Healey set to unveil billions in defence spending at Budget after adviser quits over founders 'sideshow' row
Chancellor John Healey is expected to steer £20bn into state-backed lenders, the National Wealth Fund and British Business Bank, as he prepares to announce major defence funding and a devolution package at Wednesday's Budget. Those lenders would then invest in British defence firms. The cash would come from long-term borrowing, which would not break Labour's fiscal rules because it should generate returns. Shadow Chancellor Andrew Griffith made the resignation demand on Saturday.
Healey quit Sir Keir Starmer's Cabinet over the 3 per cent defence target.
Britain spends around 2.6 per cent of GDP on core defence, while Nato allies are pledged to 3.5 per cent.
Burnham adviser Andy Haldane has warned of a 'Liz Truss-style' market meltdown.
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