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10 July 2024

Labour’s quandary over defence spending

Keir Starmer joins the Nato summit in DC under pressure from his own budget restraints and the prospect of a Trump presidency.

By Freddie Hayward

Joe Biden and Keir Starmer could not be going into the Nato summit in Washington DC in more different positions. One has brought in his party from a 14-year political exile; the other wears special shoes to stop him falling over. Biden’s precarity will be on Labour’s mind over the next two days.

In their first call, Biden told Starmer that he wants to protect the “special relationship” between these two English-speaking countries, while Starmer describes the Democrats as Labour’s “sister party”. At the same time, he and David Lammy, the Foreign Secretary, have chalked up successive meetings with leading Republicans in preparation for a Donald Trump victory in November.

That would make Labour’s quandary over defence spending worse. The party wants to increase expenditure but doesn’t have the money within the self-imposed tax and debt constraints. When he was last in the White House, Trump forced European countries to spend more, and we can expect him to exert similar pressure if he wins a second term. On top of this, Europe’s Nato member states might find themselves compensating for cancelled US aid to Ukraine.

The Tories began to reverse the defence spending cuts of the 2010s, with real spending 8.4 per cent higher in 2024-25 compared to four years ago. But the political consensus now demands more: both parties want to increase spending to 2.5 per cent of GDP. The Tories said by 2030. Labour didn’t put a date on it. Hence the pressure on Starmer in Washington DC.

In response, Starmer has said a “roadmap” to 2.5 per cent will be laid out as part of the MoD’s strategic review. Pressure is building. The outgoing army chief, General Sir Patrick Sanders, has said Britain could not replicate the 2003 Iraq invasion or retake the Falkland Islands as in 1982. As I wrote in January, the 2.5 commitment has the potential to become a Green New Deal-esque problem for Labour. The renewal of Trident, restoring weapons stocks, paying soldiers properly and fixing their poor accommodation will all cost money. The question is whether Starmer has time to wait for economic growth.

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[See also: How will Rishi Sunak fund higher defence spending?]

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