Ally of PM-in-waiting says four-year boost for the armed forces is an ‘unexploded bomb’
Andy Burnham will have to find an extra £4.7bn for defence in his first budget, after Keir Starmer announced a £298bn defence investment plan (Dip) without having fully identified how it will be funded.
Sources close to the Makerfield MP said he would not try to renegotiate the Dip after the outgoing prime minister announced its details at a press conference on Tuesday.
Those close to the likely next prime minister acknowledged he would have to find nearly £5bn more than expected to fund the plans over the next four years, which one Burnham ally likened to an “unexploded bomb”. The Guardian understands the Makerfield MP was not told about the funding gap when he was briefed on the plan.
A defence insider said it was “madness after all that wrangling to have left a £4.7bn black hole for someone else to fix”, while the Conservatives described the plan as a “delayed-action poison pill” for Burnham.
A Treasury source said it was normal for a chancellor to make a spending announcement with some of the money left to be found at the next fiscal event, as happened when Rachel Reeves, the chancellor, said she would scale back cuts to the winter fuel allowance.
They said that Burnham and his chancellor could borrow more to fund the gap given the government had nearly £24bn of “headroom” against its fiscal rules at the spring statement earlier this year.
Doing so, however, would risk driving up the cost of government borrowing, with some in the market already worried about the economic consequences of a Burnham government.
Some of those close to Burnham believe the prime minister’s allies deliberately omitted details of the missing £4.7bn when they briefed him.
Starmer said on Tuesday he expected his successor to back his plan and to find more money for defence at the next spending review – though warned against issuing new “defence bonds” to do so, as some of the prime minister’s own allies have urged.
“Defence bonds are just borrowing by another name,” he said. “We’ve looked at this very carefully, but the fact is doing this through borrowing will push interest rates higher at a time when £1 in every £10 already goes on paying their interest.”
https://www.theguardian.com/politics/2026/jun/30/burnham-left-with-47bn-bill-for-starmers-new-defence-investment-plan
Today's investment plan also relies on £10.7bn of "defence efficiencies" being found by 2030, with little detail about how that would be achieved.
