The Chancellor, John Healey, says funding the £4.7bn gap in the Defence Investment Plan "involved hard choices, it's reprioritising within Government". He made the comment on Good Morning Britain in his post-Budget broadcast round, PA reports.
PA also reports that he signalled departments would have to find further savings for the 2027 spending review. He told Bloomberg:
"My Cabinet colleagues are demonstrating that they can also exert fiscal discipline and spending control, and we will take that into the spending review"
PA's reading of the Budget document also shows where the rest of the defence money comes from. A 1% cut to each department's capital budget between 2027-28 and 2029-30 raises about £3bn. The remaining £1.7bn comes from an unallocated contingency in the Treasury's capital reserve.
His remarks match the document's own warning that "it is not necessarily the case that all departments will see real terms increases at the next spending review".
Healey is visiting a Rolls-Royce factory in the East Midlands to promote the Budget with the Prime Minister, Andy Burnham, and the Business Secretary, Jonathan Reynolds, PA reports.