Rachel Reeves warned that the ‘world is changing’ as she revealed a major cash injection for defence ahead of the Spring Statement, where she faces a gloomy verdict on the economy
Rachel Reeves talks defence spending while visiting RBSL in Telford
Rachel Reeves has vowed to make Britain ready to face down global threats as she fires up defence spending today.
The Chancellor warned that “our world is changing” and the Government won’t stand by in the face of Russian aggression and threats from hostile states. In today’s Spring Statement, she will announce an extra £2.2billion for defence from next month to provide cutting-edge weapons for British armed forces and better homes for military families.
It will come as she addresses Parliament on the state of the country’s finances, after the Office for Budget Responsibility delivers what’s expected to be a gloomy verdict on the Government’s plans to kickstart growth. Ms Reeves will spell out how she plans to plug the fresh black hole through cuts to Whitehall budgets. The small print of massive cuts to sickness and disability benefits will also be published.
Ms Reeves will confirm a major cash boost for defence in the wake of last month’s controversial decision to increase military spending using cash from the foreign aid budget. The move comes after Keir Starmer said he was willing to put British boots on the ground in Ukraine to enforce a peace deal and deter Vladimir Putin from future aggression.
Crunch talks have been underway with allies on forming a “coalition of the willing” to keep the peace, which could be a years-long operation. However few details have been set out on what troops and equipment would be sent to police a ceasefire.
Speaking exclusively to the Mirror, Ms Reeves said: “Our world is changing and Putin is a global threat, but we’re a strong country, and this government won’t just sit back and watch. We will make sure Britain is ready to face down threats in an uncertain world. We’ll bring in a new era of security and renewal.”
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The announcement is the first step towards hitting the target of spending 2.5% of GDP on defence by 2027, taking the figure to 2.36% for 2025/26. It also comes on top of £2.9billion announced in the Budget in October.
The new cash is funded from Treasury reserves and from controversial cuts to the foreign aid budget announced last month. Ms Reeves defended the decision to slash support for the world’s poorest to pay for defence, saying: “The number one priority of any government has got to be to keep its citizens safe and secure.”
Pointing to the threat from Russia, she said: “We are a strong country, and we can come out stronger from the challenges that we face. But it does require thinking again about how we spend taxpayers’ money. It’s right given the challenges and the circumstances that we face, that we uplift our spending on defence.”
Ms Reeves spoke to the Mirror as she toured the Rheinmetall BAE Systems Land (RBSL) factory in Telford, where she saw state-of-the-art Boxer armoured vehicles being built. She climbed inside one of the combat vehicles, which will be used by the British Army and are already operated in 20 Nato countries.
The Chancellor argued that the funding would fire up manufacturing and technology in Britain, creating jobs and putting more money into people’s pockets. She said: “I recognise a strong economy depends on strong defences but also as we invest in defence, we can bring good jobs to Britain.”
The new funding will be invested in high-tech kit to help Britain’s armed forces compete in modern warfare. This includes fitting Royal Navy ships with Directed Energy Weapons by 2027, which can hit a £1 coin from 1km away and shoot down drones at a distance of 5km.
New radar technology will be developed to stop interference from wind farms, allowing more to be built to deliver green energy. It will also fund upgrades to infrastructure at His Majesty’s Naval Base Portsmouth.
It will also be used to provide better homes for military families by refurbishing the defence estate – including over 36,000 homes recently brought back into public ownership from the rental sector.
Last year, MPs warned that military families are being forced to live in “shocking” housing riddled with damp and mould. Parliament’s Defence Committee heard that service personnel have been left “traumatised” by grim conditions, with rat infestations, broken hot water and heating systems, and flooding that was not dealt with for months.
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Ms Reeves said: “If you serve our country, you and your family should be treated well, and that has not been the case the last few years with a lot of the shoddy accommodation for our armed forces.”
Further details on the plans will be set out in the Strategic Defence Review in the Spring and the Spending Review in June.
Ahead of the Spring Statement, Ms Reeves defended planned benefit cuts as the Government prepares to spell out the true impact. The fine print on plans to save £5billion a year by 2030 through cuts to sickness and disability benefits will be published today.
The changes will make it harder for people to claim Personal Independence Payments (PIP), a lifeline benefit that offers help with living costs for people who have a long-term physical or mental health condition. Extra payments for health conditions for Universal Credit will also be frozen for current claimants and nearly halved for new applicants.
Asked if she understood how frightened some disabled people are, the Chancellor said the Government “will always protect those who most need it”. But she said too many people were being written off who could get back to work.
She said: “Many people with the right support, with the right help, are able to get back into work, and when they get back into work, they have more money in their pockets, more money to spend on their family, and they’re contributing to the national economy as well.
“And that’s a future I want for more of our people, whilst also recognising that there are some people who are not able to work, either temporarily or permanently, and they deserve the support and dignity that should be afforded to them, and that will continue under this government.”
Meanwhile, the Chancellor said that taxpayers’ cash should be spent on hospitals or GP surgeries rather than Government departments. Ms Reeves is looking to slash Whitehall running costs by 15% by the end of the decade, ordering savings of around £2billion a year – with 10,000 civil service jobs facing the axe.
In the Spring Statement, she is also expected to spell out plans to cut Government spending, which will mean cuts for some government departments in the Spending Review in June. Unprotected areas like local government, which runs social care, justice, which oversees courts and prisons, and the Home Office could be in the firing line.
Ms Reeves has vowed to stick to her strict fiscal rules, which rule out borrowing to fund day-to-day spending. But this means she must make cuts to balance the books after ruling out further tax hikes.
The OBR is expected to halve its growth forecast for 2025 to around 1 per cent in a major blow to the Chancellor’s bid to get the economy firing. She told the Mirror there was a need for “leaner, more efficient, more agile public services”. But she said the plan was to “root out inefficiencies, waste, duplication” so cash could be put back on the frontline.
She said: “The use of technology is going to change the way that government services operate, but we’re also looking at every pound that government is spending and making sure we’re getting value, because I’d rather see that money spent in a hospital or a GP surgery than in a government department.”
Ms Reeves denied Labour was planning another wave of austerity. She said: “Look at the Budget last year, we put tens of billions of pounds into public services, £100 billion more on capital investment in roads, rail, energy, digital, transport infrastructure.
“We also put more than £20 billion into the National Health Service.That is Labour investment in our public services and public spending will increase in real terms so above inflation in every single year of this Parliament. That is very different from what we saw, for example, under George Osborne, where government spending was cut.”
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