Chancellor John Healey will deliver his first Budget on Wednesday 28 October, little more than four months after he resigned as Defence Secretary in protest at a funding settlement he said "falls well short of what is required for defence and the country at this dangerous time".
The Budget is the biggest set-piece of a Westminster career that began in 1997, and it comes as Healey faces claims that the Treasury he now runs is squeezing the defence programmes he left Sir Keir Starmer's cabinet to defend.
The Telegraph reported on Tuesday that nearly £2bn has been removed from the Army's armoured vehicle programme as Healey seeks to close a defence funding gap the paper put at £4.7bn. The basis of the £4.7bn figure has not been set out in any official document.
The reduction appears in the 2025-26 annual report of the National Infrastructure and Service Transformation Authority, the government's major projects watchdog, which recorded £1.86bn leaving the Boxer armoured vehicle programme. The overall programme budget fell from more than £7bn to just over £5bn, with the cause given as "funding removal following Army re-prioritisation".
The Ministry of Defence has confirmed it is no longer pursuing three planned Boxer variants, including a battlefield recovery vehicle, but disputes the description of a cut. A spokesperson said there were "no changes to our committed £2.2bn budget over the next four years for the delivery of our 623 Boxer vehicles, which includes support vehicles", that the changes "relate to future spend that was uncommitted" and that officials were "exploring alternative options for maximum battlefield effectiveness".
The reporting year covered by the NISTA figures is one in which Healey was still Defence Secretary and Rachel Reeves was Chancellor. When the funding was removed, and by whom, is not yet clear.
James Cartlidge, the shadow defence secretary, said: "They talk about increasing defence spending but then gut current procurement programmes to save cash. All because they are unable and unwilling to cut welfare to fund defence."
Kemi Badenoch, the Conservative leader, was due to argue in a speech on Tuesday that the "whole argument on defence spending" would disappear if the interest rate on government debt were reduced, according to the Telegraph.
Healey quit on 11 June in a letter to Starmer that he posted on X, days after receiving the Defence Investment Plan settlement. He wrote that "this is a letter I never expected to write", and that the proposal "does not give our Forces the investment they need".
According to Al Jazeera, the settlement would have taken defence spending to 2.68% of GDP in 2030, against the firm 3% target Healey had argued was essential. He wrote: "I'm being forced to make decisions that would reduce the readiness of our Forces and increase the risk to personnel on operations, and could make the country less safe."
The resignation was one of a series of blows to Starmer, who announced on 22 June that he would resign as Labour leader after Andy Burnham won the Makerfield by-election. Burnham became Prime Minister on 20 July and appointed Healey Chancellor the same day, replacing Reeves.
Al Jazeera reported on Tuesday that Healey, as Chancellor, will not commit to the 3% by 2030 target he set out in his resignation letter. The government's formal pledge is to reach 3.5% of GDP by 2035, and Burnham has declined to say how it would be paid for, according to the same report.
Healey has said the Budget "will be built on fiscal discipline". Confirming the date in July, he said: "This will be a Budget that moves money and power out of Westminster, and into every postcode around Britain."
On his appointment, Healey said: "It is the greatest privilege to be appointed Chancellor of the Exchequer by the Prime Minister."
Healey has been an MP without a break since 1 May 1997, representing Rawmarsh and Conisbrough since 2024, and was Defence Secretary from Labour's return to office in July 2024 until his resignation. The full Boxer programme, which the Telegraph says involves more than 600 vehicles, is not due to complete until at least 2031.
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