Defence secretary fails to rule out tax rises to fund defence spending uplift
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Tax rises are ‘inevitable’ after Labour pledges billions for defence, top economist warns
- Ministers are facing scrutiny over how the government plans to fund increased military spending, aiming for 3 per cent of GDP, amid warnings of necessary tax rises.
- Defence Secretary John Healey stated the government will detail how future increases will be funded, similar to reallocating overseas development aid to defence, but did not rule out tax hikes.
- Economists, including Paul Johnson from the IFS, suggest "chunky tax increases" may be inevitable to meet defence spending goals alongside other financial commitments.
- The defence review warns current armed forces are unprepared for conflicts with nations like Russia or China, citing inadequate resources and personnel issues.
- Despite concerns, Healey expressed confidence in achieving the defence spending uplift, banking on economic growth to support the plans, highlighting recent interest rate cuts and revised growth forecasts.