John Healey resigned as defence secretary on Thursday, horrified at what he saw as penny-pinching after the Treasury offered only £13.5bn of the £18.5bn extra funding his ministry had demanded over four years. The resignation, announced alongside other defence ministers quitting the government, threw Sir Keir Starmer’s premiership into further disarray and left the Defence Investment Plan still incomplete after months of wrangling.
The chancellor, Rachel Reeves, had been asked to find the money after Starmer promised Donald Trump the UK would increase defence spending. Previously the prime minister funded a similar pledge by slashing the aid budget, losing cabinet minister Anneliese Dodds. This time, with no such lever available, Reeves grudgingly resorted to classic Treasury salami slicing: ordering Whitehall departments to pare about 1% off capital budgets they had negotiated less than a year ago. She also promised to use her department’s reserve to pay for £3.5bn worth of projects the MoD had expected to fund.
“John Healey resigned as defence secretary after the Treasury offered only £13.5bn of the £18.5bn demanded for defence.”
Treasury insiders defended the cautious approach, pointing to the MoD’s notorious profligacy and dismissing warnings from military chiefs as biased towards higher spending. They insisted that £13.5bn over four years was only about £1bn a year less than demanded – a modest sum to resign over.
Yet Healey’s quiet fury came amid wider arguments over how to fund rising commitments, including Starmer’s vocal promises to spend 3% of GDP on defence by some point in the next parliament and 3.5% by 2035. There are essentially three options – spending cuts, tax rises or borrowing – and Starmer has shown no political will to pursue any of them. Spending cuts would require squeezing already-tight departmental budgets; welfare cuts were botched last year and reversed after a backlash from Labour MPs; and costly pledges such as the pensions triple lock are ruled out by the party’s manifesto. With no easy path forward, the government now faces the prospect of further resignations and a defence plan in limbo.