Andy Burnham is wrong. The suggestion that the UK should simply bypass fiscal rules to fund a massive military expansion is not just "creative accounting"; it is a recipe for a sovereign debt crisis that would leave the nation more vulnerable than any foreign adversary ever could. Politicians love to talk about "investment" when they actually mean "spending." There is a fundamental difference between borrowing to build a high-speed rail line that generates economic activity and borrowing to buy a fleet of fighter jets that sit in a hangar and depreciate. One is an asset; the other is a liability that costs millions just to maintain.
The current consensus suggests that because the world is getting more dangerous, we must throw money at the problem regardless of the balance sheet. This "safety at any cost" mentality is a financial suicide pact. If you break the fiscal rules to fund the military, you signal to the bond markets that the UK has lost its mind. We saw how the markets reacted to the "mini-budget" of 2022. Imagine that, but with the added weight of an indefinite commitment to military hardware that offers zero return on investment (ROI) to the taxpayer. For a deeper dive into this area, we recommend: this related article.
The Myth of the Defence Multiplier
Proponents of borrowing for defence often cite the "industrial benefit" to the UK. They claim that buying British tanks or ships creates jobs and "unleashes" growth. This is the Broken Window Fallacy in its purest form. If you take £10 billion out of the economy via debt to build a submarine, you haven't created £10 billion in value. You’ve diverted resources away from the private sector—where they could have been used for genuine innovation—into a highly specialized, state-managed project that serves a single customer.
When you look at the actual data, the "multiplier effect" for military spending is consistently lower than almost any other form of government expenditure. Infrastructure, education, and even tax cuts historically provide a better boost to GDP. Defence spending is an insurance premium. You pay it to keep the house from burning down, but you don't pretend that paying insurance makes you richer. Borrowing to pay your insurance premium is what people do right before they go bankrupt. For broader information on this topic, detailed analysis can also be found at Forbes.
Fiscal Rules Are Not Suggestions
The "fiscal rules" being mocked by regional mayors were put in place for a reason. They exist to prevent the government from cannibalizing the future to pay for the present. The UK's debt-to-GDP ratio is already hovering around 100%. At this level, interest payments alone start to crowd out essential services.
If we move defence spending "off-book" or exempt it from debt targets, we are lying to ourselves. The debt still exists. The interest still has to be paid. To the international lenders who buy UK gilts, "off-book" looks like "hiding the truth."
Consider the mechanics of the debt ceiling or the fiscal mandate.
$$ \text{Primary Balance} = \text{Revenue} - \text{Non-Interest Spending} $$
If you increase the spending side of this equation while the revenue side is stagnant, your primary balance craters. You then have to borrow more just to pay the interest on the money you borrowed to buy the missiles. It is a mathematical death spiral. I have watched firms try this exact maneuver—reclassifying operational expenses as "capital investments" to keep their stock price up. It always ends in a restructuring or a total collapse.
The Military-Industrial Complex is an Efficiency Black Hole
We are being told we need more money for defence, but nobody is asking why the money we already spend vanishes so effectively. The UK's procurement system is a disaster. It is characterized by "gold-plating"—adding so many complex requirements to a piece of equipment that it becomes over-budget, years late, and occasionally obsolete by the time it hits the field.
Take the Ajax armoured vehicle project. Billions of pounds spent on a vehicle that literally vibrated so much it made soldiers sick. That wasn't a lack of funding. That was a lack of competence. Throwing borrowed money into that same broken system is like trying to fill a bucket with a hole in the bottom by using a larger hose.
Instead of borrowing more, the focus should be on:
- Ruthless Procurement Reform: Cancel projects that are failing. No more "sunk cost" fallacies.
- Specialization: The UK cannot be a global superpower in every domain. We need to stop trying to buy everything and start buying what we actually need for modern, asymmetric warfare.
- Cyber vs. Kinetic: A billion pounds spent on cyber-defence provides more security in 2026 than a billion pounds spent on a single destroyer that can be sunk by a £50,000 drone.
The National Security of a Strong Currency
The ultimate irony is that by borrowing to "strengthen" our defence, we weaken our most important line of protection: the pound. A nation with a collapsing currency and a debt crisis cannot project power. It cannot buy the fuel, the parts, or the technology it needs from abroad. It becomes a hostage to its creditors.
True national security is built on a foundation of economic stability. During the Cold War, the West didn't just out-muscle the Soviet Union; it out-competed them. The USSR spent itself into oblivion trying to keep up with military spending while its internal economy rotted. We are currently flirting with that same mistake.
Imagine a scenario where the UK doubles its defence budget through borrowing. We have the shiny new toys. But then, a global recession hits. Interest rates spike. The cost of servicing that new debt doubles overnight. Suddenly, the government has to choose between funding the army and funding the hospitals. In that moment of internal chaos, we are far more vulnerable to foreign interference than we would have been with a smaller, more efficient, and fully-funded military.
Stop Asking the Wrong Question
The question isn't "How do we find the money to borrow for defence?"
The question is "What are we willing to stop doing to pay for it?"
If defence is truly a priority—and it should be—then it must be prioritized within the existing budget. That means making hard choices. It means cutting other departments. It means telling the public that we can't have it all. But politicians like Burnham don't want to make hard choices. They want to borrow, because borrowing is the coward's way of avoiding a tax hike or a spending cut.
Borrowing for defence is an admission of failure. It is an admission that we don't have the political will to manage our finances properly. It is a short-term fix that creates a long-term existential threat.
You cannot secure a nation by mortgaging its future to the point of insolvency. If you want a stronger military, build a stronger economy first. Everything else is just expensive theater.
The bond market doesn't care about your patriotism. It cares about your ability to pay.
