The largest military investment in 30 years is set to be announced by the prime minister – an extra £4bn a year over the next four years.
The money will fund space and cyber defence projects such as an artificial intelligence agency, and could create 40,000 new jobs, the government said.
Boris Johnson said it would help the UK to “bolster our global influence”.
The Ministry of Defence’s annual budget is around £40bn, so the £16.5bn over four years is about a 10% increase.
The extra spending is on top of the Conservatives’ 2019 manifesto commitment.
Then, the government pledged to increase defence spending by 0.5% above the inflation rate, which is currently at 0.7%, for every year of the current Parliament.
So based on forecasts of inflation, the government said it expects the Ministry of Defence (MoD) to get a total overall increase of about £24.1bn over four years, compared with last year’s budget.
‘This is our chance’
Mr Johnson said on Wednesday evening that he was making the announcement “in the teeth” of the coronavirus pandemic because “the defence of the realm must come first”.
“The international situation is more perilous and more intensely competitive than at any time since the Cold War,” he added.
The PM said in order for Britain to “be true to our history and stand alongside our allies” it must make improvements “across the board”.
“This is our chance to end the era of retreat, transform our armed forces, bolster our global influence, unite and level up our country, pioneer new technology and defend our people and way of life,” he said.
The prime minister will set out further details in a virtual speech to the House of Commons on Thursday.
He will do so from 10 Downing Street, where he continues to self-isolate after coming into contact with an MP who later tested positive for Covid-19.
As part of the speech, Mr Johnson will announce:
- A new agency dedicated to artificial intelligence
- The creation of a national cyber force to protect people from online harm
- A new “space command”, which will be capable of launching a first rocket in 2022
The projects are expected to create up to 10,000 jobs annually across the UK, for the next four years, the government said.
Defence Secretary Ben Wallace said the jobs and business opportunities being created by the investment would bring “prosperity to every corner of the UK”, helping the country to “build back” from the coronavirus pandemic.
Conservative MP and defence select committee chairman Tobias Ellwood said: “This is a lot of money but ultimately there are still huge financial pressures facing our armed forces.”
But he said the “key takeaway” for him was the “message this sends to the British people, to the MoD as well, that we want to be back as a strong power capability”.
“That message is being heard loud and clear in the White House where the new occupant has made it very, very clear indeed, that he wants to reset Western resolve,” Mr Ellwood said.
The announcement is part of the first conclusions of the government’s Integrated Review which looks at security, defence, development and foreign policy.
Labour’s shadow defence secretary John Healey said the extra money would give “a welcome and long-overdue upgrade to Britain’s defences after a decade of decline”.
He also called for highly trained troops to be “at the heart” of the review, above high-tech weapons systems.
“Ministers must not repeat the mistakes of the last two Conservative defence reviews,” he said.