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UK Government aims to spend 3% of GDP on defense by 2030, Chancellor says, but not everyone's convinced

Former Defense Secretary Dan Jarvis sets out Defense Investment Plan to MPs

The UK Government will aim to spend 3% of economic output on defense by 2030, and will plot a course for the target at next year's spending review, Chancellor of the Exchequer John Healey has said. Work is underway to reach the target – and Britain's promise to NATO to spend 3.5% of GDP on defense by 2035 – in a “fiscally sustainable way”, the Chancellor said, indicating that raising defense spending further could in part come from making cuts elsewhere.

Mr. Healey's target of 3% by 2030 would fulfil a threshold he thought would be missed under Sir Keir Starmer's premiership, which sparked his resignation as defense secretary in June this year.

The announcement was welcomed by Nato Secretary General Mark Rutte, Defense Secretary Wes Streeting and the author of the Strategic Defense Review (SDR), Lord Robertson of Port Ellen.

Meanwhile, Conservative leader Kemi Badenoch criticized his announcement as a “plan to have a plan”.

As he delivered his first Budget, the Chancellor told the Commons: “This year, our defense budget is £14bn higher than it was in the Conservatives’ last year of government.

”At the spending review next year, I confirm that I will set out the details of how we will meet our Nato commitment to spend 3.5% of GDP on defense by 2035, with a target date for 3% in 2030.And today I am getting work underway to get there in a fiscally sustainable way.“

Reaching the 3% target by the end of the decade is estimated by the Office for Budget Responsibility to cost an extra £17.3bn in 2029-30.

And Mr Healey hinted that reaching the commitment could come at the cost of spending elsewhere, telling MPs: ”That will include looking hard at public spending, as I have done to fund the Defense Investment Plan (DIP) today.But I am also determined to use more innovative financing, alongside the private sector and our international allies.“

Defense will rise to a 2.7% share of the economy by 2027 Mr Healey also committed at the Budget to ”fully funding“ a £4.7bn black hole in the Defense Investment Plan, left over by Sir Keir Starmer. The £4.7bn shortfall will be funded ”through reprioritization of capital budgets“, according to the published Budget document.

Departments across Government will be asked to reduce their capital budgets by 1% between 2027-28 and 2029-30 to raise some £3bn. The remaining £1.7bn shortfall will be made up from an “unallocated contingency in the Treasury’s capital reserve”.

The DIP, one of Sir Keir's final major announcements as prime minister, promised an extra £15bn of funding for the UK defense sector but only committed £10.3bn to it, leaving the rest for Mr. Healey to find. The extra cash means that government spending on defense will rise to a 2.7% share of the economy by 2027.

Responding to the Budget, Tory leader Kemi Badenoch said Mr Healey had not met his pledge and was making troops unsafe.

Mrs Badenoch said: ”He should have set out a plan for 3% today. So, now he is the man who is increasing risk to personnel on operations; he is the man who is making our country less safe; he has failed his own test. This is on him and no-one will ever forget. If he had any decency he would resign again today.“

She added: ”What he's done is he’s given himself a bit of breathing space until next year. Instead, what we have is a plan to have a plan. I bet (Vladimir) Putin's really scared now.“

Budget reaction in the defense world One of the SDR authors and former Nato secretary general Lord Robertson of Port Ellen said: ”John Healey is acting in the national interest – and has done exactly what he said was needed for defense in his resignation letter, by setting a head-mark for 3% in 2030.

“I am strongly in favor of innovative ways of financing defense – and this is a credible route to get more into UK defense. Today’s announcements strengthen UK leadership in NATO once again.”

Liberal Democrat leader Sir Ed Davey pressed the Government to push for a “European rearmament bank” which he said would “bring our allies together behind a shared vision of defence investment to protect our continent from Putin”.

Former defense secretary and Scots Guards officer Sir Ben Wallace was quick to criticize the Budget, highlighting the way he said it would affect people like Mr Healey's own son, who is a member of the Army Reserve.

Sir Ben posted on X: ”The MOD faces a real term cut to day-to-day spending of nearly 0.5% (RDEL) in 27/28.That's money we spend on training, ammunition, maintenance and operations. So the Chancellor's son in the reserves will have even less training and ammo.“

His comments were echoed by Afghanistan veteran Mike Martin, who said: ”The Chancellor has handed another year to Putin by deferring decisions to increase defense spending in today's Budget.

“The Government says we should prepare for war with Russia in three years, but is totally comfortable wasting one of those years standing still as it defers increasing defense spending until the next Spending Review.

”By then it will be 18 months since the Chancellor resigned as defense secretary over the Government's failure to reach 3% of GDP.”

Mr Healey also announced plans that will see the Government work with private and international finance. A defense finance taskforce is being set up ahead of next year’s spending review. (Forces.net by Sian Grzeszczyk Melbourne).