Daniel Keohane (Dublin City University)
As is customary for new British governments, the recently elected Labour administration will conduct a strategic review of UK defence policy. Lord George Robertson, former NATO Secretary-General and UK Defence Secretary (in a previous Labour government, from 1997-1999), will lead the review, with publication expected during summer 2025. There is plenty for the reviewers to consider. The new Labour government will have to take some tough defence policy decisions in the coming years on the size and shape of the British armed forces, against a backdrop of a “£22 billion black hole” in state finances, alongside Russia’s ongoing invasion of Ukraine which threatens broader European security.
Partly with a nod to the evolving geopolitical landscape in Europe, the UK foreign and defence secretaries, David Lammy and John Healey, have declared that “We will have a ‘NATO first’ defence strategy. European security will be our foreign and defence priority”. The Labour government has also adopted an EU-friendlier approach than its predecessors, seeking a “reset” in those relationships following a difficult almost-decade of Brexit tumult. At the Washington NATO summit in July, US President Joe Biden encouraged UK PM Keir Starmer to strengthen relations with Europe, describing the UK as “the knot tying the transatlantic alliance together” when it was closer to Europe.
Furthermore, as Karin von Hippel, the Director General of the Royal United Services Institute (RUSI) in London, has argued, regardless of who wins the US presidential election in November, the UK must develop closer ties to other Europeans: “If Trump wins, the UK will not be able to rely on the US for support, and not just with respect to Ukraine. Closer ties and greater efficiencies on defence and security for the UK and Europe will be critical. If Harris wins, she will still have trouble getting funding for Ukraine approved in a divided Congress, just as we saw this past year with Biden’s efforts. In both cases, the UK and Europe will have to act, and possibly without the US at their side.”
A ”shopfront military”
However, even if the Labour government aspired to become the “transatlantic knot” at NATO, the UK may struggle to fulfil some of the military parts of such a role. For example, Britain is no longer the top European defence spender at NATO, having been surpassed by Germany this year, and there are few immediate signs of Britain regaining that top spot. Labour has committed to reaching the 2.5% of GDP target for defence spending set by the previous Conservative government “as soon as possible”. But the UK currently spends 2.3% of GDP on defence, no deadline has been set, and the government says it has to fill the aforementioned £22 billion black hole in the state’s finances. With many pensioners, for example, losing their winter fuel allowance, it is not obvious that increasing defence spending will be a political priority for everyone in the new Labour government.
More specifically, the UK National Audit Office has identified a deficit in the defence ministry’s equipment budget of £3 billion for 2024/25, with a further deficit of almost £4 billion projected for 2025/26. As a result of these broader state and specific defence funding gaps, some key decisions will have to be made before the Strategic Defence Review is completed. As Malcolm Chalmers from RUSI points out: “The October Budget will be key. Over the next two months, the prime minister and chancellor will have to decide how far, if at all, to go in providing extra funds for defence and other public services, and how they intend to fund these increases…these decisions will be a big step towards setting the budgetary priorities for the rest of the parliament”.
In addition, existing defence money is being stretched too sparsely. Current defence spending is simply inadequate if the UK wishes to be as full spectrum a military power as possible with a global reach. Although the UK has nuclear weapons and two new aircraft carriers, days before the UK general election Rob Johnson, who had recently stepped down as director of the UK defence ministry’s office of net assessment and challenge, said “the UK military was operating with a ‘bare minimum’ that only just allowed it to mount peacekeeping and humanitarian relief operations, civilian evacuation from warzones, and some anti-sabotage activities”. His blunt warning was that “Our defences are too thin, and we are not prepared to fight and win an armed conflict of any scale…The UK has reached a situation where it cannot defend the British homelands properly”. Concretely, Johnson added that the UK needed 25 warships compared to the current 19, 265 combat aircraft compared to the current 137 typhoons and less than three dozen F-35s, and to increase the size of the army to 125,000 personnel from the current 72,500. Retired Air Marshall Edward Stringer, echoing Johnson, said that Britain has “a shopfront military”.
EU-UK military cooperation
Despite its current military capability and budgetary shortfalls, the UK will want to sustain a military presence beyond Europe, in particular, as noted by Ben Bland of Chatham House, across the Indo-Pacific. Some defence experts also suggest that investing more in new technologies, such as artificial intelligence, would compensate for a lack of older types of equipment. In addition, closer relations with the EU might help ease some of the UK’s military budget and capability shortfalls – alongside broader geopolitical benefits, 23 of the 27 EU member-states are also members of the NATO alliance.
Since Brexit, the EU has set up a European Defence Fund (EDF) to support collaborative (pan-EU) defence industry projects, with an €8 billion budget from 2021-2027 that is expected to grow substantially in the next EU budget after 2027. The EDF is designed to complement the broader European Defence Industrial Programme (EDIP), a defence industrial strategy that aims for 40% of national defence procurement budgets to go towards pan-European programmes by 2030, and that EU members will spend 50% of national procurement budgets within the EU. It remains to be seen how successful the EU’s defence industrial efforts will be in practice, but as Luigi Scazzieri of the Centre for European Reform put it: “It seems likely that the EU’s role in defence industrial matters will slowly deepen”. In that scenario, the UK defence industrial base would be at risk of becoming the “odd one out” between the biggest transatlantic defence markets, the evolving EU market and that of the United States.
Moreover, the UK would benefit from access to the EDF, since its industry already has close ties to various continental defence firms, and the EDF will likely fund some projects that are also NATO capability priorities. Some EU member-states – such as the Netherlands, Poland, and the Nordic and Baltic States – would also surely welcome deeper UK involvement in EU defence industrial efforts, given British defence industrial know-how and shared desire to bolster NATO’s defences. Helpfully, UK PM Starmer has proposed an EU-UK security pact, to foster closer cooperation on foreign and defence policies. He has also agreed a new bilateral defence cooperation pact with Germany, and re-affirmed the UK’s commitment to the existing bilateral defence treaties with France. All this positive mood music might help encourage deeper EU-UK military cooperation in the coming years.
Plus, there is a precedent for non-EU countries to participate in the EDF and broader EDIP, namely Norway, a non-EU member of NATO. But Norway’s participation in the EDF hinges on its membership of the European Economic Area (EEA), which effectively means that it can trade freely across the EU single market as long as it follows EU rules and pays into the EU budget. Herein lies the rub: Starmer has ruled out such a Norway option for the UK, which would essentially involve rejoining the EU single market. It is currently difficult to imagine the EU granting the UK access to the EDF unless the Labour government reconsiders its trade relationship with the EU (the UK and the EU are due to review their trade and cooperation treaties during 2026). At the same time, as Mujtaba Rahman of the Eurasia Group has argued, the geopolitical context points to a need for more EU creativity in its relations with the UK, especially if Donald Trump returns to the White House and weakens the US commitment to European security. Furthermore, “Ukraine is now being progressively integrated into parts of the single market rather than being forced to swallow the acquis communautaire – the body of common law – wholesale, showing that the EU can prioritise politics, and think creatively, when it wants to”.
All this raises at least two interesting questions for Ireland. The next Irish government should come to power before the UK strategic defence review is completed next year. Two areas Irish politicians and officials should consider in the meantime are: 1) will the UK be able to help Ireland with protecting its national security to the same degree in coming years, as it has done in the recent past (such as monitoring Russian submarine activity in Irish waters)?; and 2) will Ireland support any UK efforts to gain access to the EU’s European Defence Fund? There are a few strategic and (geo)political angles to consider when answering both questions, but without doubt the tough decisions that the UK strategic defence reviewers will assess for the new British Labour government will also matter for Ireland.
Daniel Keohane, Senior Research Fellow, Dublin City University (DCU)
An earlier version of this piece was published by The Azure Forum for Contemporary Security Strategy
The views expressed in this blog post are the position of the author and not necessarily those of the Brexit Institute blog.