Healey tells departments to make 1% cuts to fund defence
Summary
Chancellor John Healey has asked every UK government department to cut its capital budget by 1% to help cover a £4.7bn shortfall in the Defence Investment Plan. He said the government would explain next year how it plans to meet its NATO defence-spending targets, including spending 3% of national income by 2030 and 3.5% of GDP by 2035.Key Facts
- The 1% reductions are in addition to cuts requested earlier this year to fund the first £10.3bn of the plan's £15bn cost.
- Departments have not yet decided which capital projects to cut.
- Capital budgets fund long-term investment rather than day-to-day spending.
- Healey said the government would set out its plan for meeting the defence-spending targets at next year's spending review.
- Healey said the government would consider public-spending changes, private-sector partnerships and cooperation with international allies.
- The proposed measures include treaty negotiations with Finland, Poland and the Netherlands on sharing defence resources.
- Healey said the National Wealth Fund and British Business Bank would be directed to invest £5bn in defence, dual-use technology and sovereign capability.
- The Office for Budget Responsibility estimates that the 3.5% of GDP target for 2035 will cost £35bn.
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