{"id":531491,"date":"2026-07-08T16:26:08","date_gmt":"2026-07-08T16:26:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/531491\/"},"modified":"2026-07-08T16:26:08","modified_gmt":"2026-07-08T16:26:08","slug":"treasury-yet-to-do-due-diligence-on-finding-extra-money-for-uks-nato-spend-business","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/531491\/","title":{"rendered":"Treasury yet to do due diligence on finding extra money for UK\u2019s Nato spend | Business"},"content":{"rendered":"

The Treasury has as yet carried out no analysis of the trade-offs necessary for the UK to hit the 3.5% of GDP defence spending promise made to Nato<\/a>, the department\u2019s chief secretary has said.<\/p>\n

Under robust questioning in a joint session of the Treasury and defence select committees on Wednesday, Lucy Rigby repeatedly said that how to fund additional defence spending would be a matter for \u201cthe next prime minister\u201d.<\/p>\n

Keir Starmer, who is attending his last Nato summit in Ankara, Turkey, has promised the UK will hit the 3.5% target by 2035.<\/p>\n

The failure to set out a future spending path was among the reasons for the dramatic recent resignation of John Healey<\/a> as defence secretary.<\/p>\n

Asked if the Treasury had done any number-crunching , Rigby said, \u201cthese are decisions for the future government to make.\u201d<\/p>\n

Treasury select committee chair, Meg Hillier, reminded her, \u201cyou are the chief secretary of Treasury. You\u2019re the one in the government who oversees all the public spending.\u201d<\/p>\n

Asked, \u201chave you done an analysis of the trade offs that would need to be done, in the short or long term?\u201d Rigby first deferred to the Treasury official appearing alongside her, and when pressed again, responded, \u201cno, is the short answer.\u201d<\/p>\n

Committee member Bobby Dean pointed out the scale of the shift that would be necessary \u2013 \u201cyou\u2019re talking about \u00a330-40bn extra, equivalent to 3p to 4p on all rates of income tax.\u201d Rigby said there would have to be a debate about \u201cpublic consent\u201d for such a change.<\/p>\n

The government has an interim target of spending 3% on defence in the next parliament, but the path to that has not yet been set out \u2013 a question Rigby said would be left for the next spending review, expected in mid-2027, by which time Andy Burnham is expected to be prime minister.<\/p>\n

\u201cWe\u2019ve said for the next parliament, we will get to 3%. And I understand that the question is being asked when in the next parliament. And I come back to the fact that the prime minister has said that defence will be the number one priority at the next spending review,\u201d she said.<\/p>\n

Rigby repeatedly stressed the difficult decisions in prospect, however, saying, \u201cit\u2019s not straightforward: money is finite.\u201d<\/p>\n

Healey resigned in the run-up to the publication of the contentious Defence Investment Plan, which set out an additional \u00a315bn of funding<\/a> for the department over the next four years, taking it to 2.7% of GDP.<\/p>\n

Whitehall departments have been asked to cut on investment plans to fund the shift; but Rigby conceded that an extra \u00a34.7bn will also have to be found in the autumn budget \u2013 by which time Rachel Reeves is expected to have been replaced.<\/p>\n

Rigby said the approach, of announcing projects and then funding them at subsequent fiscal events, was \u201cnot uncommon\u201d.<\/p>\n

But Hillier compared the approach with the \u201cblack hole\u201d in the public finances<\/a> that Reeves claimed to have identified when Labour came to power two years ago.<\/p>\n

\u201cThere were projects that had been promised that hadn\u2019t been fully funded in the normal way, as you\u2019ve just described, but that was described as a shocking \u00a322bn black hole unfunded by the previous government,\u201d she said.<\/p>\n

Rigby and the minister for defence readiness and industry, Luke Pollard, who appeared alongside her were repeatedly asked about the fractious relationship between the Treasury and Ministry of Defence.<\/p>\n

The pair both claimed the two departments were now working better together. But Pollard, the MP for Plymouth Sutton and Devonport, joked, \u201cI come from a naval family where, I was taught from an early age, the Royal Navy has two enemies, the French and the Treasury. We\u2019re now good friends with the French \u2026 and I would say that the process between the Treasury and MoD, has been on a journey.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"The Treasury has as yet carried out no analysis of the trade-offs necessary for the UK to hit…\n","protected":false},"author":2,"featured_media":531492,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[114,85,46],"class_list":["post-531491","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-il","tag-israel"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/531491","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=531491"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/531491\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/531492"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=531491"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=531491"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=531491"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}