Shorouk Express
Sign up for the View from Westminster email for expert analysis straight to your inbox
Get our free View from Westminster email
Get our free View from Westminster email
The defence secretary has failed to rule out tax rises to pay for Britain’s “war readiness” amid concerns that the government does not have enough money to fund the plans outlined in a major defence review.
John Healey said the government would “set out how we’ll pay for future increases in the future” when quizzed over how Britain can afford to boost its military funding to 3 per cent of the country’s gross domestic product.
Speaking a day after Sir Keir Starmer unveiled the long-awaited defence strategic defence review, Mr Healey said he is “100 per cent confident” the target would be met — but he struggled to say how it would be paid for after economists warned that significant tax rises would be needed.
Questions have been raised over the government’s big ambitions to make Britain “safer and stronger” after Sir Keir refused to commit to hitting the 3 per cent target by 2034 — which the review warned was essential to ensure the plans were affordable.
open image in gallery
Asked how the government would pay for the uplift, Mr Healey failed to rule out tax rises.
He told Times Radio: “We’ll set out how, just as we’ve done with our 2.5 per cent commitment where we have made that tough decision to switch money out of overseas development aid into defence – because that’s the priority to meet the threats that we face as a country, that’s the priority for building up our armed forces.”
“We’ll set out how we’ll pay for future increases in the future”, he added.
On Monday, Sir Keir declined to rule out another raid on the aid budget to fund increased defence spending, and signalled he was hopeful that the extra investment could be supported by a growing national economy.
Mr Healey also indicated the government is gambling on economic growth to pay for the plans, telling BBC Breakfast that growth is “the way that we are able to pay for the things that we need to do and we want to do as a country”.
“For 14 years under the Tories, we’ve had a failure on economic growth”, he said. “We’ve got a chance during the government now starting to fix the foundations of that economic growth. We’ve had four interest rate cuts since the last election.
“We’ve got the fastest growing economy in the G7 now, and we’ve had the Office of Budget Responsibility revising up their growth forecasts because of the actions that this government is taking.
“So I’m confident that’s going to give us the basis hit our 3 per cent in the next parliament.”
It comes after Paul Johnson, of the Institute for Fiscal Studies (IFS), warned that the prime minister will need to make “really quite chunky tax increases” to pay for the plans.
He told Times Radio: “It looks like the government wants to reinstate the winter fuel payment. It’s thinking about the two-child limit for benefits. We’ve got a spending review next week.
“And if we are really going to spend another £10-£15bn a year on defence, whilst inevitably we’re going to spend more and more on health and pensions and so on, you really do have to ask that question, what are the choices that you’re going to make?”
Mr Johnson added: “I mean, bluntly, it really does seem to me that the only choice that is available, if we’re going to go through all of those things, is some really quite chunky tax increases to pay for it.
“But of course, that’s not something the prime minister or the Chancellor is willing actually to say.”
Unveiling the long-awaited SDR on Monday, Mr Healey said Britain’s army needed to become “10 times more lethal” in the face of the “immediate and pressing threat” from Russia and the rise of China. “We are in a new era of threat, which demands a new era for UK defence,” he told MPs.
open image in gallery
The government has promised to increase defence spending to 2.5 per cent of gross domestic product (GDP) by 2027, and has an ambition – but no firm commitment – to hike it to 3 per cent in the next parliament.
With a backdrop of “turbulent times” and a promise to learn lessons from the Ukraine conflict, the report even warned “it may be necessary to go faster” on increasing the UK’s defence capabilities.
The review found that the armed forces are not ready to fight opponents like Russia or China, with inadequate stockpiles of weapons, medical services that cannot cope with a mass-casualty conflict and a personnel “crisis” that means only a small number of troops are ready to be deployed.
One of its authors, General Sir Richard Barrons, warned that a cruise missile was “only 90 minutes away from the UK”.
Sir Keir said: “Russia is already menacing our skies and our waters, and threatening cyber-attacks, so this is a real threat we’re dealing with.”
Unveiling the details of the review, the prime minister said he was “100 per cent confident” the plans to make Britain “ready for war” could be delivered on current funding plans.
