The UK military is to receive an extra £4bn a year over the next four years, the government has said.
The money will fund space and cyber defence projects such as an artificial intelligence agency, and could create 40,000 new jobs.
Defence Secretary Ben Wallace said “letting go” of older weapons would create “headroom to invest”.
The Ministry of Defence’s annual budget is around £40bn, so the £16.5bn over four years is about a 10% increase.
Mr Wallace told BBC Breakfast: “When I looked across at the armed forces today I saw them with equipment that was out-of-date, I saw our adversaries across the world having better equipment, the ability to attack us and harm us getting wider and wider from our capabilities.
“And when that happens, time runs out and you need to modernise your forces. You need to sometimes let go of some older capabilities and that takes money in order to first of all create the headroom to invest.”
He also told BBC Radio 4’s Today programme there would potentially be an increase in soldiers working in “electronic warfare, signals intelligence, long-range fires”.
“We have to move with the threat,” he said, adding “if we don’t learn from the threat we will end up fighting yesterday’s battles”.
The extra spending is on top of the Conservative Party’s 2019 manifesto commitment to increase the budget.
The government has pledged to increase defence spending by 0.5% above inflation, which is currently 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’
Prime Minister Boris 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”.
The announcement is part of the first conclusions of the government’s Integrated Review (IR) which looks at security, defence, development and foreign policy.
BBC diplomatic correspondent James Landale said the funding deal “will be seen by some as putting the cart before the horse”.
He said the upcoming IR was meant to decide where the UK wanted to be in the world by the year 2030 – before committing spending to get there.
“Number 10 insists they know where they are going, that 90% of the IR is already fixed, and the defence announcement is merely the first iteration. And yet I am told by insiders that this review was always about the money and that has now been decided,” our correspondent added.
BBC