Key facts
- Keir Starmer announced a £298bn defence investment plan over four years.
- An unfunded gap of £4.7bn remains, to be addressed in the next budget.
- Defence spending is set to increase to 2.7% of GDP by 2030.
- The plan includes significant investment in nuclear submarines, fighter jets, and drones.
- Funding will be partly sourced from efficiency savings and cuts to other government projects.
Keir Starmer has unveiled a £298bn defence investment plan, but a significant funding gap of £4.7bn has been left for the incoming Chancellor, Andy Burnham, to address. The plan, intended to modernize Britain's armed forces and enhance national security, prioritizes areas such as nuclear submarines, fighter jets, and drones.
The funding for the plan is to be partially sourced through £10.7bn in efficiency savings within the Ministry of Defence, including a 10% cut in civil servants and a £1bn reduction in spending on consultants. Additional funds will be generated by cutting capital budgets across Whitehall by 1%, selling government assets, and reducing spending on road and energy projects. However, nearly a third of the plan remains unfunded, with £4.7bn needing to be allocated in the next budget and £1.8bn in the upcoming financial year.
Starmer stated the plan would drive a "generational transformation" of the armed forces, increasing overall defence spending to 2.7% of GDP by 2030, with a trajectory towards 3% in the subsequent parliament. Key investments include new nuclear submarines, a new nuclear warhead, 12 Lockheed Martin F-35A jets, and enhanced drone capabilities. However, some military capabilities, such as Storm Shadow missiles and 34 Wildcat helicopters, will be retired early.
The announcement has drawn criticism, with some allies of Burnham likening the unfunded portion to an "unexploded bomb" and defence insiders calling the situation "madness." The Conservatives have labeled the plan a "delayed-action poison pill." John Healey, who resigned as defence secretary in protest, argued that Britain would still be spending only 2.7% of GDP by 2030, a date when NATO has warned of potential Russian aggression, and called for a clear target date to reach 3% spending.
Sources suggest that Starmer's allies may have deliberately omitted details of the missing £4.7bn when briefing Burnham. A Treasury source defended the approach, stating it is normal for a chancellor to announce spending with some funds to be found later, and noted that Burnham could potentially borrow more given the government's fiscal headroom. However, this could risk increasing borrowing costs.