Labour's ambitious plan to increase defense spending over four years is facing scrutiny as questions arise about the identification of its funding, according to Conservative criticism. Kemi Badenoch, a Conservative leader, has accused Labour's Keir Starmer of a "total dereliction of duty" following admissions from Downing Street that savings required to finance the £15 billion boost have not yet been fully identified.
The Prime Minister announced the delayed Defence Investment Plan, intended to enhance Britain's armed forces, with claims it would bolster deterrence against Russia. However, Treasury documents reportedly indicate that £4.7 billion of the necessary funding has not been secured and is slated for identification in a future budget. Additionally, final decisions on where £10.3 billion in departmental savings will be generated have been postponed until the autumn, a period when Sir Keir is no longer expected to be Prime Minister.
Concerns have been raised that the funding gap could lead to the delay or cancellation of hospital building projects. Some Labour MPs are reportedly protesting the scrapping of three road schemes, which are the only identified savings so far, and are urging a potential future leader, Andy Burnham, to reinstate them. While Downing Street stated that Mr. Burnham was briefed on the defense plan's outline, his allies claim he was not informed about the funding shortfall and are reportedly "furious" about being left to address an issue that has been under consideration for a year.
The chief of the defense staff, Air Chief Marshal Sir Richard Knighton, has stated that spending needs to increase to 3.5 percent of GDP to fully implement the strategic defense review, a figure significantly higher than the 2.7 percent agreed upon in Labour's plan. Analysts suggest that closing the funding gap would require an additional £25 billion, equivalent to a 3 pence increase in the basic rate of income tax, necessitating a national discussion on how to fund it.
Badenoch criticized the plan as "too weak, it is too little and it is too late," suggesting that the necessary funds should come from welfare cuts, an action she claims Labour has been unwilling to take. She linked the current funding dilemma to Labour's earlier decision to abandon welfare savings, arguing that this demonstrates a weakness in their approach to national security.
In response to challenges regarding the missing £4.7 billion, Sir Keir stated that it is customary for governments to finalize funding for initiatives at the Budget. However, doubts persist about the funding for the remainder of the package. Departments have been instructed to reduce capital budgets by one percent, with the Department for Transport and the energy department facing additional cuts. While the "first wave" of a New Hospital Programme is reportedly not affected, delays or cuts to later phases have not been ruled out. Health organizations have warned that such delays could negatively impact patient care and represent a "false economy."
Sir Keir has suggested that Mr. Burnham could utilize the government's fiscal "headroom" to cover some of the shortfall, implying increased borrowing. However, Rachel Reeves has cautioned against funding increased spending through borrowing, emphasizing that current possibilities are contingent on adhering to fiscal rules. She argued that a nation spending beyond its means is vulnerable and could be exploited by adversaries, to the detriment of national security.