By Eamon Dyas

On Sunday 28 June the former Chief of the Defence Staff, Sir Tony Radakin, said in an interview with Laura Kuenssberg on BBC that whoever follows Keir Starmer as Prime Minister would have to operate “almost like a wartime Prime Minister” in the light of global threats. These comments were no doubt directed at Andy Burnham and were the latest in a series of “defence experts” voices wheeled out by the BBC to offer their advice in the light of his election at Makerfield.

Then on the day after, on 29 June, following a meeting with Keir Starmer at Downing Street the Secretary General of NATO Mark Rutte said that he did not expect the UK to meet an alliance target to spend 3.5% of GDP on defence by 2035 “in one step” – a target expected to be included in the publication of the defence investment plan published on Tuesday. Rutte went on to say that he was confident that Burnham would view the boosting of UK defence spending by nearly £30 billion a year as a means of delivering economic growth and increasing employment. He went on to repeat the message that has been doing the rounds since he was made head of NATO in 2024 and which has been pressed on every EU country since then. That

         “Defence spending does two things at the same time. One, your first priority as a government, keep the country safe, obviously number one., But also second [is the] impact of your defence investments. Next to keeping the country safe and strong, is [the fact] it will create jobs.” (The Guardian, 29 June 2026)

This has been one of the “go to” excuses used by the leaders of most EU countries, particularly, Frederich Merz of Germany and Emmanuel Macron of France as well as Keir Starmer of the UK in justifying increased defence spending. These three, alongside Ursula von der Leyen of the EU, have constituted “The Four Horsemen of the Apocalypse” as they attempt to generate a stronger anti-Russian military backbone for NATO. Their efforts have been based on the promise that the increase in military spending in Europe will provide compensation for the loss of industrial competitiveness that has resulted from the previous implementation of the insane policy of rejecting cheap Russian energy on which European prosperity had previously relied. 

Rutte’s comments followed a speech by Andy Burnham earlier the same day in which he was supposed to outline his plans for Britain should he become Prime Minister. In that carefully crafted speech Burnham does not mention defence spending and no doubt it was timed to avoid any questions that might have arisen from that omission should the speech have been made after the publication of the Defence Spending Review scheduled for the Tuesday.

The term “Defence Investment Plan” (DIP) was first coined as part of the Strategic Defence Review last year. In formulating that phrase the officials at the Ministry of Defence no doubt did so knowing that the money they were demanding could only be garnered by cuts elsewhere in the government’s budget. Convincing the electorate to view that spending and the required cuts that were part of it as something that was an investment in the future was part of a clever marketing strategy meant to overcome the significant cynicism of the claim that the country was in imminent threat from Russia. Unlike the unreal impact on people’s daily existence from the so-called threat from Russia the cuts demanded by the Ministry of Defence would have a very real impact on people’s daily existence and so it had to be packaged as an “investment” – a sacrifice that would bring tangible benefits in the long run. 

This is Luke Pollard, the Minister of Defence at the time, on 8 September last explaining to Parliament how this was to happen:

         “There are huge opportunities across the nation in defence industries, but we need the workforce of the future to deliver them. That is why, in the defence industrial strategy being announced this afternoon, he [another MP he was replying to] will see more investment in skills, not just in defence technical colleges of excellence but in schools and university clusters, to maximise the opportunity to enhance our skills offer and make defence an engine for growth everywhere in the country.” (Hansard, 8 September 2025).

The economic justification for increasing spending on defence that it helps growth is something that Burnham is likely to use in order to commit to it. That growth, it will be argued, will be spread more widely beyond London and the South-East and will benefit the north through the resulting wider re-industrialisation of the economy. 

However, no matter what such spending might promise on paper the reality is that  the re-industrialisation of the north won’t happen on the basis of increased military spending alone. This is because the country no longer possesses the wider manufacturing capacity or workforce skills for the economy to be revived on the basis of the market – that heartbeat has long ago stopped. Unless the state acts not only as an economic defibrillator but as a long-term life support provider parts of the economy may splutter back in to life on the basis of what is proposed in the Defence Investment Plan but it will not provide the means for any wider long-term recovery. 

The only way for Burnham to realise any dream he might have to re-industrialise the North would be through significant state investment in fostering manufacturing and developing the skill-set of the workforce over a long period of time. But time is what the war-hawks keep telling him the country doesn’t have. So, no matter how much government investment might be thrown at military spending the country’s economy is currently in no state to make use of it as a stimulant for a wider re-industrialisation and much of that investment will instead go towards sustaining the manufacturing industry of other economies. 

The paradox facing Burnham – providing he’s serious about his dream of re-industrialising the North – is that the current war-hysteria is creating the decision-making environment where breaking the fiscal rules constraints can be justified. However, that same war-hysteria itself places a time restraint on how any investment outside the fiscal rules can be spent. As a consequence, instead of it being part of a wider long-term policy for re-industrialising the economy that investment will inevitably be wasted on meeting defence targets that are being scheduled to a timetable that sees Russia as “a real and present danger”. This means that anything that emerges by way of justification for additional government spending will prove to be too limited and result in the same outcome of the old policies of short-term, narrowly conceived investment planning that has plagued the country since the seventies. 

There is also the spectre of the new relationship with the EU that Starmer has been cultivating since he came to office and which there is every indication that Burnham will continue. That potential new relationship cannot be seen outside the threat of a re-imposition of constraints on the practice of state assistance to industry. The opportunities provided by Brexit were squandered by every government which oversaw the economy since the referendum. However, that squandering was self-imposed by ideologues pursuing their free-market approach. Starmer’s Labour government was the first Labour government given the mandate to oversee the economy under Brexit and instead of using the freedoms Brexit offered it chose to fit into the free-market blueprint.

The inevitable failure of a Brexit Britain tied to free market policies is now being used to justify the claim that Brexit was a failure and there are strong winds pushing the country once more in the direction of the EU. This represents a potential threat to any future Labour Prime Minister seeking to utilise the opportunities offered by Brexit to use the state in the process of reinvigorating the economy. Should Starmer’s EU ambitions succeed it will tie any future British government to policies which exclude any meaningful involvement of the state in the running of the economy that is considered a constraint on the free market. While that isn’t something which the free market advocates in Britain would view as a problem it would be a problem for anyone seeking to grow the involvement of the state in the economy.

At present the EU has released national governments from that requirement in the realms of arms production and many countries have taken advantage of this to pump money into their arms manufacturing sectors. Because of this any government spending that is planned under Britain’s Defence Investment Plan would enjoy the same freedom even under EU rules. However, should Burnham continue the free market approach he inherits from Starmer and continue to pursue Starmer’s ambition for a reset of Britain’s relationship with the EU he will end up being tied to a narrow range of options on how the state can be utilised in pursuance of his ambition to re-vitalise the economy.

There are certainly opportunities offered by the Defence Investment Plan for Burnham but those opportunities will only be realised if the spending inherent in that plan is seen as part of a wider role for the state in how the British economy can be revitalised. That will involve a break from the free market ideology which has been the main reason for the condition in which the country’s economy now finds itself. Should Burnham attempt to revitalise the economy by relying solely on the freedom that the Defence Investment Plan provides but continue to commit to the free market and Rachel Reeves’ fiscal rules when it comes to the wider economy not only will he inevitably fail but he will have wasted an opportunity to restore the economy and Labour’s reputation as a meaningful representative party of the people.

Note:

As an example of how a good proportion of the funds allocated under the Defence Investment Plan will be spent the UK Defence Journal reported  on 30 June that the Royal Navy is to spend £90 million to acquire new mine-hunting motherships from Norway. 

“The Royal Navy is to acquire new offshore support vessels alongside Norway to serve as motherships for its growing fleet of autonomous minehunters, as part of a wider investment in mine warfare, the Defence Investment Plan said.”

It also states that under the plan the Royal Navy will spend around £1.3 billion over the next four years in conjunction with France as part of the same project. 

‘From Norway’  ‘alongside Norway’, ‘in conjunction with France’    are we to understand that these minesweepers won’t be built in England?

What does that mean for the redevelopment of British industry?  it seems to be in doubt.

The headline in the UK Defence Journal makes it clear. Procurement policies in conjunction with Norway and France imply a shared cost arrangement which in turn involves the equipment all or in part being manufactured abroad.