UK Chancellor Reeves turns to departmental budget cuts to fund £18.5bn defence shortfall
By
Heather Stewart
3h ago· 5 min readenInsight
92/100
Golden Brown
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A baker's-dozen of insight crammed into one ring.
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Summary
Chancellor Rachel Reeves, facing demands for an additional £18.5bn over four years for UK defence spending, resorts to cutting 1% from Whitehall departmental capital budgets rather than pursuing major options like tax rises, spending cuts, or borrowing. This follows a previous move where PM Starmer funded a defence increase by slashing the UK aid budget, which cost a cabinet minister. The article critiques the lack of political will for more substantial fiscal decisions.
Key quotes
· 3 pulledInstead, asked to find the money, the chancellor, Rachel Reeves, grudgingly resorted to classic Treasury salami slicing: asking Whitehall departments to pare about 1% off capital budgets they painstakingly negotiated.
When Keir Starmer wanted to promise Donald Trump that the UK would increase defence spending, he decided to fund it by slashing the UK's aid budget – losing a cabinet minister, Anneliese Dodds, in the process.
Starmer shows no will to pursue the main options for rising commitments: spending cuts, tax rises or borrowing.
Starmer shows no will to pursue the main options for rising commitments: spending cuts, tax rises or borrowing
