Chancellor Rachel Reeves will argue the “world is changing” – and Labour needs to move quickly to ensure the safety of the country as well as the economy
Rachel Reeves will argue boosting defence spending in this week’s Spring Statement will not only keep Britain safe – but to create opportunities and jobs for the next generation.
And she’ll hit back at critics who accuse her of ushering in a new age of austerity in Wednesday’s crunch speech.
“I’m proud that it was a Labour government that pledged to increase defence spending to 2.5% in 2027,” the Chancellor said ahead of her crunch speech on Wednesday.
“That is not just about national security, but economic security too. It is funding that will support highly skilled jobs in our defence industry, driving opportunities for young people and helping to re industrialise our heartlands. That is the change Labour promised – and it’s what I’m determined to deliver.”
Ms Reeves is set to announce a “significant” chunk of the Ministry of Defence budget will be ring-fenced to spend on tech like drones and AI – which bring benefits to the wider economy.
And the Chancellor is expected to confirm a £400 million MoD investment fund to harness cutting-edge innovations from the UK’s science and tech sectors.
It’s hoped UK Defence Investment, announced earlier this month, will make it easier and quicker for Britain’s high-tech businesses to get their innovations into soldiers’ hands on the front lines.
The Chancellor will use the speech to argue the world has changed and the government has to do more.
But she’ll say it’s the job of a Labour government to make people feel both their finances and the country are safe.
Ms Reeves has ruled out tax increases or major spending cuts to meet the financial rules she set at the budget in October – after disappointing growth figures and higher-than-expected borrowing.
The defence budget has already been boosted by slashing spending on aid, and sweeping cuts to welfare were announced this week.
But she’ll hit back at critics accusing her of ushering in “Austerity 2.0” – highlighting a string of Labour’s progressive actions since taking office.
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She told the Mirror : “Since the election we have brought an end to fourteen years of Tory chaos and begun to deliver on the promise of change.
“We have increased the minimum wage, funded two million NHS appointment and begun the roll out of free breakfast clubs in every primary school.”
But she admitted there is more to do.
“The world is changing – and we can see that change before our eyes. That’s why we have got to go further and faster to deliver security for working people and national renewal for Britain.”
When she delivers her spring statement on Wednesday, Ms Reeves will be responding to new forecasts from the Office for Budget Responsibility made after the Bank of England reduced its forecasts for growth this year.
Public sector net borrowing was £10.7 billion in February, £4.2 billion more than had been forecast by the OBR.