UK Chancellor Healey to Borrow Billions for Defence Push Ahead of Budget
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Chancellor John Healey is preparing a multi-billion-pound borrowing package for defence ahead of Wednesday’s Budget, using state investment vehicles to fill the gap, while Defence Secretary Wes Streeting says the UK will “lead from the front” on NATO spending.
Britain’s defence spending is set to get a major cash injection as Chancellor John Healey prepares to unveil a borrowing programme worth billions of pounds ahead of Wednesday’s Budget. The money will be routed through the National Wealth Fund and the British Business Bank, with an extra £20.4 billion handed to the two state-run investment funds, including £15.4 billion ring-fenced for the National Wealth Fund.
Defence Secretary Wes Streeting told The i Paper that the United Kingdom, NATO’s third-largest defence spender, will “lead from the front” and do “whatever it takes” to keep the country and its allies safe. He pointed to cooperation with the E5 group of European powers – Germany, Poland, France, Italy and the UK – as part of a wider effort to strengthen collective defences and meet NATO commitments.
Healey, who resigned as defence secretary in June, is expected to confirm that the £4.7 billion shortfall in the Defence Investment Plan will be covered, and that the Department for Transport will be spared further cuts after a previous raid on its capital budget. Other Whitehall capital budgets, including parts of the Ministry of Defence’s own spending and the heat-pump subsidy programme, are likely to be trimmed to plug the gap.
A Treasury spokesperson said the additional capital will help British businesses grow and create jobs, while supporting industries and infrastructure that drive lasting economic growth.
Shadow Chancellor Andrew Griffith urged Healey to prioritise defence spending in the Budget and suggested that cuts to the heat-pump subsidy scheme would not be enough to close the funding gap. He argued that welfare reform could provide the necessary resources to reach the target of 3 percent of GDP on defence by 2030.
The proposed funding approach is intended to support a broader effort to raise defence spending by £15 billion over four years, even as the UK currently spends 2.6 percent of GDP on defence.