The UK can cut taxes AND increase defence spending, Rishi Sunak says as he insists the economy is strong enough

Rishi Sunak yesterday vowed to ‘keep cutting taxes’ while boosting defence spending – as he insisted that the economy was strong enough to do both.

The Prime Minister dismissed claims from Labour that his dramatic pledge to spend an extra £75 billion on defence by the end of the decade was not fully funded.

At a press conference in Berlin, he said much of it would be paid for by slashing the civil service back to its pre-pandemic size, reducing numbers by 72,000.

He did not rule out cuts to other areas of public spending outside health and education. 

But he insisted the Government could still cut taxes while hiking defence spending.

The Prime Minister Rishi Sunak is pictured taking a selfie with German and British troops at the Julius Leber Barrackson April 23

Rishi Sunak speaks with military personnel as he visits troops at the Julius Leber Barracks in Berlin on April 23

‘We have record investment in our public services, including the NHS, that’s not going to change, it’s going to continue. We have record investment in our schools, that’s not going to change, it’s going to continue to increase. And alongside that we are able to cut people’s taxes,’ he said.

‘But 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.’

He added: ‘It is the biggest strengthening of our national defence in a generation. It is fully funded. And it is based on the fact we have a strong working economy and an economic plan that is working.’ 

Mr Sunak was in Berlin for talks with German Chancellor Olaf Scholz which focused on defence and the war in Ukraine. 

He hailed a ‘new chapter’ in the relationship between the UK and Germany, with both countries now investing heavily in military spending.

It came as US President Joe Biden finally signed off a £49billion aid package for Ukraine yesterday – including long-range missiles and air defence systems.

Meanwhile, Mr Sunak also urged European countries to match Britain’s promised defence spending boost, as he warned they could not expect the United States to ‘pay any price’ to protect the continent. 

German Chancellor Olaf Scholz walks with British Prime Minister Rishi Sunak during a meeting in Berlin, Germany on April 24

German Chancellor Olaf Scholz and British Prime Minister Rishi Sunak attend a press conference, at the Chancellery in Berlin, Germany on April 24

Currently only three Nato countries in Europe spend more than the UK’s new target of 2.5 per cent of GDP on defence. 

‘We can’t expect the Americans to pay any price, to take any burden if we in Europe are not ourselves prepared to make the sacrifices and make those investments,’ he said.

The call was backed by Mr Scholz, who has overseen rapid rises in defence spending since Russia’s invasion. Germany has hiked defence spending to 2 per cent of GDP and Mr Scholz said he was committed to hitting 2.5.

British officials were told the German Chancellor would not accept a gift from Mr Sunak during the trip. 

One Whitehall source said Mr Scholz was ‘not a gift kind of person’.