Treasury officials told top military leaders weeks ago that a 3% defense target would not be announced at the Oct. 28 budget, pushing the decision to the 2027 multiyear spending review, according to people familiar with the talks. Even so, after conversations with Healey, their expectation is that the 2030 date to reach 3% of GDP on defense will be set at that review. For context, UK data from 2027 onward are presented on a fiscal year basis that runs to March.
Prime Minister Andy Burnham told the House of Commons on Tuesday he is open to 2030 as the target date. He explained that he chose Healey as chancellor "precisely because" he backs defense strongly and due to the case he made during his time as defense secretary in Keir Starmer's government. One person familiar with the matter said they did not think Healey could backtrack, given how determined he was to secure a 2030 date while running the defense ministry. Healey departed the post earlier this year, a step that hastened the former premier's fall, writing in his resignation letter: "I am certain that a headmark date for 3% of GDP on defense in 2030 is what Britain must set."
Healey has faced accusations of backsliding, but in an interview with the Times published Monday night he said defense would be "central to the spending review." He added: "For the first time at the spending review, we will set out a clear path about how we will meet that NATO commitment in 2035, of 3.5% of GDP. And as part of setting out that clear path, we will set that target date for 3%."
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Raising defense from 2.6% to 3% of GDP would run to roughly £15 billion each year, the Office for Budget Responsibility estimates, an amount comparable to increasing the basic rate of income tax by about 2%. How to pay for it is still an open question. In the October budget, people familiar with the matter say Healey plans to prioritize generating funds to cover a gap of nearly £5 billion spread over four years in the government's defense investment plan, or about £1.2 billion a year.
Another person familiar with the discussions said the armed forces understand the Treasury's bind as public finances are stretched. They would have preferred an earlier pledge, but would like to see the commitment set next year. Successive UK governments have faced growing pressure to spend more on defense amid the rising threat from Russia, and President Donald Trump has repeatedly urged NATO countries to increase outlays. The UK may revisit proposals to trim the welfare budget to finance greater defense outlays, and the country today allocates far more to welfare than to defense.
For your wallet, the takeaway is simple: if Britain channels more toward defense, something else has to give - taxes, benefits, or other programs. That shift can filter into prices, services and take-home pay in the everyday economy you feel.