PRESS: UK Chancellor Healey to shelve 3% defence spending target

(Alliance News) - UK Chancellor John Healey will shelve his target for defence spending to reach 3% of gross domestic product by 2030 when he delivers his first budget in October, the Financial Times reported on Friday.

Citing government insiders, the FT said larger decisions over increasing defence spending will be delayed until a Treasury spending review next year.

Healey resigned as defence secretary in June over what he viewed as insufficient ambition for military spending under former prime minister Keir Starmer. He previously argued that the UK should spend 3% of GDP on defence by 2030 as a step towards meeting Nato's target of 3.5% by 2035.

The October budget instead is expected to focus on filling a defence equipment funding gap of almost GBP5.0 billion left by the previous government, equivalent to around GBP1.2 billion annually.

"The immediate priority is to fund the defence investment plan that was published by Keir Starmer and the chancellor will set out more details on that at the budget," a government figure told the FT.

The government plans to set out a path towards spending 3.5% of GDP on defence by 2035 at next year's spending review, when it will also establish a target date for reaching 3%.

UK defence spending is currently set to reach 2.7% of GDP by 2030.

Healey told Sky News that "fiscal discipline" was the first priority for any chancellor, while acknowledging the financial pressures created by global conflict and increasing security threats.

By Eva Castanedo, Alliance News senior economics reporter

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