We can’t properly fund our Armed Forces in these dangerous times by raising growth-destroying taxes.
One month ago, on June 5, Sir Keir Starmer stood on the factory floor of a defence firm in Swindon and told the country: “It is our intelligence assessment, and the assessment of other countries in Nato, that there could be an attack by Russia on Nato as soon as 2030.” That would mean Britain would be directly at war with Russia for the first time in over a century.
He made this dire warning to emphasise the importance of a defence investment plan that was already late and rumoured to be far short of the extra £28bn the Chief of the Defence Staff assessed was the minimum needed by our Armed Forces.
Last week, Starmer, by then little more than a caretaker prime minister, unveiled this so-called “historic” defence investment plan. It amounted to barely half that minimum required to keep our nation safe. And it still only took Westminster-watchers and journalists a few hours to discover that even this weak plan had a £5bn black hole in its funding, and depended on £11bn of unidentified “efficiencies”.
Russia, the world’s largest country, has a formidable arsenal of nuclear weapons, and spends more on its military than anyone besides the US and China. In the past month alone, a Russian ship has fired on a civilian vessel in the English Channel. Meanwhile, a leaked Nato report reportedly ranked the UK 31 out of 32 in an assessment about how well member states were fulfilling their rearmament promises.
Starmer used to promise defence would be the organising principle of his government. He has failed to deliver. On Tuesday, he will be at the Nato summit in Ankara, where he will claim he’s committed to upholding the Western alliance and standing up for democracy. But his defence investment plan does not meet the moment. We must find the money to defend our country and we must give our military and defence industry the confidence to invest in our long-term security.
As Starmer himself said, Britain could be at war with a nuclear power by 2030. The stakes could not be higher. Yet under the Government’s plans, much of the money and, critically, new capability will not be available until after we could be at war. Starmer is dragging his heels and leaving a mess for his successor to clean up.
The Conservatives understand that the best way to prevent war is to prepare for it. That means properly funding our Armed Forces before it’s too late.
We are bringing back common sense and have set out credible ways to increase defence spending. We would start by restoring the two-child benefit cap and using the money to fund defence. We are clear that people on benefits should have to make the same choices as those who aren’t, and we believe it is imperative to reduce unsustainable welfare spending. We would also redirect money from wasteful net-zero projects into a £50bn sovereign defence fund to invest in next-generation military technology.
As the Labour Government prepares for a change of leadership, the debate is already moving in the wrong direction. When challenged about how he planned to fill the hole in the defence investment plan, Burnham told LBC there was “room for movement” on taxes. He’s right, but the only movement should be cutting taxes. But we know that isn’t what he intends to do.
This matters because defence cannot be funded by weakening the very economy that pays for it. New taxes on investment, enterprise and wealth creation may raise money on a Treasury spreadsheet in year one, but they make Britain poorer in years two, three and four. They drive away capital, punish risk-taking, and shrink the tax base we need for long-term defence spending. That is the Labour trap and Burnham has already fallen into it: tax more, grow less, then discover there is even less money for the Armed Forces.
We now face a summer of damaging speculation about which taxes might rise and which new bombshell is coming. Burnham’s favoured Land Value Tax would mean higher annual charges on many homes, a tax raid on millions of people living south of Manchester. And some of the other possible changes under discussion, such as equalising the rates of income tax and capital gains tax, would kill investment and risk-taking entirely. Even Rachel Reeves backed away from that terrible idea.
Defence and economic strength go hand in hand. A strong defence requires a strong economy. That has always been the Conservative belief. Britain should reach three per cent of GDP on defence by the end of the decade as an absolute minimum. But this can’t just be an argument about percentages. Three per cent of a growing, strong economy is much better than three per cent of Britain in the slow lane.
Labour is avoiding the difficult decisions on spending. The obvious place to find savings is the benefits bill. But Burnham is dancing around the issue because he knows Labour MPs will refuse to accept meaningful cuts. Burnham’s vague promises to reduce welfare costs over the long term might sound attractive, but in practice require even more spending.
The Liberal Democrats’ solution is more borrowing, when we are already spending more on debt interest than our defence. The Scottish Nationalists want to abandon Britain’s nuclear deterrent. And Reform has failed even to appoint a defence spokesperson, despite defence being one of the country’s defining issues.
The public needs honesty. Britain must live within its means while making the defence of the nation the government’s highest priority. This is the most dangerous security environment most of us have seen in our lifetimes. National defence cannot be an afterthought.
The defence of the realm is the first duty of government. Conservatives are doing the hard work now, building the plans we will use to deliver after the next election. These plans will rebuild our Armed Forces, grow the economy that pays for them, and keep Britain safe. We need serious people with real military expertise to help with this work. If you are one of them, please join us. Nothing is more important.
