Chancellor Rachel Reeves has warned that “difficult choices” are required to increase defence spending, potentially including cuts to welfare budgets. Speaking at the IMF spring meetings in Washington, she said she was “working through a range of options” but preferred not to raise taxes or increase borrowing.
Reeves stressed the need to prioritise national security, stating: “National security always comes first, I’ll always do the right thing as chancellor for our country.” She declined to confirm whether welfare would be specifically targeted, but her comments follow health secretary Wes Streeting’s suggestion that welfare cuts may be necessary given global challenges.
The chancellor ruled out abandoning the pensions triple lock, reaffirming Labour’s manifesto commitment. UK defence spending is on track to reach 2.6% of GDP by April next year, which she said exceeds pre-election plans from both major parties.
Reeves noted that the economic shock from the Iran conflict limits her fiscal room, as the IMF warned a further escalation could trigger a global recession affecting the UK more than other G7 nations. She criticised blanket energy support used by the previous government, saying it led to higher inflation and taxes, and pledged targeted measures funded by reprioritising other budgets.
