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By Lord Watson of Wyre Forest
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Calls To Increase Defence Spending Could Clash With Labour's Tight Fiscal Rules

Keir Sarmer, David Lammy and Lisa Nandy arrive at the cabinet office (Alamy)

4 min read

Labour has made a commitment to tight fiscal rules a core part of the offering to voters they hope will propel them to Government at the next general election, but they could make it difficult to deliver an increase to defence spending.

Starmer has pledged that Labour would raise defence spending to 2.5 per cent of GDP when economic conditions allow if Labour wins the next election, mirroring the Government’s figure and timeline for funding. 

But having also promised to mirror Prime Minister Rishi Sunak’s promise to reduce public debt as a percentage of GDP, if they reach Downing Street Labour could be met with the same criticism levelled at the current government that an increase to defence spending is needed sooner than these restrictions allow, and that a greater percentage would be needed to revive depleted armed forces – especially in light of inflation. 

Edward Arnold, a Senior Research Fellow at defence think tank RUSI, told PoliticsHome a future Labour Government could find it as difficult as the current administration to “unlock” funds for defence.

“At the moment the difficulty is the tight control over fiscal rules and policy announcements. Labour will criticise the current Government for their cuts, but they won’t go as far to say they would reverse them,” he said.

One major challenge facing the Ministry of Defence (MoD) is retention in the armed forces which will prove costly to rectify. Last year more army personnel left the forces compared to those it recruited, according to a UK Parliament report. In only six of the last 23 years has the net flow of people coming in to the military has been greater than those leaving. 

“It's not just as simple as we need 15-20,000 more soldiers,” Arnold continued. “It has to be a fundamental shift in how the UK attracts and retains and gets them into the right places. That doesn't take a year, that is a five-to-10-year process.”

Labour has been keen to highlight army and that navy recruitment targets have been missed every year from the Government since 2010, The House Magazine reported. The army is being reduced to 73,000 soldiers by 2025, which is far fewer than 100,000 in service when Labour left government.

Labour is expected to take a number of seats from Tories at the next general election. Some Tory MPs with majorities of more than 10,000 have even accepted they may face defeat. The same cohort of Conservatives believe their party has failed on defence policy and have called for higher spending in order to outpace Labour on the issue. 

But a former cabinet minister accused Labour of a “vague pledge to match Conservative plans at an undefined time in the future". 

"Starmer asked us to put [Corbyn] who wanted one sided nuclear disarmament into No 10," they added. "Why would anyone trust him with our national security?”

Corbyn, who was Labour leader between 2015 and 2019, has spent his political career campaigning for nuclear disarmament and in 2019 the Party stood on a manifesto to maintain defence spending of two per cent of GDP. But since Starmer became Labour leader in 2020 there has been a clear break from Corbynism, and Corbyn himself has been ejected from the party over his refusal to apologise for the party's record on antisemitism. 

A minister told PoliticsHome Labour's decision to match the Government's target was “meaningless” and was purely about “political placement”.

John Healey, the Shadow Defence Secretary, has previously said a strong relationship with the Treasury would be vital to future defence spending given the scale of its cost. In an interview with The House Magazine, he said this required resetting "the relations between defence and the rest of Whitehall, particularly the Treasury and the Foreign Office”.

But large problems in the MoD await whoever wins the next general election. The next Government will likely have to decommission Britain's existing nuclear submarines by 2026, and reform the "lack of discipline" when it comes to budgeting in the department, according to a House of Commons report. 

In a reverse of the historical norm, Labour is now more trusted than the Tories on defence, and is more trusted by the electorate on national security by 11 percentage points, according to polling commissioned by The Daily Mail.  

A government spokesperson said it has been clear that we need to spend more on defence in a more dangerous and contested world.

“That is why the Government has overseen the largest sustained defence spending increase since the end of the Cold War - with a £24 billion uplift in cash terms since 2020, and an additional £11 billion at last year’s Spring Budget," they said. 

“We have committed to increase that to 2.5% of GDP on defence, when the economic situation allows.”

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