Sir Keir Starmer has unveiled the long-delayed defence investment plan (Dip), pledging billions to prepare Britain for war by 2030. The plan includes a £15 billion spending increase, funded by scrapping investments elsewhere, and focuses on drones, nuclear deterrent upgrades, and a new stealth fighter jet.
Defence Spending Increase
Chancellor Rachel Reeves confirmed the Treasury provided an extra £15 billion above last year’s increase, which was paid for by cutting the aid budget. Some £3.4 billion was absorbed by the Treasury through reprioritising and reducing other departments’ budgets. This figure exceeds the previous £13.5 billion offer but falls short of the £28 billion defence chiefs reportedly requested. Starmer emphasised he would not cut day-to-day frontline services, instead scrapping capital projects not “immediately vital,” such as some roads and energy projects. Annual defence spending is set to reach £80 billion by 2029, up from £54 billion when Labour came to power.
Defence Bonds Ruled Out
Starmer rejected calls from the Liberal Democrats to issue “defence bonds,” describing them as “borrowing by another name.” He stated the government examined the proposal carefully but concluded it would push interest rates higher, noting that one pound in every ten already goes on debt interest.
Drone Transformation and New Fighter Jet
Learning from conflicts in Ukraine and Iran, Starmer pledged over £5 billion over four years for a “drone transformation.” This includes £650 million for combat and surveillance drones for land forces, aiming to increase the Army’s “lethality” ten-fold. The Royal Navy will adopt a “hybrid” model with smaller autonomous vessels alongside crewed ships. Additionally, over £8 billion will fund the Global Combat Air Programme to develop a next-generation stealth fighter jet with Japan and Italy, supported by autonomous “wingmen” invisible to enemy radar.
Nuclear Deterrent Upgrade
The plan includes a £64 billion upgrade to Britain’s nuclear deterrent, covering new Dreadnought submarines, a new sovereign warhead, and 12 F35-A jets capable of carrying nuclear weapons. Four Dreadnought boats will replace the current Vanguard class from the 2030s. Part of this funding supports a decade-long £26 billion overhaul of naval bases at Faslane, Portsmouth, and Devonport, dubbed “Project Royal Oak.”
Defence Exports Boost
Starmer announced a “once-in-a-generation” £50 billion defence export facility to help British firms compete internationally, aiming to “support British defence businesses to create more jobs and opportunity up and down the country.”
Successor Expected to Back Plan
Starmer described the Dip as a “platform on which whoever comes after me can build,” amid speculation Andy Burnham could seek to rewrite parts of the plan. He added it was “something which any Labour prime minister would want to stand behind.” He did not confirm whether Burnham had seen or signed off on the plan.
Efficiency Savings and Cuts
The plan outlines nearly £11 billion in savings the Ministry of Defence must achieve over four years, though the spending increase is not conditional on these savings. Savings come from reducing the armed forces workforce (£3.3 billion), cutting consultancy spending, and expanding technology use. Older equipment will be scrapped: Storm Shadow missiles will be replaced by Stratus “stealth” missiles developed with France and Italy; Skynet 6 narrowband satellite system is cancelled, extending Skynet 5; Type 83 and 32 frigates are axed; two Type 23 frigates and older Chinook helicopters retired; and 34 Wildcat helicopters will be reduced to 28 from 2027.
