
What’s a boy to do? What’s the country to do? From trying to sell a new security alliance in Brussels, to the perilous quick-step with a raging Donald Trump – how, we wonder, does the King feel about Canada being bullied into becoming the US’s 51st state? – to Putin’s menacing advance in Ukraine, Keir Starmer finds the world stage this month about as cosy as one of the grimmer moments of Wagner.
There’s uncertainty on every side. Britain is the target of brickbats from around the world – we are weak, disorderly, deluded. And for Starmer, there is only one surefire course of action: Britain must start to defend itself properly. Without a stronger UK defence posture, there will be no more grand dinners at the Palais d’Egmont urging other nations to shoulder the burden in the fight against Russia; no more special consideration from Trump; no more photogenic flak jackets in wintry climes.
He knows this. And back home, the struggle over defence spending is coming to a head. Even ahead of the Treasury’s all-important Spending Review in June, the huge dilemma over Britain’s military budget is overshadowing everything else. The Chancellor Rachel Reeves and the Prime Minister have been having tense private conversations. The Treasury and the Ministry of Defence are discussing some radical ideas. And there are noises off. “The Americans,” says one senior source, “are going berserk.”
Marco Rubio, Donald Trump’s Secretary of State, scheduled to meet Foreign Secretary David Lammy in Munich shortly, is said to be “appalled” by a recent press story suggesting the Treasury was delaying Britain’s increase in military spending 2.5 per cent of GDP by another seven years.
And appalled, right now, is not a good look in Washington. One rare bright spot for the UK economy recently is that while Trump unveils tariffs targeting Mexico, Canada, China and the EU, Britain has so far not been singled out. “I think that one can be worked out,” Trump says. But the threat is always there. London faces a new “get into line” feedback loop which links defence spending and tariffs.
The problem is easy to lay out. How do we get a properly equipped army which can do its job in Europe; enough troops; a missile defence; protection for undersea cables; a cyber capability and the rest when there is no money?
The Strategic Defence Review under Lord Robertson is due to land on Whitehall desks by 14 February. It has examined 25 different defence propositions, with more than 800 submissions: the review is under tight security but those who have seen it say it will be “profoundly transformational” and will “change everything” in British defence thinking. It ranges from recent battlefield lessons from Ukraine to missile defence, the woeful recent history of defence procurement, and the cost of projecting naval power to the other side of the world.
It also comes with a price tag. Senior British military figures, like the Americans, believe Britain must go beyond 2.5 per cent to nearer 3 per cent of GDP – and quickly. In private, both Starmer and Reeves are said to be clear about the need for a jump in spending. Further rounds of defence cuts now would, in the words of one senior minister, “blow our entire foreign policy to pieces”.
But this comes just as the Parliamentary Labour Party steels itself for a very tough spending round. Treasury people are bracing themselves for difficult conversations with the likes of Bridget Phillipson, the Education Secretary, and Health Secretary Wes Streeting. “More money for missiles means less money for hospitals and kids,” says an official, bleakly.
Defence sources suggest that a more creative and imaginative approach will be needed. There have been calls in Germany for a specific defence tax; another alternative might involve “war bonds” which the public could subscribe to for five dangerous years with a guaranteed premium. One senior minister tells me that has been discussed with allies in recent months – but while it is “conceptually strong”, there is still much work to be done on the practicalities.
Downing Street thinks that because some of the increase will be capital spending, the overall impact on Treasury budgeting may be less dramatic than it looks at first sight. Whitehall is also examining the US experience in the use of investment funds and private capital in growing defence. “In the UK we have been entirely myopic in regarding investment in defence as solely about public money channelled through the MoD,” says one defence source.
This is part of a quiet but major rethinking of defence procurement, which has been a scandal for years. In 2021 the Public Accounts Committee described Britain’s system as “broken” and wasting billions of pounds while two years later the House of Commons Defence Committee found it “highly bureaucratic, overly stratified, far too ponderous and… with very poor accountability”. There have been repeated reports about fraud, theft and corruption. The Prime Minister recently talked about “the complete rewiring of the British state”. Ministers think the Ministry of Defence is an obvious place to start.
Sadly, not all the military spending dilemma can be dealt with structurally; there are more immediate pressures. Assuming Trump strikes a deal with Putin over Ukraine, where the front line now looks fragile, then the UK will be expected to lead among the European nations providing troops as peacekeepers along the thousand-mile border. Nato’s 23-nation Allied Rapid Reaction Corps is headquartered in Gloucester, under Lieutenant General Ralph Wooddisse. But is the British army well-enough equipped, with sufficient medical and logistics back-up to stay the course – we may be talking years – on a perilous front line?
The Defence Secretary, John Healey, has spoken about inheriting an army hollowed out and underfunded, and a recent Lords report concluded the same: “Successive governments have attempted to maintain the notion of the UK as a global power, but the war in Ukraine has been a wake-up call, laying bare the gap between that ambition and reality.”
That gap could be exposed very soon. The pledge to spend more on defence was actually in the Labour manifesto, but people on all sides describe hard spending decisions this spring. Looking at policing, welfare, education and the justice system, one can see a brutal crunch and perhaps a political crisis coming soon.
Thus far, Starmer has kept his top team quiet. He will want to avoid a repetition of what happened in 1998 when the then chancellor Gordon Brown wanted £2bn taken out of the defence budget. Only after the defence ministers George Robertson, John Reid and John Spellar arrived late at night at Tony Blair’s flat and threatened to resign was this prevented.
Conversely, a determined pivot to national security would do no harm to a government which has seemed recently to be searching for a sense of purpose. Reeves’ drive against deregulation and for greater productivity may well result in a healthier economy in a few years’ time. Her recent speech in Oxford, proclaiming support for a third Heathrow runway and an interconnected Oxford and Cambridge technology hub, is lauded by fellow cabinet ministers as “the first time we have felt as if we were dominating the agenda for months”. But right now, as the recent decision by AstraZeneca to pull its planned £450m investment in a Merseyside vaccine plant underlines, it is hard for ministers to call this a growth government.
“Security government” is still up for grabs, however. Given the state of dangerous international relations, it would be popular, and it plays to Keir Starmer’s natural strengths. As Labour eyes up Reform, it should remember that in general, a government which knows what it’s about, does better than one which doesn’t.
[See also: Labour needs to spend more]
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This article appears in the 05 Feb 2025 issue of the New Statesman, The New Gods of AI