Sir Keir Starmer has left the door open for tax rises in order to pay for mammoth increases to defence spending, amid growing questions over how the UK will afford the £30bn pledge.
On Tuesday, Britain joined its Nato allies in committing to spending 5 per cent of GDP on defence and related spending by 2035.
But IFS director Paul Johnson warned that the planned increase in defence spending would cost more than £30bn – a sum that he said could only come from tax increases, “because in the end there’s nowhere else it can come from”.
Just three weeks ago, ministers struggled to explain how Britain would reach a target of 3 per cent defence spending by 2034 – casting doubt over the fresh target of 5 per cent.
Speaking to journalists on the plane to the Nato summit in The Hague, the prime minister pointed to current manifesto commitments which commit the government to no tax rises for working people.
But any tax hikes to fund the 2035 pledge are likely to come after the next election in 2029, which will see Labour campaign on an entirely separate manifesto – meaning current manifesto commitments will no longer apply.
Asked whether he plans to hike taxes in order to pay for the pledge, Sir Keir said: “Every time we’ve set out our defence spending commitments, so when we went to 2.5 per cent in 2027/28, we set out precisely how we would pay for it, that didn’t involve tax rises. Clearly we’ve got commitments in our manifesto about not making tax rises on working people and we will stick to our manifesto commitments.”
As Iran and Israel traded further strikes overnight, Sir Keir warned that Britain is facing “volatile times, probably more volatile than most of us have lived through recently”.
“We have entered a new era for defence and security. And the first duty of prime minister is to keep the country safe, and that sits above all other duties, and I take it really seriously.”
Amid a growing rebellion over the government’s controversial plan to slash the welfare bill by cutting disability benefits, the prime minister also denied that money for defence spending is coming from welfare receipts.
“The commitment we’ve made on defence to go to 2.5 by 2027/28, it’s absolutely clear that we’ve set out where the money comes from, and it’s not coming from welfare. It’s coming from the overseas development aid.
“So it’s a misdescription to suggest that defence spending commitment we’ve made is at the expense of money on welfare, and obviously on the welfare front, we’re making huge commitment to the money we’re putting in to get people back to work.”
IFS director Paul Johnson warned that the defence spending increase would need to be funded by “£30 or £40bn more taxes”.
Speaking to Times Radio about the increase, he said: “Where that’s going to come from, goodness only knows. Well, I think we do know it’s going to come from; £30 or £40bn more taxes, because in the end there’s nowhere else it can come from.
“I can’t really see this government cutting spending on pensions or the health service or welfare or what have you by that amount. I mean they can’t.”
The prime minister’s remarks on the flight to The Hague also saw him insist that Donald Trump is still a “close ally” – just minutes before the US president declined to commit to Nato’s Article 5, which requires members to defend each other from attack.
Over the weekend, Mr Trump launched strikes on Iran, despite Sir Keir saying he has “no doubt” the prime minister supports his goal of de-escalation.
Speaking on Tuesday, the PM said that while de-escalation was his priority, he had also been preparing to take “necessary measures should there be American action taken”.
Asked by The Independent whether the US president is still a reliable enough partner for British lives to be put on the line alongside the US, Sir Keir said: “We’re a close ally, we work together.
“As you’ll have seen on Tuesday as I immediately landed back from Canada from the G7 we went straight into a COBRA in Downing Street because we obviously had the G7 statement on the Monday after the session over dinner which was clear about deescalation.
“I obviously wanted to take necessary measures should there be American action taken. So where we had the G7 statement my first step on getting back was to cover all eventualities – including the eventuality of a US attack.
“We had then been talking to the US all of last week into the attack on Saturday. We were kept informed at all stages of what they were doing and working as allies as you’d expect.”
Asked if he would commit to the mutual defence clause of Nato, Mr Trump responded that it “depends on your definition” of Article 5.
“There’s numerous definitions of Article 5. You know that, right? But I’m committed to being their friends, you know, I’ve become friends with many of those leaders, and I’m committed to helping them,” the US president told reporters aboard Air Force One on Tuesday.
