Defence secretary quits: is this the end for Starmer? – The Latest

0:00This is The Guardian.

0:30This new mission explores what it means to live as a double agent. Twice the lies, twice the risk. The lines between ally and enemy blur like never before, and survival depends on trusting no one. Starring Michael Fassbender, Jeffrey Wright, Jodie Turner-Smith and Richard Gere. Don't miss The Agency. All episodes streaming June 21st on Paramount+.

1:10The fact of the resignation is one thing, but the actual wording of the statement is so blistering. He said, you are not as committed to defence as you claim, and you're actually putting our security at risk. Not only is he saying that Keir Starmer's not willing to do it, but he's unable to overrule his Chancellor. So he's saying he's also weak. All of these things play into all of the doubts that Keir Starmer's critics have about him.

1:36Nosheen Iqbal:From The Guardian's Today in Focus, this is The Latest with me, Nosheen Iqbal. Kieran Stacey, you're The Guardian's policy editor. And I don't want to make too many assumptions about our audience. But I think when a lot of people see the headline, John Healy resigns. They might then think, who? But this is a very big deal. Why? Well, first of all, John Healy was, until about an hour ago, the Defence Secretary. That's a pretty big job in itself. It's a big job. It's true to say that he's probably one of the more low-key members of the Cabinet. I've actually known him for quite a long time and he's very softly spoken.

2:14But he's well liked. He's been around the Labour Party for an extremely long time. He's got history in the Treasury. He's done senior jobs at a number of posts. But why is this a big deal? Because the fight that the government is having right now is over defence spending. And we are told, although this has been happening behind closed doors until today, that the Treasury had been saying that they were willing to fund a certain amount for the defence budget over the next few years, and that John Healy, the defence secretary, was pushing back very heavily and saying, no, we need much more. The problem is you've got Keir Starmer saying that defence of this country and also geopolitical uncertainty and instability is the major force in the world right now, the one political issue we need to deal with.

2:56And not only have you just had his defence secretary resign saying you're not going to spend enough on defence, but if you look at the statement he's put out, it is really damaging for the prime minister and probably for the party as a whole.

3:07Nosheen Iqbal:Can you tell me more about the statement? Because how big is the shortfall in the first instance between what Healy was asking for and what the government was able to negotiate? We think the military chiefs had said we think this requires another 28 billion pounds on top of what's already been promised. I mean, they're always going to go at the top end. They're always going high. It's what the military chiefs do. They were saying 28 billion pounds over the next four years. That got moderated, we're told, to a request for 18 billion pounds. What sources are now saying today is that the Treasury came back with their final offer on Monday afternoon.

3:38And they said something in the realm of 14 or 15 billion pounds, only 10 billion pounds of which was new money, though. and that seems to have been very important and a lot of it was backdated so it was due to come in towards the end of the four-year period and what John Healy has said is the gap between what we wanted and what you're offering is one of whether our country is safe or not and that is such a huge accusation to make against the Prime Minister.

4:04Nosheen Iqbal:And what does that then mean for national security if there is that big gap and if your Secretary of State of Defence is resigning over the issue? It's difficult to know. If you listen to Treasury people, they will say, well, look, the problem you've got is the Ministry of Defence, as you say, Nosheen, always asks for too much, number one. And number two, always mismanages its projects. A very famous example of this, the Ajax tank programme, tanks that basically didn't work and ran up huge bills as the Ministry of Defence tried to build them. And the Treasury always says, well, look, you don't run these programmes very well.

4:36You ask for a lot of money. You try and build very big, very sophisticated pieces of kit. They're often out of date by the time you get them. In Ministry of Defense, what they would say is, we are living at a time of real instability. John Healy talks a lot about the threats, not only about what's going on in the Gulf, but also particularly about the threat from Russia. He has talked in the past, he's given a whole press conferences about the fact that Russian submarines are spying, he says, on our communications equipment at the seabed, you know, around the top of the North Sea, and that we need equipment to be able to deal with that.

5:06Now, there are two or three really big projects that are in question here.

5:10Nosheen Iqbal:One is called GCAP, which is a silly name really, but it's actually just fighter planes. Right. And we were supposed to be building a whole new fleet of fighter planes. The Treasury said in the end, we're happy to do that, but we actually want to take charge of the program, not you, because you misspend this money. Okay. Another big program that's in question here is called AUKUS. And this is a big deal, not only for defense, but also geopolitics. This is a partnership between the US, UK and Australia to design a new fleet of nuclear submarines. It's going to incorporate technologies from all three of those countries.

5:41And the UK and Australia are supposed to buy these submarines at the end. Now, this was going to provide a major boost to the UK, not just in terms of defence, but also in terms of growth. It's going to boost the industrial base. It'll create jobs. And the prime minister's talked in glowing terms about this project, not least because the Americans and the Brits actually stole that contract away at the last minute from the French. So that's been put at risk. And then you've got other things going on in the world, which Keir Starmer has also made commitments on. whether that is to be part of the coalition of the willing, the forces that might get deployed in Ukraine, should there be peace there, or the prime minister has also promised to take part in any kind of peacekeeping force in the Straits of Hormuz, should that conflict end.

6:21So defence sources will tell you that since the budget of last November, the prime minister has made a series of commitments on the world stage, but is now not willing to back that up with hard cash.

6:32Nosheen Iqbal:I guess you don't need to be a defence expert to know that defence and national security is very high on the agenda right now for most countries. And so given that and given this resignation, how damaging is it for the prime minister? Enormously damaging. The fact of the resignation is one thing, but the actual wording of the statement is so blistering that it removes one central plank of Keir Starmer's entire argument for why he should remain in position. Wow. Keir Starmer will go around if asked about his premiership and say, the world is a very uncertain place. I have proved myself on the world stage.

7:08I've proved that I can do the diplomacy and I'm committed to our defence. This is not the time to start shaking things up. His defence secretary has just resigned, saying you are not as committed to defence as you claim. And you're actually putting our security at risk because you're not willing to commit the money that we need. So he really put the boot in. He really put the boot in. And then just for an added kind of double whammy here, he said the wording of this is quite interesting. He said the Treasury has been unwilling and you have been unable to provide the funds needed. Now, what that's saying is not only that.

7:42Hot sauce. Yeah. Not only is he saying that Keir Starmer is not willing to do it, but he's unable to overrule his chancellor. So he's saying he's also weak. So you've got weakness, indecision, a lack of commitment to the nation's security. all of these things play into all of the doubts that Keir Starmer's critics have about him. You know, people are now saying, ironically, that the make-a-feel by-election might actually be giving Keir Starmer more time in post. I mean, maybe only a week. But this is the kind of thing that brings prime ministers down.

8:13Nosheen Iqbal:But were he to go, there's no easy fixes to this. I mean, could anyone sort of bridge this gap between what the military wants, what the defence secretary says is needed, and what the Treasury is willing to give up? Frankly, nobody has said so in open terms. The closest we've got for an explanation as to how you can bridge this gap is something that Andy Burnham used to say, but has since you turned on, which was you can borrow more. You can issue specific bonds to pay for defence. This is something Germany has been doing recently. In recent weeks, Andy Burnham's or at least Andy Burnham's allies have clarified that, no, he doesn't intend to do that.

8:47And he would stick to the fiscal rules as already set out by this government and not borrow any more than they allow. That boxes him in to a certain extent. The reality is he would have been boxed in anyway because it's not actually the fiscal rules that hem the chancellor in. It's how much we are paying on our interest rates when the government borrows money. And it's the markets who tell you how much you can borrow, not your own made up rules. Your own made up rules are there to reassure the markets. But essentially, if when you're going out to the market to borrow money, they're saying, OK, but you've got to pay five, six percent interest rates.

9:19I mean, that's not what the government's paying. But, you know, if they're saying you have to pay high interest rates, then you're hampered. You know, you simply can't afford to do that. And that is what Andy Burnham would have found anyway. That's why we've started to hear murmurings of maybe the answer to this is to tax people more.

9:33Nosheen Iqbal:Breaking the manifesto pledges. Well, look, there are elements of tax that you can raise without breaking the manifesto pledges. The manifesto pledges were not to raise national insurance, not to raise income tax and not to raise VAT. You could go for capital gains tax. You could find other things to tax. They might not raise as much. I suspect if you're Andy Burnham or at least somebody who's doing policy for him, at the moment, you're looking at exactly those options right now. And in the meantime, Kieran, where does this leave John Healy, who appears to have made a very principled resignation?

10:05But what's his game? Well, that's a good question. That's what a lot of people are asking. Why resign now? I mean, honestly, this is a genuine dispute. I wrote a piece a couple of days ago for The Guardian saying that this has caused the biggest rift in Cabinet since Labour has been in power. And the briefings I was getting from Treasury, from Number 10 and from the MOD were really vitriolic. You know, people being very scathing about each other and the way that they've handled themselves during this essentially year long debate within government. So that rancor does exist. And I think Jordan Healy is resigning because he genuinely feels quite strongly about this.

10:41I think you could ask whether he would have done this if the prime minister of the day was in a slightly stronger position. And I think that's questionable. If there was a different prime minister in post who didn't look like their days were numbered, would he be resigning in this way? There will be people who say he sees that Andy Burnham is coming in. Actually, it's better to get off this ship before it sinks.

11:04Nosheen Iqbal:Right. And see what happens after if Andy Burnham becomes prime minister. There are people who think that John Healy himself has been positioning himself as a potential leadership candidate. Right. Right. So for all the people who are asking who is he, potentially he could be putting himself in the ring. There was a theory a few months ago that Keir Starmer would have to stand aside because of all the problems that have affected his government. And that in the interim, before Andy Burnham finds a seat or whatever happens, you needed a steady as she goes type minister to take the reins. John Healy being a classic example of that.

11:41Safe pair of hands. Now that Andy Burnham's found a seat and if he wins, he'll be back in Westminster soon. That kind of theory of the case seems to be somewhat undermined. I don't quite see what the theory is for John Healy as a relatively low key, albeit capable minister to take over at this point when you've got someone like Andy Burnham who has a higher profile, more charisma, is more popular with the public. You never know. He might have a go. He might just be positioning himself for whatever comes in the future. but I would say, you know, to take the cynical hat off for a second, this is a genuine dispute and I think he genuinely does feel quite strongly about it.

12:18Nosheen Iqbal:Keeping an eye on him nonetheless. Kieran, thank you so much for your time. Thank you. That's it for today. My huge thanks again to Kieran Stacey, The Guardian's policy editor and host of our sister podcast, Politics Weekly. Thanks for listening to this episode of The Latest. Today in Focus, we'll be back with you as usual tomorrow morning and The Latest will be back tomorrow night. This episode was presented by me, Noshe Nikfarl. The producer was Jacob Liebenberg. The senior producer is Ryan Ramgobin. And the lead producer was Zoe Hitch.

12:50This is The Guardian.

13:00This message comes from Jackson. Taxes aren't something you can only think about once a year. With investments, planning for tax days year-round. Fortunately, Jackson offers tax-efficient products. Visit Jackson.com for more information on how our products can make your tax bill a little bit less painful. Jackson is short for Jackson Financial Incorporated, Jackson National Life Insurance Company, Lansing, Michigan, and Jackson National Life Insurance Company of New York. Purchase New York.