Reeves, UK's Reeves, says borrowing and higher taxes are not good for additional defence spending

Rachel Reeves, the British finance minister, said that she did not support tax increases or increased borrowing in order to pay for an increase in defence spending. This has now become a priority after Russia's invasion of Ukraine at full scale and Iran war.

Reeves said to reporters at the International Monetary Fund's and World Bank's spring meeting in Washington, "Obviously we are looking into a variety of options. But my two budgets both have increased taxes significantly and I would rather not have to do it?again."

She said that the British government's spending on interest rates is too high in terms of borrowing.

Keir starmer, the British Prime Minister, has pledged the biggest sustained increase in defence spending since the Cold War. However, with public finances already strained, his government still hasn't published its 10-year plan for defence investment.

Cuts to other public expenditures could be used in addition to raising taxes or borrowing additional funds.

Reeves stated that the government is working "pretty intensively" with energy companies to finalise details of the so-called 'tie-back projects' in the North Sea, which would allow new oil and natural gas production near or on existing fields.

Starmer's Labour Party pledged to stop awarding new oil and gas licenses during the 2024 election campaign in order to move towards net-zero emission. However, its tie-back plan, announced in November of last year, allows for new oil and gas licences that do not require exploration.

Reeves said that the government also hoped to have more information on how?to delink UK electricity prices from gas prices?in the coming days or even weeks. This could help reduce the high cost for power in Britain. (Writing and editing by Paul Simao; William Schomberg)

(source: Reuters)