Sir Keir Starmer has found an extra £1bn to fund Britain’s defence, promising that the long-delayed plan for future-proofing the armed forces will keep the UK “safe and secure long into the future”.
The defence investment plan (DIP), originally due last year, has been held back amid furious wrangling within government over the amount of money required to finance the military.
Earlier this month, former defence secretary John Healey quit in protest over the Dip, arguing it did not provide enough funding for the UK to transform its armed forces and meet future threats, throwing Sir Keir’s government into further turmoil.
Mr Healey said he had received a financial settlement which “falls well short of what is required”, with extra support coming after 2030 when the “imperative to speed up readiness to fight is in the first two years”.
While the government has committed to spending 3.5 per cent of GDP on defence by 2035, Mr Healey said the plan he was presented with moved too slowly, with defence spending rising to just 2.68 per cent in 2030 after hitting 2.6 per cent next year.
The Dip will be published on Tuesday, with Dan Jarvis now defence secretary.
It comes just weeks before Andy Burnham is expected to take over as prime minister when he is widely expected to rip up the plan and try to find more money for defence, amid concerns that even the increased package does not go far enough.
Why is defence spending being increased?
The push to hike Britain’s defence budget to 2.5 per cent of its GDP comes amid talks to end the war in Ukraine - with the UK poised to act as a peacekeeper in the country to deter future Russian aggression - and the ongoing conflict in the Middle East.
Sir Keir also hopes that the spending boost will help to rebuild the country’s military and curry favour with President Trump, who has threatened to pull out of Nato and wants Europe to be less reliant on the US for support.
It comes as military figures warn that the hollowing out of Britain’s defences has left the country unable to defend itself, with George Robertson - a former Labour defence secretary who was appointed by the prime minister to write the government’s Strategic Defence Review (SDR) - earlier this year claiming Sir Keir is unwilling “to make the necessary investment” in Britain’s defence.
He accused “non-military experts” in the Treasury of “vandalism”, arguing that Britain is “underprepared” and “underinsured” in the face of global threats.
Piling in on Lord Robertson’s criticisms in April, Malcolm Rifkind, a former defence secretary, argued that the government’s “prime responsibility” is defence, and called for ministers to fund this through a cut to welfare or an increase in income tax.
Jack Straw, who was foreign secretary under Tony Blair, agreed, saying there is “a great urgency to settle the defence spending programme at a level which meets our needs, now and in the future, and with that make necessary decisions to cut non-essential welfare spending.”
How much has the military been hollowed out in recent years?
Real-terms defence spending fell by 22 per cent between 2009/10 and 2016/17 (from £59.2bn to £46.2bn in 2024/25 prices). It then started to rise again, recently returning to its 2010 levels.
While real-terms spending has increased steadily since 2016/17, the seven year dip between 2009 and 2017 has contributed to a significant hollowing out of the military, with a drop in budgets meaning the capabilities of the Armed Forces has steadily declined.
This has also been reflected in the size of the UK Armed Forces, which have shrunk by approximately 15 to 20 per cent since 2016. Total full-time personnel (including regulars and Gurkhas) fell from over 150,000 in 2016 to around 122,000 in 2025.
How much will it cost?
Last year, the UK spent around 2.3 per cent of its GDP on defence, around £66bn. The government has committed to raising defence spending to 2.5 per cent of GDP by 2027, with an ambition to reach 3.5 per cent by 2035. That implies an increase of around £6–7 billion per year in the near term, rising to more than £30 billion per year by the mid-2030s in today’s money.
It has also been reported that the government is facing a funding gap of £28bn over the coming years to implement the recommendations of the Strategic Defence Review – a bottom-up review of Britain’s military capabilities commissioned by Sir Keir’s government.
And, with Mr Trump piling pressure on Nato countries to spend 5 per cent of their GDP on defence, the IFS said meeting the demand would cost an eye-watering £80bn of extra spending.
Can the UK afford it?
A major increase to defence spending would force the government to pursue highly unpalatable trade-offs, such as tax hikes or major cuts to public services or departmental budgets.
The chancellor previously suggested that the government would look to tax rises to fund it, admitting that “we are in a constrained fiscal world” and ruling out borrowing more.
But there have been growing calls for the government to cut welfare to fund defence, from both within the Labour Party and from opposition figures.
However, Labour’s attempt to slash welfare last year was met with opposition from Labour MPs, and saw the prime minister ultimately forced to row back on the majority of the cuts – leaving ministers with fewer options this time around.
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