UK Politics

Healey’s Budget: £14bn More on Debt Interest and £10bn for Ukraine as Boats Keep Coming and Bills Bite

John Healey told MPs Britain will spend £14bn more on debt interest this year, and pledged £10bn for Ukraine. Only £500m of the Ukraine package is new spending.

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Matt · 28 Oct 2026 · 16:53 · 11 min read · 100 reads

Chancellor John Healey in his official government portrait in front of a Union flag

News | By Matt, Editor

Chancellor John Healey told MPs in his first Budget on Wednesday, 28 October, that “the OBR predict that we will spend £14bn more on debt interest this year”. In the same speech he pledged “£10bn of additional economic and military support” for Ukraine. (Sky News; The Telegraph) The Treasury’s own Budget documents show that only £500m of the Ukraine package is new spending. The rest is World Bank lending, loan guarantees and extra export credit. (HM Treasury, Budget 2026)

Both announcements came on the day ministers handed households a £100 energy payment and raised taxes on savings and property income. Inflation is 3.5%, and nearly 21,000 people have crossed the Channel in small boats this year. (HM Treasury; ONS; Home Office)

What Healey told MPs

The Telegraph reported that Mr Healey told MPs the week “had started with another Russian ballistic missile attack on Kyiv as the conflict rages into its fifth year following the illegal Russian invasion of Ukraine in 2022”. (The Telegraph; Telegraph Budget live) According to the Telegraph, he went on:

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This morning, the Prime Minister and I called President Zelensky to tell him about our commitments in the Budget today. He told us: you’ve made my day. £10bn of additional economic and military support, based on loans, export finance guarantees, and half a billion in urgent military funding for this winter. The whole House, the whole country, is united for Ukraine. Today we send a clear message to Moscow: Britain will stand with Ukraine for as long as it takes.
John Healey, Budget statement, House of Commons, 28 October 2026, as reported by The Telegraph

The BBC and the Guardian reported the same lines. The Guardian described the package as support “worth £10bn based on loans and export finance guarantees”. (BBC; The Guardian) HM Treasury said on X that the Budget “is providing over £10bn in additional support to Ukraine”. (HM Treasury) The official Hansard record of the statement had not been published at the time of writing.

£14bn more on debt interest

Mr Healey blamed the war in the Middle East. According to the Telegraph, he said the OBR “sets out that the war in the Middle East is a key driver affecting today’s forecasts”. He added: “We did not want this war and we rejected the calls from the leader of the Opposition to jump two-footed into it.” The Telegraph reported that he said oil had risen “from around $70 a barrel to well over $100” and that gas prices “have nearly tripled since February”. (The Telegraph; Telegraph Budget live) Journalist Steven Swinford’s account of the speech, posted on X, records the same lines in slightly different words. (X) The Treasury says Brent crude rose by around 60% between February and October, and UK wholesale gas by nearly 200%. (HM Treasury)

The Treasury’s Budget document gives the detail behind the £14bn. It says the OBR forecasts “an average of £14 billion per year in extra government debt interest, compared with the March forecast”. The comparison is with the OBR’s March 2026 forecast, not with last year’s bill. The OBR figures reproduced in the Budget (Table 1.3) put the extra debt interest at £15.4bn in 2026-27, £16.0bn in 2027-28 and about £12bn a year after that. (HM Treasury, Budget 2026, Table 1.3)

Borrowing this year is now forecast at £133.2bn, or 4.2% of GDP. That is £17.7bn more than the OBR expected in March. The Treasury says higher debt interest “more than account[s]” for that rise. (HM Treasury) The Treasury says gilt yields across the G7 are at or near “highs not seen for decades”. The OBR’s March forecast assumed a 10-year gilt yield of 4.5%. (OBR, March 2026) The ONS says central government debt interest was £10.9bn in September alone. That was the highest September figure since monthly records began in 1997. (ONS)

What the £10bn actually is

The Budget document sets the package out line by line. It says the UK will “make available over £10 billion of additional financial support to Ukraine” from 2026-27 onwards. (HM Treasury) It is made up of:

£7bn of economic support over three years. This includes “up to £5.5 billion in loan guarantees through the World Bank”. The Treasury also says it is using the World Bank International Development Association’s crisis facility “to mobilise £1.5 billion of development funding”.
£3bn of extra UK Export Finance (UKEF) credit capacity for Ukraine, “prioritised for military support”. This takes total UKEF cover for Ukraine to £6.5bn.
£500m of new military support for Ukraine’s air defences this winter.
A further £17m for repairs at Chornobyl and £3m to help return children deported by Russia.

Only the £500m appears as spending in the Budget’s table of policy decisions, all of it in 2026-27. Loan guarantees and export credit are not cash handed over on day one. They become a cost to the taxpayer only if loans go unpaid and the guarantees are called on.

The package sits on top of existing commitments. Britain already gives £3bn a year in military aid “until 2030-31 or for as long as needed”. The Treasury says the new £500m, plus £750m from the Extraordinary Revenue Acceleration (ERA) loan, takes UK military support for Ukraine this year to £4.3bn. (HM Treasury) The ERA loan is repaid from profits on frozen Russian assets. Before Wednesday, the government put total UK commitments to Ukraine at £25bn. That was £16bn military, up to £5.6bn non-military and a £3.5bn export finance limit. (GOV.UK factsheet, updated 13 October 2026)

Bar chart: £7bn World Bank economic support, £3bn UK Export Finance capacity, £0.5bn new winter air defence spending — What is in the £10bn. Graphic: BBN. Source: HM Treasury, Budget 2026

The rest of the Budget

Mr Healey’s wider package was built around what he called “breathing space” for households. The main measures, according to the Budget document and the Evening Standard’s summary of the speech, are: (HM Treasury; Evening Standard)

A £2.6bn “Household Energy Payment”: £100 paid from January 2027 to up to 20 million households in council tax bands A to D in England.
To help pay for it, the bank corporation tax surcharge doubles from 3% to 6% for 15 months from 1 January 2027.
The VAT cut on household electricity is extended to July 2027, which the Treasury says will take around £50 off the annual price cap in April.
The 5p fuel duty cut is extended to July 2027. (Reuters)
Rates of income tax on savings and property income will rise by a further two percentage points from April 2027, on top of the two-point rise already set in Budget 2025. The Treasury says 84% of income tax payers will be unaffected.
From 2030, the triple lock will drop the earnings link, so the state pension will rise by the higher of inflation or 2.5%.
The government aims for defence spending of 3% of GDP by 2030. The Defence Investment Plan will be funded partly by cutting other departments’ capital budgets by 1% from 2027-28.

BBN has already looked at Labour’s grocery tariff cuts, worth up to £21 a year. (BBN)

Meanwhile, at the border

Home Office figures show 20,935 people crossed the Channel in small boats between 1 January and 22 October 2026, on 305 boats. That is down 43% on the same period in 2025, when the total was 36,954. There were no recorded arrivals between 20 and 26 October. (Home Office; BBC) Our small boat crossings explainer sets out the numbers, costs and failures in full.

Asylum remains costly. The Home Office spent £4.2bn on asylum support, resettlement and accommodation in 2025-26, according to the National Audit Office. (NAO) In 2024-25 it spent £2.1bn on hotels alone, an average of £5.77m a day. (NAO, citing Home Office accounts) The Home Affairs Committee found that a hotel place cost £144.98 per person per night, against £23.25 in dispersal housing. (Home Affairs Committee)

Hotel numbers are falling. 16,021 asylum seekers were in hotels in June 2026, out of 89,089 in asylum accommodation. (BBC, Home Office data) The Budget found £150m of capital money in 2027-28 for “additional large sites” to help end the use of asylum hotels. (HM Treasury) Net migration was 171,000 in the year to December 2025, according to the latest ONS estimate. The next figures are due on 26 November. (ONS)

And the cost of living

Inflation rose to 3.5% in the 12 months to September 2026, up from 3.1% in August, with motor fuels the biggest upward pressure. (ONS) Ofgem’s price cap rose 4% on 1 October to £1,723 a year for a typical dual-fuel household. (Ofgem) The Treasury says household energy debt has “almost tripled to over £5 billion”. (HM Treasury)

Bar chart comparing £14bn a year extra debt interest, £4.2bn asylum support, £2.6bn energy payment and £0.5bn Ukraine winter spending — Budget day numbers side by side. The figures cover different years and are not like-for-like. Graphic: BBN. Sources: HM Treasury; OBR; NAO

How the opposition reacted

Replying to the Budget, Conservative leader Kemi Badenoch said Mr Healey had been handed a “hospital pass” by his predecessor, Rachel Reeves, and had “got a big job to do, cleaning up her mess”. (BBC) Before the Budget she called the delay to higher defence spending “unconscionable”. She also said the extra defence money was “less than a third of the increase in welfare since Labour came to office”. (The Independent, 20 October)

Reform UK’s shadow chancellor Robert Jenrick posted “Is that it?” minutes after Mr Healey sat down. (X) During the speech, Reform said: “Labour will lift tariffs on groceries to save families 6 pence a day.” (Reform UK) The party is promising a £15,000 personal allowance instead. (Reform UK; Reform UK Policies Explained; BBN)

BBN found no public comment from Nigel Farage, Richard Tice or Mr Jenrick on the Ukraine package itself by the time of writing. We will update this story if they respond.

Key facts

John Healey delivered his first Budget as Chancellor on 28 October 2026. (BBC)
The OBR forecasts an average of £14bn a year more in debt interest than it expected in March, including £15.4bn more in 2026-27. (HM Treasury, Table 1.3)
He pledged “over £10 billion” of extra support for Ukraine: £7bn through the World Bank, £3bn of extra export credit and £500m of new military spending. (HM Treasury)
Only the £500m is scored as spending in the Budget, all in 2026-27.
UK military support for Ukraine this year now totals £4.3bn, on top of a £3bn-a-year pledge to 2030-31. (HM Treasury)
20,935 people crossed the Channel in small boats from 1 January to 22 October 2026, down 43% on 2025. (Home Office)
Asylum support cost £4.2bn in 2025-26. (NAO)
CPI inflation was 3.5% in September. The energy price cap is £1,723. (ONS; Ofgem)

Verdict

This is opinion. Put the two numbers side by side. Taxpayers will pay around £14bn a year more just to service the national debt, money that buys nothing. Mr Healey blamed a war abroad, but Labour chose to run the public finances with so little room that a shock overseas lands straight on the bill.

Britain is right to help Ukraine resist an illegal invasion. Most of this package is lending and guarantees, not a £10bn cheque, and ministers should be honest enough to say so instead of letting the headline figure do the work.

But many voters will hear “£14bn” and “£10bn” in the same speech and ask a simple question: if there is money for interest and for Ukraine, then why do our borders still feel wide open and why does the cost of living still bite so hard? Nearly 21,000 people have crossed the Channel this year. Asylum support costs £4.2bn a year. Inflation is rising again, the energy cap is up, and savers face another tax rise. On the same day, Labour found just £150m to start moving people out of hotels. (BBN; BBN)

Supporting Ukraine and protecting Britain should not be rivals. The problem is that Labour shows urgency abroad and drift at home. Mr Healey managed a call to Kyiv before his speech. He should show the same urgency over Dover and over household bills. (BBN; BBN; BBN)

FAQ

Is debt interest really £14bn higher this year?

Mr Healey said so in the Commons. The Treasury’s Budget document puts it more precisely: the OBR forecasts an average of £14bn a year more than in its March forecast, with £15.4bn more in 2026-27. It is a change against the March forecast, not against last year’s bill.

Is Britain giving Ukraine £10bn in cash?

No. According to the Treasury, £7bn is economic support through the World Bank, including up to £5.5bn of loan guarantees. £3bn is extra UK Export Finance credit capacity. Only £500m is new spending, on air defence this winter.

Who is the Chancellor?

John Healey, the former Defence Secretary. He delivered his first Budget, and the first of Andy Burnham’s government, on 28 October 2026.

How much military aid does the UK give Ukraine each year?

£3bn a year until 2030-31 “or for as long as needed”. With the new £500m and £750m from the ERA loan, the Treasury puts this year’s total at £4.3bn.

How many small boats have crossed in 2026?

20,935 people between 1 January and 22 October 2026, according to provisional Home Office figures. That is down 43% on the same period last year.

What does the Budget do for energy bills?

It gives a £100 payment from January 2027 to up to 20 million households in England in council tax bands A to D, and extends the VAT cut on electricity to July 2027.