Defence Secretary John Healey has issued a pointed message to the Prime Minister over funding for the military as Cabinet wrangling continued over the Defence Investment Plan (DIP).
Discussions on the DIP are understood to be going “down to the wire”, amid speculation that Rachel Reeves is refusing to budge on a final settlement of £13.5bn – short of the £18bn originally expected.
Keir Starmer and the Chancellor are likely to push ahead with spending cuts across Whitehall to fund the plan, rather than opt for borrowing more or, as had been reported earlier, tax rises.
At a press conference alongside Foreign Secretary Yvette Cooper and their Australian counterparts on Wednesday, Healey insisted he was “not going to get into numbers” when asked whether he would accept anything less than £18bn for the DIP.
Defence levy or war bonds unlikely
But in what will be seen as a pointed message to Starmer, he added: “The Prime Minister knows what defence and the nation needs.”
Healey also appeared to quash speculation that the blueprint would be published this Friday, a non-sitting day in the Commons, after Speaker Sir Lindsay Hoyle said it would be an “utter disgrace” if the plan was published without MPs having a debate.
The Defence Secretary insisted that he is a “parliamentarian first” and a “minister second”, adding: “The Speaker asserts the right of parliament. Parliament is there for the people and when we publish really significant reports from defence, like the Defence Investment Plan, we respect parliament.”
It is understood that the Prime Minister and Chancellor will not introduce any special defence levy or hypothecated tax (a ring-fenced portion of tax income), or war bonds, to pay for the DIP, originally set to be published last autumn.
As The i Paper reported earlier this week, the government may have to fund part of the plan via private investment. Discussions over how to pay the bill are still ongoing in Whitehall, it is understood.
It is also possible the Prime Minister and Chancellor will use joint funding with allies like Finland and the Netherlands to help pay the cost.
Hospitals and rail projects could be vulnerable
It was reported earlier this week that Whitehall departments had been asked to find 1 per cent budget cuts to fund defence costs. While any cuts have not yet been decided, it is thought they would likely come from capital or infrastructure projects, with schemes such as the plan to build 40 new hospitals, northern powerhouse rail and the long delayed lower Thames crossing – a tunnel under the Thames – at risk.
In his Munich speech earlier this year, Starmer said he was stepping up work with likeminded allies on options for a collective approach to defence financing and procurement.
A government spokesperson said: “The Defence Investment Plan will deliver the best equipment and technology into the hands of our frontline forces at speed, while investing in and growing the UK economy.
“We are working across government to finalise the plan and as the Defence Secretary said last week, the Prime Minister is determined to publish it before the NATO Summit.”
Earlier Hoyle told the Commons: “There are strong rumours that the Government is going to produce its Defence Investment Plan on Friday. That would be an utter disgrace and an utter kick in the face to the members of this House.
“I will say to Downing Street, Government’s responsibility in the ministerial code states major announcements should be made here.
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