Business Secretary denies government has shelved 3% target on defence spending

Business Secretary Jonathan Reynolds has denied that the Prime Minister has moved the goalposts on getting defence spending to 3% of GDP by 2030, but said that 3.5% by 2035 was now “the principal target”.

He told the Camilla Tominey Show on GB News: “Look, let me just say first of all, the Prime Minister came to power, and since that moment, he’s cut taxes, he’s cut business rates for pubs, he’s cut people’s energy bills, by the way, as well. He’s also capped bus fares. So no, I don’t accept that the tax burden is going up in this government.

“We’ve made some clear movements early on to show that direction of travel. When it comes to the Budget, yes, that’s where you set those things out. He has not moved away from the target you’ve said. He said the fundamental target is the 2035, 3.5% of GDP on defence spending, that is our NATO commitment. The trajectory to that covers the 3% but that is the principal target.

“The sums of money that involves cannot be moved around outside of these big events. They happen at spending reviews, they happen at budgets. But the fact that John Healey is the Chancellor tells you everything about the government’s commitment to defence spending, which, by the way, has increased substantially since Labour came to power.”

Asked if he accepts that Healey had moved the goalposts by focusing on the 2035 goal, Reynolds said: “No, I do not. I know that John is deeply committed to defence spending. He is going to set out that target and pathway.

“If he wasn’t going to do that, John would not be the chancellor. The Prime Minister himself said in Parliament that is why John Healey is the Chancellor.”

Reynolds dismissed a suggestion that Healey is a “complete fraud”, having previously resigned over defence spending but is now extending the spending target by five years as Chancellor.

He said Healey will address defence spending in a speech: “John will set out first of all a speech on growth next week that will cover the aspirations he has for the British economy that will therefore deliver the envelope he needs to do that level of defence spending. But as I say again, these are not sums of money you move around in between just week to week. They are fundamental changes.

“The government’s record is one of increased defence spending, and it did so making some difficult decisions. International aid has gone into the defence budget, for instance, in order to do that, so already we have a situation where the country is spending substantially more a year on defence than it was when this government came to power after the election in 2024.

“What John is saying is, he wants to set out the route to get to that fundamental target, which is where the country needs to be.”

He declined to rule out income tax, VAT or National Insurance rises in the Budget: “Look, he has been very clear. The Budget is when he will set out all of those tax and spending plans in the normal way. And I think a few days into Parliament being back, we don’t need to start the process of speculation on the budget. We know what it’s going to be. Let him put that forward to the nation.”