The UK will be forced to agree this month to increase defence spending to 3.5% of national income within a decade as part of a NATO push to rearm and keep the US on side, Sky News understands.
The certainty of a major policy shift means there is bemusement in the Ministry of Defence (MoD) about why Sir Keir Starmer‘s government has tied itself in knots over whether to describe an earlier plan to hit 3% of GDP by the 2030s as an ambition or a commitment, when it is about to change.
The problem is seen as political, with the prime minister needing to balance warfare against welfare – more money for bombs and bullets or for winter fuel payments and childcare.
Image: Prime Minister Sir Keir Starmer during a visit to a military base training Ukrainian troops in April. File pic: PA
Sir Keir is due to hold a discussion to decide on the defence spending target as early as today, it is understood.
As well as a rise in pure defence spending of 3.5% by 2035, he will also likely be forced to commit a further 1.5% of GDP to defence-related areas such as spy agencies and infrastructure. Militaries need roads, railway networks, and airports to deploy at speed.
This would bolster total broader defence spending to 5% – a target Mark Rutte, the head of NATO, wants all allies to sign up to at a major summit in the Netherlands later this month.
It is being referred to as the “Hague investment plan”.
Asked what would happen at the summit, a defence source said: “3.5% without a doubt.”
Yet the prime minister reiterated the 3% ambition when he published a major defence review on Monday that placed “NATO first” at the heart of UK defence policy.
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1:46
What’s in the UK Strategic Defence Review?
The defence source said: “How can you have a defence review that says NATO first” and then be among the last of the alliance’s 32 member states – along with countries like Spain – to back this new goal?
Unlike Madrid, London presents itself as the leading European nation in the alliance.
A British commander is always the deputy supreme allied commander in Europe – the second most senior operational military officer – under an American commander, while the UK’s nuclear weapons are committed to defending the whole of NATO.
Even Germany, which has a track record of weak defence spending despite boasting the largest economy, has recently signalled it plans to move investment towards the 5% level, while Canada, also previously feeble, is making similar noises.
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2:37
Is the UK battle ready?
The source signalled it was inconceivable the UK would not follow suit and said officials across Whitehall understand the spending target will rise to 3.5%.
The source said it would be met by 2035, so three years later than the timeline Mr Rutte has proposed.
Defence spending is currently at 2.3%.
A second defence source said the UK has to commit to this spending target, “or else we can no longer call ourselves a leader within NATO”.
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Sky News’s political editor Beth Rigby challenged the prime minister on the discrepancy between his spending ambitions and those of his allies at a press conference on Monday.
Sir Keir seemed to hint change might be coming.
“Of course, there are discussions about what the contribution should be going into the NATO conference in two or three weeks’ time,” he said.
“But that conference is much more about what sort of NATO will be capable of being as effective in the future as it’s been in the last 80 years. It is a vital conversation that we do need to have, and we are right at the heart of that.”
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New Sky News podcast launches on 10 June – The Wargame simulates an attack by Russia to test UK defences
Mr Rutte, a former Dutch prime minister, said last week he assumes alliance members will agree to a broad defence spending target of 5% of gross domestic product during the summit in The Hague on 24 and 25 June.
NATO can only act if all member states agree.
“Let’s say that this 5%, but I will not say what is the individual breakup, but it will be considerably north of 3% when it comes to the hard spend [on defence], and it will be also a target on defence-related spending,” the secretary general said.
The call for more funding comes at a time when allies are warning of growing threats from Russia, Iran, and North Korea as well as challenges posed by China.
But it also comes as European member states need to make NATO membership seem like a good deal for Donald Trump.
The leaders of all allies will meet in The Hague for the two-day summit.
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The US president has repeatedly criticised other member states for failing to meet a current target of spending 2% of national income on defence and has warned the United States would not come to the aid of any nation that is falling short.
Since returning to the White House, he has called for European countries to allocate 5% of their GDP to defence. This is more than the 3.4% of GDP currently spent by the US.
Mr Rutte is being credited with squaring away a new deal with Mr Trump in a meeting that would see allies increase their defence spending in line with the US president’s wishes.
The NATO chief is due to visit London on Monday, it is understood.
The cobbled streets of Newport in Middlesbrough survive from the Victorian era.
The staggering levels of child poverty here also feel like they belong in a different time.
Six out of every seven children in Newport are classified as living in poverty.
Image: Six out of every seven children in Newport are classified as living in poverty
The measure is defined by the Child Poverty Action Group as a household with an income less than 60% of the national average.
More than half of children across the whole of the constituency of Middlesbrough and Thornaby East are growing up in poverty.
As a long-awaited new strategy on child poverty is expected from the government, much of the focus on tackling the problem has been placed on lifting the two-child cap on benefits for families.
Researchers say there is direct link between areas with the highest rates of child poverty and those with the highest proportion of children affected by that two-child cap.
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Image: The two-child benefit cap means Gemma Grafton and Lee Stevenson receive no additional universal credit for three-month-old Ivie
Mother-of-three Gemma Grafton said: “Maybe if families do have more than two children, give them that little bit of extra help because it would make a difference.”
Three months ago, she and partner Lee welcomed baby Ivie into the world. With two daughters already, the cap means they receive no additional universal credit.
“You don’t seem to have enough money some months to cover the basics,” said Lee.
“Having to tell the kids to take it easy, that’s not nice, when they’re just wanting to help themselves to get what they want and we’ve got to say ‘Try and calm down on what you’re eating’ because we haven’t got the money to go and get shopping in,” added Gemma.
Image: Katrina Morley, of Dormanstown Primary Academy, says lack of sleep affects concentration
Image: Tracey Godfrey-Harrison says parents ‘are crying that they’re failing’
The couple had to resort to paying half of the rent one month, something they say is stressful and puts their home at risk.
Those who work in the area of child poverty say they are engaged in a battle with child exploitation gangs who will happily step in and offer children a lucrative life of crime.
“Parents are crying that they’re failing because they can’t provide for their children,” said Tracey Godfrey-Harrison, project manager at the Middlesbrough Food Bank.
“In today’s society, it’s disgraceful that anyone should have to cry because they don’t have enough.”
In the shadow of a former steelworks, Dormanstown Primary Academy serves pupils in a community hit hard by the economic collapse that followed.
The school works with charities and businesses to increase opportunities for pupils now and in the future.
Katrina Morley, the academy’s chief executive, said: “A child who hasn’t been able to sleep properly can’t concentrate. They’re tired. We know that the brain doesn’t work in the same way. A child who is hungry can’t access the whole of life.
“When you face hardship, it affects not just your physiology but your emotional sense, your brain development, your sense of worth. They don’t get today back and their tomorrow is our tomorrow.”
Image: Dormanstown Primary Academy serves pupils in a community hit hard by the closure of a steel plant
Image: Barney’s Baby Bank founder Debbie Smith says local people ‘are struggling with food’
The school’s year six pupils see the value of things like the on-site farm shop for families in need.
They are open about their own worries, too.
Bonnie, 10, said: “I think that’s very important because it ensures all the people in our community have options if they’re struggling.
“It can be life-changing for families in poverty or who have a disadvantage in life because they don’t have enough money and they’re really struggling to get their necessities.”
Mark, also 10, said: “I worry about if we have nowhere to live and if we haven’t got enough money to pay for our home. But at least we have our family.”
They also see the homelessness in the area as the impact of poverty. “I think it actually happens more often than most people think,” said Leo, “because near the town, there’s people on the streets and they have nowhere to go.”
The school is one of many calling for the lifting of the two-child cap.
The need for life’s essentials has prompted more than 50 families to register for help at Barney’s Baby Bank in the last 11 months. Nappies, wipes, clothing, shoes, toys, are a lifeline for those who call in.
Founder Debbie Smith said local people “are struggling with food. They’re obviously struggling to clothe their babies as well. It’s low wages, high unemployment, job insecurity and that two-child benefit cap”.
“Middlesbrough does feel ignored,” she added.
A government spokesperson said: “Every child, no matter their background, deserves the best start in life. That’s why our Child Poverty Taskforce will publish an ambitious strategy to tackle the structural and root causes of child poverty.
“We are investing £500m in children’s development through the rollout of Best Start Family Hubs, extending free school meals and ensuring the poorest don’t go hungry in the holidays through a new £1bn crisis support package.”
But what is the message to those making the decisions from the North East?
“Come and do my job for a week and see the need and the desperation the people are in,” said Ms Godfrey-Harrison. “There needs to be more done for people in Middlesbrough.”
Many Labour MPs have been left shellshocked after the chaotic political self-sabotage of the past week.
Bafflement, anger, disappointment, and sheer frustration are all on relatively open display at the circular firing squad which seems to have surrounded the prime minister.
The botched effort to flush out backroom plotters and force Wes Streeting to declare his loyalty ahead of the budget has instead led even previously loyal Starmerites to predict the PM could be forced out of office before the local elections in May.
“We have so many councillors coming up for election across the country,” one says, “and at the moment it looks like they’re going to be wiped out. That’s our base – we just can’t afford to lose them. I like Keir [Starmer] but there’s only a limited window left to turn things around. There’s a real question of urgency.”
Another criticised a “boys club” at No 10 who they claimed have “undermined” the prime minister and “forgotten they’re meant to be serving the British people.”
There’s clearly widespread muttering about what to do next – and even a degree of enviousness at the lack of a regicidal 1922 committee mechanism, as enjoyed by the Tories.
“Leadership speculation is destabilising,” one said. “But there’s really no obvious strategy. Andy Burnham isn’t even an MP. You’d need a stalking horse candidate and we don’t have one. There’s no 1922. It’s very messy.”
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0:54
Starmer’s faithfuls are ‘losing faith’
Others are gunning for the chancellor after months of careful pitch-rolling for manifesto-breaching tax rises in the budget were ripped up overnight.
“Her career is toast,” one told me. “Rachel has just lost all credibility. She screwed up on the manifesto. She screwed up on the last two fiscal events, costing the party huge amounts of support and leaving the economy stagnating.
“Having now walked everyone up the mountain of tax rises and made us vote to support them on the opposition day debate two days ago, she’s now worried her job is at risk and has bottled it.
“Talk to any major business or investor and they are holding off investing in the UK until it is clear what the UK’s tax policy is going to be, putting us in a situation where the chancellor is going to have to go through this all over again in six months – which just means no real economic growth for another six months.”
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After less than 18 months in office, the government is stuck in a political morass largely of its own making.
Treasury sources have belatedly argued that the chancellor’s pre-budget change of heart on income tax is down to better-than-expected economic forecasts from the Office for Budget Responsibility.
That should be a cause of celebration. The question is whether she and the PM are now too damaged to make that case to the country – and rescue their benighted prospects.
We’re told that Shabana Mahmood, the still new home secretary, is “a woman in a hurry”.
She’s been in the job for 73 days – and is now announcing “the most sweeping reforms to tackle illegal migration in modern times” – effectively since the Second World War.
Her language is not just tough – it’s radical. Not what you’d have expected to hear from a Labour home secretary even just a few months ago.
“Illegal migration”, she believes, “is tearing our country apart. The crisis at our borders is out of control”.
Her team argues that those never-ending images of people crossing the Channel in small boats have led to a complete loss of faith in the government’s ability to take any action at all – let alone deliver on its promises.
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1:29
‘Illegal migration is creating division across our country’.
The political reality is that successive failures of Tory and Labour ministers have fuelled the inexorable rise of Reform.
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But speaking to Sir Trevor Phillips on Sky News, Ms Mahmood firmly hit back at suggestions today’s announcements are pandering to a racist narrative from the far right.
“It’s not right-wing talking points or fake news or misinformation that is suggesting that we’ve got a problem,” she said.
“I know, because I have now seen this system inside out. It is a broken system. We have a genuine problem to fix. People are angry about something that is real.
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1:09
Trevor’s takeaway
“It is my job, therefore, to think of a proper solution to this very real problem, to do so in line with my values as a Labour politician, but also as a British citizen, and to have solutions that work so that I can unite a divided country.”
There are many striking elements to this.
While she’s not been in the job for all that long, her government has been in power for 16 months. Her own press release highlights that over the past full calendar year asylum claims here have gone up by 18% – compared with a drop of 13% elsewhere in the EU.
The UK, she argues, has become a “golden ticket” for asylum seekers due to “far more generous terms” than other countries in Europe.
While she politely insists that her predecessor’s policies – the one in one out deal with France, closer partnership with law enforcement across Europe – are beginning to take effect, the message is clear. No one in office before Shabana has had the stomach to grasp the nettle.
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4:42
Inside Europe’s people smuggling industry
The Home Office is determined to present their boss as the new hard woman of British politics.
In a bleak warning to those in her party who will be deeply uncomfortable with this unflinching approach, we’re told she believes this is “the last chance for decent, moderate politics”.
“If these moderate forces fail, something darker will follow…. if you don’t like this, you won’t like what follows me.”
That’s a clear reference to the anti-asylum policies of Reform and the Conservatives, who are pledging to leave the European Convention on Human Rights and deport all illegal arrivals.
Both parties have responded by effectively claiming they don’t trust Labour to deliver on this, given they believe the government has lost control of our borders and overseen a surge in asylum claims.
That much Ms Mahmood herself has already acknowledged.
It’s unusual to hear a Conservative shadow minister like Chris Philp responding to a government announcement by claiming they will support the “sensible steps” the Home Office is making.
Unsurprisingly, he went on to belittle her ideas as “very small steps” combined with “gimmicks” – but the main thrust of his critique was that Labour lacks the authority to push these kinds of measures through parliament, given the likely opposition from their own left wingers.
It’s a fair point – but the lack of fundamental disagreement highlights the threat these plans pose to her opponents.
If the government looks like it might actually succeed in bringing down the numbers – and of course that’s a colossal if – Ms Mahmood will effectively have outflanked and neutralised much of the threat from both the Tories and Reform.
That’s why she’s so keen to mention her Danish inspiration – a centre-left government which managed to see off the threat from right-wing parties through its tough approach to migration, without having to leave the ECHR.
The Home Office is planning further announcements on new safe and legal routes.
But refugee charities have described the new measures as harsh, claiming they will scapegoat genuine refugees, fail to integrate them into society, and fail to function as a deterrent either.
There will surely be an almighty internal row among Labour MPs about the principle of ripping up the post-war settlement for refugees.
For a government floundering after the political chaos of the last few weeks and months, Ms Mahmood is a voice of certainty and confidence.
At a moment of such intense backroom debate over the party’s future direction, it’s hard to avoid seeing her performance this weekend as a starting pitch for the leadership.