UK defence funding plan faces leadership clash before Nato summit

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UK defence funding and Nato

Highlights

Starmer attempts to finalize a long-delayed defence investment plan before the Nato summit amid internal leadership disputes and potential revision by likely successor Burnham.
Chancellor Rachel Reeves authorizes about £13.5 billion in additional military funding, but outgoing defence secretary Healey argues it is insufficient and urges a 3 per cent of GDP target by 2030.
UK's current plan would raise defence spending to only 2.68 per cent of GDP, as the country slips down Nato rankings while other European nations seek to signal increased responsibility to the U.S.

Funding plan timeline and leadership dispute

As reported by Financial Times, Starmer is trying to push through the long-delayed defence investment plan before the Nato summit, despite mounting resistance inside government and uncertainty over whether his likely successor would keep it intact. The blueprint has been the subject of internal conflict since last year and the tensions culminate this month in the resignation of defence secretary John Healey.

Burnham wants to review the plan himself rather than simply approve a proposal drafted under Starmer, according to people familiar with his thinking. That raises the prospect that any document published by Starmer could later be revised or reversed if Burnham enters Number 10, which could happen by July 17 if no other Labour MP challenges him for the party leadership.

Starmer, who announces on Monday that he will end his six years as Labour leader and two years as prime minister, sees the defence plan as a central part of his legacy, officials say. His appearance at next month's Nato summit is likely to be his final overseas engagement as prime minister, increasing pressure to present a credible public spending framework before the meeting.

Budget pressures and UK defence implications

Chancellor Rachel Reeves says she is confident the plan will be published before the Nato summit and tells MPs it will include more money, spent more effectively, to match the scale of the threats facing the country. She also says she meets on Monday with Dan Jarvis, who succeeds Healey as defence secretary, and with Air Chief Marshal Sir Richard Knighton, head of the UK military, to discuss the package.

Reeves approves about £13.5 billion in additional military funding in the latest version of the plan, but Healey says in his resignation letter that the amount is not enough to protect the UK. He urges the government to commit to a target date for defence spending to reach 3 per cent of GDP in 2030, while saying Starmer's proposed plan reaches only 2.68 per cent and falls short of what current conditions require.

The dispute comes as the UK slips down Nato capability and spending rankings while other European countries try to show U.S. President Donald Trump that they are taking greater responsibility for continental defence. One defence figure says the Ministry of Defence is working intensively on the final plan but remains doubtful that Starmer can break the deadlock, arguing that the key political judgment now rests with Burnham.

Our earlier article on Labour’s leadership transition after Keir Starmer’s resignation outlined how Andy Burnham emerged as the frontrunner to take over, with a fast-track handover potentially putting him in Number 10 by mid-July. We noted that the unusually rapid turnover at the top of UK politics was fuelling uncertainty for markets, businesses and international partners, with particular focus on Burnham’s approach to fiscal discipline and core policy priorities.

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