LABOUR Chancellor John Healey has told every government department to find a further 1% cuts in their capital budgets to fill a £4.7 billion hole in the funding of the Defence Investment Plan (DIP).
Healey announced ‘£10 billion in additional economic and military support’ for Ukraine in the Budget on Wednesday.
Then yesterday, he demanded that Health, Education, Housing, Transport and all other government departments make further 1% cuts on top of the 1% cuts they had to make earlier this year.
The cuts are required to boost defence spending to meet a further target of spending 3% of national income on defence by 2030, Healey said, claiming that meeting that goal would require further cuts, and involve ‘looking hard at public spending’.
NATO secretary general Mark Rutte applauded Healey’s Budget, claiming the UK is on ‘a credible path towards meeting the commitment made by all NATO Allies in The Hague – to ensure we’re all investing what’s needed to remain ready and able to deter aggression and defend our freedom and security’.
Former Nato secretary general Lord Robertson said the Budget was ‘pretty good news for defence generally’ but warned there would be ‘battles ahead with the spending departments’ to reach the 3% target.
Earlier this year, Healey resigned as defence secretary, accusing the then PM Starmer of not providing enough money for defence.
In addition to slashing public services spending, Healey said he also wanted to use ‘more innovative financing alongside the private sector and our international allies,’ including:
- Starting treaty negotiations with Finland, Poland and Netherlands to set up a ‘multilateral defence mechanism’; which would allow allies to share resources.
- Increasing the amount of private investment in defence through public-private partnerships.
• Directing the National Wealth Fund and British Business Bank to put £5bn into ‘defence, dual-use technology and sovereign capability’.