By Alistair Smout and Andrew MacAskill
LONDON, June 12 (Reuters) - Keir Starmer has a new defence minister, but the same problem: no spare money, competing political and financial demands and a party reluctant to cut spending on public services and welfare.
And if Britain gets a new prime minister, those problems are not going away.
Starmer is likely to face a challenge to his leadership in the coming months, most likely from Greater Manchester Mayor Andy Burnham if he wins a seat in parliament at a special election next week, and Wes Streeting, who resigned as health secretary last month.
But while Starmer has been criticised as indecisive, whoever leads Britain will face the same difficult trade-offs — finding money for public services, helping voters cope with the rising cost of living, and increasing defence spending — in an era of low growth and rising government borrowing costs.
Chris Hopkins, director of pollster Savanta, said a new leader could appear more decisive and present a better vision for government than Starmer but would face the same larger challenges.
“The task of governing effectively, retaining popular support and staving off electoral challengers could well be a needle that is impossible for any new prime minister to thread,” he said.
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Defence Secretary John Healey resigned on Thursday with a damning indictment of Starmer’s leadership: that while he clearly recognised the threats facing the country, he was unable to secure the money that was needed to address them.
The shock resignation of one of Starmer’s most loyal ministers came after the prime minister took months mulling how to fund a defence investment plan (DIP) before ultimately settling on a figure that Healey said was unacceptable.
Healey said that, under the plan he had seen, defence spending would only rise to 2.68% of GDP in 2030 when he believed it needed to be at 3%. In comparison, Germany plans to spend 3.7% of its GDP on defence by 2030.
Starmer has responded that other government departments are having money reallocated to defence, while he believes that “irresponsible borrowing” would increase risks to Britain.
“Whoever is prime minister is going to face the same prevailing winds as I am facing,” Starmer told the BBC on Friday after meeting Dan Jarvis, a former paratroop officer who replaced Healey. “None of that is going to change.”
But Starmer’s argument left some Labour politicians unimpressed.
Fred Thomas, a Labour lawmaker and former Royal Marine who is on parliament’s defence committee and last month called for Starmer to resign, said Britain needed a leader with “conviction, confidence and courage”.
“If you really want something to happen, and you’ve got the responsibility of running the country, then ultimately you can make that thing happen,” he told Reuters, saying Britain’s military was “simply not ready” for the threats it faced.
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The decision to quit by Healey, who was widely respected within government and the defence industry, is one in a series of damaging departures from the government which have highlighted concerns about Starmer’s record.
Former health minister Streeting said “where we need direction, we have drift” when he quit, while the former safeguarding minister Jess Phillips described Starmer’s style as the “definition of incremental change. Nothing bold about it”.
The departure of Healey, and the armed forces minister Al Carns, means Starmer will go to key G7 and NATO summits in the coming weeks with criticism over his defence strategy ringing out, all while Nigel Farage’s right-wing populist Reform UK party maintains a comfortable lead in opinion polls.
But while Starmer may have his critics, any potential successor would struggle with the same trade-offs.
Already financial markets have sounded the alarm over Burnham, with borrowing costs spiking when he has made moves which bring him closer to a return to Westminster, something that would trigger yet more turbulence in Britain’s politics and potentially a seventh prime minister in 10 years.
Burnham would pitch himself as the candidate to the left of Starmer in any leadership contest, and investors predict there could be an increase in government borrowing or higher taxes if he replaces Starmer.
He has said he would respect the government’s fiscal rules on spending but has hinted at possible exceptions to fund areas like defence through borrowing. He has also expressed support for the nationalisation of key public services.
Rain Newton-Smith, head of the Confederation of British Industry, said mounting speculation about potential tax rises during a leadership contest could lead to a summer of “drift and speculation”, damaging business confidence.
“There are just so many critical decisions that are sitting on the desks of government,” she told Reuters, citing talks with the EU on steel tariffs, a food deal and energy policy. “We want to see a picking up in the pace of decision-making, and political instability just makes that harder.”
(Reporting by Alistair Smout and Andrew MacAskill, Editing by Kate Holton and Jon Boyle)
