UK's Healey says government will fill defence gap by 'reprioritising' (updated)
UPDATE 2-UK's Healey says government will fill defence gap by 'reprioritising' Adds further detail on funding plans for the DIP in paragraphs 4-5, innovative finance and MDM in paragraph 8, Rutte in paragraphs 9-10
LONDON, Oct 28 (Reuters) - Finance minister John Healey said on Wednesday "reprioritisation" in other departments would fill a £4.7 billion ($6.3 billion) gap in Britain's Defence Investment Plan, a blueprint government hopes shows its NATO commitment.
In his first budget, Healey said he would also adopt an approach of "looking hard at public spending" to set out how Britain will meet the NATO commitment of spending 3.5% of GDP on defence by 2035, and before that, reach 3% in 2030.
"In today's budget, I am fully funding the Defence Investment Plan, including through capital reprioritisation across Whitehall. This honours the commitment made both by me - and by the prime minister," he told parliament, referring to a part of London home to most government departments.
According to the government's 'red book' detailing the budget, the government will fill the £4.7 billion funding deficit by further reducing departmental capital budgets by 1% from 2027-28 to 2029-30 to raise £3 billion.
The additional £1.7 billion would be funded from "unallocated contingency in the Treasury's capital reserve", it said.
Healey, Prime Minister Andy Burnham and defence minister Wes Streeting are under pressure to offer a concrete plan on how they will increase defence spending to prepare Britain for what officials say are growing threats from Russia and Iran.
Confirming that detailed plans for reaching the 3% and 3.5% goals would be set out in a spending review next year, Healey said he was also "determined to use more innovative financing, alongside the private sector and our international allies".
Healey, who resigned as defence minister under Keir Starmer in June over his concerns about defence spending, said Britain would launch an "Innovative Defence Finance Taskforce" to try to boost investment and start treaty negotiations on the Multilateral Defence Mechanism, an initiative to attract private cash into rearming nations.
Nato Secretary General Mark Rutte welcomed the moves as underlining a "strong commitment on defence".
"The UK role in transatlantic security is vital, and I welcome this move to put (Britain) on a credible path towards meeting the commitment made by all NATO Allies," he said on X.
Yet, that delay in plotting a clear pathway on how to reach 3.5% will only heighten calls by the main opposition Conservatives, who had demanded Healey's resignation if he failed to set out a credible plan on Wednesday.
(Reporting by David Milliken and Elizabeth Piper; Editing by Kate Holton)
((elizabeth.piper@thomsonreuters.com; 07979746994; Reuters Messaging: elizabeth.piper.thomsonreuters.com@reuters.net))