John Healey 'unveiling billions in defence spending at Budget' — but funding questions raised

John Healey 'unveiling billions in defence spending at Budget' — but funding questions raised The Conservatives have demanded the Chancellor resign unless his Budget has 'fully funded 3 per cent defence spending' Sign up to the Politics Newsletter Email address Sign up I agree to receive updates and information about my account, the GB News Community, and related products and services from GB News. By signing up you agree to the Terms and Conditions and Privacy Policy and Community Rules. Thank you for signing up! See the latest from GB News here . Choose GB News on Google - add us as a preferred source Choose GB News Support GB News Champion free speech and independent journalism while unlocking exclusive benefits. Support us John Healey is set to announce billions in defence spending in Wednesday's Budget. He will also invest in the National Wealth Fund and British Business Bank, two separate Government funds. Those funds will, in turn, invest in British defence companies, generating jobs and economic development. But questions have already been raised around funding. TRENDING Stories Videos Your Say The investment would be generated by long-term borrowing, but would not break Labour's fiscal rules because it should generate returns. The surprise announcement comes as Mr Healey is under pressure to increase defence spending to three per cent of GDP by 2030, a target he himself set, and quit Sir Keir Starmer's Cabinet over. All Nato allies have committed to spending 3.5 per cent of GDP on defence by 2035. The UK currently spends around 2.6 per cent of GDP on core defence spending, but critics - and Mr Healey - have called for an increase to ensure a clear timetable to reach the alliance's target. Mr Healey previously said he would lay out a path to hitting the target at the 2027 spending review . John Healey will unveil billion in defence spending through investments in National Wealth Fund and British Business Bank | PA The investment at the Budget will serve as a "down payment" on his three per cent ambition, according to The Times. Shadow Chancellor Andrew Griffith on Saturday demanded Mr Healey resign if the UK fails to set out how it will reach the target he himself set. He said: "By the end of his Budget statement, John Healey must have fully funded 3 per cent defence spending, or resign. "We are living in an era of extraordinary threats, and yet the Chancellor is dithering over finding the money to pay the country's insurance premium." The Conservatives have said they would fund defence by cutting benefits. HEALEY'S FIRST BUDGET - READ MORE: John Healey hit with resignation days before Budget as advisor warns of 'Liz Truss-style crisis' Labour gives taxman new powers to raid bank accounts in bid to recover £4billion Autumn Budget 2026: What John Healey could announce for pensions, savings and household finances John Healey's full path to the target he set is expected to be laid out at the 2027 spending review | PA But Mr Healey will make the investments by using long-term borrowing and may draw criticism from political opponents. One of Rachel Reeves’ fiscal rules requires public debt to fall as a share of GDP within three years, but the rule was defined to allow borrowing for investment in public financial institutions that could generate a return. This means that investment into public financial institutions, or so-called "PuFins", will not appear on the Treasury "scorecard". James Cartlidge, the Conservative Shadow Defence Secretary, welcomed the plans, and accused the Government of copying a similar policy unveiled last December to create a sovereign defence fund. He told The Times: "A key part of this was to make the National Wealth Fund switch its investment from Net Zero to defence. Andrew Griffith called on the Chancellor to resign unless defence is fully funded at the Budget | GETTY "So I welcome Labour copying our idea, particularly if that means getting more cash to UK start-ups and defence tech businesses." Mr Cartlidge said the investment should be used to "accelerate the uncrewed, artificial intelligence-driven transformation of our armed forces". Defence Secretary Wes Streeting has defended the Government's lack of clarity around defence spending, laying blame at the Tories for failing to invest in previous Governments. He said: "The public must be sick and tired of the Tories complaining about things they never did. "They owe Britain an apology, not another lecture. "Kemi Badenoch's Conservatives shrunk the British Army to its smallest size since the Napoleonic era and left a £17billion hole in the equipment plan. "Their fantasy economics won’t keep Britain safe, just as their reckless hollowing out of our armed forces didn't when they were in power." 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