Overview
- The Treasury confirmed on Friday that Chancellor John Healey will not include a pledge to reach 3 percent of GDP on defence by 2030 in his 28 October Budget and has pushed the timetable decision to the 2027 spending review.
- The government says it will fully fund the existing Defence Investment Plan and plug an equipment funding gap of about £5 billion that ministers inherited from the previous administration.
- Critics including Conservative frontbenchers and defence experts accused Healey of backtracking on the issue that prompted his June resignation as Defence Secretary and warned the delay could weaken deterrence against threats such as Russian activity.
- Markets and industry signalled concern, with reports that British defence shares fell and lost roughly £1.7 billion in value after the announcement, while analysts warned that extra cash alone will not fix procurement and delivery problems.
- Independent analysis and official projections show defence spending is set to reach about 2.6–2.7 percent of GDP by 2030 and the Institute for Fiscal Studies estimates raising it to 3 percent by 2030 would cost roughly an extra £10 billion a year, making the spending-review timetable a key fiscal and security test.