Key facts
- Keir Starmer launched a £298 billion Defence Investment Plan over four years.
- The plan allocates an additional £15 billion for the armed forces, with £5 billion for autonomous systems.
- The UK is projected to spend 2.7% of GDP on defense next year, short of NATO's 3.5% target by 2035.
- Andy Burnham faces a £4.7 billion funding gap, requiring savings from other government departments.
- £1.8 billion of these savings must be secured in the current financial year.
Keir Starmer has unveiled a new Defence Investment Plan (DIP) amounting to £298 billion over the next four years. However, the plan leaves his successor, Andy Burnham, with a substantial funding challenge.
The DIP includes an additional £15 billion for the armed forces, with £5 billion earmarked for autonomous systems like drones. This announcement comes as the UK is set to reach only 2.7% of GDP on defense spending next year, falling short of NATO's target of 3.5% by 2035. The plan provides no clear roadmap for achieving this target before the next general election in 2029.
John Healey resigned as Defence Secretary partly in protest over the lack of a credible funding plan. Starmer, in his speech, highlighted his achievements in defense spending increases since the 1980s, effectively setting priorities for Burnham. However, industry representatives criticized the UK's slow approach compared to other European allies.
Burnham will be required to allocate nearly £5 billion in his first budget to fund Starmer's plans and will need to find further billions in his first spending review to meet NATO commitments. Starmer also cautioned against financing options such as 'war bonds,' citing concerns about rising interest rates, which already consume a significant portion of government debt servicing.
The DIP explicitly states that defense will be the top priority in the next spending review. However, it also requires £4.7 billion in savings from other government departments, with £1.8 billion needing to be secured in the current financial year. Allies of Burnham acknowledge the need for increased defense investment but have not detailed how these funding targets will be met.