Healey’s budget to ditch 3% defence spending target by 2030
The Chancellor resigned as Defence Secretary in Sir Keir Starmer’s government over 'inadequate' ambition for military spending
The Chancellor John Healey will not commit to his own target of spending 3% of GDP on defence by 2030 when he presents his first Budget in October, the Treasury has confirmed.
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A decision on the timetable will instead be pushed back to next year's spending review.
Mr Healey resigned as defence secretary in June, accusing Sir Keir Starmer’s government of inadequate ambition for military spending.
At the time, he said the Treasury was “unwilling” to provide the resources needed to protect Britain.
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The Chancellor's first budget on 28 October will instead focus on fully funding the defence investment plan, Treasury sources confirmed.
This includes filling a nearly £5 billion defence equipment funding gap left over by former prime minister Keir Starmer, government insiders told the Financial Times.
“The immediate priority is to fund the defence investment plan that was published by Keir Starmer, and the chancellor will set out more details on that at the Budget," a government figure said.
“Beyond that, at the spending review we’ll set out a clear path to meet our 3.5 per cent Nato target in 2035 and set a target date for us to hit 3 per cent on that path. The spending review is the right place to set a target date,” they added.
It comes amid renewed threats from Russia to strike British military targets inside and outside Ukraine after British missiles were used to hit Russian territory.
So far, Prime Minister Andy Burnham has refused to commit to the 3 % target by 2030.
A government spokesman 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 3.5 % of GDP on defence by 2035, and will set a target date to hit 3 per cent on that path."
In an interview with Sky News on Friday, Mr Healey said that “fiscal discipline” was the “first priority” for any chancellor.
“It’s the bedrock for economic stability,” he said. “We simply can’t deal with the problems we face as a country by maxing out the country’s credit card," he added.
Defence stocks sank on the London Stock Exchange after Mr Healey's change in direction, with military companies listed on the FTSE 100 and FTSE 250 shedding around £1.7 billion in value.
One defence industry executive described the Government's position as "disappointing but entirely predictable."
They told The Telegraph: "When the Government turns a blind eye to direct threats from the Russian state against British infrastructure, factories and, in some cases, individuals, but talks about defence as a percentage point of GDP or a job creation scheme, we shouldn't expect anything better.
"The longer we mess around with reaching defence spending targets, the more we will see direct threats to our country escalate, and we will only have ourselves to blame."
Shadow Defence Secretary James Cartlidge also criticised the Chancellor over the issue.
He said: "Given he is now the Chancellor, it is extraordinary that he is backtracking on the very pledge which sealed the fate of the last PM and opened the door of No 10 to Andy Burnham.
"Russia doesn't work to Treasury timetables."