LONDON — Keir Starmer has published a long-awaited plan to spend billions of pounds on defense that could cement his legacy as a world statesman. In doing so, he has effectively tied his successor’s hands.
The British prime minister’s speech heralding the arrival of the Defence Investment Plan (DIP) will probably be the last major piece of policy he announces before stepping down, with Andy Burnham all but certain to take over as leader in three weeks.
He announced an extra £15 billion for the armed forces to meet the greatest threats facing the U.K., including £5 billion towards autonomous systems such as drones and uncrewed vehicles. The defense budget now sits at almost £300 billion over the next four years.
This included an additional £1.5 billion of new money secured by new Defence Secretary Dan Jarvis on top of the initial proposal – which prompted Jarvis’ predecessor, John Healey, to resign.
But significant problems remain. The DIP gives no funding pathway to hit the U.K.’s NATO target of 3.5 percent of GDP by 2035, and with no commitment to provide one before the next general election, scheduled for 2029.
The U.K. will hit 2.7 percent next year, and that number will not rise before 2030.
Should he become prime minister, Burnham will have to use his first budget to find almost £5 billion to fund Starmer’s plans, as well as use his first spending review to find billions more to make good on Britain’s promise to NATO allies.
Starmer took the opportunity to lay out what he sees as his key international achievements in office, talking up the coalitions he helped build to support Ukraine and bring stability in the wake of the Iran conflict. He also boasted of “delivering the biggest sustained increase in defence spending since the 1980s.”
In doing so, the outgoing PM effectively shone a light on what he believes Burnham’s priorities should be on the world stage, even setting out his own prescription for how they should be met. But at the same time he called attention to some of the deep frustrations during his own time at No.10, which saw him push national security up the Labour Party’s agenda while failing to match the pace of Britain’s allies in rearming.
Andrew Kinniburgh, director-general of Make UK Defence, said: “As many other European allies rapidly accelerate towards meeting our new NATO target several years early, the U.K. is on the go-slow.”
Partial relief
The arrival of the DIP will allow defense companies and service personnel to breathe a sigh of relief. While arguments continue over the level of funding, many will be pleased that it provides some certainty and allows people to make commercial and strategic decisions after spending the last ten months in limbo.
Kevin Craven, CEO of ADS, which represents more than 2,000 firms in the sector, said: “The clarity provided will support the U.K.’s defense industry to do what we do best: supply equipment, capabilities and services that ensure the UK’s national security.”
Yet there was widespread acceptance even at the plan’s launch that the price tag is only part of the picture. Answering questions at the headquarters of a drone manufacturer in Berkshire, Starmer described the DIP as a “massive step forward” while effectively admitting he had no road map for hitting 3 percent of GDP on spending, specifying that it “must be the number one priority at the next spending review.”
Healey, who quit in protest partly at the refusal to set out a roadmap towards the U.K.’s spending pledges, said: “We need a target date for 3 percent and a clear credible funding plan to meet our NATO commitment for 3.5 percent on defence by 2035,” because “European security is at stake.”
One Labour MP with a close interest in defense, who, like others in this story, was granted anonymity to speak candidly, said that the strategy “takes us forward” — but added “there is a lot more that needs to happen” which they said would now fall to Burnham when he assumes power.
A defense industry representative went further, saying: “It’s ludicrous that the PM could say earlier this month that our intelligence assessment is that Russia will be ready to invade a NATO country by 2030, only for him to then fail to commit to 3 percent by then.”
Ed Arnold, associate fellow at RUSI, said the “modest uplift” under the DIP to take Britain to around 2.7 percent by 2029 “only defers a massive financial injection to defense.”
Over to you
Starmer also laid out what he thinks Burnham should prioritize in his first spending review as prime minister – a major exercise carried out by the Treasury every few years – but fired a warning shot over other forms of financing reportedly being considered.
The DIP explicitly states that defense “will be the number one priority” at the next spending review, even though it will almost certainly be presented by the next chancellor and not Rachel Reeves, who appeared alongside Starmer at Tuesday’s launch.
The PM said that the mooted option of so-called “war bonds,” which have been floated by Andy Haldane, a former Bank of England economist who is advising Burnham, would “push interest rates higher at a time when one pound in every ten already goes on paying debt interest.”
He made no mention of the Canadian-backed multilateral Defense, Security and Resilience Bank (DSRB), which will fuel the impression that the U.K. will not join as a founding member at next week’s NATO summit, despite a push from Burnham’s team for London to sign up.
The Treasury has allocated just £400 million in investment for the “Multilateral Defence Mechanism” – a proposal by the U.K., Finland and the Netherlands to provide financing for defense projects – around half of the DSRB’s entry requirement.
Most pressing for Burnham, the small print contained in the DIP states that £4.7 billion must be found in savings at the next budget — likely from cuts to other departments — with £1.8 billion of that front-loaded to the current financial year.
Allies of Burnham said he had been briefed on the DIP and backed the plan, but would not be drawn on how he planned to meet the targets which have eluded Starmer.
One person close to him said that he “recognizes the rising demands on defence and has been clear on the need for defence investment which unambiguously backs British jobs and British industry.”
