Senior Labour figures have cautioned Chancellor Rachel Reeves against funding increased military spending through cuts to welfare, arguing that pitting defence against welfare risks undermining public support for defence investment. The warning comes as pressure mounts from Labour backbenchers for the Treasury to urgently agree the defence investment plan (Dip), following former Nato secretary general George Robertson's criticism of a 'corrosive complacency' on defence funding.
MPs and peers have rejected opposition calls for defence investment to be funded by welfare cuts, insisting there are alternative ways to secure funds. The chancellor is understood to have proposed increasing the defence budget by less than £10bn over four years, amid concerns that more would be unaffordable. Prime Minister Keir Starmer has disagreed with Robertson's comments, insisting defence spending is increasing rapidly.
The government has committed to reaching 2.5% of GDP on defence from April 2027 and 3% in the next parliament, but military leaders believe there remains a £28bn shortfall after years of underfunding. Defence Secretary John Healey is pushing for a larger increase, but one senior Labour figure described him as 'totally captured' by the MoD's desire for more funding, while Reeves adopts a Treasury scepticism of the 'money pit'.
Labour peer and former defence secretary John Hutton said Starmer needed to 'knock heads together' to ensure the Treasury releases more funding without first seeking guarantees on procurement systems. He argued that while the MoD wastes money on inefficient procurement, it is unreasonable for the Treasury to demand savings before allowing spending, given the geopolitical situation.
Unite general secretary Sharon Graham said defence spending should be significantly increased but not at the expense of the poorest, calling for a wealth tax instead. Labour MP Graeme Downie stated that the solution cannot be a fight between defence and welfare, but requires a whole-of-government approach. Defence select committee member Emma Lewell suggested alternatives such as scrapping digital ID, reviewing net zero policies, and rethinking fiscal rules.
