Starmer dodges questions on funding for defence spending
Sir Keir Starmer dodged several questions over funding for an uplift in defence spending as he appeared to suggest that the full defence investment plan will take weeks to be published.
Starmer refused to confirm the publication date for a 10-year blueprint on defence spending as he stuck to a commitment that it would be shared by the Nato summit on 7 July.
During Prime Minister’s Questions, Starmer also declined to rule out tax rises after Chancellor Rachel Reeves said she preferred inflicting the “pain of higher taxes” over adding to the debt load to fund an uplift in defence spending.
In response to Kemi Badenoch’s question on whether he would raise taxes, the PM said the Defence Investment Plan (DIP) would be “done before the Nato summit”. The publication has been delayed by over half a year amid questions over funding for taking defence spending up from 2.6 per cent of GDP to 3.5 per cent. Reeves has also raised around £65bn in taxes over her first two Budgets.
When asked if he would cut welfare spending to pay for defence, Starmer said: “They did neither welfare reforms or spending on armed forces.”
‘Bond markets are watching’
The Tory leader hit back at the Prime Minister, saying: “At a time when we need leadership we have total paralysis.”
Badenoch suggested the government has “maxed out” borrowing, saying: “The military is waiting, the bond markets are watching.”
Media reports have suggested that there could be sweeping cuts to departments’ infrastructure budgets, including across the NHS and energy.
Officials have also reportedly sparred over setting a deadline for when the UK would spend three per cent of GDP on defence after the government said last year the target would be reached some time after 2029.
It has also been reported that a shorter version of the DIP could be published by the end of the week, setting out some plans for procurement across technology despite months of delays.
Defence spending debates rattle Westminster
Speculation over spending cuts, tax rises and borrowing to take defence spending from 2.6 per cent of GDP in 2027 to 3.5 per cent by 2035 has left City analysts and top economists on edge.
Manchester mayor Andy Burnham, who is standing as Labour’s candidate at a by-election ahead of a leadership bid, had suggested that defence spending could get a carve-out from the current fiscal rules as in Germany before he rowed back on his comments.
The Liberal Democrats have also suggested that the government should borrow more to pay for defence by creating a specific bond.
Both the Conservatives and Reform UK have not set out full funding plans. The Conservatives said it would reverse a lifting of the two-child benefit cap, worth around £3bn, to fund defence and allocated National Wealth Fund capital towards defence firms.
The party has also pushed Labour to urgently publish the DIP.