The armed forces are in line for a £3 billion boost, according to reports, as Rachel Reeves prepares to unveil the Labour Government’s first Budget.
The Chancellor is set to announce an increase in the defence budget for next year in her fiscal statement in the Commons on Wednesday, part of which will be used to give soldiers a pay rise backdated to April, the Telegraph reported.
The funding will also be used to buy weapons, with the aim of replenishing stockpiles depleted by donations to Ukraine.
A pathway to increasing defence spending to 2.5% of national economic output demanded by the Tories will not be in the Budget.
Ms Reeves will make history as the UK’s first female Chancellor when she delivers Wednesday’s Budget.
Tomorrow we deliver on our promise of change. pic.twitter.com/hWtGiZZclz
— Rachel Reeves (@RachelReevesMP) October 29, 2024
In her speech, she is expected to say the “prize on offer” is “immense”, and she will lay out new funding to cut hospital waiting lists, pave the way for more affordable homes and rebuild crumbling schools.
She will add: “More pounds in people’s pockets. An NHS that is there when you need it. An economy that is growing, creating wealth and opportunity for all. Because that is the only way to improve living standards.”
Harking back to the Labour governments of Attlee, Wilson and Blair, Ms Reeves will say it is “not the first time that it has fallen to the Labour Party to rebuild Britain”.
The truth is, we inherited a mess.
— Rachel Reeves (@RachelReevesMP) October 29, 2024
I’m prepared to take the tough decisions necessary to grow our economy and deliver the promise of change. pic.twitter.com/wzfcjGTca7
The Chancellor has warned that the tax hikes and borrowing increases she is considering may not be enough to undo “14 years of damage” to the NHS, despite plans to pump billions of pounds into the health service.
Alongside its Budget analysis, fiscal watchdog the Office for Budget Responsibility (OBR) will publish a report on the Conservatives’ legacy in government, which is expected to account for the so-called £22 billion “black hole” in the public finances.
Shadow chancellor Jeremy Hunt is contesting the report, claiming in a letter to top civil servant Simon Case that the OBR risks “straying into political territory and failing to follow due process”.
Other Budget developments include:
– A 6.7% increase in the minimum wage – confirmed by Ms Reeves – meaning it will rise to £12.21 an hour next year.
– More funding for the NHS, including £1.5 billion for new surgical hubs and scanners and £70 million for radiotherapy machines.
– Increases to tax including fuel duty, inheritance tax and capital gains tax are reportedly under consideration.
– Labour has promised not to increase the headline taxes on the pay cheques of “working people”: national insurance, VAT and income tax.
– Reforms to business rates could be on the way, Ms Reeves hinted in the Commons, “as well as a business tax road map”.
– £240 million in funding for local services will be spent on helping people get back to work, Sir Keir Starmer revealed earlier this week.
– The £2 cap on bus fares across England will rise to £3.
