Article by London CND Chair Carol Turner
By common acclaim, the Chancellor presented a steady-as-she-goes budget on 28 October. With no sign in John Healey’s budget that the cycle of welfare cuts and military spending hikes will change in future, London CND Chair Carol Turner looks at what was promised and offers an opinion of what’s this means in the longer term.
‘The MoD was the stand-out winner from the budget.’ That was Defence Secretary Wes Streeting’s assessment of the 2026 Autumn Budget on ITV’s Good Morning Britain. He’s right. The Chancellor’s budget statement to parliament on 28 October emphasised a raft of short term ‘fixes’ to ease the cost of living crisis, putting off bigger economic changes until the 2027 Spending Review, but keeping military spending on course for 3.5% of GDP by 2035. Raising the MoD’s budget will have a dramatic and lasting impact on all other areas of government spending – not just in this parliament but well into the next.
The 2026 Autumn budget commits to:
Fully funding the Defence Industrial Plan (DIP), including ‘including through capital reprioritisation across Whitehall’ – ie further cuts to government departments plus an injection from Treasury reserved to fill the £4.7 billion black hole which Keir Starmer bequeathed his successor.
Providing an additional £10 billion economic and military support for Ukraine ‘based on loans, export finance guarantees, and half a billion in urgent military funding for this winter’.
Detailing how Britain will ‘meet our Nato commitment to spend 3.5% of GDP on defence by 2035, with a target date for 3% in 2030’, using ‘innovative financing, alongside the private sector and our international allies’, which includes:
launching a Defence Finance Taskforce to lead this work ahead of the spending review next autumn,
opening treaty negotiations on the ‘multilateral defence mechanism – or bank – with Finland, Poland, and the Netherlands to boost defence investment and joint procurement across Nato allies’,
expanding Britain’s defence industrial base by ‘getting the maximum amount of private investment into defence, including through public-private partnerships’, and
as an immediate step, providing £5bn of investment and lending upto 2029 via the National Wealth Fund and the British Business Bank for ‘defence, dual-use technology and sovereign capability’.
The PM and Chancellor appear to be staking their spending plans on the belief that military spending, combined with welfare cuts and government debt reduction, will act as a driver for economic growth. In his budget speech Healey told the Commons: ‘I will ensure this record defence investment works twice: once for our national security, and once for British jobs and British business. Places across all four nations – Barrow, Rosyth, Aldershot, Plymouth, Glasgow and Belfast – re-industrialised and transformed. Security for our nation, jobs for our people, fresh hope for the future – delivered for Britain by this Labour government.’
CND and others argue that military spending isn’t the jobs generator the government claims it is. Investing in armaments doesn’t lead to any more jobs being created than investment in many other sectors of the economy. Studies by CAAT and others suggest more jobs are generated by directing money into education and the NHS for example.
As far as public opinion goes, the 2026 budget will be a test of whether this government can ease the cost of living despite ramping up military spending. Most economists say not, which leaves us in the midst of the same taxes-vs-cuts debate which has dogged government for more than a decade, and caused so much public dissatisfaction.
The critical factor for economic growth is investment. Investing heavily in the military at the expense of social spending is a political choice. An accurate view of UK investment requires a longer-term look at Britain’s record than the short term indicators published ahead of the budget – and, in Britain’s case, the longer term trends make pretty depressing reading.
UK investment dropped sharply in the recession of the early 1990s, with a further contraction during the 2008-09 global financial crisis. Since 1990, UK fixed capital formation (the standard measure of investment) has averaged around 18.5% of GDP – persistently lower than France (21.5%), Germany (20.4% ), and the US (19.5%). Over time, UK investment has been consistently lower than the major G7 partners. The World Bank estimates G7 average fixed capital formation to be 21-21.5%. The Institute for Fiscal Studies shows UK investment to be significantly lower than the rest of the G7 over a similar period, 1996-2020.
The cost of rearmament and nuclear expansion is not the sole – or even the main – reason for opposing the drive to war we are currently experiencing. But as CND’s People Not Nukes campaign makes clear, it is certainly a relevant factor when thinking about whether successive UK governments notions of security are the same as the majority of people.