𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Rachel Reeves is accused of presiding over an “eye-watering” rise in debt interest which it is claimed would be nearly enough to boost defence spending to 3.5% of GDP. Shadow Chancellor Sir Mel Stride says the Chancellor’s legacy will be one of “unforgivable profligacy”.

The Conservatives say borrowing across this parliament is forecast to be “over a quarter of a trillion pounds higher than the plans Labour inherited”. They expect debt interest spending in 2029-30 to be £23.9billion higher under Labour than forecast – a figure within touching distance of the £25billion increase they say is required to boost defence investment to 3.5% of GDP.

UK defence spending is projected to reach 2.7% of GDP by 2027-28 but the country has made a commitment to NATO to spend 3.5% by 2035. Then-Defence Secretary John Healey plunged Sir Keir Starmer into total crisis last month when he resigned, claiming the “Treasury has been unwilling” to “commit the resources that the nation needs to defend the country at this time of rising threats”.

The Tories say the “amount the government would be saving on debt interest if Labour had not chosen to increase borrowing since coming to office would be roughly enough to fund the 3.5% target”.

The Conservatives want defence spending to hit 3% of GDP by the end of this parliament, with Kemi Badenoch setting out plans including restoring the two child benefit cap. The Shadow Chancellor has pledged that “at least half of all savings the party finds from public spending will be used to reduce government borrowing”.

Sir Mel said: “The legacy of Rachel Reeves as Chancellor is one of unforgivable profligacy. Debt interest is continuing to soar on her watch, thanks to reckless borrowing and high inflation. Every pound wasted on debt interest is money which could have gone to other priorities, such as the urgent need to boost defence spending where Labour have utterly failed to meet their commitments. The Chancellor’s repeated claims to have brought stability and discipline to the public finances are laughable. The bond markets [charge] us more to borrow than any other G7 country – in fact, more than countries like Greece and Morocco.”

A Treasury spokesperson said: “We have the right economic plan: because of the choices we have made, for the first time since 2004 we are forecast to be borrowing less than the rest of the G7 on average, and borrowing fell to its lowest level for six years. We have boosted defence spending to the highest level since the Cold War, and the Defence Investment Plan goes further still, committing almost £300billion over this Parliament to transform our armed forces.”