Former Defence Secretary John Healey criticized the UK Treasury on July 6, 2026, stating it views defence spending as a liability rather than a catalyst for economic growth. Healey's comments came during an interview on the BBC, where he expressed his frustration over the government's reluctance to increase defence budgets.
Defence Spending and Economic Growth
Healey argued that increased defence spending could serve as an engine for growth, particularly in the defence technology sector. He emphasized that the Treasury's current approach undermines the UK's commitments to NATO. At a NATO summit in June 2025, the UK pledged to allocate 5% of GDP to defence and security by 2035, which includes 3.5% for NATO-qualifying core defence.
The recent Defence Investment Plan (DIP) unveiled a slight increase to £15 billion, but Healey pointed out that £4.7 billion remains unfunded in the next budget. He stated, "The Treasury's a paradox: you have some of the very best and brightest officials in the Treasury, but you have, too often, a Treasury orthodoxy that’s a dead hand on dynamic government."
Political Implications of Defence Spending
Healey's resignation from the cabinet was largely due to disagreements over the DIP, which originally aimed for a core defence spending of 2.68% by 2030. He insisted that the government should commit to at least 3% by that time. Despite the DIP's recent adjustments, it still projects a shortfall, maintaining the 2.7% figure.
