Telegraph: UK yet to identify funding for higher defence spending

The British government has yet to identify how it will finance a new defence spending plan that would increase the budget by 15 billion pounds ($20.6 billion), The Daily Telegraph reports.

Chancellor of the Exchequer Rachel Reeves said government departments had agreed to deliver combined savings of 10.3 billion pounds (nearly $14 billion) to help fund the plan; however, the Prime Minister's Office was later unable to explain where those savings would come from.

A spokesperson for Prime Minister Keir Starmer made it clear that the government had so far decided only to cancel several road construction projects, adding that "details of the actual cuts would not be announced until the autumn."

According to the spokesperson, the Department for Transport will save up to 700 million pounds ($936 million) by cancelling investments in road projects for which contracts have not yet been signed. The spokesperson also did not rule out cuts to funding for hospital construction.

Each government department has been instructed to submit plans to reduce its budget by 1%. The Departments for Transport and Energy Security, whose budgets had previously been increased, are expected to make even deeper spending cuts.

The Treasury stated that the additional defence spending would be financed through "finding efficiencies, cancelling or delaying lower-priority programmes and remaining ruthlessly focussed on value for money for the taxpayer."

" Departments will also monetise assets, including underused land and buildings, so that we are securing the maximum value from the £1.9 trillion of assets the Government holds," the Treasury noted.

According to The Daily Telegraph, the government could alternatively increase tax revenues by lifting the ban on new oil and gas drilling in the North Sea.

However, the newspaper said the move would likely face opposition from Ed Miliband, whom it described as the leading contender to succeed Reeves as chancellor.

By Bakhtiyar Abbasov