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.
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