UK Defense Plan Crisis: Resignation Highlights Funding Shortfall

LONDON — The U.K. defense plans were supposed to lay the groundwork for a rearmament drive to deter Russia and reinforce Britain's role in NATO. Instead, it's turned into a political and defense-policy crisis.

On Thursday, Defence Secretary John Healey unexpectedly resigned, blaming a mismatch between the country's ambitions and how much it was willing to spend under the much-delayed Defense Investment Plan.

In his resignation letter, Healey said Prime Minister Keir Starmer had been "unable, and the Treasury has been unwilling, to commit the resources that the nation needs to defend the country at this time of rising threats,” adding that the plan as it stands would force him to make decisions that could make the country less safe.

Now Starmer, who already faces a growing rebellion in his Labour Party, has a new defense secretary in Dan Jarvis, appointed hours after Healey quit, and is also dealing with an angry military and defense industry.

With the NATO summit in Ankara less than a month away, Britain and the embattled Starmer are running out of time to show seriousness about funding defense and match the strides made by allies like Germany and Poland and meet demands from U.S. President Donald Trump to increase defense spending.

Healey underlined what had gone wrong in his letter. He said that under a version of the DIP he saw on Monday, defense spending would only rise from an estimated 2.4 percent of GDP last year to 2.68 percent by 2030. That's well off the pace needed to reach the 3.5 percent of GDP by 2035 that NATO countries agreed to set as a target last year.

The spending plan "falls well short of what is required for defence and the country at this dangerous time," Healey wrote, adding: “After explaining to you that I would not be able to accept a DIP settlement that does not give our Forces the resources they need, I am now left with no other option than to submit my resignation as your Defence Secretary.”

And even the level of spending proposed by the government and rejected by Healey would cause enormous political difficulties for Starmer by forcing cutbacks in many non-military areas of government.

“Let's be clear on what John is asking for: cuts to schools and hospitals," a Treasury official told POLITICO.

The DIP spells out how the government intends to meet the goals of last year's Strategic Defence Review, which warned that "state conflict has returned to Europe."

It was supposed to be published last fall, then in the winter, and then on Thursday, but has been hit by repeated delays stemming from battles among Downing Street, the Ministry of Defence and the Treasury over how much funding should be set aside for the military.

On Friday morning U.K. Trade Secretary Peter Kyle insisted the DIP will be published before the NATO summit — which begins on July 7 — but is "not yet entirely finalized."

Angering the military-industrial complex

The delays were condemned by both the military and industry.

Healey was described as a “serious political figure, and one who fundamentally understands the dangerous moment the UK and our allies face,” by Andrew Kinniburgh, director general of the Make UK Defence trade body.

The lobby warned that the country "has no fiscal plan" to reach the NATO target.

One industry figure told POLITICO that smaller defense companies, such as those in supply chains, are relying on cash injections to stay afloat while they wait for the contracts and investment that the DIP was set to provide. A second industry figure said they are now worried that defense companies will pull out of the country because of the lack of certainty. Other companies have gone bust waiting for the U.K. to get investment moving.

A U.K. defense industry representative said "fundamentally, it means more delays" for the sector.

The reaction from the military establishment is similarly stark.

Richard Barrons — the general who led the Strategic Defence Review alongside former NATO Secretary-General George Robertson — said the government is “actively going backwards” and “diminishes the U.K.’s standing within NATO.”

Allies are also worried about what's happening with one of Europe's two nuclear powers, whose military plays a key role in NATO and is seen as an ally of the U.S. at a time of growing worry about Trump's commitment to European security.

In a post on X, Elbridge Colby, the Pentagon’s policy chief said there is "again a great need for more British military strength in this critical time." He urged the U.K. to "meet that need with urgency, scale, and determination."

A senior U.K. government official acknowledged it was a "grim" blow to the U.K.'s standing with allies just before the G7 and weeks ahead of NATO, and confirmed it had been consistently raised by international partners in bilateral meetings.

Britain's political and fiscal difficulties stand in marked contrast to allies like Germany and Poland, which are dramatically increasing their defense budgets and rapidly expanding their militaries.

Other countries facing fiscal headwinds, like France and Italy, are also having difficulty making the tough political choice of spending more on defense while cutting social programs.

A senior European defense official told POLITICO that the situation in the U.K. shows clearly that “several countries will struggle with 5 percent.”

A second senior European defense official described the departure of “true friend and true ally” Healey as “a pity,” but acknowledged it is not easy for anyone to agree “the speed of increase and actual spending areas” needed.

Sophia Gaston, a security expert from King's College London, said: "It’s been humiliating having to explain the delays to allies and also knowing that even when it comes, the DIP wouldn’t be enough for us to deliver on our commitments."