John Healey U-turns on defence spending

It was just 78 days ago that John Healey resigned as defence secretary, heralding the beginning of the end of Keir Starmer’s government. In his resignation letter, he told the prime minister: ‘You have been unable, and the Treasury has been unwilling, to commit the resources that the nation needs to defend the country at this time of rising threats.’ Healey was widely praised for doing that rare thing in politics: resigning on a real matter of substance. A month after quitting, Healey was brought back into government, becoming Andy Burnham’s Chancellor. It prompted much hope that Britain would finally hit the target of spending three per cent of GDP on defence by 2030.

Yet it seems that John Healey at the Treasury has different priorities to John Healey at the Ministry of Defence. Today, 39 days after Burnham made him chancellor and stood outside No. 10 promising to ‘honour our commitments on defence’, Healey has confirmed what many had previously suspected. He will not commit to spending three per cent by 2030, and will wait until next year’s spending review to set out a pathway to further defence investment. The focus in Healey’s first Budget on 28 October will be on fully funding the defence investment plan (DIP), with its £1.2 billion annual black hole. No date has yet been set for next year’s spending review, with defence spending on track to only reach 2.7 per cent of GDP by 2030. 

Healey’s decision will infuriate much of the defence establishment and disappoint many of his newfound admirers. The Treasury and MoD have one of the tensest institutional relationships in Whitehall – today it looks like the former has won again. Healey and his team will argue it reflects the inevitable: there is simply not enough cash to plug both the DIP and meet the 2030 target. Making this clear now, in recess, when Burnham is riding high, was probably the right tactical call: there are no Urgent Questions for the Tories to table nor awkward MPs hanging around parliament. One wonders though, how the purged Starmerites feel at watching Healey quit as a man of principle, only to reveal himself as an artful politician upon bagging a great office of state. 

There is, as the economist Julian Jessop notes, something of a theme emerging: a raft of difficult choices are increasingly being deferred until next year. Ministers will point to the spending review and the ‘ten-year plan’ currently being drafted. ‘Trust us, the detail is coming’, is the message being given to Labour MPs. But Burnham has talked a very good game on social care funding, council house building, resolving water, property taxes, infrastructure spending and business rates. In the wait between promise and delivery, he runs the risk of setting expectations high, only to then inevitably disappoint when reality falls short – something his neighbour John Healey knows all too well.