Labour leader Keir Starmer's commitment to raise Britain's defence spending to 2.5% of GDP threatens to undermine the country's economic security, according to a detailed analysis published by leading economists. The pledge, made during a campaign event in Birmingham, would require an additional £15 billion annually by 2030, potentially diverting funds from critical public services.
Economic consequences of higher military spending
The analysis by the Institute for Fiscal Studies (IFS) warns that such a large increase in military expenditure could lead to higher borrowing or cuts to healthcare, education, and infrastructure. "Starmer's proposal risks repeating the mistakes of past governments that prioritised defence over domestic investment," said IFS director Paul Johnson. "Without a clear plan for funding, the UK could face a decade of austerity."
Britain currently spends around 2.1% of GDP on defence, meeting NATO's target. Starmer's plan would push spending to levels not seen since the Cold War, but the IFS argues that the economic trade-offs are too severe. The additional £15 billion could instead be used to reduce the national debt or invest in green technology and social care.
Impact on public services and debt
If funded through borrowing, the UK's national debt could rise by 1.5% of GDP, adding pressure to already strained public finances. Alternatively, cuts to other departments would be required. The IFS estimates that a 0.4% of GDP increase in defence spending would necessitate a 4% cut to health, education, and social care budgets combined.
"Starmer's defence pledge is a political move that ignores the fiscal realities," commented former Treasury official Catherine Haddon. "The UK cannot afford to spend more on the military without jeopardising its long-term economic stability."
NATO commitments and strategic priorities
Starmer has argued that the increase is necessary to meet NATO expectations and counter threats from Russia and China. However, critics point out that the UK already meets the 2% target, and that further increases should be tied to a comprehensive defence review. "We need a strategic debate about what our military priorities are, not arbitrary spending targets," said defence analyst Sophia Gaston.
The Labour leader's proposal has also drawn criticism from within his own party, with some MPs warning it could alienate voters who want more investment in public services. Shadow defence secretary John Healey defended the plan, stating, "A strong economy requires a strong defence. This investment will protect British jobs and security."
The IFS analysis underscores the difficult choices facing the next government, regardless of who wins the election. With the UK's debt-to-GDP ratio already above 100%, any significant increase in spending must be carefully balanced against other priorities.
