Keir Starmer has warned his successor Andy Burnham not to borrow more to pay for defence as he raided energy, transport and housing projects to plug a military spending deficit with an extra £15bn over the next four years.
The outgoing prime minister revealed his long-awaited defence investment plan (Dip) on Tuesday, after an 11-month government row that cost him a defence secretary and arguably contributed to his downfall. He appeared alongside Chancellor Rachel Reeves and Defence Secretary Dan Jarvis.
“Starmer raids road and energy projects to fund £15bn defence plan, warns successor Burnham not to borrow.”
Starmer said the government had found the £15bn by taking money from road and energy schemes. A £9bn scheme to upgrade military housing over the next decade has been adjusted so costs fall after 2030. The plan marks a £1.5bn improvement obtained by Jarvis compared with the £13.5bn offered to John Healey, who resigned in protest.
In his introduction, Jarvis said the extra money was needed because Labour had “inherited a defence programme that was underfunded, overcommitted, and insufficiently attuned to the threats we now face. 47 out of 49 programmes were delayed or over budget.”
Overall defence spending will rise marginally from 2.6% of GDP in 2027 to 2.7%, or nearly £80bn, by 2030. Starmer said this put the UK “on a trajectory” to hit 3% in the next parliament.
Healey said the budgets were too small. “Britain will still be spending just 2.7% of GDP in 2030, the date when Nato has warned we could face a Russian attack,” he said, calling for a clear target date to hit 3%.
Starmer urged Burnham to find more money for defence at the next spending review, though he warned not to borrow more to pay for it. The outgoing prime minister said defence “must be the number one priority at the next spending review”. The Nato target agreed by Starmer is to reach 3.5% by 2035.
The Guardian revealed last week that some of Starmer’s allies would use the transition period to recommend Burnham revive the idea of “defence bonds”, which was previously rejected by the Treasury.
London-listed defence stocks including Rolls-Royce and BAE Systems shot higher on Tuesday as investors backed the main beneficiaries of the plan. But the publication of the long-delayed blueprint is unlikely to end military figures’ calls for more funding.