Stories

Wed, 28 Oct 2026

Wed, 28 Oct 2026 Healey tells departments to make 1% cuts to fund defence

The reduction in public spending will go towards paying for the Defence Investment Plan.

* Chancellor John Healey has told government departments to find 1% cuts in their capital budgets to fill a £4.7bn hole in defence funding.
* The reductions come on top of 1% cuts made earlier this year to pay for the initial £10.3bn of the Defence Investment Plan's £15bn price tag.
* Healey has hinted that meeting the target of spending 3% of national income on defence by 2030 will require further cuts, and will set out how the UK will reach this goal at next year's spending review.
* Conservative leader Kemi Badenoch accused Healey of only offering "a plan to have a plan" and said he had failed his own test in meeting the target.
* The UK is on track to meet its Nato commitment to spend 3.5% of GDP on defence by 2035, but there are concerns about how it will reach this goal without making further cuts.
* Healey has announced £10bn of economic and military support for Ukraine, including £5.5bn of loans through World Bank guarantees and a grant contribution to the World Bank International Development Association's crisis facility.
* A further £3bn will be made available to Ukraine through loans facilitated by UK Export Finance, a government export credit agency.