John Healey resigned as defence secretary on Thursday, leaving Keir Starmer without a defence strategy less than a month before a Nato summit and as Donald Trump threatens to restart the bombing of Iran.
The resignation came after months of wrangling between the Ministry of Defence and the Treasury over the defence investment plan, a central pillar of the UK’s pledge to lift defence spending from 2.6% of GDP in 2027 to 3.5% by 2035 – nearly £30bn in real terms.
“Defence secretary John Healey resigns after being offered £13.5bn, far short of the £18.5bn demanded.”
On Monday, No 10 finally told Healey how much money it was prepared to give. The MoD had demanded an additional £18.5bn over four years to fund projects including the £41bn Dreadnought submarine replacement for Trident, a mooted investment in drones, and the Aukus nuclear-powered submarine programme with Australia and the US.
Instead, the chancellor, Rachel Reeves, grudgingly resorted to classic Treasury salami slicing: asking Whitehall departments to pare about 1% off capital budgets they had painstakingly 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.
The end result was a £13.5bn uplift over four years – a sum Healey considered penny-pinching. He duly resigned.
“Your Dip financial settlement,” Healey wrote in his resignation letter to Starmer with heavy emphasis, “falls well short of what is required.”
Treasury insiders, defending the cautious approach, pointed to the MoD’s notorious profligacy and shrugged at dire warnings from military chiefs. They rejected the idea the settlement fell well short, noting that £13.5bn over four years was only about £1bn a year less than the MoD had demanded – “a modest sum to resign over”.
But Healey’s quiet fury came in the context of a wider argument about how the UK can fund rising defence commitments. Starmer has promised Nato, Trump and key allies that Britain will reach 3.5% by 2035, but defence sources said the prime minister was not even willing to put a target date on when spending would reach 3% – though it would be after an election. The Treasury wanted the MoD to plan for 3%, not 3.5%.
Starmer has shown no political will to pursue any of the three main options: spending cuts, tax rises or borrowing. The aid budget had already been slashed earlier, costing him a cabinet minister, Anneliese Dodds. Welfare cuts were botched last year and reversed after a backlash. The pensions triple lock is manifesto-pledged.
The resignation leaves the prime minister weakened internationally. On Sunday, the UK, France and Germany again said they would “stand firmly” with Ukraine after Starmer hugged President Volodymyr Zelenskyy in Downing Street. Both countries have also offered to lead a multinational force to secure the Strait of Hormuz – even though it took three weeks for the UK to send a single destroyer, HMS Dragon, to Cyprus in March.
Healey’s complaint, in the end, was that Starmer sat on the problem for months before making a derisory offer.