A new weapons tsar will be given a £20 billion budget to rearm Britain, the Defence Secretary has announced.

John Healey said the Ministry of Defence (MoD) was merging eight existing armaments budgets into one pot under the control of a new national armaments director.

The move will save the taxpayer at least £10 billion, Mr Healey said, and help to deliver a “more muscular” armed forces.

It comes as Donald Trump, the US president, demanded that other Nato members take greater responsibility for the defence of Europe as he begins negotiations with Vladimir Putin to end the war in Ukraine.

‘Biggest shake up in 50 years’

At the Institute for Government, Mr Healey described Labour’s reform programme as the “biggest shake up of UK defence for over 50 years”.

He said:  “Because at this time, we must rearm Britain,” adding: “I see this as a new FTSE 100 company within the MoD tasked, if you like, with getting the very best capabilities needed into the hands of our frontline forces.”

Mr Healey said bureaucracy had “mired” the MoD in “process and procedure” and led to “duplication”, with 11 different finance departments employing 2,500 people to do “the same activity in different places”.

“We’ve added complexity where simplicity is needed,” Mr Healey said.

“In procurement, we’ve got a situation where we employ eleven checkers for every one decision maker, so no wonder it takes an average six years for a large programme simply to get onto contract.”

He added: “[We have] a system where only two out of 49 major defence projects are now on time and on budget.”