Military Space News
MILPLEX
Defence or environment? UK faces spending choices
Defence or environment? UK faces spending choices
By Olivier DEVOS
London (AFP) June 9, 2025

Torn between growing geopolitical tensions and constrained public finances, Britain's finance minister Rachel Reeves is set to unveil feared trade-offs in a government spending review on Wednesday.

Prime Minister Keir Starmer is boosting the defence budget, and reports point to National Health Service (NHS) being bolstered -- forcing other key ministries to tighten their belts.

"Sharp trade-offs are unavoidable," said the Institute for Fiscal Studies, a respected think tank, of the Labour government's spending plans through to 2029-2030.

Reeves, the chancellor of the exchequer, is to detail day-to-day spending plans in her review to parliament on Wednesday.

Ahead of the announcement, the government on Monday reversed a policy to scrap a winter heating benefit for millions of pensioners, following widespread criticism, including from within its own party.

Labour will raise the income threshold for receiving the subsidy, which "extends eligibility to the vast majority of pensioners", or nine million people, the Treasury said in a statement.

The policy to remove the allowance from millions of pensioners began this winter and followed the government's inaugural budget in October featuring tax rises and big spending announcements on infrastructure.

Since Labour won power last July, sweeping aside years of Conservative Party rule, it has unveiled also contested cuts to disability welfare payments, hoping to save more than �5 billion ($6.8 billion) by 2030.

Thousands of protestors gathered in central London on Saturday, many holding placards that read "tax the rich, stop the cuts -- welfare not warfare".

The government on Sunday announced �86 billion of investment in science and technology and defence by 2030.

Reeves hopes the spending will boost sluggish growth, which risks added pressure from the tariffs trade war unleashed by US President Donald Trump.

Reeves is set to announce a funding boost of up to �30 billion for the NHS, according to The Times newspaper.

Britain's media has in recent days reported on tough, last-minute discussions between the Treasury and the interior ministry, particularly regarding the police budget, as well as with the energy department amid fears for the UK's carbon-reduction commitments.

- Defence priority -

Reeves has amended her fiscal rules to allow the government more headroom for investment in the run-up to the spending review.

At the same time, she wishes to balance the books so that tax revenues match day-to-day spending, meaning the government borrows only to invest.

The chancellor has allowed the Treasury to borrow more, particularly for infrastructure projects across the vital housing and energy sectors.

This has handed her a windfall of �113 billion over five years.

"When it comes to capital spending, government investment is set to be sustained at historically high levels in the coming years," the IFS noted.

"If spent well, this should help contribute to growth and to better public services in years to come."

Citing Russia's invasion of Ukraine, London has announced it will increase its defence budget to 2.5 percent of UK gross domestic product by 2027 -- and up to 3.0 percent by 2034, helped by cutting international aid.

"While going for growth and fixing the NHS will still be central to the Spending Review, bolstering the nation's defence is now considered an urgent pressing need," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

While seeking to cut costs, it has been reported that the government may later this year announce plans to lift a cap on child benefits, also after a backlash over the policy from some of its party members.

"U-turns on benefit and welfare spending, increased pressure to ramp up defence spending and higher borrowing costs have left the chancellor, Rachel Reeves, in a sticky position", concluded Ruth Gregory, deputy chief UK economist at Capital Economics.

"If she wishes to avoid a political backlash and/or an adverse reaction in the financial markets, she probably has little choice but to raise taxes in the Autumn Budget."

The government has already hiked a business tax that entered into force in April.

bur-ode/bcp/ajb/lth

SHARP

Hargreaves Lansdown

Related Links
The Military Industrial Complex at SpaceWar.com
Learn about the Superpowers of the 21st Century at SpaceWar.com

Subscribe Free To Our Daily Newsletters
Tweet

RELATED CONTENT
The following news reports may link to other Space Media Network websites.
MILPLEX
Israel arms exports hit all time high in 2024; As Spain cancels anti-tank missiles from Israel
Jerusalem (AFP) June 4, 2025
Israel's defence ministry said Wednesday that its arms exports hit an all-time high of more than $14.7 billion in 2024, with a sharp rise in deals with Arab Gulf states, despite international criticism of Israel's ongoing war against Hamas in Gaza. "Israel again reached an all-time peak in defence exports in 2024, marking the fourth consecutive record-breaking year in the scope of defence agreements," the ministry, which oversees and approves the exports of Israel's defence industries, said in a sta ... read more

MILPLEX
Israel army says intercepts Yemen missile after air raid sirens sound

Israel army says intercepts Yemen missile after air raid sirens sound

Israel intercepts Yemen missile, Huthi rebels claim attack

Israel military says intercepted two projectiles fired from Yemen

MILPLEX
Russian strike kills 12 Ukrainian soldiers during training: Kyiv

Merz says Germany, Ukraine to jointly produce long-range weapons

Merz says Kyiv's key allies no longer limit range of weapons

Russia strikes Kyiv after first stage of major prisoner swap

MILPLEX
Ukraine strikes Russian bombers ahead of Istanbul talks

'Aces up the sleeve': Ukraine drone attacks in Russia shake up conflict

Russia says killed man attempting drone attack on military site

Israel says hits Beirut, targeting Hezbollah drone factories

MILPLEX
Skynet 6A military satellite advances with successful module integration

Skynet 6A reaches integration milestone as Airbus prepares next-gen military satellite

Enveil Secures DIU Contract to Advance Hybrid Space Architecture Data Capabilities

Retired four-star US admiral convicted on corruption charges

MILPLEX
Meta and Anduril join forces on battlefield tech

Japan shows off futuristic 'railgun' at defence expo

Lithuania's parliament votes to withdraw from landmines treaty

Denmark to add 5,000 military positions

MILPLEX
Danish PM warns NATO defence spending target 'too late'

US pressures NATO to seal deal on ramping up defence spending

Germany has three years to overhaul military: official

In changing times, young Germans gun for defence sector jobs

MILPLEX
Zelensky arrives in Vilnius for Nato eastern flank summit

China responds after Hegseth warns to prepare for war

Germany's Merz says 'no doubt' US to stick with NATO

NATO wrestles over how to handle Ukraine at Trump summit

MILPLEX
Subscribe Free To Our Daily Newsletters




The content herein, unless otherwise known to be public domain, are Copyright 1995-2024 - Space Media Network. All websites are published in Australia and are solely subject to Australian law and governed by Fair Use principals for news reporting and research purposes. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA news reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. All articles labeled "by Staff Writers" include reports supplied to Space Media Network by industry news wires, PR agencies, corporate press officers and the like. Such articles are individually curated and edited by Space Media Network staff on the basis of the report's information value to our industry and professional readership. Advertising does not imply endorsement, agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. General Data Protection Regulation (GDPR) Statement Our advertisers use various cookies and the like to deliver the best ad banner available at one time. All network advertising suppliers have GDPR policies (Legitimate Interest) that conform with EU regulations for data collection. By using our websites you consent to cookie based advertising. If you do not agree with this then you must stop using the websites from May 25, 2018. Privacy Statement. Additional information can be found here at About Us.