Outgoing British Prime Minister Keir Starmer and Chancellor Rachel Reeves have announced a £15 billion defense funding package, just weeks before their term concludes. The plan aims to increase annual defense spending from £54 billion to £80 billion by 2029, a move Starmer stated would reverse the "corrosive hollowing out" of the armed forces.
Despite mutual congratulations between Starmer and Reeves on the agreement, the package has drawn criticism for falling short of the military's requested £28 billion over four years. Critics, including former Defence Secretary John Healey, who resigned over the funding dispute, have labeled the plan "too little too late." Healey argued that the £15 billion package would not adequately address rising security threats.
The announcement comes ahead of a NATO summit where Starmer is expected to face scrutiny from U.S. President Donald Trump, who has been a vocal critic of insufficient military investment among allies. While NATO member states have committed to spending 3.5% of GDP on defense, with an additional 1.5% on resilience, the UK's plan outlines an increase to 2.5% of GDP by 2027, with an "ambition" of reaching 3% in the 2030s. A White House official indicated Trump expects allies to adhere to a 5% defense spending pledge.
Starmer defended the plan, calling it the "right choice for the country" and emphasizing it was within fiscal rules and would not divert funds from frontline services like health and education. However, he acknowledged that some capital projects, particularly in roads and energy, would be scrapped to reallocate funds. He also dismissed the idea of "defense bonds" as "borrowing by another name," citing concerns about rising interest rates.
The plan includes a £5 billion drone "transformation," though it has emerged that only £1 billion of this represents new investment, with a £4 billion program having been announced previously. The initiative aims to manufacture hundreds of thousands of drones over the next four years. Additionally, the package proposes the construction of six "budget warships."
Starmer asserted that his time in office had improved the country's standing, stating, "We are in a much better state now than we were when we took over two years ago," particularly regarding the economy, public services, and defense.
The outgoing Prime Minister's tenure is set to conclude around July 20, with Andy Burnham expected to take over. Allies of Burnham had reportedly pushed for the defense plan's delay until after his assumption of office. The specifics of Burnham's defense policy remain unclear, as he has not detailed his plans since his initial speech.