Britain has set a target date for raising defense spending to 3% of GDP after the Chancellor of the Exchequer announced billions of dollars in aid to Ukraine in a “clear message to Moscow”.
John Healy on Wednesday set a 3% target for 2030, while reaffirming NATO’s commitment to reach 3.5% by 2035.
Mr Healy, who resigned as defense minister under the previous government due to spending shortfalls, presented his first annual budget as finance minister, emphasizing “a new era of threats”.
“Today we send a clear message to Moscow: Britain will cooperate with Ukraine for as long as necessary,” he said, announcing an additional 10 billion pounds ($13.3 billion) in economic and military support, including loans, export guarantees and a 500 million pound emergency military fund this winter.
Mr Healy told MPs that the government will set out details of how it will meet its defense spending targets in next year’s spending review.
“We are starting from a strong position as we go into the spending review. Spending will be done on a higher basis and we will have to make choices about our priorities,” he said.
Mr Healy said that against a backdrop of tight public finances and rising borrowing costs, “we are currently working to achieve our goals in a financially sustainable manner”.
Mr Healy also said the National Wealth Fund and British Business Bank would pump up to £5 billion into defense, dual-use technology and other areas supporting national security over the next four years to strengthen the UK’s defense industrial base, support domestic supply chains and attract private investment.
Chris Beauchamp, chief UK market analyst at investment and trading platform IG, said although Healy’s announcement lacked details, “it looks like the defense establishment will get the funding that Healy needed when he was secretary of defence.”
He added: “The exact path forward will be clear next year, but it looks like we’re still a long way from seeing a bumper crop of spending for things like Rolls-Royce. It may take some time to get there.”
Mr. Healy also announced rolls royce is partnering with the UK Government to develop next-generation turbine engine technology with an investment worth £2.5 billion.
