Sunak claims defence spending plan won’t affect government’s ability to keep cutting taxes
At the press conference the opening statements are over, and Rishi Sunak and Olaf Scholz are now taking questions.
Q: [To Sunak] Are you really being honest with people about the funding of your defence spending plan?
Sunak does not accept he is misleading people.
He says the government will reduce the size of the civil service.
The government is making a choice, he says.
He thinks it is important for Britain to stand up for its values.
He says this announcement is consistent with the government’s ability to “keep cutting taxes”.
He mentions tax cuts already announced, but he seems to be hinting that the defence spending announcement does not mean that further tax cuts won’t be included in the Tory election manifesto.
UPDATE: Sunak said:
The plan that I announced yesterday, it’s fully funded.
It’s funded, rightly with a reduction in civil service headcount back to 2019 levels. Snce then we’ve seen a very significant rise that isn’t sustainable or needed. The chancellor has conducted a detailed exercise, he announced this at the end of last year, that exercise is completed, and that’s what gives us the confidence that we can release the savings needed to fund our defence plan, combined with an uplift in R&S spending, which we have already budgeted for …
It is the biggest strengthening of our national defence in a generation. It is fully funded. And it is based on the fact that we have a strong economy and an economic plan that is working …
And it’s because our economic plan is working that I’m able to make these announcements and they are entirely consistent with our ability to keep cutting people’s taxes.
Key events
No 10 unable to explain how plan to cut civil service numbers can deliver savings worth almost £3bn
Jessica Elgot
At the post-PMQs lobby briefing Downing Street was unable to explain why the government now expects to save far more from its plans to cut the size of the civil service than the amount it said it would raise when this proposal was first announced.
Explaining how it will fund the plan to increase defence spending to 2.5% of GDP by 2030, the government has said £1.6bn will come from an increase in R&D funding for defence and the remaining £2.9bn will come from a reduction in civil service headcount to pre-pandemic level – a reduction of 70,000 people.
But in October 2023, when Jeremy Hunt, the chancellor, announced the plan to reduce civil service numbers at the Conservative party conferenve, he said this would save £1bn by 2025.
A No 10 spokesperson said there were no further details about how those reductions would lead to a saving of almost £2bn more. She said:
There has been work under way with the Treasury and departments after announcing that we would cap headcount and we have now come forward with the costings associated with that and confirmed that would be reallocated to defence spending.
We will set it out in spending reviews in the usual way, there will be a programme of work.
There is no spending review expected this year and one would not be expected to take place until after the election.
Labour dismisses Tory claim they will raise defence spending by £75bn as ‘fake figure’
Labour has described the government’s claim that it has a plan to raise defence spending by £75bn by 2030 as based on a “fake figure”. The Institute for Fiscal Studies has described this figure as misleading. (See 10.35am.)
Speaking in the Commons, in response to a statement from Grant Shapps, the defence secretary, his Labour shadow John Healey said:
If this 2030 plan had been in a budget, it would have been independently checked, openly costed, and fully funded. So where is the additional money coming from? How much from which other R&D (research and development) budgets? How much from cutting how many civil servants in which departments?
They’ve tried this trick before, in the 2015 defence review ministers pledged to cut 30% of the MoD civil servants to make their defence spending plans add up. Civil servant numbers didn’t go down, they went up. Not down to 41,000 but up to 63,000.
Now he’s mentioned an additional £75bn five times in his statement, over the next six years the government’s official spending plan are based on a 0.5% real annual growth in chore defence spending. Why has he invented his own zero growth baseline to produce this fake figure claiming an extra £75bn for defence. The public will judge ministers by what they do, not what they say.
In response, Shapps said:
He says judge us by our action, not our words. You know what, we will, because 11 members of that side’s frontbench voted against Trident. So it’s no good for him and the leader of the opposition to go up to Barrow and claim that they’re all in favour now of the nuclear weapons, of the nuclear defence.
Some 402 people were detected crossing the Channel on Tuesday, according to provisional figures from the Home Office, PA Media reports. PA says:
The cumulative number of arrivals by small boats in 2024 now stands at a provisional total of 6,667.
This is 20% higher than the total at the equivalent point last year, which was 5,546, but slightly lower (down 0.4%) than the total at this stage in 2022, which was 6,691.
Some seven boats were detected on Tuesday, which suggests an average of around 57 people per boat.
There were 29,437 arrivals across the whole of 2023, down 36% on a record 45,774 arrivals in 2022.
What Sunak said about how defence budget increase won’t stop government cutting taxes and investing in public services
This is what Rishi Sunak said in response to the second question about the funding of the plan to raise defence spending to 2.5% of GDP by the end of the decade. (See 1.04pm.)
We have made a choice and I am not shying away from that choice. All governing is about prioritising. I have decided to prioritise defence because I think that is the right thing to do for our country.
I am not going to get into writing the next manifesto here and now, but what I am confident about is that, if you have a strong plan for the economy, as we have, and that plan is working, we stick to that plan, we will be able to continue increasing defence spending.
It is a completely funded plan. We have got a very clear idea of how to reduce civil service headcount, which has grown considerably over the last few years, and we can bring that back and use that to fund what I announced yesterday, and alongside that, continue to invest in public services and cut people’s taxes.
Photograph: Sean Gallup/Getty Images
Q: How worried are you about Chinese spies?
Scholz says espionage will not be tolerated. From recent court cases, you can see that Germany has been quite successful at catching spies, he says.
He says allegations against the AfD candidates very worrying. He will not comment on the legal process. But what has been uncovered is a matter of concern, he says.
That is a reference to this story.
The press conference has now finished.
Q: Why won’t you deliver cruise missiles to Ukraine?
Scholz says Germany has sent missiles to Ukraine. But he is clear about his decision not to send cruise missiles.
Q: What is going to have to go to allow you to prioritise defence spending? Are more tax cuts off the table? And can you rule out further cuts to public services?
Sunak says the government has record investment in the public services, including the NHS. That is not going to change, he says.
The state pension is going up, he says.
But he says he has made a choice.
He says he will not write the next manifesto now. But he has a funded plan to increase defence spending. And, alongside that, he can “continue to invest in public services and cut people’s taxes”, he says.
This firms up what Sunak was saying earlier. See 12.53pm.
Sunak seems to be sending out a clear message to people in his party that, just because he has committed to more money for defence, that does not mean that he won’t be able to include tax cuts in the Conservative manifesto.
Yesterday Ben Wallace, the former defence secretary, told the PM programme that Sunak had told him that he was able to go ahead with the defence announcements because “other commitments” that might have been in the manifesto were being dropped. Wallace did not know what those were, but he speculated it might have been a tax cut.
Sunak praises Germany’s record on support for Ukraine. But he says every country can bring something different to the table.
On Nato defence spending generally, he says it is clear the world is becoming more dangerous. The UK recognises that it has to do more.
Germany has raised its defence spending. The UK is putting its defence spend up to 2.5%. Other European countries are doing the same. This is an “inflection point”, he says.
Q: [To Scholz] Are you convinced that Donald Trump is committed to Nato?
Rishi Sunak says US administrations have often said Nato countries should increase defence spending. That is now happening.
Scholz does not refer to Trump, but he defends Germany’s record on defence spending, which is rising.
Sunak claims defence spending plan won’t affect government’s ability to keep cutting taxes
At the press conference the opening statements are over, and Rishi Sunak and Olaf Scholz are now taking questions.
Q: [To Sunak] Are you really being honest with people about the funding of your defence spending plan?
Sunak does not accept he is misleading people.
He says the government will reduce the size of the civil service.
The government is making a choice, he says.
He thinks it is important for Britain to stand up for its values.
He says this announcement is consistent with the government’s ability to “keep cutting taxes”.
He mentions tax cuts already announced, but he seems to be hinting that the defence spending announcement does not mean that further tax cuts won’t be included in the Tory election manifesto.
UPDATE: Sunak said:
The plan that I announced yesterday, it’s fully funded.
It’s funded, rightly with a reduction in civil service headcount back to 2019 levels. Snce then we’ve seen a very significant rise that isn’t sustainable or needed. The chancellor has conducted a detailed exercise, he announced this at the end of last year, that exercise is completed, and that’s what gives us the confidence that we can release the savings needed to fund our defence plan, combined with an uplift in R&S spending, which we have already budgeted for …
It is the biggest strengthening of our national defence in a generation. It is fully funded. And it is based on the fact that we have a strong economy and an economic plan that is working …
And it’s because our economic plan is working that I’m able to make these announcements and they are entirely consistent with our ability to keep cutting people’s taxes.
PMQs – snap verdict
PMQs is has finished, and the press conference in Berlin is just starting.
We should have a live feed at the top of the blog soon.
As for PMQs? Very snap verdict – Angela Rayner has not been taken down by “housegate”, and she is still functioning effectively as an attack machine. It wasn’t her best performance, and if the best line she can come up with about Rishi Sunak is that he is a “pint-sized loser”, she really needs to try harder. Surely it’s time to abandon jibes about height. But she dealt with the attacks on her housing arrangements fairly effectively. She raised the issue before he did, and used it as a pivot into a question about the renters (reform) bill, where Dowden ended up giving a thin defence of legislation that does not do what it is meant to do. Rayner said:
I know this party opposite is desperate to talk about my living arrangements, but the public want to know what this government is going to do about theirs.
And she was right.
Chi Onwurah (Lab) says a constituent who gets the carer’s allowance made a mistake, and now faces a bill for £4,000. But the science secretary, Michelle Donelan, works as a part-time woke detector. She made a mistake, and cost the taxpayer tens of thousands, but has not had to pay that back. Why?
Dowden ignores the Donelan part of the question, but says the DWP should look into cases where mistakes have been made.
