will be found by reducing UK overseas aid from 0.5 per cent to 0.3 per cent of gross national income, according to the government, a move which prompted then-international development minister Anneliese Dodds to resign.
'You have maintained that you want to continue support for Gaza, Sudan and Ukraine; for vaccination; for climate; and for rules-based systems,' she told Sir Keir.
'Yet it will be impossible to maintain these priorities given the depth of the cut.'
Nato heads of government are set to meet in The Hague, in the Netherlands, next month.
Addressing the alliance's parliamentary assembly in Dayton, USA this month, Nato secretary-general Mark Rutte said: 'I assume that in The Hague we will agree on a high defence spend target of, in total, 5 per cent.'
A Ministry of Defence spokesperson said: 'This government has announced the largest sustained increase to defence spending since the end of the Cold War – 2.5 per cent by 2027 and 3 per cent in the next parliament when fiscal and economic conditions allow, including an extra £5 billion this financial year.
'The strategic defence review will rightly set the vision for how that uplift will be spent, including new capabilities to put us at the leading edge of innovation in Nato, investment in our people and making defence an engine for growth across the UK – making Britain more secure at home and strong abroad.'
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BBC News
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How FA's new transgender policy is affecting players
Billie Sky has just helped her team to promotion but now she cannot play for them is one of 28 transgender women registered with the Football Association to play amateur football in England who are banned from playing FA-affiliated women's the UK Supreme Court's ruling on 16 April that the legal definition of a woman is based on biological sex, the English football's governing body said that from 1 June only those born biologically female will be permitted to play women's football at all ruling has forced Sky to stop playing competitive 11-a-side football for one of her teams, London Galaxy. She will still be able to play informally for her other - Goal Diggers FC - as the club has withdrawn from all FA-affiliated leagues in response to the new policy."I just took part in a season with London Galaxy and helped them earn promotion," she told BBC Sport. "Now I can't play with them, which is really sad. I put a lot of commitment into that club."What am I supposed to do? Go and play with the men? Because I don't feel safe playing there. And all of my team-mates want me here."BBC Sport approached a number of grassroots footballers who support the did not want to go on record with their opinions because of a fear of reprisals, but one footballer, who plays in the sixth tier of the women's game, was willing to speak (not her real name) believes the FA's new policy "protects the integrity of women's football that we have fought for so long to attain".The issues around the policy have been described by the FA as a "complex subject" and wider debates have centred on inclusion, sporting fairness and safety in women's sport. 'It's been my life' When avid football fan Sky first transitioned, she had given up on the idea of sport, but that changed when she was encouraged to join Goal Diggers FC, an inclusive club based in London."I think I had the first moments of my life where I wasn't thinking about the fact that I'm trans or different or weird or something. I just felt like another person here," the 28-year-old said."It was a community that I found and I loved it. And since then it's been my life. My identity is very much one of football."Sky, who came out as transgender four years ago, said she "had a feeling" the ban was coming."It does feel scary," she said. "It feels like a little bit of my safety net has just been taken away."I felt like there's this real empowering nature to football for me, as I've become more confident on the pitch, I've become more confident as a person. And I feel like losing some of that opportunity to continue that storyline."The FA has written to transgender players facing a ban, offering "online talking therapy" or support in taking another route in women's football, such as refereeing or coaching. Sky has declined the offer."I guess I could go into coaching or refereeing, but that's not what the love of the game is for me," said Sky, who is a graphic designer. "It's being out there on the pitch, connecting with people, giving 100% until the last minute."Sometimes I wonder if I should just leave the country. I've lived in London my whole life. I love this city in so many ways, but I feel like it doesn't want me here." 'A deep sense of reassurance' Georgie started playing football when she was five and grew up around the game, with her two brothers and uncle heavily involved in the sport."When I heard about the FA's decision, it gave me a deep sense of reassurance," she said."I was happy that something was being done to protect the integrity of the women's game, a space that means so much to me and so many other women and girls."This isn't about excluding anyone. It's about recognising the importance of fairness and safety in sport."Georgie, who is in her early 20s, says her view is deeply rooted in the scientific research that suggests the physiological differences established during male puberty create advantages that cannot be fully reversed with hormone is limited research into what effect transitioning can have on an athlete - because there are so few transgender athletes. However, studies are currently under also told BBC Sport that her opinions are shared by the rest of her team and have been shaped by their experiences."One of the teams we faced included two transgender women. I've seen first-hand how the physical differences played out on the pitch," she said."This isn't something we see week in, week out in the women's game... None of us had consented to be part of that kind of match-up, and yet we were put in that position."What's worse is that when we try to speak up, we're told not to. As captain, my coach made it clear that saying anything to the match officials or to the FA - even politely - would likely result in punishment. That fear of retribution silences so many of us."On11 April the FA updated its rules to allow trans women - who are biologically male - to continue to play in women's football under stricter criteria before changing its policy a few days later after the Supreme Court said she hoped "we can continue to work towards creating spaces within football where transgender women can participate in a way that's safe, fair, and respected".
BBC News
31 minutes ago
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Plans to double Great Yarmouth arcade pier size set for approval
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Telegraph
40 minutes ago
- Telegraph
The house price nightmare ‘hollowing out' London
Tucked just behind the Victoria & Albert Museum, Kensington's Egerton Crescent is an elegant half-moon of handsome 19th-century terraces, their white facades and wrought-iron balconies overlooking a patch of private garden. In the early part of last decade Egerton Crescent was dubbed 'Britain's most expensive street'. As London boomed, you could name your selling price if you were lucky enough to own a house here. But things have changed in the capital. Coutts, the King's bankers, says 82pc of properties in 'prime London' sold for less than the asking price in the first three months of this year. Land Registry records suggest prices in Kensington and Chelsea have dropped by 15pc in the past year, and Coutts says vendors are having to cop an average discount of 9.3pc. 'The market has changed dramatically,' says Christian Lock-Necrews, the head of the Kensington and Chelsea office at estate agency chain Winkworths. 'I've done this for 20 years, I'm long in the tooth. It's unquestionably a very difficult market, because buyers are hesitant. 'Clients can't bury their heads in the sand. It may be a difficult pill to swallow … Sometimes it's not a 2pc or 3pc drop, but a 10pc drop.' Problems are not confined to the top end of the market. Average house prices in London are now growing more slowly than anywhere else in Britain. Asking prices in London are only 0.7pc higher than a year ago, according to online property portal Rightmove. In North East England, they're up 2.8pc, and in the North West 3.9pc. 'The London housing market has been struggling for a decade, it's the laggard of the housing market,' says Richard Donnell, of online property portal Zoopla. 'It's really a tale of different migration patterns, affordability, uncertainty after Brexit. Then obviously the global pandemic came along and hit global cities pretty hard. Then in the last two years or so we've had higher mortgage rates – that has had the biggest impact where house prices are higher, and who's got twice the national average house price? That's London.' As wages have stagnated, interest rates have climbed and the cost of living has soared, people have increasingly turned their backs on London for the more affordable accommodation on offer up north. It's a long way from 2016, when house prices were growing at a double-digit pace at all points of the compass, from Barking to Hounslow, Croydon to Waltham Forest. Now, the decades-old wealth creation machine that underpinned London has stalled. Owning a home in the capital used to be a way to get rich. Flip it when you retired and you'd have plenty to live off. That may no longer be the case as growth in prices slows to a crawl. The big question is: is this the nadir before a bounce back, or has the miracle of London's property market ended for good? London exodus 'London's greatest export at this minute is people who can't afford housing in London,' says Shaun Bailey, a Conservative member of both the House of Lords and the London Assembly. 'What we Londoners are doing, we're now popping up in other places in the country: Bristol, Bath, I've heard people go as far as Liverpool and Newquay. We are now pricing them out of their area.' The exodus north can be seen in prices. Land Registry records show double-digit increases this past year in towns and regions dotted across the North – Durham, Hartlepool, Liverpool, Middlesbrough, Newcastle, Oldham, Sunderland. Yet houses in these areas are still changing hands for an average of £200,000 or less, often not even a third of the average in most London boroughs. Maddie Stewart-Williams, 27, is one of those Londoners who did the maths. After almost a decade in the capital, she and her partner moved to Liverpool from South Woodford, about 10 miles north-east of central London, last September. They had bought their Woodford one-bedder – 'tiny, barely more than a studio' – in 2020 for £272,000, 'which at the time felt like a bargain'. 'I'm sat in my house now, a three-bedroom, two-bathroom terraced house in Liverpool, which is worth considerably less than what we paid for that flat,' she says. Her partner was born and raised in Hackney, and they never planned to leave London. They looked for a bigger place in cheaper corners of the capital like Plumstead and Shooters Hill, but to no avail. 'The more we were looking at these areas and the costs of the houses there, I just kept saying to my partner, we could live in the nicest part of Nottinghamshire for the price of a three-bed in not-the-best area in south London,' Stewart-Williams says. 'We realised that if we were going to stay in London, it was going to be a big expenditure. Our mortgage was always going to be a big part of our salaries and our lives, and dictated what we could and couldn't do.' The stats bear this out. In London, mortgage repayments average 57.9pc of take-home pay, according to Nationwide. In the north-west, it's just 27.5pc, and in the north-east, 22pc. The national average is 34.7pc. Living in London has always been more expensive than in the rest of the country. But in the past young professionals had to stomach it if they wanted to build a career in finance, politics, professional services or other London-centred industries. The ability to work remotely since the pandemic has changed all that, Bailey points out. 'Londoners who can arrange some kind of hybrid working, they can live very far away from London but they can have a London salary,' he says. Stewart-Williams and her partner both work in the tech industry. Some of their work still revolves around London, but she doesn't need to be there. 'On a daily basis, we both say to each other how glad we are that we're out of London and how we would never go back'. In some ways, this is a familiar British story. 'A lot of people move to London when they're young, they get generally better-than-averagely paid jobs. Then at some point they try to get on the housing ladder. There are lots of first-home buyers in London,' says Rob Houghton, chief executive and founder of reallymoving, an online property services marketplace. 'And then for a lot of them the second step will be to move out of London, whether it's to the outer region of London or right out of London together, which is what I did 30 years ago.' Data from Hamptons estate agents shows that the London property market has the highest proportion of first-home buyers of any British region: at 50pc, it's 21 points higher than the national average. But ask any London-dweller under the age of 40 about buying in the capital, and the familiar refrain of despair and desperation will ensue. 'Two years ago, I was looking at property in London up to £280,000. So many places were either 'cash-buyer only', or 'short lease', or 'not suitable for mortgage' or even just mouldy. Anything cheaper than that was in Zone 7,' says web designer Nadia. 'Then I got a pay rise, and could afford £325,000. But the habitable flats were all those same ones, they'd just got more expensive.' 'More homes for sale than buyers' Beneath this decades-old tale of despairing buyers, though, there is now a sense that something has changed. As domestic middle-class buyers look to the North or give up, and as the cosmopolitan elite abandons London for Dubai or some other less taxing jurisdiction, London has become a nightmare for sellers, too. 'There are more properties on at the moment than there are buyers, that's for sure,' says Laura Dam Villena, of real estate adviser Cluttons. Leonie Witte and her partner have had to learn this the hard way. They've been trying to offload a three-bedroom terrace with a garden in south-east London's Bromley neighbourhood for almost six months. They first advertised it on the do-it-yourself website Purplebricks in late November with a price tag above £400,000. Would-be buyers began filing through and soon they had an offer. But then the script changed. 'That buyer pulled out. We then got another offer, from a family, but they pulled out after telling us they'd realised their preferred school wasn't nearby enough – even though they would've known that already,' Witte says. The sellers dropped the price a couple of times. In March, there was a lot of interest from people frantically trying to find a place before the stamp duty threshold rose from £300,000 to £425,000. 'Once the stamp duty rules changed in April, it really dried up,' Witte says. Finally, after dropping the price below £400,000 and advertising more widely, they are hopeful they have found a serious buyer. 'We never thought it would take so long.' London falling Sales volumes in London have been in steady decline. From 8,030 transactions in January 2021, the figure this January was just 4,005, according to Land Registry records. The sharpest declines were in the swankiest locations, such as Westminster and Kensington and Chelsea. On average, it costs £1.2m to buy a place in Kensington and Chelsea, and £900,000 in Westminster. But that's 15pc and 20pc less, respectively, than the same time last year. Coutts says sellers face a 15pc haircut on their initial sale price in Mayfair and St James's, and 12.5pc in Knightsbridge and Belgravia. The prime London market's astonishing growth in the first decade and a half of this century was at least partly fuelled by an influx of wealth from abroad – from Russia, China and the Middle East – attracted to the history, the prestige, the schools and the financial services the city had to offer. 'There was a period of time when purchasing a nice house in a very desirable part of London was a very good place to put your money, if you had quite a bit of it and you could put it pretty much anywhere in the world,' says Rob Anderson, research director at the Centre for London. Since the Brexit referendum of 2016, however, London's appeal to the globe-trotting elite and its footloose capital has been slowly waning. 'There's always a geopolitical element to a lot of what's going on in the super-prime type [of] areas,' says Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors. 'There has been this sense, perhaps at the very top end, that perhaps London is not as welcoming a location for people as it once was.' In the past year, the capital's star has fallen faster and further. Agents and analysts point to Rachel Reeves's decision, in her maiden Budget last October, to press on with the abolition of non-dom tax status, and to raise the stamp duty charged on international purchases from 5pc to 7pc, and on second homes from 3pc to 5pc. Add those levies on to the 12pc top rate of stamp duty, and an overseas buyer's tax bill could easily top £100,000 in prime London. At a time of global uncertainty, that might be simply too much. It is not just an unwillingness among buyers that is hurting the market. Many non-doms are trying to sell up after the change to their tax status, meaning the market is being squeezed from both sides. 'Prices [in prime central London] fell in the last quarter of last year by about 1.9pc [year on year], and in the first quarter of this year by 2.6pc,' says Lucian Cook, head of residential research at Savills. 'That is a direct response to what's gone on in the Budget.' When the top of the market was booming, the locals who were priced out would shift to the next tier down, pushing prices up there as well. Without that ripple effect, it's no surprise to see areas surrounding the prime boroughs are also slipping back: Hammersmith and Fulham house prices are down 13.2pc year on year, according to Land Registry data, while Islington is down 8.2pc, and Wandsworth 2.4pc. 'A hollowed-out city' Across the rest of London, where all those first-home buyers are scrabbling to get a foothold, the biggest issue is not changes in tax status or geopolitics. It is affordability. 'What you might be seeing is just almost a topping-out of the market, almost reaching the limits of unaffordability,' says the Centre for London's Anderson. 'Are we reaching the top of what the market can take, basically, in what people are willing to pay for properties in London?' According to Nationwide, the average cost of a London home is now 9.3 times the average salary. In the country at large, that figure is 5.8, and in the north of England it's as low as four or five. 'London is out of reach for so many people, even for people on really good incomes,' says Sem Moema, a Hackney councillor who is Labour's housing lead in the London Assembly. She recalls meeting one of the borough police commanders for her constituency and being surprised to discover that he actually lived in London. Police officers, like nurses, teachers, and nursery workers, are being priced out of the areas where they work. 'It's a hollowing-out. It's a real, real problem, what it means for the shape and the feel of the city,' she says. 'Lots of boroughs are facing falling school enrolments, some are being forced to close school classes, because families can't afford to live in the capital.' Recent falling interest rates have eased the pressure slightly. London's price-to-earnings ratio, which compares the average house price to the average annual earnings, has dipped from the high of about 11 in both 2016 and 2022, which seems to be the ceiling. But buyers won't necessarily be feeling better for it, says Rubinsohn. 'Interest rates at where we are now don't look absurd, in a historical context. But a lot of people who perhaps bought properties in 2021 or 2022 were doing so at almost zero-cost money, and it's a much harder game now,' he says. 'Deposits to actually fund a house purchase in London or a flat purchase are still substantial. Unless you're fortunate enough to be employed in consultancy, the legal world or financial services or tech, getting that deposit together is a real challenge.' With buyers stretched close to financial breaking point, the stamp duty on a London purchase can make or break a deal. It was little wonder, then, that the looming end to the most recent stamp duty holiday caused a mini-frenzy in the middle market. More than 75,000 buyers raced to seal deals before the tax break expired, driving a 104pc surge in house sales year on year according to HM Revenue and Customs data. After April, the market fell 'into this kind of lethargic quiet', says Wendy Peterman, who runs an eponymous estate agency, founded by her father and uncle, in the well-to-do south London neighbourhood of Herne Hill. 'Now it's picked up a bit. We've seen a lot of stuff come to the market in the last week or so. Whether it's going to sell or not, I don't know.' The pundits have varying views on how to fix the problem. Bailey wants banks to be permitted to lend more generously to young first-time buyers. Rightmove's Colleen Babcock suggests stamp duty should be varied by region, so that Londoners are penalised less. Everybody talks about the need to increase the supply of houses. But the Government's target of building 88,000 new homes in London annually would equate to rolling out an entire new borough each year. The authorities didn't even hit that mark in the 1930s, when the 'Metro-land' suburbs were thrown up at the end of the new Underground lines. Labour has vowed to 'get Britain building' and promised 1.5m new homes across the country by the end of this parliament. However, the Office for Budget Responsibility's assessment of the National Planning Policy Framework, the building blueprint launched by ministers last year, concluded that the plan would only make London homes 0.8pc cheaper – perhaps a drop of £5,000 on average. And anyway, that wouldn't please the sellers, who also have a vote. 'To get London's house-price-to-income ratio down to the national average, you'd need to see prices fall by about a third over the next five years. Which no one wants. Any politician in their sane mind would think twice about that,' says Anderson at the Centre for London. The other group of buyers leaving the London market are buy-to-let investors. Extra red tape and the Chancellor's stamp duty increase on second homes have prompted many to sell up, even as rental yields have increased. New renters' rights laws, which would make it harder to evict tennants and are still moving through Parliament, are making landlords even more nervous. 'As it has gradually become harder and harder to make any money as an amateur landlord, I think the investor demand has fallen dramatically,' says reallymoving's Houghton. 'A lot of my friends had properties they rented out, and an awful lot are selling them off, us included. It became more hassle than it was worth, and we weren't really making any money out of it. I think that has changed the dynamics of the London property market.' The lack of landlords hurts not only sellers, who might previously have sold to one, but renters. This spills over into London's economy, says Anderson. Fewer rental properties mean higher prices, leaving less money to spend elsewhere. 'You've got young professionals in the prime of their spending life, and one third to half their income is going on rent or a highly leveraged mortgage.' New normal? Affordability can hurt more than just the hipster's hip pocket – it sucks up time and capital. A study commissioned by the London Assembly last year estimated that a 1pc improvement in housing affordability generates a 0.14pc increase in the city's productivity. On the other side of the ledger, there is a feedback loop between house prices and consumer confidence. Higher confidence drives higher prices, and vice versa. What the market takes from buyers and productivity, it gives to sellers and demand. So far, the Starmer Government has little to show for its focus on housing. Ramping up supply will take time and money. In the short-term, that leaves Labour's tax changes as one of the dominant drivers – often through the law of unintended consequences. Unsurprisingly, the people who make a living from the London market are hopeful that better times might yet lie ahead in the capital. Cluttons' Villena says buyers are still there in peripheral parts of London, 'in the background'. 'I've been speaking with a number of buying agents recently, saying they have some really great clients lined up. But there's a sense of hesitation and waiting,' she says. 'It wouldn't surprise me if in the next quarter we look back and see a bit of recovery on prices in those areas. But we're not expecting any sudden influx of buyers. I think this will be the new normal for a while.' Rightmove's Babcock says London is a microcosm of the country as a whole: where homes are more affordable, like Barking and Dagenham or Hillingdon, there is stronger growth. She is also seeing a rise in demand for office space, suggesting that London might once again draw workers in. Back in Kensington, Lock-Necrews says some of his prospective clients feel the worst Budget news is all out of the way now. Others are rekindling their affection for London. They may not be in the market for a terrace on Egerton Crescent, but they are sniffing around. 'There are very positive conversations with people from across the globe who still perceive London as the place they want to be. So I feel quite reassured, actually – I think London's been talked down too much,' he says. 'Yes, it's different – prices have been adjusted, there are fewer buyers. Prices probably got out of control in central London, and they've readjusted since. But it is still London, nothing goes up in a straight line forever. And we've had an incredible run.'
