Sir Keir Starmer has summoned defence chiefs for crucial talks over the future shape of Britain’s armed forces as he resists pressure for higher spending given the tight public finances.
People briefed on the strategic defence review (SDR), which is entering its final stages, say defence chiefs have been pushing hard to expand the military budget to deal with Russia and other geopolitical threats.
One person close to the negotiations said: “The chiefs want a budget of 2.65 per cent of GDP but the Treasury is adamant that they should work to 2.3 per cent.” A second official confirmed the gap between the two sides, which amounts to about £10bn a year.
Starmer’s allies say the prime minister will not budge from Labour’s manifesto commitment to set out a “pathway” to spend 2.5 per cent of Britain’s GDP on defence. But he has refused to say when spending would hit this level, leaving forces complaining about a significant short-term squeeze. “There will be real cuts,” said a person close to the talks.
Meanwhile, US President Donald Trump has said European governments should spend much more on defence, citing a figure of 5 per cent of GDP.
Francis Tusa, editor of Defence Analysis newsletter, said Trump’s view may mean that the UK government has “less manoeuvre room than it thinks” on defending spending.
“At the Munich Security Conference this weekend we’re likely to see the first set of pressures coming in from the US . . . The problem for the UK is when you have Baltic and Scandinavian states reprioritising social security spending towards defence, it’s difficult for the UK to say ‘we can’t do that’.”
The meeting between Starmer and the defence chiefs, expected in the coming days, has been given an added edge by a downgrade from the Office for Budget Responsibility in its initial growth forecasts for chancellor Rachel Reeves, which have blown a hole in the public finances.
Although the forecasts are subject to revision before Reeves’ Spring Statement on March 26, they indicate that her £9.9bn of headroom against her fiscal rules announced in her Budget last October has been wiped out, suggesting the need for more spending cuts or tax rises.
The previous Conservative government had said it would reach defence spending of 2.5 per cent of GDP by 2030.
While Starmer has committed to increasing defence spending from 2.3 per cent to 2.5 per cent, doing so before the next election, expected in 2029, would eat into scarce resources for Labour’s other priorities, such as health or education.
People close to the process say there are tensions between defence secretary John Healey and the defence chiefs. But Labour officials say Starmer, Reeves and Healey are determined to hold the line. “Defence chiefs call for more defence spending, shock!” joked one.
Some of the UK’s closest allies have decried the hollowed out state of the British armed forces — including Trump’s former national security adviser, HR McMaster, who said last week that “when you look at the British army right now . . . it makes me want to cry”.
“The British army is a professional, extremely capable army that now lacks the capacity to sustain operations,” McMaster told a seminar hosted by the Center for European Policy Analysis.
Healey’s siding with Starmer and Reeves in backing fiscal restraint appears to have wrongfooted senior military officials.
“People had got used to the idea of Tory defence secretaries lobbying Number 10 publicly and privately for more spending,” said one person close to the talks. “Healey isn’t doing that — he’s behaving as a team player.”
Conservative defence secretaries such as Ben Wallace, Grant Shapps and Gavin Williamson all courted the military — and rightwing MPs and media — by openly calling for increases in military spending.
“Everyone has sat through plenty of cabinet meetings where we’ve discussed our priorities and how tight money is,” one Labour official said.
One ally of Healey insisted there was no friction between his views and those of the military chiefs.
A UK government spokesperson said: “The strategic defence review is being conducted at pace to determine the roles, capabilities and reforms required by UK defence to meet the challenges, threats and opportunities of the 21st century.”
Additional reporting by John Paul Rathbone
