Starmer’s £18bn defence bid won’t save him but might protect the military – for now

Sir Keir Starmer is poised to announce an £18bn increase in defence spending, as he battles to stay in No 10.

While it may not be enough to save his skin at home after a devastating local election, it may just provide a temporary lifeline to the UK’s military which has been whittled to the bone – and bolster its reputation overseas, insiders said.

The uplift, first reported by The Times, comes after national security advisor Jonathan Powell reportedly wrote to the Prime Minister warning that the UK would struggle to maintain its position on the world stage without a significant increase in spending – the UK has set out to spend 2.5 per cent by 2027.

With Starmer under unprecedented pressure at home and abroad, and a leadership challenge looming, the PM’s team will be hoping the defence uplift fulfils his pledge to bolster the UK’s security while creating new jobs at home.

There is evidence to suggest they’re right; data from industry body ADS found that 50,000 additional jobs could be provided by 2035 from an increase in defence spending to 3 per cent of GDP – which the Government has pledged to set out in the next Parliament – rising to 85,000 from a spend of 3.5 per cent.

As Manchester Mayor Andy Burnham attempts to stage a return to Westminster and Wes Streeting announces his leadership bid, one senior Labour source said the defence spending hike would not significantly swing any leadership contest in Starmer’s favour, adding: “We’re on this train now and he knows it as much as anyone else.”

“This is obviously the right thing for the country and long overdue, but that’s exactly the problem. The delay to introduce a long discussed spending boost speaks to the stasis and caution that has infected government under Keir Starmer,” they said. “We wait until almost the last possible opportunity to get things done and it’s not enough.”

Funding will plug ‘urgent gaps in military’

One military source said the cash injection would bolster the UK’s international credibility ahead of the Nato summit in Ankara, Turkey, in July, where it will need to defend its record on military spending.

US President Donald Trump has repeatedly criticised the UK for its refusal to substantially engage in the Iran war, mocked delays in deploying a warship to the Middle East, and insulted its Navy as “toys”. He has also taken a hard line on defence spending, infamously threatening to encourage Russia to invade Nato allies who didn’t spend enough on defence, and driving a new spending target of 3.5 per cent of GDP on core defence and 1.5 per cent on related expenditure, like infrastructure.

While it isn’t a silver bullet for the UK’s shrinking military, the funding will contribute to the £28bn blackhole in defence spending identified earlier this year.

A military insider said the uplift “makes a start to plug some of the gaps after decades of underinvestment”.

Another said the money would be welcomed by the services and will help “keep the ships afloat”. Without the funds, the UK could be forced to reconsider defence commitments like the GCAP fighter jet programme, which would be internationally humiliating, they added.

However, the insider warned it would not change the picture for defence long-term or reduce the need for the services to make savings, largely because it is to be spread over four years.

They said more money needed to be released quickly for short-term capabilities like drones – rather than put towards long-term spending on large projects – and suggested the UK should look to supplement taxpayer funding with private investment.

Hamish Mundell, a fellow at defence thinktank Rusi, said that the additional £18bn is “very welcome” but could still leave the military facing “difficult trade-offs”, whether through pushing back deadlines, reducing order numbers, or scaling back programmes elsewhere.

“Nor does this put Britain at the level of some of our European allies who are taking rearmament far more seriously, such as Germany,” he added.

It comes as the Royal Air Force deploys a new low-cost anti-drone weapon on operations in the Middle East, which it says will strengthen the protection of civilians.

The new Advanced Precision Kill Weapon System will be fitted to Typhoon fighter jets and destroy drones at a “fraction of the cost”, the Ministry of Defence said. The procurement was speeded up to enable the system to move from testing to deployment on operations in less than two months.

Defence industry welcomes boost – but needs long-term plan

One defence industry source described the funding as a “step in the right direction” but said it had “come several months too late”.

ADS, which represents 1,700 defence industry providers, said that frictions over funding between Government and industry had resulted in a “ruinously expensive pause” in the procurement of new products, adding that defence companies “rely on clear demand signals to plan, invest and grow.”

“Over the longer term, this risks weakening the UK defence industrial base, with emerging and innovative companies – so vital in contexts such as Ukraine – being absorbed by competitors in other markets,” the body said.

Several industry insiders said that without the release of the Defence Investment Plan – the long-delayed proposal to fund the future of the Armed Forces – industry still lacked direction.

“The PM should’ve overruled the Treasury months ago and now we’ve caused serious disruption to the defence industry at a time when we need to rearm,” one said.

Mark Mathieson MBE, CEO of defence SME PurpleSector, said that the uptick was “welcome” but lacked direction, saying: “Many UK-based SMEs that are trying to support the country by building and deploying sovereign capabilities, simply do not have the cash reserves to keep waiting for decisions and consequential actions.”

Georgia Pickering, Managing Director of CMS Strategic, which works with the defence industry, said the uplift would help deliver the MOD’s core programmes and provide a “morale boost” for its suppliers, but that “SMEs need loans and credit guarantees now to build the factories and equipment for the future.”

“A spending uplift without establishing a model to help the supply chain risks increasing inflation – not security,” she added.

A government spokesperson said: “The Defence Investment Plan will deliver the best kit and technology into the hands of our frontline forces at speed, while investing in and growing the UK economy. We are working to finalise the Plan and it will be published as soon as possible.”