“The commitment to upgrade Typhoon aircraft and investment in the Global Combat Air Programme, a vital long-term partnership between the UK, Italy and Japan, will support significant economic growth across the UK, including here in the North West.
“Our people are proud to play their part in supporting the Royal Air Force and its allies; strengthening our national security, and creating a positive impact on or communities, supply chains, and the economy.”
Setting out Britain’s wider spending plans on defence, Starmer announced that the DIP will be backed by £298bn of funding over the next four years, including the GCAP cash.
The government will boost funding for the nuclear deterrent to £64bn and he unveiled a £50bn export facility to help firms in the sector. More than £5bn will be spent over the next four years on the ‘drone transformation’ for the Armed Forces.
Starmer declared that the plans will enhance the economy, by creating ‘almost 60,000 jobs.’ And in his bullish speech, the soon-to-be ex-PM said: “Every pound in this plan will work twice, delivering economic growth and opportunity for the British people, and supporting more than half a million jobs by the end of the decade, as well as reinforcing our national security.”
He went on to say that by 2029, almost £80bn per year will be spent on defence. However, as Andy Burnham looks set to collect the keys to Number 10, the wrangling over the size of the nation’s defence budget is far from over.
In his damning resignation letter in June, John Healey said the DIP fell “well short of what is required for defence and the country at this dangerous time”.
And he expressed concern that the financial settlement, was “backloaded” when the “pressure of operations and imperative to speed up readiness to fight is in the first two years”.
He quit as the government looked set to announce a £13.5bn funding increase for the MoD over the next four years, less than half of the extra £28bn it had requested.
When the plan was finally made public, just before a key NATO summit in early July, the government had managed to raise that figure to £15bn.
The PM revealed the trade-offs that have been made to get to that number. Spending has been
Andy Burnham
reallocated from across Whitehall departments and some road and energy projects that are not ‘immediately vital’ will be scrapped.
But despite the extra funding, former Army chief General Sir Richard Barrons, a co-author of the 2025 Strategic Defence Review, warned the plan was “not going to crack the issue” of properly funding the nation’s Armed Forces.
Burnham, expected to be named PM this month, is understood to have signed off on DIP after his team was included in conversations with the MoD.
However, despite that sign-off, whoever is the next chancellor of the exchequer will have to find almost £5bn of the money committed in the plan in their autumn budget.
The question is how? Could they look to cut the welfare bill to pay more for defence? And, if so, how would that play amongst his party’s backbenchers? Or will the strategy be to increase tax or to borrow more?
All options have their political dangers, as does not finding the extra funding.
Leaving his successor to find the solution, Starmer has cautioned against going down the latter route, saying: “Defence bonds are just borrowing by another name.”
He added: “We’ve looked at this very carefully, but the fact is doing this through borrowing will push interest rates higher at a time when £1 in every £10 already goes on paying their interest.
“This government has fought hard to bring the public finances under control, and it has paid off helping to bring inflation and mortgage rates down. We should not sacrifice that.”
This political conflict looks far from settled and when it comes to paying for the nation’s defence it would seem that further battles lay ahead.
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