Cabinet relations damaged by defence investment plan dispute, sources say

Cabinet relations have been left badly damaged by a protracted row over the defence investment plan (Dip), according to Whitehall sources who say the standoff has led to some of the worst infighting since Labour took power. Ministers are putting final touches on the plan, which is expected to be published in the coming weeks after departments agreed to cut their capital budgets by about 1% to pay for additional military spending. Allies say Keir Starmer wants the plan to form part of his legacy should he be replaced as prime minister by the Greater Manchester mayor, Andy Burnham, in the coming weeks. The months-long dispute between the Ministry of Defence, the Treasury and No 10 has left senior members of the government trading accusations about each other, insiders say. One Whitehall official described the process as “a mess,” noting that the MoD initially said its plans were fully costed but later asked for billions more, while the Treasury refused to budge. Starmer agreed last February to increase defence spending to 2.5% of GDP, but within months defence officials said they would need another £28bn over four years. The defence secretary, John Healey, requested about £18bn from the Treasury, but Chancellor Rachel Reeves refused to sign off on anything above £12bn for weeks. Starmer eventually pressured Reeves to agree to additional spending of about £15bn, funded in part by other departments cutting capital budgets by about 1%. The Treasury will take control of a multibillion-pound fighter jet programme in return for agreeing the funding.

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Sources: The Guardian