The Chancellor has vowed to make the Ƶ a "defence industrial superpower" and create jobs across the country as she used her spending review to announce a rise in defence spending and declare the Government would back British business.
Rachel Reeves confirmed defence spending will rise to 2.6% by April 2027.
The Chancellor quoted Sir Keir Starmer who said the global security situation meant a “new era for defence and security” was needed. And she declared that increased spending would lead to jobs across the Ƶ, she added.
She said: “A new era in the threats we face demands a new era for defence and security. That’s why we took the decision to prioritise our defence spending by reducing Overseas Development Aid so that defence spending will now rise to 2.6% of GDP by April 2027 including the contribution of our intelligence agencies.
“That uplift provides funding for the Defence Secretary, with a £11bn increase in defence spending and a £600m uplift for our security and intelligence agencies. That investment will deliver not only security, but also renewal in Aldermaston and Lincoln; Portsmouth and Filton; on the Clyde and in Rosyth. Investment in Scotland. Jobs in Scotland. Defence for the United Kingdom, opposed by the Scottish National Party delivered by Labour.”
Ms Reeves said £4.5 billion would be invested in munitions in Glasgow, Glascoed, Stevenage and Radway Green. £6 billion will be spent on upgrading nuclear submarine production in Barrow, Derby and Sheffield.
She added: “We will make Britain a defence industrial superpower, with the jobs, the skills and the pride that comes with that.”
Meanwhile the Chancellor said the Ƶ's spending on small modular nuclear reactors will ensure the Ƶ is at the “forefront of a global race for new nuclear technologies”. She said the preferred partner for the £2.5 billion project was Rolls-Royce, with the same amount being spent on nuclear fusion.
She said: “This investment is just one step towards our ambition for a full fleet of small modular reactors as well as providing a route for private sector-led advanced modular reactor projects to be deployed in the Ƶ."
She added it would “strengthen Britain’s position at the forefront of a global race for new nuclear technologies”.
The Chancellor also slammed austerity under the previous Government, calling it a “destructive choice” for society.
She said: “In this spending review, total departmental budgets will grow by 2.3%-a-year in real terms. Compare that to the Conservative choice for austerity. In contrast to our increase of 2.3%, they cut spending by 2.9% per year in 2010.
“So let’s be clear, austerity was a destructive choice for the fabric of our society. And it was a destructive choice for our economy too, choking off investment and demand, creating a lost decade for growth, wages and living standards.”
She added: “My choices are different. My choices are Labour choices. The choices in this spending review that are possible only because of my commitment to economic stability and the decisions that this Government has made. The Conservatives’ fiscal rules guaranteed neither stability, nor investment. And that is why I changed them. My fiscal rules are non-negotiable and they are the foundation of stability and of investment.”
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