**
The UK Treasury has not yet conducted the necessary assessments to determine how to meet the country’s commitment of spending 3.5% of its GDP on defence, according to Lucy Rigby, the chief secretary to the Treasury. During a recent joint session with defence committees, Rigby indicated that any additional funding for defence would ultimately fall to the next prime minister to address. This lack of clarity on future spending paths has raised concerns, particularly following the resignation of John Healey as defence secretary.
Treasury’s Lack of Analysis Raised Concerns
Rigby faced intense scrutiny during the session as MPs questioned her about the Treasury’s preparedness to tackle the significant financial commitments required to meet the NATO target. When asked whether an analysis had been performed regarding the necessary trade-offs, Rigby admitted, “No, is the short answer.” This revelation has left many questioning the government’s strategy and preparedness in regards to defence funding.
Labour leader Keir Starmer, currently attending his final NATO summit in Ankara, has pledged that the UK will achieve the 3.5% target by the year 2035. However, with the Treasury’s current lack of analysis, fulfilling this promise appears uncertain.
Financial Implications of Defence Spending
Committee member Bobby Dean highlighted the enormity of the financial adjustments required. He estimated that an additional £30-40 billion would be necessary, corresponding to an increase of 3p to 4p on all income tax rates. Rigby acknowledged that public support would be necessary for such a significant fiscal shift, hinting at the challenges that lie ahead.
Despite the government’s interim goal of reaching 3% defence spending in the upcoming parliament, Rigby noted that detailed plans would be deferred until the next spending review, anticipated in mid-2027. By that time, it is expected that Andy Burnham could be serving as prime minister.
The Fallout from Leadership Changes
Healey’s resignation, which came shortly before the controversial defence investment plan was unveiled, has further complicated the situation. This plan proposed an additional £15 billion in funding over four years, raising defence spending to 2.7% of GDP. Meanwhile, various Whitehall departments have been instructed to trim investment plans to accommodate this shift, with Rigby confirming that an extra £4.7 billion will need to be identified in the forthcoming autumn budget.
The Treasury’s recent approach, where projects are announced prior to securing full funding, has drawn comparisons to the so-called “black hole” in public finances that was cited when Labour assumed power two years ago. Rigby’s assertions that the current fiscal strategy is not uncommon have not assuaged concerns from committee members regarding the sustainability of this approach.
A Shift in Relationships between Departments
Rigby and Luke Pollard, the minister for defence readiness and industry, both remarked on the improved collaboration between the Treasury and the Ministry of Defence (MoD). Pollard, who has a naval background, humorously remarked that historically, the Royal Navy viewed the Treasury as one of its adversaries. However, he asserted that the relationship has improved significantly, alluding to a “journey” towards better cooperation.
Why it Matters
The ongoing uncertainty surrounding defence funding in the UK is a pressing issue that could have serious implications for national security and military readiness. As geopolitical tensions rise globally, the need for a clear and sustained commitment to defence spending has never been more critical. Without thorough analysis and strategic planning, the UK risks falling short of its NATO obligations, which could undermine both its military capabilities and international standing. The next prime minister will face the daunting task of navigating these financial challenges while ensuring the safety and security of the nation.
