UK Defence Spending

Is 3% beyond reach?

The UK Government’s long-postponed Defence Investment Plan (DIP) has descended into chaos with the resignation of Defence Secretary John Healey. Though regarded as a Starmer loyalist, Healey’s resignation letter did not spare the Prime Minister or his former colleagues. After referencing the cross-government work on defence requirements undertaken by himself, the Prime Minister and the Chancellor, he wrote:

“Since then, you have been unable, and the Treasury has been unwilling, to commit the resources that the nation needs to defend the country at this time of rising threats.”

That statement unambiguously accuses Keir Starmer of breaking his promises and Rachel Reeves of starving the defence budget of necessary funding. The Chancellor would only sign off on a 0.08 percentage-point increase, taking defence spending to 2.68% of GDP by 2030 (£13.5 billion), far short of the already inadequate £18 billion originally proposed. Remember that there was already a £28 billion shortfall identified by service chiefs.

It has emerged that Healey was informed of the £13.5 billion figure only on 8 June, just three days before his resignation. That the Secretary of State for Defence should be kept so uninformed testifies to the impotence of ministers in the face of the Treasury and Whitehall mandarins.

Healey’s successor, after Al Carns burned his boats by denouncing Starmer’s DIP as “not fit for purpose” and resigning, has been announced as Dan Jarvis. Presumably, he has been brought in to implement the £13.5 billion plan, which will likely damage his political reputation. On the other hand, he may have some leverage with which to demand concessions: could Starmer survive the resignation of a second defence secretary?

There has been an alarmed reaction from the trade organisation representing British aerospace contractors, and the implications are both evident and serious. The delay was already causing concern among many SMEs in the defence industry. Kevin Craven, chief executive of ADS, the trade group for aerospace, defence and space firms, said: “National security and defence of the realm is not an accountant’s job. It is imperative that an adequately funded Defence Investment Plan is published as soon as possible.” The Unite union called the DIP fiasco “a national disgrace”.

There are likely to be serious repercussions overseas. Japan was already concerned about Keir Starmer’s stalling over the joint UK-Italy-Japan Global Combat Air Programme (GCAP), which aims to develop a new generation of stealth aircraft. The industry has described GCAP as “a once-in-a-generation opportunity for British aerospace”, expected to create tens of thousands of highly skilled jobs and generate significant export revenue over its life cycle.

How will it fare under the cut-price DIP? It is known that the Treasury wants to postpone GCAP spending, of which Britain’s share amounts to £10 billion over the next decade, until the 2030s. The consequences of delay or abandonment would extend far beyond financial considerations. Francis Tusa, an independent defence analyst, has said: “If we screw this up, there will be hell to pay. It could be a disaster for our alliances in Asia.”

On 7 July, Keir Starmer will face Donald Trump at the NATO summit in Ankara. How does he think the American president will react to the resignation of the UK Defence Secretary in protest at inadequate defence funding and in favour of a lavish welfare programme? Or to the failure even to attempt to reach defence spending equivalent to 3% of GDP by 2030?

Even if the trimmed-down DIP somehow contrives to maintain commitments to the nuclear deterrent, GCAP and AUKUS, it is likely that already inadequate Army personnel numbers and armour modernisation programmes would be scaled back. The Type 83 destroyer programme could be scrapped, and frigate numbers further reduced.

Even the £13.5 billion figure is inflated: £3.5 billion has been exposed as “ghost funding”. Thus, the government is attempting to plug a £28 billion defence shortfall with only £10 billion.

Yet, with sufficient political will, the defence budget could be adequately funded. More than £10 billion currently paid in benefits to foreign nationals could be redirected towards defence. The amount earmarked for Net Zero initiatives between 2025 and 2030 totals £63 billion; clawing back even part of that sum, in a nation that contributes less than 1% of global greenhouse gas emissions, would eliminate the entire £28 billion defence deficit.

The only thing that can now save the situation is public opinion compelling the government to meet its defence obligations.

This crisis has been building for a long time. Over the past 80 years, Britain’s defence has been directed not by the Ministry of Defence or 10 Downing Street, but by Treasury mandarins, inflicting a death by a thousand cuts on the nation’s defence capabilities.

The Royal Navy illustrates this decline. In 1998, it possessed three aircraft carriers, one helicopter carrier, 12 destroyers, 20 frigates and 22 submarines; today it operates two aircraft carriers, six destroyers, five frigates and nine submarines, with two-thirds of the fleet reportedly in maintenance.

Successive Conservative and Labour governments promised to “stop the boats”, and so they did—just the wrong boats.