CNBC's UK Exchange newsletter: UK defense spending — or lack thereof — haunts Starmer's government

Speeches from 80-year old politicians who last served in government more than a quarter of a century ago seldom have an impact.

That makes the speech delivered nine days ago by George Robertson, defense secretary in former Prime Minister Tony Blair's first administration and later the 10th secretary-general of NATO, all the more extraordinary.

Robertson, who in July 2024 was asked by the then newly-elected PM Keir Starmer to undertake a "root and branch review of U.K. armed forces," delivered what the Financial Times described as "a devastating political attack" and what Deborah Haynes, the respected defense and security journalist, called "the most significant intervention on defence spending since the end of the Cold War."

Robertson, in unusually blunt language, accused Starmer's government of "corrosive complacency" towards defense. He delivered his strategic defense review to ministers as long ago as June last year but noted they have yet to provide a 10-year plan to fund it in what he described as "vandalism" by "non-military experts in the Treasury."

Noting that Britain spends five times as much on welfare as it does on defense, Robertson asked: "Are we certain this is the right priority, jeopardising people's future safety and security whilst maintaining an increasingly unsustainable welfare bill?"

He was praised by former defense secretaries from across the political divide and a clutch of former defense chiefs. Richard Dannatt, a former head of the British Army, wrote in a letter to The Times: "In 1935, like today, we were spending less than 3% of GDP on defence. We failed to either appease or deter Hitler.

"In 1939, when war broke out, the figure shot up to 19% and in 1940, when we were fighting for our very survival, it rose to the staggering figure of 46%. That is the frightening cost of fighting a war that for a modest increase in defence spending earlier could have been avoided," Dannatt warned.

That lack of money — reportedly a £28 billion funding shortfall over the next decade — is not new.

According to the World Bank, defense spending as a share of GDP fell from 4.1% in 1991, when Britain played a key role in the first Gulf War, to just 1.9% by 2018. That reflected the post-Cold War 'peace dividend', post-financial crisis austerity, and the end of the British presence in Iraq and Afghanistan. The government has pledged to raise this to 2.6% by 2027 from 2.3% now.

But there is also a suspicion among defense chiefs, amplified by Robertson, that the Treasury dislikes handing money to the Ministry of Defense (MoD) due to the latter's various procurement mishaps.

Most notorious of these is the £6.3 billion spent on the Ajax armoured vehicle program — just 165 have been delivered from a planned 589 — but there have been plenty of others, including cost over-runs and delays in delivering Astute-class and Dreadnought-class submarines to the Royal Navy and the cost of maintaining its two new aircraft carriers, HMS Queen Elizabeth and HMS Prince of Wales.

The lack of money has, at times, led to quarrelling between the services - most notably pitting the navy against the army and the Royal Air Force. But few would dispute it has led to falling personnel numbers and poor recruitment, retention and morale — the latter, as flagged by the 2024 Kerslake Commission, reflecting the sub-standard accommodation endured by many service personnel and their families.

In his introduction to the strategic defense review, Starmer wrote: "My first duty as prime minister is to keep the British people safe."

Robertson spoke for many when he argued that, at a time of growing geopolitical instability, it is high time his government delivered sufficient money for this.

— Ian King

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