London (Parliament Politics Magazine) – Rachel Reeves pledged to direct a higher defence budget toward British local industries and jobs while ensuring economic growth alongside national security.
MS Reeves affirmed that UK businesses and employment would take precedence in the government’s increased defence spending, with a focus on supporting industrial towns and driving broader economic expansion.
What did Rachel Reeves say about defence spending and UK jobs?
As European countries work to enhance their military strength, the chancellor highlighted that the additional defence budget would support Britain’s employment sector and also stimulate the country’s economy by directing funds to local defence companies.
She stated,
“I do want to make sure as we spend more on defence that is used to support British jobs and British industries. That’s why I met on Friday with UK defence companies and companies operating in the UK to work on how we can increase the capacity and the capability.”
The chancellor added,
“I am determined that as we spend that money on that defence and security, that we use it in a way that can also help stimulate the economy, and particularly to revive some parts of the country that do often feel like they’re left behind.”
During a Make UK conference in London, Ms. Reeves avoided reporters’ questions about whether Britain could continue relying on the US as a military partner under Trump’s administration.
Britain’s nuclear weapons program and numerous military systems, like F-35 jets and Apache helicopters, depend significantly on US collaboration.
She said,
“The UK and the US are closely intertwined in terms of security and defence. They are our closest partners in defence and security, and that will continue to be the case.”
The chancellor reaffirmed that the UK intends to maintain its strong military-industrial relations with America.
Ms Reeves stated,
“We’ll always need to buy things from abroad. I don’t want to pull up the drawbridge. But as we spend more on defence, I want to see that benefit for the UK economy and UK jobs.”
What did Rachel Reeves say about US tariffs?
The chancellor warned that a G7 trade war could harm Britain’s economy, even if the UK is exempted from Donald Trump’s potential tariffs.
She stated,
“It’s absolutely the case that even if tariffs aren’t applied to the UK, we will be affected by slowing global trade, by a slower GDP growth and by higher inflation than otherwise would be the case.”
Ms Reeves continued,
“I’ve always been really clear that I believe strongly that free trade is good for exporters and importers for both countries on the sides of a trade deal. So I don’t want to see tariffs increased. I don’t think it serves anyone well.”
How is Britain allocating its billions in defence spending?
The UK invested £32bn in domestic and overseas industries, with a significant portion focused on contracts outside London and the south-east. However, billions also flow to international partners, including the US.
As defence spending increases, the chancellor plans to reallocate the £27.8bn National Wealth Fund, initially reserved for environmental projects, to contribute to national security expenses.
How much is Starmer increasing the UK’s defence budget?
Last week, in an unexpected move, Keir Starmer revealed the most significant defence budget expansion since the Cold War, with spending reaching 2.5% of GDP by 2027, three years sooner than initially proposed, with aspirations to push it to 3%.
The Labour leader declared the UK will “fight for peace in Europe” by financing the increase through cuts to the foreign aid budget.
Insiders at Downing Street indicate that cutting the foreign aid budget could attract Reform UK supporters. However, they recognize the potential backlash, with support possibly shifting to the Liberal Democrats and Green Party.