Starmer warns Burnham not to borrow to fund defence as he reveals £15bn plan

Keir Starmer speaking during a visit to Malloy Aeronautics in Berkshire after the publication of the long-delayed defence investment plan on Tuesday.

Photograph: Stefan Rousseau/PA Keir Starmer speaking during a visit to Malloy Aeronautics in Berkshire after the publication of the long-delayed defence investment plan on Tuesday.

Photograph: Stefan Rousseau/PA Starmer warns Burnham not to borrow to fund defence as he reveals £15bn plan PM unveils long-awaited defence investment plan, which he says will mean hit to road, housing and energy schemes UK politics live – latest updates Keir Starmer has warned his successor not to borrow more to pay for defence as he raided energy, transport and housing projects to plug a military spending deficit with an extra £15bn over the next four years.

The prime minister revealed his long-awaited defence investment plan (Dip) on Tuesday, after an 11-month government row that cost him a defence secretary and arguably contributed to his downfall.

Starmer said the government had found the £15bn for the plan by taking money from road and energy schemes.

A £9bn scheme to upgrade military housing over the next decade has been adjusted so costs fall after 2030.

It was a £1.5bn improvement obtained by new defence secretary, Dan Jarvis, who is fighting to keep his job after Starmer leaves, compared with the £13.5bn offered to John Healey, who resigned in protest at the money he had been offered.

In his introduction to the investment plan, Jarvis said the extra money was needed because Labour had “inherited a defence programme that was underfunded, overcommitted, and insufficiently attuned to the threats we now face.

47 out of 49 programmes were delayed or over budget”.

Overall defence spending will rise marginally from 2.6% of GDP in 2027 to 2.7%, or nearly £80bn, by 2030, which Starmer said would put the UK “on a trajectory” to hit 3% in the next parliament.

Dan Jarvis at an Armed Forces Day event in Aldershot, Hampshire, on Saturday.

Photograph: Jonathan Brady/PA As the plan emerged, Healey said the budgets were too small.

“Britain will still be spending just 2.7% of GDP in 2030, the date when Nato has warned we could face a Russian attack,” he said.

A clear target date to hit 3% was necessary, he added.

Starmer urged his successor, likely to be the Labour MP Andy Burnham, to find more money for defence at the next spending review, though he warned not to borrow more to pay for it.

The outgoing prime minister said defence “must be the number one priority at the next spending review”.

The Nato target, agreed by Starmer, is to reach 3.5% by 2035.

The Guardian revealed last week that some of the prime minister’s allies would use the transition period to recommend Burnham revive the idea of “defence bonds”, which was previously rejected by the Treasury.

“Defence bonds are just borrowing by another name,” he told an audience at a drone-making company in Berkshire.

“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.” The prime minister’s plan means the government will now spend an extra £15bn on defence over the four years between 2026-7 and 2029-30, beyond the £283bn it had previously allocated.

It comes at a time when, according to the full 80-page plan released in the afternoon, “demands on defence are rising”.

It warns that Russian “aggression is growing around our shores”, that the Iran war has reinforced the need to boost air and missile defence and that “the US is rightly demanding that Europe steps up”.

The former defence secretary John Healey (right) in a Chinook helicopter with his Norwegian counterpart, Tore O Sandvik, in Norway in February.

Photograph: Leon Neal/Getty Images Key programmes that will be funded over the four years include: £47bn on new nuclear submarines, including the Dreadnought replacement for the Trident submarines and the new Aukus attack submarine project, being developed with Australia and the US. £13bn on a new nuclear warhead and £1.7bn on nuclear fuels plus an unspecified commitment – estimated at £1bn – on 12 new Lockheed Martin F-35A jets capable of carrying nuclear bombs that will enter service in the 2030s. £8.6bn on the development of the Gcap next-generation fighter aircraft in a joint project with Italy and Japan, plus an extra £1.1bn to keep existing Typhoons into service until the 2040s.

A total of £5bn more on drones, £1bn more than announced in last year’s strategic spending review, with investments in air, land, sea and underwater drones to operating alongside soldiers, warships and fighter jets.

A total of £600m was found for drone spending in particular after Jarvis, the new defence secretary, agreed to sacrifice other parts of his budget to do so.

He also secured another £500m for day-to-day needs and £400m extra for the Treasury-backed multilateral defence mechanism funding scheme.

It would be funded by £10.7bn of efficiency savings, including cutting civil servants by 10% and spend on consultants by £1bn.

A few military capabilities would be retired early, including 34 Wildcat helicopters used by the army, while investment in Storm Shadow missiles would be diverted in favour of the Stratus replacement.

The prime minister did not deny reports on Tuesday that money had come from a plan to push back upgrades to military housing, something Jarvis’s predecessor, Healey, had prioritised.

Healey announced £9bn last year to help fix more than 40,000 military homes.

Starmer did admit, however, that much of the additional £15bn was coming from other departments’ capital budgets, meaning infrastructure projects may have to be delayed, scaled back or scrapped.

Starmer, Jarvis and (centre) the chancellor, Rachel Reeves, at Malloy Aeronautics in Berkshire after the publication of the long-delayed plan.

Photograph: Stefan Rousseau/PA “Some capital projects, for example, on roads and energy, which are important but not immediately vital, will no longer go ahead as planned,” he said.

“But this is about taking the necessary choices, the right choices to protect our nation.” Asked about reported cuts to the military housing programme, the prime minister added: “We have put a lot of money into military housing, and I’m proud that we have … Of course, I have to balance that against investment in the military capability that we need.” Despite the sacrifices imposed on the Ministry of Defence (MoD) and other departments, military chiefs have complained that the additional funding falls short of what is needed.

The MoD asked last year for £28bn beyond what had been allocated as part of the spending and defence reviews, with Healey arguing to lift defence spending to 3% of GDP by 2030.

This plan grants just over half what was demanded.

Starmer wanted to announce the Dip before travelling to the Nato summit in Ankara in July and before departing as prime minister.

Burnham, whose most likely rivals have announced they will not stand against him, is likely to take over as party leader on 17 July and become prime minister on 20 July.

Starmer said he was sure his successor would not seek to unpick the settlement he agreed, and would prioritise defence investment at the next spending review.

“[The Dip] is something which any Labour prime minister would want to stand on, because the first duty of any prime minister is the defence and security of the country,” he said.

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