Departments Told to Find Further 1% Cuts to Fund Defence
Every Whitehall department must cut its capital budget by a further 1% to fill a £4.7bn hole in the Defence Investment Plan. Healey, who resigned as defence secretary in June over funding, postponed the route to 3% of GDP by 2030 until next year’s Spending Review. Badenoch called it “a plan to have a plan”; Nato’s Mark Rutte called it “a credible path”.
Departments have not yet said what they will cut. Earlier capital cuts for defence scrapped several major road schemes. The OBR puts the cost of reaching 3.5% of GDP by 2035 at £35bn. Tan Dhesi, the Labour chairman of the defence committee, said decisions had “lamentably been delayed”. Healey wants allied and private money too: treaty talks with Finland, Poland and the Netherlands on a shared defence mechanism, and £5bn from the National Wealth Fund and British Business Bank. The IFS doubts the target can be met “without topping up spending totals”.