Labour Finds ‘Over £10bn’ for Ukraine but Gives the MoD £2bn Less Than It Promised

News | By Matt, Editor

Chancellor John Healey used his first Budget on Wednesday, 28 October, to make “over £10 billion of additional financial support” available to Ukraine. The same Budget gives the Ministry of Defence £1bn a year less than Labour promised it just four months earlier. (HM Treasury, Budget 2026; The Telegraph)

According to the Telegraph, the Budget documents put the MoD’s budget at £72.8bn in 2027-28 and £75.5bn in 2028-29. Former Chancellor Rachel Reeves’s Defence Investment Plan in June set £73.8bn and £76.5bn. That is £2bn less over the two years. The Conservatives call it a cut. The Treasury says it is a “technical adjustment” to pensions accounting that leaves defence spending power untouched. (GB News)

Key facts

• Ukraine: “over £10 billion” of extra support from 2026-27. That is £7bn of World Bank-linked support over three years, including up to £5.5bn of loan guarantees, plus £3bn of extra UK Export Finance credit and £500m of new military aid for Ukraine’s air defences this winter. (HM Treasury)
• Cash versus guarantees: only the £500m is new spending. The loan guarantees and export credit cost the taxpayer only if loans go unpaid. As we reported on Budget day, it is not a £10bn cheque.
• Ministry of Defence: £72.8bn in 2027-28 and £75.5bn in 2028-29, against £73.8bn and £76.5bn in June’s Defence Investment Plan. (The Telegraph; GB News)
• Why it fell: the Treasury points to lower employer pension contributions after the 2024 public service pensions valuation. The Budget says the change does not alter Nato-qualifying defence spending. (HM Treasury, Table B.1)
• 3% of GDP: no plan yet. Mr Healey said he would set out at next year’s Spending Review how Britain reaches 3% by 2030 and 3.5% by 2035. (Budget speech)

What the Budget book shows

The Budget’s own spending table shows the MoD’s day-to-day budget for 2027-28 at £41.1bn, down from £42.6bn before what the Treasury calls a “technical pensions adjustment”. For 2028-29 it falls from £43.7bn to £42.2bn. A footnote says the change is meant to ensure “that departments are no worse or better off”. It also says the change “does not alter NATO-qualifying defence spending”, because lower employer pension contributions are “offset by higher Exchequer funding for pensions”. (HM Treasury, Budget 2026, Table B.1)

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The Telegraph reported that the Treasury had taken control of about £1bn a year the MoD had been allocated for Armed Forces pensions, moving it into a central pot. Treasury minister Torsten Bell called the cut claims “absolute garbage”. On X he wrote: “There’s no impact on defence spending power and the Tories used the same mechanism in government.” A Tory source told the paper: “Labour have been caught out – talking up defence spending in the speech then cutting it in the footnotes.” (The Telegraph)

The independent Office for Budget Responsibility expects defence spending to rise from 2.6% of GDP this year to 2.7% in 2029-30, then 3.0% in 2030-31. It says reaching 3.5% by 2035 would cost around £35bn a year in today’s money. (OBR, October 2026)

What Healey told MPs

In the same section of his speech, Mr Healey announced the Ukraine package and then defended his record on defence. He said: “£10bn of additional economic and military support – based on loans, Export Finance guarantees, and half a billion in urgent military funding for this winter.” He added: “This year, our defence budget is £14billion higher than it was in the Conservatives’ last year of Government.” (GOV.UK, Budget 2026 speech; GB News)

On the Nato target, he said: “At the Spending Review next year, I confirm that I will set out the details of how we will meet our NATO commitment to spend 3.5% of GDP on defence by 2035, with a target date for 3% in 2030.” To fund the Defence Investment Plan, the Budget makes every department cut its capital budget by a further 1% from 2027-28. (Budget speech; HM Treasury)

In June, Mr Healey quit as Defence Secretary over that same plan. His resignation letter said it “falls well short of what is required for defence and the country at this dangerous time”. (The Independent, 11 June 2026) More in our report on Labour’s defence spending claims.

Labour’s own defence chair speaks out

Tan Dhesi, the Labour MP who chairs the Commons Defence Committee, said on Budget day that the committee was pleased the Defence Investment Plan was fully funded. But he said: “Some of the key decisions on defence spending have lamentably been delayed until next year’s spending review. There is a cost to inaction. Investment in our nation’s defence and security cannot be kicked into the long grass.” He warned: “We need to urgently rebuild our capabilities now, or we risk leaving ourselves seriously vulnerable in the event of a major conflict.” (Defence Committee, 28 October 2026)

On Thursday, Defence Secretary Wes Streeting hit back in the Commons. He said: “I think that is completely unfounded criticism.” He went on: “It would be fair criticism if this Government had not already made decisions that are leading to the fastest increase in defence spending since the end of the cold war.” He called Mr Dhesi “a good friend”. (Hansard, 29 October 2026; The Guardian)

Shadow Defence Secretary James Cartlidge said it was “wholly inappropriate for any Defence Secretary to talk about the Chairman of the Defence Select Committee in this way”. (Daily Mail) Mr Streeting warned this month that Britain must be ready for war by 2030. (BBN)

How the opposition reacted

Conservative leader Kemi Badenoch called Mr Healey’s defence plans “a plan to have a plan” and said: “I bet Putin’s really scared now.” (GB News) On Thursday she posted: “John Healey couldn’t even find £10 billion to get defence spending to 3% of GDP – the thing he quit over.” (The Guardian) Mr Cartlidge accused the Chancellor of “penny-pinching our military”. (GB News)

Reform UK response

Nigel Farage skipped the Budget but said afterwards he was “shocked” by the extent of the extra money for Ukraine. “I don’t mind a reasonable sum of money being spent on defence of Ukraine,” he said. “I’m more worried about Putin now than I’ve been at any point since the war started… But I really am concerned as to whether the money is going to get used properly and spent well.” (The Independent, 28 October 2026)

Reform’s shadow chancellor Robert Jenrick called it “a ‘do nothing’ Budget” and “a nothing burger”. (Reform UK)

Our view

This section is opinion.

Standing by Ukraine against Putin is right, and most of the £10bn is guarantees rather than cash. But look at the priorities. On Budget day Labour found a headline figure of over £10bn for Kyiv. Our own Ministry of Defence got a smaller allocation than it was promised in June, and the plan for reaching 3% was put off until next year. Two days after the Budget, Foreign Secretary Ed Miliband told Russia’s Sergei Lavrov at the G20 “you are not winning this war”.

The Treasury may be right that the pensions change is just accounting. If so, ministers should publish the reconciliation and show that not a penny of fighting power has been lost. John Healey resigned saying the plan fell short at a “dangerous time”. Now he holds the purse strings, and he has asked for more time. A sovereign nation’s first duty is its own defence. Britain’s armed forces should not be left waiting for next year’s Spending Review.

FAQ

Has the defence budget been cut?

It depends who you ask. The MoD has been allocated £1bn a year less for 2027-28 and 2028-29 than in June’s plan, and the Conservatives call that a £2bn cut. The Treasury says it is a technical pensions change with no effect on defence spending power or Nato-qualifying spending. Overall defence spending is still forecast to rise. (The Telegraph; OBR)

Is Ukraine getting £10bn in cash?

No. Only £500m is new spending, on air defence this winter. The rest is World Bank loan guarantees and development funding plus extra export credit. This is on top of Britain’s £3bn a year in military aid to 2030-31. For the full breakdown, see our Budget 2026 explainer.

Sources

• HM Treasury, 28 October 2026: Budget 2026 (Table B.1 and section 6.5); Budget 2026 speech
• Office for Budget Responsibility, 28 October 2026: Economic and fiscal outlook
• Hansard, 29 October 2026: Budget Resolutions; Defence Committee, 28 October 2026: Chair’s statement
• The Telegraph, 28 October 2026: MoD budget; GB News: £2bn defence row; The Guardian, 29 October 2026: politics live
• The Independent: Farage on the Budget; Healey’s resignation letter; Daily Mail: Cartlidge on Streeting; Reform UK: Budget reaction
• Main image: Ministry of Defence Main Building, Whitehall, London. Photo: Harland Quarrington/MOD, Wikimedia Commons, Open Government Licence v1.0 (cropped).