Starmer warns successor against debt-funded defence spending

Keir Starmer has warned his successor, Andy Burnham, not to relax fiscal rules to finance additional defence spending. The outgoing prime minister delivered the caution as he wrapped up his final Nato summit in Ankara.

The warning highlights a critical economic dilemma facing European governments as they confront pressure from Washington to increase military budgets. Starmer argued that taking on more debt is an unsustainable method for funding defence.

“The caution I have with extra borrowing is that we are already spending £1 of every £10 that we spend as a government servicing our borrowing, and therefore it is not for me the sensible place to go for extra defence money,” Starmer told reporters. “I think the fiscal rules are really important. They are undoubtedly amongst the reasons that we’ve stabilised the economy.”

Despite this advice, senior UK defence officials indicated that a Burnham administration is likely to explore ways to raise military expenditure without breaking those rules. One senior official noted that Burnham has previously expressed interest in the topic. “In truth that’s definitely going to be a judgment that the next prime minister will have to make,” the official said.

The officials also suggested the incoming government could revisit the idea of war bonds, a mechanism the Treasury under Starmer dismissed as equivalent to extra borrowing. “We definitely need to look at all of these things, and we’ve got to find the best mechanisms of generating the kind of resource that we are going to need now and in the future,” a senior official said.

This domestic debate occurs against a backdrop of intense pressure from the United States. At the Ankara summit, US President Donald Trump distributed a chart to leaders showing real-terms defence spending over the last decade, placing the UK in second place. However, the UK ranks just 12th out of 32 members when measured as a proportion of GDP.

Relations between Starmer and Trump have been strained after the UK refused to join the US war against Iran. This prompted Trump to recently label the country a “deindustrialised welfare zone” in decline due to Starmer’s “weak leadership”. Starmer declined to retaliate, but noted Trump had thanked the UK for its material contributions at the summit's close.

Starmer said the two had agreed to stay in touch. “I saw it as my duty to make sure it’s a relationship that worked,” he added. Looking beyond his departure from office, Starmer declined to rule out a future bid to become Nato secretary general, stating he was focused solely on discharging his current duties.