Sir Keir Starmer is under pressure to quickly lift defence spending to 2.5% of GDP or face new military cuts this year – even as he considers deploying troops to Ukraine, Sky News understands.
Defence sources said such an increase – which would amount to about an extra £5bn annually – is still far short of what is required to rebuild and transform the armed forces, stressing that an ultimate hike to at least 3% of national income would be necessary.
But the sources said a rapid rise in investment to the government’s promised target of 2.5% of GDP, from 2.3% at present, should prevent new swingeing reductions in capabilities – just as Donald Trump orders European militaries to be stronger.
“The truth is there needs to be more money now or else prepare for further cuts,” said one military insider, who spoke on condition of anonymity.
A second defence source said: “We know the government is in a difficult financial position. But getting to 2.5% sooner rather than later would be enormously beneficial for their relationship with the new US administration, and the UK’s leadership role within NATO.”
The prime minister has pledged to set a path to investing 2.5% of GDP on defence but he has yet to say when this commitment will be announced, let alone by what date the target will be met.
Defence sources said they believe the Treasury wants to push the timeline out to the very end of this parliament – a delay that would leave the armed forces to “wither on the vine”.
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“It is just not serious,” said a third defence source, sounding exasperated.
The UK position on defence spending came into sharp focus last week as European allies reeled from a barrage of criticism by the new Trump administration for their over-reliance on the US to defend Europe and support Ukraine.
Britain – a nuclear power – presents itself as the strongest European military within the NATO alliance and boasts of a special relationship with the US.
Image: Sir Keir Starmer has said he is ‘ready and willing’ to put UK troops on the ground in Ukraine to enforce any peace deal. Pic: PA
Yet, Sir Keir has stuck with his 2.5% target even as Mr Trump calls on allies to boost defence expenditure to 5% and take on a much greater responsibility for security in Europe.
Mark Rutte, the secretary general of NATO, says the goal for all 32 allies should be “north of 3%”.
The reality of Europe’s weakness on defence has been brutally exposed by Mr Trump’s approach to ending Russia’s war in Ukraine, with the president sidelining the UK, the Europeans and Kyiv.
But, given the hollowed-out state of the UK armed forces, an announcement by the prime minister that he was considering sending British soldiers to Ukraine to help secure the peace as part of any ceasefire deal raised eyebrows within defence circles.
One insider questioned how Mr Starmer could propose such a challenging deployment without explaining how he was going to fill the army’s gaping gaps in weapons and manpower.
Ukrainian President Volodymyr Zelenskyy has said any international security force of British and other foreign troops would need to be about 110,000-strong.
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Zelenskyy warns of Russian army ‘danger’ to Europe
The UK would struggle to sustain a deployment of several thousand soldiers for any enduring length of time and would have to give up other commitments, such as a battlegroup of around 900 military personnel based in Estonia on a NATO mission to deter Russian aggression.
With defence matters in focus, Admiral Sir Tony Radakin, the head of the armed forces, and his fellow chiefs met with Sir Keir on Friday to talk to him about military capabilities.
It is highly unusual for such a meeting to take place and signals a desire by the prime minister to understand the thinking of his top brass.
The meeting came as an external team of experts, led by Lord Robertson, a former Labour defence secretary and former secretary general of NATO, was putting the finishing touches to a sweeping review of defence that the government has said will be published this spring.
The reviewers were tasked with setting out how to transform the army, Royal Navy and Royal Air Force to meet future threats, but their ability to deliver has been constrained from the start by Downing Street saying this must be achieved within a defence spending target of 2.5% of GDP.
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Europe faces new reality
A government spokesperson said any suggestion the prime minister was considering raising defence spending beyond 2.5% “is purely speculation”.
The spokesperson said: “The Strategic Defence Review is wide-ranging, ensuring we look hard at the threats we face and the capabilities we need to meet the challenges and opportunities of the 21st century. As we have consistently said, the review will be published in the spring.
“To ensure the UK is prepared to deal with the changing threat, our budget increased defence spending by £2.9bn for next year and we are committed to setting a path to 2.5% of GDP on defence.”
Sir Keir Starmer has suspended four Labour MPs today for “repeated breaches of party discipline”.
Brian Leishman, Chris Hinchliff, Neil Duncan-Jordan and Rachael Maskell were suspended from the parliamentary Labour Party and will sit as independent MPs.
However, Sky News understands that this isn’t the only reason behind the decision, and that more suspensions could come.
But who are the four MPs suspended? And how critical were they of the government?
Brian Leishman
Image: Pic: UK Parliament
The MP for Alloa and Grangemouth was first elected in last year’s general election. While the constituency was contested for the first time that year, it would have been an SNP seat notionally.
Mr Leishman is also a member of the Socialist Campaign Group inside Labour and was previously elected to Perth and Kinross Council in 2022.
A frequent voter against the government, he has criticised his party for not doing enough to save Grangemouth oil refinery, and rebelled against votes on the Winter Fuel Allowance and welfare.
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From April: Minister defends refinery closure
In a statement, he said: “I am a proud Labour member, and I remain committed to the party.”
He added that he wishes “to remain a Labour MP and deliver the positive change many voters are craving,” but added he voted against the government on some issues to represent his constituents.
“I firmly believe that it is not my duty as an MP to make people poorer, especially those that have suffered because of austerity and its dire consequences,” he said.
“It is the honour of my life to be the MP for Alloa and Grangemouth, and my priority remains representing and fighting for constituents, whether they voted for me or not.”
Chris Hinchliff
Image: Pic: UK Parliament
Another 2024 newcomer to Parliament, the MP for North East Hertfordshire is one of the younger politicians at 31 years old.
He won the constituency for the first time since it was established in 1997.
As MP, Mr Hinchliff has supported rebellions on cuts to welfare and the Winter Fuel Allowance, and also proposed amendments to the government’s Planning and Infrastructure Bill – criticising the government’s consultation with private finance groups – in April.
So far, the MP hasn’t made a public statement, but he had previously said he didn’t mind losing the whip over his opposition to the welfare cuts.
The MP for Poole was also elected in the 2024 election, winning his seat from the Conservatives by just 18 votes. It was the first time Labour had won in the constituency.
Before standing for election, Mr Duncan-Jordan was a regional officer for UNISON, one of the largest trade unions in the UK.
He’s been an outspoken critic of proposed cuts to welfare and disability payments, calling the welfare bill a “dog’s dinner” and last year leading an early day motion to postpone an end to the Winter Fuel Allowance.
In response to losing the whip, said in a statement: “I understood this could come at a cost, but I couldn’t support making disabled people poorer”.
“Although I’ve been suspended from the Parliamentary Labour Party today,” he added, “I’ve been part of the Labour and trade union movement for 40 years and remain as committed as ever to its values.
“To my constituents: it’s business as usual. I remain your hardworking local MP, I will continue to take up your concerns and speak up for Poole.”
Rachael Maskell
Image: Pic: UK Parliament
Shortly before 4pm, the MP for York Central became the fourth MP to be suspended by the government for rebelling.
In Parliament since 2015, Ms Maskell led the welfare rebellion against the government’s reforms – and voted against them even after they were significantly watered down.
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Maskell slams ‘Dickensian’ welfare cuts
Earlier this month, she told Sky News presenterGareth Barlow: “No one feels comfortable when the family is arguing, and that’s why listening is so important.
“I want to see instituted back in the heart of the party a recognition of the role of backbenchers.”
And speaking to Sky’s chief political correspondent Jon Craig after her suspension, she said: “The reason I have been suspended is because I voted in the way I did. I believe I am fighting for people that really matter, the poorest people in society.
“That is why the Labour Party was created – I will never give up that fight.”
Sir Keir Starmer has said former Tory ministers have “serious questions to answer” about how the names of Afghans who worked with UK forces were exposed.
Nearly 7,000 Afghan nationals are being relocated to the UK after their names were accidentally sent in an email in February 2022, when Boris Johnson was prime minister, but the leak was only discovered by the British military in August 2023, when Rishi Sunak was PM.
A super-injunction, preventing the reporting of the mistake, was imposed that year in an attempt to prevent the Taliban from finding out about the leak.
The Conservative government at the time then started transporting thousands of Afghans to the UK in secret as they were in danger.
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Victim of Afghan data breach speaks to Sky
Kicking off Prime Minister’s Questions, Sir Keir said: “Ministers who served under the party opposite have serious questions to answer about how this was ever allowed to happen.
“The chair of the defence committee has indicated that he intends to hold further inquiries.
“I welcome that and hope that those who are in office at the time will welcome that scrutiny.”
The data breach saw a defence official accidentally release details of almost 19,000 people seeking to flee Afghanistan after the return of the Taliban.
Conservative leader Kemi Badenoch avoided mentioning the data breach, but Lib Dem leader Sir Ed Davey said it was “shocking” how it had been kept secret for three years.
Sir Ed said the prime minister will have the Lib Dems’ support if he decides to pursue a public inquiry.
Mr Healey’s Tory predecessor, Sir Ben Wallace, said he makes “no apology” for applying for the initial four-month injunction and insisted it was “not a cover-up”.
The scheme, which had been kept under wraps until yesterday, has so far cost hundreds of millions of pounds.
However, the total cost to the taxpayer of existing schemes to assist Afghans who are deemed eligible for British support, as well as the additional cost from the breach, will come to at least £6bn.
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He said: “I’m really deeply uncomfortable with the idea that a government applies for a super-injunction.
“If there are any [other] super-injunctions in place, I just have to tell you – I don’t know about them. I haven’t been read into them.
“The important thing here now is that we’ve closed the scheme.”
Mr Healey was informed of the breach while in opposition, and earlier this year he commissioned a review that led to the injunction being lifted.
He said “accountability starts now” and added Labour had to deal with the risks, court papers, intelligence assessments and different schemes when they came to power last summer before they could lift the injunction.
The rate of inflation has risen by more than expected on the back of fuel and food price pressures, according to official figures which have prompted accusations of an own goal for the chancellor.
The Office for National Statistics (ONS) reported a 3.6% level for the 12 months to June – a pace not seen since January last year.
That was up from the 3.4% rate seen the previous month. Economists had expected no change.
ONS acting chief economist Richard Heys said: “Inflation ticked up in June driven mainly by motor fuel prices which fell only slightly, compared with a much larger decrease at this time last year.
“Food price inflation has increased for the third consecutive month to its highest annual rate since February of last year. However, it remains well below the peak seen in early 2023.”
A key driver of food inflation has been meat prices.
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Beef, in particular, has shot up in cost – by more than 30% over the past year – according to Association of Independent Meat Suppliers data reported by FarmingUK.
Image: Beef has seen the biggest percentage increase in meat costs. Pic: PA
High global demand alongside raised production costs have been blamed.
But Kris Hamer, director of insight at the British Retail Consortium, said: “While inflation has risen steadily over the last year, food inflation has seen a much more pronounced increase.
“Despite fierce competition between retailers, the ongoing impact of the last budget and poor harvests caused by the extreme weather have resulted in prices for consumers rising.”
It marked a clear claim that tax rises imposed on employers by Rachel Reeves from April have helped stoke inflation.
Balwinder Dhoot, director of sustainability and growth at the Food and Drink Federation, said: “The pressure on food and drink manufacturers continues to build. With many key ingredients like chocolate, butter, coffee, beef, and lamb, climbing in price – alongside high energy and labour expenses – these rising costs are gradually making their way into the prices shoppers pay at the tills.”
Chancellor Rachel Reeves said of the data: “I know working people are still struggling with the cost of living. That is why we have already taken action by increasing the national minimum wage for three million workers, rolling out free breakfast clubs in every primary school and extending the £3 bus fare cap.
“But there is more to do and I’m determined we deliver on our Plan for Change to put more money into people’s pockets.”
The wider ONS data is a timely reminder of the squeeze on living standards still being felt by many households – largely since the end of the COVID pandemic and subsequent energy-driven cost of living crisis.
Record rental costs alongside elevated borrowing costs – the latter a result of the Bank of England’s action to help keep a lid on inflation – have added to the burden on family budgets.
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Is the cost of living crisis over?
Most are still reeling from the effects of high energy bills.
The cost of gas and electricity is among the reasons why the pace of price growth for many goods and services remains above a level the Bank would ideally like to see.
Added to that is the toll placed on finances by wider hikes to bills. April saw those for water, council tax and many other essentials rise at an inflation-busting rate.
The inflation figures, along with employment data due tomorrow, are the last before the Bank of England is due to make its next interest rate decision on 7 August.
The vast majority of financial market participants, and many economists, expect a quarter point cut to 4%.
That forecast is largely based on the fact that wider economic data is suggesting a slowdown in both economic growth and the labour market – twin headaches for a chancellor gunning for growth and juggling hugely squeezed public finances.
Professor Joe Nellis, economic adviser at the advisory firm MHA, said of the ONS data: “This is a reminder that while price rises have slowed from the highs of 2021-23, the battle against inflation is far from over and there is no return to normality yet – especially for many households who are still feeling the squeeze on essentials such as food, energy, and services.
“However, while the Bank of England is expected to take a cautious approach to interest rate policy, we still expect a cut in interest rates when the Monetary Policy Committee next votes on 7th August.
“Despite inflation at 3.6% remaining above the official 2% target, a softening labour market – slowing wage growth and decreasing job vacancies – means that the MPC will predict inflation to begin falling as we head into the new year, justifying the lowering of interest rates.”