Overview
- The Treasury confirmed on Friday that Chancellor John Healey will not set a firm target to reach 3% of GDP on defence by 2030 in the October 28 Budget and has pushed the timetable to next year’s spending review.
- Healey resigned as defence secretary in June because he demanded a 3% headmark for 2030, and critics including former ministers say his change of course looks like a reversal of that principle.
- The Budget will instead prioritise plugging an immediate shortfall in the Defence Investment Plan of about £5 billion in total, equivalent to roughly £1.2 billion a year in equipment funding.
- Official projections put defence spending at about 2.7% of GDP by 2030 and independent analysis from the IFS estimates moving to 3% by 2030 would cost around an extra £10 billion a year in today’s terms.
- Allies and defence firms have warned the delay could disrupt procurement and projects linked to AUKUS and affect military readiness, while the government says a spending pathway to meet NATO’s 3.5% by 2035 will be set at the spending review.