Sir Keir Starmer has committed the UK to increase spending on defence and security from 2.3 per cent to 2.5 per cent by 2027 in response to the Trump administration’s threats that it will pull support for Ukraine.
According to one government insider, the Budget in the autumn would provide an “opportune moment” to look at tax hikes to pay for the pledge.
Britain is boosting its military capabilities to deter Russian President Vladimir Putin (Photo: Vyacheslav Prokofyev, Sputnik/Kremlin Pool Photo/AP)
Last month, Starmer chose to cut spending on overseas aid in order to fund the 0.2 percentage point rise in defence spending. However, according to the Office for Budget Responsibility (OBR), increasing funding to 3 per cent would cost an additional £17.3bn in 2029/30.
Backbenchers have argued that Donald Trump’s actions towards Ukraine and his regular threats that he would ignore Article 5 that underpins Nato – the agreement that an attack on one state is considered an attack on all – provide Starmer and Reeves sufficient political cover to increase taxes to fund defence.
One government insider said they “accepted the argument” about the need for tax rises, but insisted that it would not have been right to have done so when Starmer announced the 0.2 percentage point uplift to defence last month.
But the insider added that decisions around tax and increasing spending to 3 per cent will come later in the year. “When you start talking about the Budget and how we get to 3 per cent, that seems like a more opportune moment to have those conversations.”
square TAX ExplainedAll the taxes that could go up after the Spring Statement - and the risks, rated
Read More
The Government has ruled out increasing taxes on working people, meaning there will be no increases to income tax, employees’ national insurance contributions or VAT.
The Chancellor is also widely expected to overhaul cash ISAs in order to encourage savers to put their money in stocks and shares ISAs. Reeves is understood to be open to the idea of cutting the amount of money that can be saved in a cash ISA tax-free, which is currently £20,000. Official figures show that the tax relief cost the Treasury £2.1bn in the year up to April 2024.
Labour MPs on the left of the party have long been calling for a “wealth tax” to be introduced, targeting individuals worth more than £10m but the Institute for Fiscal Studies has said no country has successfully introduced such a levy.
Speaking in Paris on Thursday, Starmer suggested that the Government’s record to date showed it had a “mindset” that was opposed to increasing taxes.
Hence then, the article about new putin tax hikes on the table to protect uk from russia threat was published today ( ) and is available on inews ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
Read More Details
Finally We wish PressBee provided you with enough information of ( New ‘Putin tax’ hikes on the table to protect UK from Russia threat )
Also on site :