Will John Healey fund the UK defense increases he previously demanded?

Opinion>Opinions - National Security The views expressed by contributors are their own and not the view of The Hill Will John Healey fund the UK defense increases he previously demanded? Comments: by Dov Zakheim, opinion contributor - 07/24/26 10:30 AM ET Comments: Link copied by Dov Zakheim, opinion contributor - 07/24/26 10:30 AM ET Comments: Link copied

Stefan Rousseau/PA via AP, Pool John Healey

Finance ministries tend to clash with defense ministries over levels of defense spending. In the U.S., the Office of Management and Budget generally is skeptical of Department of War proposals for major spending increases. The British Treasury is no different.

Under Keir Starmer, the Treasury frustrated the Ministry of Defence’s efforts to come closer to NATO’s spending targets of 3.5 per cent of Gross Domestic Product by 2035.

Instead, defense spending was to rise to 2.7 percent of GDP by 2030. The Minister of Defence posited that it should reach 3 per cent by then. The minister resigned over what he considered to be serious budget shortfalls, arguing that “the Treasury [is] unwilling to commit the resources that the nation needs to defend the country at this time of rising threats.”

That Minister of Defense was John Healey. He is now Chancellor of the Exchequer in the new Andy Burnham government. He now is in charge of the Treasury that he had so bitterly criticized only weeks earlier. Burnham has said all the right things about increasing defense spending, except actually committing to do so. He has gone no further than to assert that “we’ll set out more on defense in due course.”

Wes Streeting, who took over the Ministry of Defence when Burnham moved into 10 Downing Street, has likewise insisted that the U.K. would honor its international commitments. He has not indicated how the government would find the £15 billion (through 2029) that Starmer added to the budget just before he left office without identifying a source. Nor has he identified the source for an additional £2.3 billion that the government’s Office for Budget Responsibility has estimated Britain must spend annually until 2030 to meet Healey’s 3 percent target.

Like Streeting, Healey reiterated Britain’s commitment to increasing defense spending, stating that “fiscal credibility is the bedrock for economic stability and for national security, and you heard the prime minister … say, in this more dangerous world, we will meet our commitments on defense to our international allies.” But he too gave no indication as to whether and how that commitment might actually be met.

One possible way that the government could have raised more money for defense would have been to issue defense bonds. At one point, Healey appeared to support the idea. That is no longer the case, however; the government has made it clear it will not issue bonds.

The Treasury is now indicating that it will raise £10.3 billion through budget transfers from other agencies. That may prove exceedingly difficult, given Burnham’s other spending commitments.

Burnham has promised to lift the country out of its economic doldrums; to improve public services; and at the same time, to consider raising individual tax exemptions, which have been frozen since 2021. The government has estimated that unfreezing the exemptions by 10 percent could cost the government more than £17 billion annually or roughly equal to the defense budget shortfall.

Not surprisingly, the Office for Budget Responsibility is warning that the U.K. is on an “unsustainable” trajectory. Under these circumstances, Healey faces a major challenge to find a way to support the defense increases that he so recently advocated.

Defense Minister Streeting has asserted that social justice and boosting Britain’s national security could “go hand in hand.” He has added that “it’s for the chancellor to make announcements on those matters but I certainly feel like we’ve got a firm friend in His Majesty’s Treasury.”

Burnham clarified on Wednesday that he had made “no immediate commitment” to raise the tax allowance, possibly indicating that defense spending might indeed be increased. Nevertheless, it is far from clear how firm a friend of defense spending Healey will prove to be. Even without the government’s increasing the tax exemption, Healey will confront multiple claimants for government funds and may simply adopt the Treasury’s traditionally cautious attitude toward defense spending. Where he sits may well prove to be where he stands.

In that regard, it is worth recalling that as Richard Nixon’s director of the Office of Management and Budget, Caspar Weinberger was a budget cutter, earning him the moniker “Cap the Knife.” Yet Weinberger became the Reagan Administration’s most powerful advocate for increases in the defense budget and oversaw the largest peacetime military buildup in American history.

Healey has moved in the opposite direction — from defense minister seeking an increase in his agency’s budget to leading the ministry that traditionally pushes for reductions in defense spending.

Whether in his new role he will continue to advocate for a defense budget that reaches 3 percent of GDP by 2030, or adopts the culture of his new ministry in light of Britain’s fiscal woes, very much remains an open question.

Dov S. Zakheim is a senior adviser at the Center for Strategic and International Studies and vice chairman of the board for the Foreign Policy Research Institute. He was undersecretary of Defense (comptroller) and chief financial officer for the Department of Defense from 2001 to 2004 and a deputy undersecretary of Defense from 1985 to 1987.

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