Jeremy Hunt
Main Page: Jeremy Hunt (Conservative - Godalming and Ash)Department Debates - View all Jeremy Hunt's debates with the HM Treasury
(1 day, 9 hours ago)
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Rachel Reeves
I thank my hon. Friend for that question. We have already signed off commitments to both Sizewell C—a publicly funded nuclear power station—and small modular reactors, which we will build with Rolls-Royce in north Wales. The purpose of the Fingleton review is to ensure that we can build those quickly and cheaply, as—more than ever—the current situation demands.
Sir Jeremy Hunt (Godalming and Ash) (Con)
When I was doing the Chancellor’s job, the Treasury rule of thumb was that a 20% increase in energy prices meant 1% more on inflation and 0.5% less on growth. The truth is that it is much too early to know whether the Chancellor will have to find £78 billion to help households with energy bills, as I had to do in 2022, but we do know that the world is much more dangerous and that there are big problems in our defence budget. I welcome the fact that the Government are now committed to increasing defence spending to 2.5% of GDP, but nearly two years on from when the previous Government made the same commitment, it is clear that that is not enough. Will she unblock the arguments between the Treasury and the Ministry of Defence and outline a timetable whereby defence spending increases to 3% of GDP and we are able to defend our interests in the middle east and our allies in Europe, as the whole House would wish?
Rachel Reeves
The right hon. Gentleman’s point about it being too early to tell the impact is really important. Of course we will take the necessary actions to protect consumers and businesses, but the most important thing we can do at the moment is to de-escalate the conflict and work with Lloyd’s of London and countries around the world to get those vessels flowing through the strait of Hormuz. That is absolutely key for containing the rises in energy prices.
On defence spending, the Conservative manifesto committed to getting to 2.5% by the end of the Parliament. We are going to get to 2.6% by April next year, and we have made further commitments to 3% and then 3.5%. Obviously, we have a spending review coming up next year where these decisions will be taken in the round.