Starmer has finished in the Commons answering questions on his defence uplift to 2.7% GDP by 2027. Outside the chamber eyebrows are being raised at the PM’s sums…
The PM said the increase in defence spending would be achieved by slashing funding for overseas aid from 0.5% of gross national income to 0.3%: “And let me spell it out, that means spending £13.4 billion more on defence every year from 2027.” Badenoch asked if that would be funded by tax or borrowing increases, which Starmer batted away:
“She asks me if we’re going to tax to pay for the 2.5% or to borrow to pay for the 2.5%, the answer to that is no which is why I’ve set out precisely pound for pound how we will pay for it today. That has meant a very difficult decision on overseas development, a very difficult decision and not a decision I wanted to take or that I’m happy to take.”
As the Institute for Fiscal Studies has immediately pointed out the sums aren’t quite adding up there:
“The Prime Minister followed in the steps of the last government by announcing a misleadingly large figure for the “extra” defence spending this announcement entails. An extra 0.2% of GDP is around £6 billion, and this is the size of the cut to the aid budget. Yet he trumpeted a £13 billion increase in defence spending. It’s hard to be certain without more detail from the Treasury, but this figure only seems to make sense if one thinks the defence budget would otherwise have been frozen in cash terms. This is of course dwarfed by the significance of today’s announcement but is frustrating nonetheless.”
Serious spin from Starmer there by ignoring the planned increases in the defence budget. Unless the PM misspoke or Labour has another £7.4 billion in its pocket. There’s always the £18 billion for the Chagos deal…
In Henry Mance’s piece today for the FT, lunching with Nigel Farage:
“Splendido!” Farage says, when the drinks arrive; I suppose it’s a step to European reconciliation. We clink glasses, and he lights the first of two back-to-back Benson & Hedges. A few minutes later, we’re back downstairs. “Are you drinking? Good.” He orders a glass of Sauvignon blanc for each of us — not a bottle, “because it’s Lent” — followed by a bottle of claret, to have with our meal. They say Farage drinks less than he used to. They say a lot of things.”