Cabinet relations have been left badly damaged by the protracted row over the defence investment plan (Dip), according to Whitehall sources who say the standoff has led to some of the worst infighting since Labour took power. The plan, which is expected to be published in the coming weeks, has been delayed for months due to disputes between the Ministry of Defence, the Treasury and No 10.
Prime Minister Keir Starmer has put heavy pressure on Chancellor Rachel Reeves to agree additional defence spending of about £15bn, funded in part by other departments cutting their capital budgets by about 1%. The energy and transport departments have agreed bigger cuts, though Transport Secretary Heidi Alexander successfully lobbied to protect spending on new buses, trains and HS2.
The MoD initially told the Treasury that their plans were fully costed, but later requested billions more, infuriating officials. The Treasury refused to budge for weeks, with Reeves declining to sign off on anything above £12bn. Starmer intervened to secure around £15bn, with the Treasury taking control of a multibillion-pound fighter jet programme in return.
Allies say Starmer wants the Dip to form part of his legacy should he be replaced as prime minister by Greater Manchester mayor Andy Burnham. The plan is expected to be announced before a Nato summit early next month. A No 10 spokesperson said the prime minister is determined to “get the Dip right” to deliver the best equipment to frontline forces.
Defence Secretary John Healey’s allies argue that escalating global conflicts, including commitments to Ukraine and a possible mission in the Strait of Hormuz, forced the request for more money. The MoD has a “terrible record” in keeping costs down, according to one government source, making the additional request galling.
