Burnham under pressure to rule out welfare cuts to fill £5bn defence budget black hole
Andy Burnham is under growing pressure from Labor MPs not to use welfare cuts to plug the £4.7bn black hole in the defense spending plan if he becomes prime minister later this month as expected.
Allies of the Makerfield MP refused to speculate on how the future prime minister planned to fill the void, but said Mr Burnham was “seething” that Sir Keir Starmer had left him with a multi-billion pound funding gap in the Defense Investment Plan (DIP) – describing it as a “poison pill”.
The Treasury has yet to explain how it will fund almost a third of the £15bn increase in defense spending; Cuts or tax increases are expected to close the gap.
But Labor MPs and charities are warning against any attempt to repeat the crackdown on the welfare budget following Sir Keir’s failed reforms last year; This led to a major backtracking, forcing him to abandon plans for £5bn a year cuts and also dealing a major blow to his authority as Labor leader.
Rachael Maskell, who was instrumental in last year’s backbench rebellion, said: Independent: “Ensuring financial security for disabled people and those on poverty wages must remain a principle of our social security system, and while it is right that Labor is doing everything possible to help people get into work to reduce demands on the DWP, cuts will only replace spending.
“Instead, we need to look to overprofitable corporations, including the defense industry, to ensure national and individual security; redistribution is vital if we want to see a fairer and safer country.”
Another prominent welfare rebel, Alloa and Grangemouth MP Brian Leishman, said the government should be “funding welfare and ways of looking after people, improving their lives and improving the country’s infrastructure, rather than billions of dollars going to arms manufacturers”.
“You can’t cut ministry budgets and lift people out of poverty and improve people’s lives,” he added.
Alternative options for reducing welfare are to raise separate taxes or find further savings in other departments, but Labor MPs are already angry about cuts to the roads improvement budget.
Cuts at other ministries have already angered some MPs, with Foreign Secretary Hamish Falconer objecting to the cancellation of road improvements to help his Lincoln constituency among those voicing concerns.
He said: “Following the Labor leadership contest, I will seek an urgent meeting with the new prime minister, new chancellor and new secretary of state for transport to discuss this decision and explore whether there is a credible way forward for this vital project.”
A new YouGov poll has found the public backs increasing the top income tax rate for those earning £125,140 and above as a way to plug the defense spending black hole with a +43 per cent rate to fill the gap.
Raising the middle 40p income tax rate has a rating of +20 per cent, while reducing welfare has a rating of +36 per cent, coming in second as an option to fund defence.
But James Taylor, strategy director at disability equality charity Scope, said: “A new Prime Minister will have many different options and ways to invest in defence.
“We don’t need to and shouldn’t balance the balance on the shoulders of disabled people.
“The benefits system needs reform, but reform cannot be code for cutting support. Life is more expensive if you’re disabled, and daily living costs remain stubbornly high.”
Meanwhile, Chancellor Rachel Reeves warned the future prime minister against taking on more debt to fund defence, warning that this would harm Britain’s national security.
Don’t write TelegramHe said the defense investment plan was possible because of its tight financial rules and warned Mr Burnham not to break those rules if he moved to No 10.
He said: “Financing this is only possible thanks to the changes I made to the financial rules two years ago.
“They allow us to spend what we need to secure Britain, maintaining economic resilience, keeping borrowing costs low and supporting growth.”
But a source close to Mr Burnham said they would not comment on the issue “until we have the full picture”.
Sir Keir Starmer faced pressure from Conservative Party leader Kemi Badenoch over the Defense Investment Plan at Prime Minister’s Questions, which he described as “fake outrage”.
Ms Badenoch described the DIP as a “total dereliction of duty” and called on Mr Burnham to condemn it, following a minister’s suggestion that Mr Burnham only discovered he was facing a funding shortfall on the day it was published.
Speaking in the House of Commons, he said it was “unwise” and added: “How can the Prime Minister stand there and say that’s enough?” Sir Keir defended this, saying: “Anyone who knows what’s in the plan… welcomes it.”
He added: “We have £22bn available because of decisions in the last Budget, which is exactly so we can make decisions like this.”
“We did this outside the Budget, outside the spending review, just as we did on special educational needs – outside the budget, outside the spending review – just as the previous government did in 2018 when they announced their five-year NHS plan, outside the budget, outside the spending review.”
