Defence Spending Priorities: Streeting and Burnham's New Plan

Wes Streeting, the new defence secretary, has made clear that the military will be a spending priority for Andy Burnham’s government over other departments. Speaking at the Farnborough International Airshow on 22 July 2026, Streeting said increased defence spending would make “an enormous contribution” to economic growth. He promised to give the arms industry “clarity and confidence” — a direct contrast to the row that contributed to the fall of Keir Starmer.

Streeting did not make any extra financial commitments at the airshow, but he laid out a vision for how the Ministry of Defence will operate under the new prime minister. The core message: spend wisely, cut waste, and modernise.

The Numbers Behind the Plan

Burnham recommitted the UK to lifting defence spending from 2.6% of gross domestic product to the Nato target of 3.5% by 2035 in his first speech as prime minister. That implies a real-terms increase of more than £25bn in less than a decade. The defence investment plan (Dip) sets spending at 2.7% of GDP by the end of the decade.

A £15bn increase in military spending over four years was announced by Sir Keir Starmer in his final days as prime minister, although it is not yet fully funded. Chancellor John Healey — who quit as defence secretary during the row over the Dip — now faces the task of finding the extra money.

Streeting, pressed on whether he supports raising defence spending to 3% by 2030, told reporters that fiscal policy is “a matter for the chancellor”. He added that his calls for greater defence investment are “on the record”.

Waste Reduction and Modernisation

Streeting said he wants to ensure “every penny is spent wisely”, adding that investment in the armed forces must come with “modernisation”. He said he would follow the same “mantra” he used as health secretary: “maximising value for money and cutting waste” after securing billions of pounds of extra funding for the NHS.

Speaking at the airshow, Streeting said his aim is to make the UK a “strong, dependable ally” while also supporting jobs at home. He and BAE Systems chief Charles Woodburn unveiled an unmanned fighter aircraft at the event, a tangible symbol of the kind of advanced technology the government wants to back.

Streeting also criticised Israel for having “fallen short” in its conduct during the war in Gaza and in its operations in the West Bank — a peripheral but notable comment on foreign policy.

Regional Economic Benefits

In a video address played before Streeting’s speech, Burnham said military spending would help reindustrialise the UK. “We are going to honour our commitments on defence and use that investment to transform people’s lives,” he added. He highlighted “significant benefits for the South West” from the new defence plan, though no specific figures or projects were provided.

The emphasis on regional economic impact aligns with the government’s broader agenda to spread investment beyond London and the South East. For areas like the South West, which host major defence contractors and naval bases, the promise of sustained spending could mean long-term job security and infrastructure development.

For more on how the new prime minister’s style is shaping policy, see our analysis of Andy Burnham’s off-the-cuff comments and their impact.

The Political Context

The announcement of the long-delayed Dip followed a row in government that led to John Healey quitting as defence secretary. Healey is now chancellor and faces the pressure to deliver for the armed forces. The Dip sets spending at 2.7% of GDP by the end of the decade, a stepping stone toward the 3.5% target by 2035.

Streeting said spending more on defence would come at “an opportunity cost across government”, meaning the Ministry of Defence had to show “we are spending existing resources wisely”. That message is likely to resonate with voters who want to see military investment without cuts to public services.

The government’s approach also reflects a broader shift in how the UK positions itself globally. As the US and other allies ramp up their own defence budgets, the UK is signalling that it will remain a reliable partner. The Farnborough airshow, a key event for the global aerospace and defence industry, was the natural venue for that message.

What This Means for the Defence Industry

For companies like BAE Systems, the clarity and confidence promised by Streeting is a welcome change after months of uncertainty. The row that preceded Starmer’s exit had left the industry unsure about the pace and direction of future spending. Now, with a clear target of 3.5% of GDP by 2035, firms can plan long-term investments in R&D, manufacturing, and workforce development.

The unveiling of the unmanned fighter aircraft at the airshow underscores the government’s interest in next-generation technology. Modernisation, as Streeting put it, is not just about spending more — it is about spending smarter. That means investing in cyber capabilities, autonomous systems, and advanced manufacturing, all of which have spin-off benefits for the broader tech sector.

For a deeper look at how technology is reshaping public services, read our piece on how AI and smart tech are transforming UK train travel.

The Bottom Line

The Burnham government’s defence spending plan is ambitious, but it comes with real trade-offs. The £15bn increase announced by Starmer is not yet fully funded, and Chancellor Healey will have to find the money somewhere. Streeting’s focus on waste reduction and value for money is a sensible starting point, but it remains to be seen whether the Ministry of Defence can deliver the efficiencies needed to make the numbers add up.

For the South West and other regions with strong defence ties, the promise of significant benefits is a positive signal. But the proof will be in the delivery — and that will take years.

As the government moves forward, the balance between military investment and other spending priorities will be a defining test of the Burnham administration. Streeting has made his position clear: defence comes first. Now the hard work of making that a reality begins.