IFS warns of 'chunky' tax rises to pay defence costs

Sir Keir Starmer has been warned he will need to make “really quite chunky tax increases” to pay for his plans to increase defence spending.

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The Prime Minister said he was “100 per cent confident” cash would be available for all plans laid out in the new strategic defence review, which includes extra attack submarines, £15 billion on nuclear warheads and thousands of new longrange weapons.

The Government has promised to increase defence spending to 2.5 per cent of gross domestic product (GDP) by 2027, and has an ambition - but no firm commitment - to hike it to three per cent in the next parliament.

Paul Johnson, the director of the Institute for Fiscal Studies (IFS) think tank, warned the Government faces tough financial choices over the plans, as it also grapples with other key areas of public spending.

He told Times Radio: “It looks like the Government wants to reinstate the winter fuel payment. It’s thinking about the twochild limit for benefits. We've got a spending review next week.