John Healey's appointment as chancellor under Prime Minister Andy Burnham signals a decisive shift toward fiscal discipline in defence, according to political strategist John McTernan. The former defence secretary's two years at the Ministry of Defence (MoD) give him firsthand knowledge of the department's spending habits, which have been marked by gross overspending despite claims of underfunding.
Healey's appointment and the budget challenge
After weeks of speculation that the chancellor role would go to either energy secretary Ed Miliband or home secretary Shabana Mahmood, the appearance of Healey alongside Mahmood in Downing Street on 21 July 2026 confirmed the prime minister had chosen a "cool, calm political operator with extensive Treasury experience." McTernan, who served as political secretary to Tony Blair, notes that Burnham's team avoids briefing wars, making the appointment a clear signal of intent.
The upcoming October budget is expected to be low-key, with the balance between defence, social care, council housing, and devolution deferred to a spending review next year. This is a positive development, McTernan argues, because the MoD's record of overspending is stark. The National Audit Office has documented repeated failures in the department's spending control.
Defence procurement and the military-industrial complex
Drawing on his experience as a special adviser in the MoD during the Gordon Brown government, McTernan recalls a saying: "If you wanted to know what was going on in procurement you just needed to speak to BAE Systems." This was a sardonic acknowledgment of producer capture by UK defence industries. Today, phrases like "sovereign capability" or GDP percentage targets—"3% by the next parliament and 3.5% by 2035"—mask the same reality: the military-industrial complex is insatiable.
Wes Streeting's appointment as defence secretary is seen as a strong move, given his apparent success in taming NHS overspending. The Institute for Fiscal Studies reported last week that "last year the NHS saw no spending top up for frontline services from the Treasury reserve or capital budgets for the first time since 2013-14."
Geopolitical pressures and political responses
The defence spending question is overshadowed by geopolitics. The Hague investment plan, which committed US Nato allies to higher defence spending, was driven by President Trump, despite his threats to alliance members' territorial integrity. Keir Starmer's approach—flattery through a second royal visit and subservience, such as picking up the president's dropped papers—is criticized by McTernan as reinforcing bully behaviour.
Canada's Prime Minister Mark Carney offers a more appropriate model. His Davos speech in January sketched a new world order, and his resolute response to US trade talks and Trump's attempted "renaming" of Lake Ontario has broad support. Carney has floated a deepening partnership between Canada and the EU, which could set a precedent for the UK to realign with Europe without reopening the Brexit debate.
Political entrepreneurship and domestic vision
Miliband, now foreign secretary, is demonstrating similar initiative by taking the UK seat on the World Bank rather than delegating it, showing intent to shape the international situation. This gives Burnham space to focus on domestic issues like "growth in every postcode," fixing social care, devolving power, and building council houses—a programme that has already boosted Labour's support.
Defence also offers a political wedge. The Conservative party and Reform UK, eager to support Trump, wanted the UK to commit to the Iran war, putting US interests first. The SNP's vision of a non-nuclear Nato ignores Russian infractions in Scottish waters, and the Greens are split on Nato membership. McTernan concludes that defence is returning to the right space in UK politics: neither an unfeasible demand nor a neglected backwater, but a positive tool for a progressive government.
