The defense funding gap haunting Keir Starmer

LONDON — Beset by warnings of “corrosive complacency” from defense heavyweights, Keir Starmer is eyeing a stitched-together funding fix for the British armed forces that avoids a direct confrontation with his own MPs over the soaring cost of social security.

The U.K. prime minister is expected to resist calls for a major change to the country’s welfare system to pay for a massive promised uplift in defense spending. That leaves him searching for more limited savings from across government departments.

Britain’s defense budget has come under fresh scrutiny in recent days as George Robertson – a former NATO secretary general and British defense secretary who authored a landmark review of threats facing the U.K. – criticized a “corrosive complacency today in Britain’s political leadership” on the issue. “Lip service is paid to the risks, the threats, the bright red signals of danger,” Robertson warned. “But even a promised national conversation about defense can’t be started.”

Robertson highlighted serial delays to a promised Defence Investment Plan (DIP) — meant to allocate military funding over the next decade. That plan is stuck amid finger-pointing between the Ministry of Defence and the powerful Treasury, with military chiefs seeking more money and the finance department insisting on spending restraint.

The decision on what to prioritize, however, ultimately lies with Starmer. The prime minister told MPs last month the DIP was on his desk and that it was his job to resolve the funding question.

He has few good options available. Starmer has already cut overseas aid and unsuccessfully attempted to trim welfare, triggering a backbench rebellion in the process. It means it will now be extremely difficult for the prime minister to find extra funding from any single large swing of the axe — forcing him toward more piecemeal solutions. 

Luke Akehurst, a Labour MP on the right of the party, said the PM “faces some extremely difficult political choices about the trade-offs needed to fund increased defense spending, but there is no getting away from the need to get on with re-equipping and expanding our armed forces.”

Welfare dead-end

When it comes to finding the money, some avenues have been all but ruled out. Starmer’s government has faced fierce criticism over already-high tax levels, making new revenue increases unlikely. His Chancellor, Rachel Reeves, opposes any change to borrowing rules designed to keep the markets onside.

The government has so far given short shrift to alternative funding sources, such as proposals to join a Defense, Security and Resilience Bank or innovation bonds.

Influential figures in British security circles, such as Robertson and former No.10 foreign policy adviser John Bew, continue to argue that the government needs to completely rethink welfare expenditure — which has soared since the pandemic — in order to meet the threats facing the U.K.

However, Labour MPs from different segments of the 403-strong parliamentary party told POLITICO there was little appetite for significant welfare reforms, and that it would appear an even less attractive option after local elections in May, when the party will come under pressure on the left from the Green Party.

Calvin Bailey, a Labour MP on the House of Commons defence committee, said there was a need for “the urgent national conversation that Lord Robertson rightly highlights,” but called for “more creativity about solutions for capitalizing rearmament.”

The Royal Navy aircraft carrier HMS Prince of Wales departs Rosyth dockyard in Scotland in September 2019.

Graeme Downie, whose Dunfermline constituency is home to defense jobs at Rosyth Dockyard, said: “We must resist the narrative of this simply being a straight choice of defense or welfare. It is a false choice where, in all probability, defense loses, everyone is less safe and we’re unable to effectively tackle poverty either.”

A Labour MP who played a key role in last year’s welfare rebellion, granted anonymity like others in this piece to speak candidly, said they “just can’t see” the government trying again to make savings from welfare. 

A second Labour MP, this one in favor of changes to social security, acknowledged he was “in the minority,” while a third said defense “should have been funded by reducing the welfare bill. But we know what happened last summer when that was attempted — people don’t want to confront that choice.”

The fudge

What awaits Starmer instead is yet more delay and an awkwardly put-together solution dictated by his precarious political position.

The PM is likely to find more money for defense in the wake of May’s elections, however difficult it may be. When his premiership was rocked in recent months by direct challenges to his authority, his allies repeatedly made the argument that MPs should not seek to remove him because he represents stability at a time of global turbulence.

It would be “very hard” for Starmer to continue to project strength on the world stage without a boost to defense spending, as one former aide put it. “It’s self-evident the PM cannot fix U.S. relations, nor attend NATO in July, without a major new uplift,” said Sophia Gaston, research fellow at King’s College London. 

Starmer cannot make an announcement during Britain’s current, pre-election ban on new political communications. That gives him a narrow window for movement in the week of the King’s Speech on 13 May, after which parliament disbands for a week — pushing any statement into June.

As a fourth Labour MP put it on the defense spending promise: “No.10 rushed to get involved and then declared their neutrality.”

They argued that the government is “now in stasis until June… The machinery is not geared for action. There is no appetite for any great action or rocking the boat on anything.”

Government officials strongly reject this characterization, pointing out that Starmer has acted to boost defense spending and that the painstaking exercise of devising a comprehensive DIP is “long overdue.”

When the investment plan does eventually come, MPs expect that the prime minister and chancellor will make do and mend: paying for it through savings from disparate pots of funding across a number of departments due to a lack of other options.

A U.K. government spokesperson said: “We are delivering on the Strategic Defence Review to meet the threats we face. It is backed by the largest sustained increase in defense spending since the Cold War, with a total of over £270 billion being invested across this parliament.”