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John Healey Backpedals on Military Cash Boost Despite Resigning over Row

The chancellor is prioritizing a nearly £5 billion equipment gap as Treasury pressure pushes back his 3% GDP target, the Financial Times reports.

  • On Friday, Chancellor John Healey signaled he will "shelve his own target of spending 3% of Britain's GDP on defence by 2030," citing "fiscal discipline" as his "first priority" amid Treasury constraints.
  • Healey previously resigned as defence secretary in June, protesting former Prime Minister Sir Keir Starmer's refusal to meet the 3% threshold; now he argues current economic pressures make immediate increases unfeasible.
  • Government insiders revealed Healey must address a defence equipment funding gap of nearly £5bn left by Starmer, amounting to about £1.2bn annually, while officials maintain commitment to NATO's 3.5% target by 2035.
  • Critics have branded Healey a "hypocrite" for scaling back his target, while the Daily Telegraph reports Pentagon officials are exploring measures to "incentivise" the UK to meet NATO's 5% spending pledge, including challenging British sovereignty over the Falkland Islands.
  • Prime Minister Andy Burnham's administration is reinforcing its "continuity" with Starmer's government, with Healey expected to detail the Treasury's financial strategy when he presents his first Budget in October.
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The London Economic broke the news in London, United Kingdom on Friday, August 28, 2026.
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