Keir Starmer's Defense Spending Increase

During Prime Minister's Questions, Keir Starmer claimed that the increase in defense spending he announced on Tuesday would amount to £13.4 billion a year. However, Kemi Badenoch challenged this figure, pointing to the independent Institute for Fiscal Studies (IFS) estimate of a £6 billion annual increase in real terms.

Starmer's explanation for the £13.4 billion figure involved comparing cash figures from the current financial year to those projected for the 2027-28 financial year, without accounting for inflation. Additionally, he used a share of GDP as the basis for the increase, assuming no economic growth over the next three years. This approach essentially inflates the increase by pretending that defense spending would have fallen as a share of GDP without the additional funding.

Furthermore, Starmer may have included intelligence services spending in the 2027 figure but not in the current year's baseline. This reclassification of existing spending as an increase is misleading and inaccurate.

The funding for the increased defense spending will come from a reduction in foreign aid, from 0.5% of national income to 0.3%. This represents a transfer of 0.2% of national income, equivalent to approximately £6 billion in 2027.

The majority of the increased spending is expected to go towards personnel costs, including pay raises and recruitment. However, this comes at the expense of aid programs in some of the world's poorest countries. The impact will be greater than the 40% cut implied by the reduction in the aid budget, as a significant portion of the budget is currently used for housing asylum seekers in Britain.

Starmer also announced an aim to further increase defense spending to 3% of GDP in the next parliament. This would be a substantial increase, although the reclassification of intelligence spending would make it slightly easier to achieve. However, this goal would likely come at the expense of restoring aid spending to the 0.7% target set under David Cameron's government.