BORIS Johnson is set to unveil what is being billed as the biggest programme of investment in Britain’s armed forces since the end of the Cold War.

The Prime Minister will lay out a four-year financial deal for the Ministry of Defence (MoD) to “transform” the military, developing cutting-edge capabilities in the future battlefields of cyber and space.

It will include the creation of an agency dedicated to artificial intelligence, and a “space command” capable of launching the UK’s first rocket by 2022.

The plan – to be announced in the Commons today – will see the MoD get an additional £16.5 billion over and above the Government’s manifesto commitment to a 0.5% real terms increase for each year of the Parliament.

It comes as the Conservative Party leader refused to rule out slashing the foreign aid budget by more than £4bn as the Treasury looks to raise money to pay for the Government’s borrowing during the coronavirus response.

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The announcement also comes weeks after ministers resisted spending to help hungry children access school meals over the holidays.

The Government has also refused to extend the £20 uplift to Universal Credit beyond April despite pleas from children’s charities and campaigners. Extending the policy would cost £9bn overall.

The chief executive of the National Children’s Bureau, Anna Feuchtwang, said: “If the Government can find significant extra funds for defence then surely they can find money for children in crisis. It’s appalling that hard-pressed families have to rely on food banks to get by, and that the services that might stop them spiralling into further crisis are being cut year-on-year with local authorities facing bankruptcy.

“We need the Government to take seriously its responsibility to the next generation and have a proper strategy for investing in children.”

Johnson, challenged at Prime Minister’s Questions over reports that plans are being drawn up to pare back the UK’s commitment to spend 0.7% of national income on overseas aid to 0.5% in next week’s Spending Review, said only that the UK would “continue” to tackle global poverty.

“I have taken this decision in the teeth of the pandemic because the defence of the realm must come first,” the Prime Minister said.

“The international situation is more perilous and more intensely competitive than at any time since the Cold War and Britain must be true to our history and stand alongside our allies. To achieve this we need to upgrade our capabilities 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.”

The spending commitments are set to be made despite reports that the Spending Review will reveal that the UK’s economy will contract by almost 11% in 2020, the worst annual performance for more than three centuries.

The Financial Times said, based on previous Office for Budget Responsibility (OBR) and Bank of England statements, the Chancellor was likely to publish forecasts showing the country’s economy would still be reeling from the impact of Covid-19 by the time of the next General Election in 2024.

Washington’s acting secretary of defence, Christopher C Miller, said in a statement the US “applauds the announcement”, which he added would ensure “the UK military continues to be one of the finest fighting forces in the world”.

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“Their commitment to increased defence funding should be a message to all free nations that the most capable among us can – and must – do more to counter emerging threats to our shared freedoms and security,” Miller said.

The move will be underpinned by an additional £1.5bn investment in military research and development with a commitment to invest further in the Future Combat Air System to develop the next generation of fighters for the RAF.

Labour’s shadow defence secretary John Healey said: “This signals a welcome and long overdue upgrade to Britain’s defences after a decade of decline.

“Since 2010 the size of the armed forces has been cut by a quarter, defence spending was cut by over £8bn and the defence budget has a £13bn black hole.”

However Lloyd Russell-Moyle, the Labour MP for Brighton Kemptown, said while “funding our military is a must … people will wonder if rightly our national security can get money, why is the Government letting councils who offer child protection and social care go to the wall”.