Budget Delay on Defence Spending Target
Chancellor John Healey will delay setting out when the UK will meet its target of allocating 3% of GDP to defence until next year's spending review, the Treasury has confirmed. The decision marks a reversal for Healey, who resigned as defence secretary in June under Prime Minister Keir Starmer's leadership, accusing the then prime minister of being "unable" and the Treasury "unwilling" to "commit the resources that the nation needs to defend the country".
Since succeeding Rachel Reeves as chancellor when Andy Burnham arrived at No 10, Healey has declined to set a date for meeting the 3% target, which he had previously insisted should be hit by 2030. Treasury sources confirmed that instead, the focus in Healey's first budget on 28 October would be fully funding the defence investment plan (DIP).
The three-year DIP was one of Starmer's final announcements, but approximately 2bn a year was left unaccounted for, with Healey's predecessor Reeves suggesting the money would have to be found through cuts in other Whitehall departments. The Treasury confirmed on Friday there would be no further detail about the timeline in the budget. A spending review is expected to be held next year but no date has yet been set.
A government spokesperson said: "The first duty of government is to keep its citizens safe. The prime minister and chancellor are committed to fully funding the defence investment plan. At the spending review we will set out a pathway to meet our Nato commitment of 5% of GDP on defence by 2035 and will set a target date to hit 3% on that path."
Defence spending is forecast to reach 7% of GDP by 2030, funded partly by Starmer's decision to slash the UK's aid spending. Healey had previously said that this should rise to 3% urgently, given rising global conflicts and security risks. He wrote in his resignation letter to Starmer in June: "As we have regularly discussed, I am certain that a headmark date for 3% of GDP on defence in 2030 is what Britain must set."
Fiscal Pressures and Political Context
The delay comes against a backdrop of significant fiscal strain. The UK's public sector net debt has passed £3 trillion, equivalent to 94% of GDP, according to reporting in The Age. The Age also reported that the previous Conservative government allowed defence spending to stagnate over 14 years.
In an interview with Sky News on Friday, Healey said fiscal discipline was the "first priority" for any chancellor. "It's the bedrock for economic stability. We simply can't deal with the problems we face as a country by maxing out the country's credit card," he said.
The chancellor will fly to North Carolina this weekend for a meeting of G20 finance ministers. Healey and his colleagues will discuss the prospects for global growth, against the backdrop of continued high energy prices, volatile government bond markets and the US-Canada trade war.
Security Warnings and International Pressures
The decision to delay the target comes amid warnings from military figures about the security environment. Air Chief Marshal Sir Rich Knighton warned of the "most dangerous period" in his career, as reported by The Age. Lord George Robertson called for more investment and said: "We are underprepared. We are underinsured. We are under attack. We are not safe."
The Age also reported that Russia's attacks on Ukraine highlight shortages of Patriot interceptors, and a Russian strike on a Kyiv ammunition depot killed 37. Britain and allies are developing hypersonic missiles and missile defence systems, with tests at Woomera in South Australia.
US President Donald Trump wants NATO allies to spend more on their own security, adding further pressure on the UK to increase its defence outlay.