Starmer defence plan faces £4.7bn funding gap, Pollard says

A £4.7bn hole now sits beneath Sir Keir Starmer’s £15bn Defence Investment Plan, and Luke Pollard said the next chancellor will have to find the money. The Treasury has identified £10.3bn of savings so far, leaving the shortfall to be filled in a future Budget and forcing the next prime minister and chancellor into what Pollard called difficult decisions.

Pollard told broadcasters the funding question could not be dodged, even as he defended the plan as a response to real threats facing the United Kingdom. He said the government was not unusual in announcing spending first and settling the funding later, but the scale of the reallocation was unusual outside a spending review. The minister said the next chancellor, “whoever that may be”, would have to “find the resources” to cover the gap.

The pressure will fall partly on other departments’ capital budgets. Pollard said departments were being asked to give up 1p in the pound of those budgets to help pay for the defence uplift, with around £700m expected to come from the Department for Transport. That points directly to roads and transport schemes being squeezed to make room for military spending, underlining the trade-offs that will land on the Treasury desk before the next Budget.

The row comes as Starmer has already locked in a sharper timetable for higher military spending. On 25 February 2025, he brought forward the target of spending 2.5% of GDP on defence to April 2027, with an ambition to reach 3% in the next Parliament if economic and fiscal conditions allow. The Strategic Defence Review 2025 framed that shift as the biggest sustained increase in defence spending since the Cold War, arguing that Russia’s war in Ukraine, cyber attacks and rapid technological change demanded a step-change in British defence.

That wider strategy was meant to project certainty about national security. Instead, the £4.7bn gap has exposed the harder question behind the slogan: if defence spending rises again, what gets cut, deferred or taxed to pay for it. Pollard insisted the threats are real and the response must be credible, but the credibility test now sits with the next chancellor and the choices that follow.