Prime Minister Keir Starmer is facing a tough challenge as he tries to balance the UK’s budget while boosting defence spending. Despite being a Labour leader—a party traditionally known for supporting foreign aid and social welfare—Starmer has made some surprising decisions.
He recently cut foreign aid from 0.5% to 0.3% of GDP, a move that has left many in his party uncomfortable. Even Foreign Secretary David Lammy, known for his progressive views, has reluctantly accepted the decision, acknowledging the need to “deal with the world as it is.”
This shift highlights Starmer’s willingness to make difficult choices, even if they go against Labour’s traditional priorities. His government is now focusing on increasing defence spending, aiming to raise it to 2.5% of GDP by 2027. This means more money will go toward military equipment like guns, ammunition, missiles, drones, and soldiers—a move that doesn’t align with the typical Labour agenda. But Starmer seems determined to push forward, showing that no spending commitment is safe in the current economic climate.
The UK’s economy is in a precarious state, partly due to the Conservative Party’s mismanagement over the past 14 years, which included wasteful spending on projects like HS2 and the flawed Covid Test & Trace system. Now, Chancellor Rachel Reeves is struggling to clean up the mess. Her upcoming Spring Statement on March 26 is expected to include significant spending cuts and possibly tax increases to balance the books. Reeves’ task has become even harder with Starmer’s pledge to increase defence spending, leaving her to find savings elsewhere.
One area under scrutiny is benefits spending. While so-called “benefits scroungers” are often targeted, pensioners could also face cuts. The state pension triple lock, which guarantees annual increases in pensions, is particularly at risk. Critics within the Treasury have long opposed the triple lock, and recent global events, such as US President Donald Trump’s controversial comments praising Vladimir Putin and criticizing Ukrainian leader Volodymyr Zelenskyy, have added pressure. These developments have shaken international alliances and highlighted the need for stronger defence spending, further straining the budget.
Starmer’s government is also facing criticism for other spending commitments. For example, billions are being allocated to projects like the Chagos Islands, Ed Miliband’s Great British Energy initiative, and unproven Carbon Capture & Storage technology.
Additionally, the UK is spending nearly £5 billion annually on asylum and refugee support. With so many demands on the budget, every expenditure is now under review.
The Prime Minister’s promise to increase defence spending will require real money, not just rhetoric. If Starmer plans to send UK troops to Ukraine, for example, he must ensure they are properly trained, paid, and equipped.
This means making tough decisions elsewhere, such as potentially cutting working-age benefits, tightening eligibility for Personal Independence Payments, or even reconsidering perks like free bus passes and NHS prescriptions for those over 60.
The triple lock on pensions, a policy long supported by the Daily Express, is also under threat. If Starmer doesn’t address waste in other areas, this popular policy could be scrapped, sparking significant backlash. The government’s ability to manage these challenges will determine its success in navigating the UK’s financial and geopolitical crises.
In summary, Keir Starmer’s government is walking a tightrope, trying to boost defence spending while managing a fragile economy. His decisions to cut foreign aid and potentially reduce benefits mark a significant departure from traditional Labour values, but they reflect the harsh realities of the current global and economic landscape. The coming months will test whether Starmer can deliver on his promises without alienating his core supporters or further straining the UK’s finances.
