Defence spending pledge left unfunded
Treasury minister Lucy Rigby admits no plan exists to fund a £4.7bn defence gap, as disabled claimants lose £47 a week and roads jobs go.
Disabled people are losing £47 a week from universal credit. Infrastructure workers are losing their jobs so roads projects can be shelved. Neither group asked for a fight with Moscow. Both are already paying for one the Treasury cannot say how it will fund.
On Wednesday, Chief Secretary to the Treasury Lucy Rigby was asked directly by a joint Commons Treasury and Defence committee session whether her department had analysed how to pay for the UK’s promise of 3.5% of GDP on defence spending by 2035. “No, is the short answer,” she told MPs. Asked who would decide, she said funding it would be a matter “for the next prime minister.”
Who pays for UK defence spending
That next prime minister is expected to be Andy Burnham, who inherits a £4.7bn hole in the Defence Investment Plan published on 30 June, almost a third of the extra £15bn promised over four years. The rest is being found by taking 1p in the pound from every department’s capital budget. Transport is losing up to £700m, putting the A38 Derby Junctions and A46 Newark Bypass schemes at risk. Energy is losing £2bn. A report estimates the resulting infrastructure cuts will cost roughly 10,000 jobs.
Committee chair Meg Hillier told Rigby she is “the one in the government who oversees all the public spending,” and compared the pledge-now, fund-later approach to the “£22bn black hole” Labour accused the Conservatives of leaving in 2024. Committee member Bobby Dean put the true cost of reaching 3.5% at £30bn to £40bn a year, equivalent to 3p to 4p on every rate of income tax. The Institute for Fiscal Studies says honouring the commitment in full would “reshape the British state.”
Rigby said any change of that size would need “greater public discussion” because “money is finite.” That debate has already been settled once this year, without a vote: since April, new universal credit claimants with a health condition have had £47 a week cut, and tightened PIP criteria threaten more than a million disabled people with losing support.
The IFS is right that the defence rise and the disability cuts are separate budget lines, not a direct swap, and the threat picture is not invented: John Healey resigned as defence secretary on 11 June saying the settlement already fell short and left Britain “less safe.” The argument worth having is not whether Britain rearms. It is why the money for the arms firms was found first, and the argument about who else pays only opens once it is the public’s turn.
Burnham has promised the £4.7bn will be “fully funded” while keeping Labour’s fiscal rules, which rule out extra borrowing. That leaves two routes: more cuts, or higher taxes. The Treasury has told parliament it hasn’t picked either.
