Britain ‘faces up to £30bn of tax rises' to hit Nato defence target
Britain faces tax rises of up to £30bn in the autumn Budget to fund greater defence spending, economists have warned.
Analysts said higher taxes looked inevitable as without them Rachel Reeves, the Chancellor, would struggle to meet promises to increase defence spending while still meeting her self-imposed fiscal rules.
Sir Keir has pledged that the UK will spend 3pc of GDP on defence by the next parliament and Nato is expected to demand even higher commitments later this year.
Michael Saunders, of consultancy Oxford Economics, said the Prime Minister was likely to ramp up spending gradually over this parliament to make the 3pc and above target easier to meet in future.
Mr Saunders said: 'To establish a more credible path to defence spending 'considerably north of 3pc' next decade, the Government may decide in the autumn Budget that it needs to add some extra spending within the five-year OBR forecast horizon. It's not hard to see pressures for extra fiscal tightening of £15bn to £30bn.'
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