The Prime Minister will face MPs in his first PMQs since he announced the controversial Defence Investment Plan and leadership front-runner Andy Burnham set forward his vision to fix a “broken” system.
Keir Starmer announced £15 billion of spending over the next four years for the Dip but questions have been raised over a £4.7bn funding gap left for Burnham to plug. In a statement to Parliament, Chancellor Rachel Reeves said only two-thirds of the sum – £10.3 billion – had been identified, while the remaining £4.7 billion would be “confirmed at Budget 2026, in a fair and balanced way”.
Defence Secretary Dan Jarvis denied the funding gap was a hand grenade for the new Makerfield MP after a Burnham ally likened it to an “unexploded bomb”.
On Monday, Andy Burnham made his first major speech since Starmer said he would step down. He set forward his blueprint for the top job, including a promise to kickstart the biggest council house building drive since the post-war era.
Burnham also vowed to deliver “the biggest rebalancing of power our country has seen”, with more powers being handed to mayors and local leaders, saying: “It is time for Whitehall to accept that growth cannot be ordered from the top down. Instead, it can only be nurtured from the bottom up.”
No rivals have put themselves forward to take on Burnham in a leadership race for PM, meaning he could become Prime Minister in the middle of July.
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Of the funding that has already been identified, most comes from reducing other departments’ capital budgets by 1%, providing some £4 billion over the next four years.
The Department for Transport and the Department for Energy Security and Net Zero will be forced to find additional savings of £800 million and £2 billion respectively.
This money is expected to come from cancelling or delaying projects, in a move which has already caused some disquiet among MPs concerned about spending that had been promised to their constituencies.
Chancellor Rachel Reeves said another £2.4 billion had been found by the Treasury taking responsibility for the costs of “ongoing international objectives” such as providing security guarantees for Ukraine in the event of a ceasefire.
Some £400 million is expected to be raised by selling off Ministry of Defence land, and another £600 million from “reprioritisation” of the department’s existing budget.
Elizabeta RanxburgajToday08:07 BST
Keir Starmer announced £15 billion of spending over the next four years to support the Defence Investment Plan, but the Treasury put off setting out full details of how it would fund the increase.
In a written statement to Parliament, Chancellor Rachel Reeves said only two-thirds of the sum – £10.3 billion – had been identified, while the remaining £4.7 billion would be “confirmed at Budget 2026, in a fair and balanced way”.
Andy Burnham, the frontrunner for No 10, was briefed on the Dip before its publication, but reportedly not told about the need to find an additional tranche of funding in his first budget.