What is Keir Starmer’s plan to increase UK defence spending and is it affordable?

Sir Keir Starmer has come up with an extra £1bn to fund Britain’s defence, promising that the long-delayed plan to future-proof the armed forces will keep Britain “safe and secure for the long future”.

The defense investment plan (DIP), originally planned for last year, was postponed due to fierce wrangling within the government over the amount of money needed to fund the military.

Earlier this month, former defense secretary John Healey resigned in protest over Dip; He argued that this did not provide sufficient funds for the UK to transform its armed forces and meet future threats, and plunged Sir Keir’s government into further disarray.

Mr Healey said he had received a financial deal “well below what is required” and that extra support would come after 2030 “where the imperative to step up war readiness is in the first two years”.

Although the government has committed to spending 3.5 per cent of GDP on defense by 2035, Mr Healey said the plan presented to him was progressing too slowly, with defense spending rising to just 2.68 per cent in 2030 after reaching 2.6 per cent the next year.

The Dip will be published on Tuesday and Dan Jarvis will now become defense secretary.

Just weeks before Andy Burnham is expected to take over as prime minister, he is expected to tear up the plan and try to find more money for defence, amid concerns that even the increased package does not go far enough.

Why are defense expenditures being increased?

The push for Britain to increase its defense budget to 2.5 percent of GDP comes amid talks to end the war in Ukraine (with Britain prepared to act as a peacekeeper in the country to deter future Russian aggression) and ongoing conflicts in the Middle East.

Sir Keir also hopes the spending boost will help rebuild the country’s military and win favor with President Trump, who has threatened to withdraw from NATO and wants Europe to be less reliant on the US for support.

This came at a time when military figures were warning that the gap in Britain’s defenses was leaving the country unable to defend itself; Former Labor defense minister George Robertson, appointed by the prime minister to write the government’s Strategic Defense Review (SDR), claimed earlier this year that Sir Keir did not want 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.

Building on Lord Robertson’s criticism in April, former defense secretary Malcolm Rifkind argued that the government’s “core responsibility” was defense and called on ministers to fund this by cutting benefits or increasing income tax.

Jack Straw, who was foreign secretary under Tony Blair, agreed with this view and said that “there is great urgency in bringing the defense spending program to a level that meets our needs now and in the future, as well as taking the necessary decisions to cut non-essential welfare spending.”

How much has the army been gutted in recent years?

Real-term defense 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 and recently returned to 2010 levels.

While real-term spending has risen steadily since 2016/17, the seven-year decline between 2009 and 2017 has contributed to a serious gap in the military, with the decline in budgets meaning a steady decline in the capabilities of the Armed Forces.

This is also reflected in the size of the UK Armed Forces, which has shrunk by around 15 to 20 per cent since 2016. Total full-time personnel (including regular soldiers and Gurkhas) fell from 150,000 in 2016 to approximately 122,000 in 2025.

How much will it cost?

Last year the UK spent around 2.3 per cent of its GDP, or £66bn, on defence. The government has committed to increasing defense spending to 2.5 percent of GDP by 2027 and aims to reach 3.5 percent by 2035. This represents an increase of around £6-7bn a year in the near term, rising to over £30bn a year in today’s money by the mid-2030s.

It has also been reported that the government faces a funding gap of £28bn in the coming years to implement the recommendations of the Strategic Defense Review, a bottom-up review of Britain’s military capabilities commissioned by Sir Keir’s government.

And with Mr Trump pressuring NATO countries to spend 5 per cent of their GDP on defence, the IFS said meeting the demand would cost an eye-watering £80 billion in extra spending.

Can the UK afford this?

A major increase in defense spending would force the government to make extremely unpalatable concessions, such as tax increases or major cuts to public services or departmental budgets.

The Chancellor has previously suggested the government will look at tax increases to fund itself, admitting “we are in a constrained fiscal world” and ruling out further borrowing.

But there are growing calls from both within the Labor Party and opposition figures for the government to cut benefits to fund defence.

But Labour’s attempt to cut welfare last year was met with opposition from Labor MPs and the prime minister was ultimately forced to back down on most of the cuts, leaving ministers with fewer options this time around.