Badenoch Calls for Welfare Cuts to Fund Higher Defence Spending
Conservative leader says Britain must reduce welfare to reach 3% of GDP on defence as Treasury rules out a capital gains tax rise
By AXY War & Crime Desk ·
Key points
- Kemi Badenoch used a pre-budget speech on 20 October 2026 to call for welfare cuts to fund higher defence spending.
- She said reaching 3% of GDP on defence was necessary because Britain's national security is under threat.
- Treasury sources said John Healey had ruled out a rise in capital gains tax.
- Badenoch said the two-child benefit cap could be restored early in office, but gave no costing in the source material.
- The autumn Budget and any spending review timing will determine whether the proposals move forward.
Conservative leader Kemi Badenoch has called for cuts to welfare spending to pay for a higher defence budget, using a speech ahead of the autumn Budget to argue that Britain's national security is under threat and that the money must be found now. Speaking on 20 October 2026, she said the government should reduce welfare to fund a rise in defence spending to 3% of gross domestic product, the total value of goods and services produced in a country in a year. The same morning, Treasury sources told reporters that John Healey had ruled out an increase in capital gains tax, a tax on profits made from selling assets such as shares or property.
Badenoch's speech focused on tax as well as defence. She said Britain needed tax cuts and told an audience that the government should get out of the way of job creators, encourage risk-taking and support wealth creation. 'Britain's tax burden has never been higher,' she said, listing taxes people pay on home heating, petrol, car insurance and family holidays. Her central argument, however, was that the country cannot both keep its current welfare bill and meet its defence commitments without choosing between them.
What Badenoch said about defence and welfare
Badenoch restated a position she has held for some time. Quoting her own words, she said: 'I have said it before and I will say it again and again until I'm blue in the face: Britain's national security is under threat.' She added: 'We need to cut welfare to fund defence. Cutting welfare to fund defence is our next challenge.'
She also pointed to the 3% target itself. According to her account, the former defence secretary John Healey resigned from the cabinet because he could not, in good conscience, preside over a funding settlement below 3% of GDP. Badenoch said Healey had written that failing to meet that commitment would put troops at risk. 'If at this budget he does not find the money to get to 3%, John Healey has an awful lot of explaining to do,' she said.
Badenoch's claim that Healey resigned over the funding level is her own characterisation of events, and it is presented here as her statement rather than as an established fact. The source material does not include a response from Healey or from the government on this point.
Badenoch also set out the scale of the sum she believes is needed. She said that the increase required to reach 3% of GDP costs less than a third of the rise in welfare spending since Labour came to office. Labour took power after the July 2024 general election. Her comparison is a political argument about proportion rather than a costed plan, and the source material does not set out the underlying figures.
The decision on the timing of defence spending
Badenoch said she had heard that the decision on defence funding had been moved into the spending review, and that the spending review itself had been pushed back to the autumn of the following year. 'If this is true, it is unconscionable,' she said. She argued that Britain was at risk and that political difficulty should not stop the government from responding.
These are her claims about internal government planning. The source material does not confirm the timetable, and the government's position on the spending review is not included in the report. Readers should treat the timing as reported by Badenoch rather than as an official confirmation.
Why the 3% figure matters
The debate is about how much the United Kingdom spends on its armed forces, and it sits within a wider international context. Members of Nato, the North Atlantic Treaty Organization, agreed in 2014 to aim to spend at least 2% of GDP on defence. Since then, the target has been debated repeatedly, with some members pushing for higher levels as tensions with Russia have grown. Figures of 3% and above are therefore not unusual in political debate, but they are substantial commitments. For a country the size of the UK, each additional percentage point of GDP represents a large sum of public money.
For ordinary people, the trade-off is direct. Defence spending pays for personnel, equipment, ships, aircraft and readiness. Welfare spending covers benefits such as support for families, people who are out of work and people who are sick or disabled. Any shift between the two affects household incomes, public services and the wider economy. This is why the argument Badenoch is making is likely to draw strong responses from the government and from charities that support benefit claimants, though the source material does not include those responses.
The term 'welfare' is also worth defining for readers. In British politics it usually refers to the social security system, including working-age benefits, pensions and disability support, although the exact boundaries depend on how a particular budget or statistic is defined. Badenoch did not, in the extract available, specify which benefits she would cut, which is a key question for any future proposal.
Tax policy and the Budget
The speech also belongs to a wider argument about taxation before the autumn Budget, the annual statement in which the Chancellor sets out tax and spending plans. Badenoch argued that the tax burden is at a record high and that the government should reduce it to encourage enterprise. The Treasury sources' statement that capital gains tax will not rise is relevant to that debate, because it signals that one of the options for raising revenue has been ruled out, at least for now.
Capital gains tax is charged on the profit made when people sell assets that have risen in value, such as shares, second homes and business interests. Any change to it is closely watched by investors and by people with savings or investments. Ruling out an increase reduces one potential source of revenue, which may increase pressure on other choices about spending and borrowing. The source material does not include the government's own explanation for the decision, so the reasons behind it remain unclear from this report.
Speaking about specific welfare changes
Asked by Chris Mason of the BBC how quickly she could implement the welfare cuts she proposes, and whether they could take effect in her first year in office, Badenoch said: 'There will be many things that we can do on day one. We won't be able to do everything on day one.' She gave one example: 'Things like restoring the two child benefit cap, for instance, are some things that we can start doing sooner rather than later.'
The two-child benefit limit was introduced by the Conservative government in 2017. It restricts child-related support in the benefits system to the first two children in most families. Its restoration would therefore be a specific policy choice with effects on families with three or more children. Badenoch's answer suggests she sees it as one of the earliest measures she would consider, but the source material does not set out a costing or a timetable for it.
What to watch next
Several questions will shape how this debate develops. The first is whether the government confirms or denies that the defence funding decision has been moved into the spending review, and whether the review's timing is changed. The second is whether ministers respond to Badenoch's claim about Healey's resignation and the 3% commitment. The third is how the Budget treats both defence and welfare, given that the two are now being presented by the opposition as linked choices.
Analysts would be likely to watch the figures closely. A move to 3% of GDP on defence would require a large sum, and the source material does not include an estimate of the cost or of the savings Badenoch says could be found from welfare. Until those numbers are published, the proposal remains a political call rather than a costed policy. Readers should look for official Treasury figures, Office for Budget Responsibility forecasts and Ministry of Defence statements as the Budget approaches.
The speech shows the Conservatives trying to set the terms of the autumn debate by linking national security, taxation and welfare in a single argument. Whether that link persuades voters will depend on how the government answers, and on whether the figures Badenoch cites hold up when they are tested against official data.
Questions and answers
What did Kemi Badenoch call for in her pre-budget speech?
Badenoch called for cuts to welfare to fund higher defence spending, arguing that reaching 3% of GDP on defence is necessary because Britain's national security is under threat. She also called for tax cuts to encourage enterprise.
Did the Treasury rule out a capital gains tax rise?
Treasury sources said John Healey had ruled out a rise in capital gains tax, according to the Guardian's live coverage of the speech. Capital gains tax is charged on profits made from selling assets such as shares or property.
What welfare change did Badenoch say could be made early?
Asked by the BBC how quickly welfare cuts could be implemented, Badenoch said restoring the two-child benefit cap was among the things that could start sooner rather than later. She said not everything could be done on day one.
Why does the 3% defence spending target matter?
Badenoch said John Healey resigned as defence secretary because he could not preside over a funding settlement below 3% of GDP. She said the target is needed to avoid putting troops at risk, although this is her account and not a confirmed government position.
Topics: Kemi Badenoch, John Healey, Conservative Party, UK defence spending, Welfare cuts, Autumn Budget, Capital gains tax, UK politics
Sources: The Guardian UK Crime
https://axynewsglobal.com/article/badenoch-calls-for-welfare-cuts-to-fund-higher-defence-spending