Higher spend on Ukraine could leave Starmer with a fight on his hands at home
Donald Trump is set to slash US spending on European security, particularly in Ukraine. That leaves Britain with difficult choices
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When US vice president JD Vance stood on stage at the Munich Security Conference and declared that there was “a new sheriff in town”, he was not simply delivering a soundbite for the world’s media. He was signalling a seismic shift in the geopolitical order — one that will have far reaching consequences for European security and economic policy.
With Donald Trump back in the White House, the US is reorienting its foreign policy, and Ukraine finds itself at the centre of this transformation.
The rapid changes of the past week, including Trump’s direct outreach to Vladimir Putin, his unilateral negotiations with Moscow over ending the war in Ukraine that exclude Kyiv and European allies, and the broader shift in Washington’s security commitment to Europe, have left the continent’s leaders scrambling. French president Emmanuel Macron’s emergency summit in Paris on Monday sought to formulate a response. The central questions were clear: can Europe fill the gap if the US withdraws its support for Ukraine? And how does the continent react to not having a seat at the negotiating table?
For British prime minister Keir Starmer, this is more than just a diplomatic challenge — it’s an economic and strategic one, too. The UK has been one of Ukraine’s most steadfast supporters, providing military aid, intelligence and diplomatic backing. But with America stepping back, Britain and other European nations may have to bear a significantly greater burden. And that burden comes with a price tag.
For decades, UK defence spending has gradually declined as a percentage of gross domestic product (GDP). Successive governments relied on the implicit understanding that the US would remain Europe’s ultimate security guarantor, allowing Britain to allocate more funds to domestic priorities. That era appears to be coming to an abrupt end.
Currently, the UK spends about £54bn a year on defence — approximately 2.3% of GDP. The government had already set a target of raising this to 2.5% but, with Trump’s shift in policy, senior figures within the government have privately acknowledged to me that even this may not be enough. As one defence source said, the more realistic figure may be north of 3%, which would require upwards of an extra £20bn a year — the most significant increase in UK defence spending in more than a generation.
An increase of this scale leaves the government in a difficult position. There are only three ways to fund it within Labour’s own self-imposed fiscal rules: raising taxes, stimulating economic growth, or cutting spending elsewhere. Each option carries significant political and economic consequences.
Raising taxes would be difficult for Labour, especially after its manifesto commitments. Amid a cost of living crisis that has seen it take cash away from pensioners, it would be hard for many to swallow; even just concentrating on taxing the richest would open the party up to criticism from the Conservatives and business leaders.
Then there’s generating higher tax revenues through economic growth. While this would be ideal, a surge in growth appears unrealistic in the short term. We have had little to no growth in the last six months and, while increased defence spending itself could stimulate certain industries such as the arms sector (also likely to attract some opposition within Labour), the effects would not be immediate, nor would they be enough to cover the full cost.
That brings us to arguably the most likely option: cuts to “unprotected” government departments. According to Westminster insiders, departments outside health and education, which the government usually shields from spending reviews, have already been asked to identify potential savings of up to 11%. The implications of such cuts could be severe. “That would be nothing more than austerity,” one left-leaning Labour MP told me. “We need to be honest and call it what it is.”
The prospect of renewed austerity is politically charged; since entering government, Labour has repeatedly had to bat away accusations that this was its plan. The Conservative-led austerity measures of the 2010s left deep scars on public services, and Labour came to power promising to rebuild the welfare state, invest in infrastructure and strengthen the NHS. If the government is forced to cut public spending to fund increased defence commitments, it risks alienating core voters and provoking a backlash from within its own ranks. One Labour MP told me it would be “politically so damaging” to go down that path.
On the other hand, a few Labour sources have made the argument in recent days that an increase in defence spending would be strategically beneficial. Winning favour with the Trump administration may help Britain secure a stronger leadership role globally. A UK that positions itself as Europe’s primary security guarantor could have greater influence in global affairs, potentially offsetting the economic costs with increased diplomatic and military clout.
Ultimately, though, the coming months will be critical. The government faces a stark choice: find new revenue streams or make painful sacrifices. Either way, the era of assuming the US will underwrite European security appears to be over. Britain has long been able to prioritise domestic spending while maintaining a relatively modest defence budget thanks to America’s overarching military presence. Now the geopolitical equation has changed. Britain and its European allies must decide whether they are willing to pay the price to maintain existing levels of defence, or risk being left exposed in a world where American support is no longer guaranteed.
Shehab Khan is an award-winning presenter and political correspondent for ITV News.
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