Overview
- The Treasury confirmed late Friday that the October 28 Budget will not set a target to raise defence spending to 3% of GDP by 2030 and will defer a firm timetable to the 2027 spending review.
- Chancellor John Healey has made plugging an inherited defence equipment funding gap of about £5 billion his immediate Budget priority rather than announcing a 2030 deadline.
- Opposition figures accused Healey of hypocrisy because he resigned as defence secretary in June over the 3% pledge and now as chancellor has shifted the timetable.
- The Institute for Fiscal Studies estimates that reaching 3% by 2030 would cost roughly an extra £10 billion a year in today’s terms and defence stocks fell after the announcement.
- Ministers say they will still fund the existing Defence Investment Plan and set out a pathway to meet NATO’s 3.5% goal by 2035 at the spending review, leaving procurement reform and delivery timelines as the key issues to watch.