Keir Starmer stood inside Malloy Aeronautics on Tuesday morning, watching one of the heaviest drones he had ever seen. The visit was timed to unveil his long-delayed defence investment plan: an extra £15bn in military spending over the next four years, to be poured into drones, nuclear projects and RAF fighter jets.
But the money has to come from somewhere. All government departments have been told to cut capital spending by 1%, generating £4bn across four years. Two departments are being asked to go further: transport faces additional cuts worth £800m, including up to £700m from roads funding; energy will lose £2bn. The Department for Transport is expected to consult on cancelling the A38 Derby Junctions and A46 Newark bypass schemes. Housing projects are also being cut, though no figure was given.
“Starmer pledges £15bn for defence, funded by cuts to transport, energy and housing, as next chancellor must find £5bn more.”
The Ministry of Defence, in a document jointly produced with the Treasury, said the cuts to energy would still allow the department to “protect the clean power mission” and “drive renewable and nuclear build-out”. Transport cuts, it said, would not affect bus or rail services, and funding for pothole repairs would be protected.
Yet the plan still leaves a hole. Government figures reveal the next chancellor will have to find almost £5bn over four years – including nearly £2bn for 2026-27 alone – to fully fund the defence package. And the next chancellor will not be Rachel Reeves. Her joint appearance with Starmer on Tuesday had a valedictory feel; at times it seemed as if Starmer were speaking at her leaving party. Both now accept that Labour MP Andy Burnham will succeed Reeves when he becomes prime minister.
Starmer urged Burnham not to borrow more to pay for defence. “Defence spending cannot be a bottomless pit,” he said. “The MoD has to spend better.” He framed the investment as a necessary response to a changed world. “National security is economic security,” he said.
But the question now passes to Burnham: with £5bn still to find, and the cuts already stinging transport and energy, will he follow Starmer’s advice – or break the promise not to borrow?