UK political leaders debate defence funding and economic growth

Conservative leader Kemi Badenoch has proposed a plan to increase annual defence spending by £10 billion to reach a target of 3% of GDP by 2029-30. The funding would be sourced through welfare cuts, most notably by reducing the Local Housing Allowance (LHA) to cover only the bottom 10% of local market rents, rather than the current 30% target. Other proposed savings include restoring the two-child benefit cap and applying VAT to cars used in the Motability scheme.

Separately, Chancellor of the Exchequer John Healey is preparing to outline an economic agenda ahead of Prime Minister Andy Burnham’s first budget in October. Healey’s strategy focuses on wealth creation and regional growth, including a £150-million fund to support business innovation in northern England. The Chancellor aims to balance growth with fiscal discipline, navigating economic challenges such as high energy prices and youth unemployment.