Burnham under pressure to rule out welfare cuts to fill £5bn defence budget black hole

Andy Burnham is under mounting pressure from Labour MPs to rule out using welfare cuts to fill the £4.7bn black hole in the defence spending plan if, as expected, he becomes prime minister later this month.

Allies of the Makerfield MP have refused to be drawn on how the prospective prime minister plans to plug the gap, but say Mr Burnham is “seething” that Sir Keir Starmer has left him with the multibillion-pound funding gap in the Defence Investment Plan (DIP), describing it as a “poison pill”.

The Treasury has yet to spell out how it will fund almost a third of the £15bn uplift in defence spending, with cuts or tax rises expected to bridge the gap.

But Labour MPs and charities are now warning against any attempts to repeat the raid on the welfare budget after Sir Keir’s failed reforms last year, which led to a major backbench rebellion and forced him to ditch plans for an annual £5bn cut – as well as striking a major blow to his authority as Labour leader.

Rachel Maskell, who was instrumental in last year’s backbench rebellion, told The Independent: “Ensuring financial security for disabled people and people who are on poverty pay must remain the principle of our social security system, and while it is right that Labour does everything possible to help people into work to cut the demands on the DWP, cuts will simply displace the expenditure.

“Instead, we need to look at companies with excessive profits, including in the defence industry, to ensure national and individual security; redistribution is vital if we are going to see a fairer and safer country.”

Alloa and Grangemouth MP Brian Leishman, another leading welfare rebel, said that the government should "fund welfare and methods of looking after people and improving their lives and the infrastructure of the country, instead of billions that will go to weapons manufacturers".

"You cannot cut departmental budgets and lift people out of poverty and improve people’s lives,” he added.

The alternative options to cutting welfare is to raise different taxes or find more savings in other departments, but Labour MPs are already furious about cuts to the roads improvement budget.

Cuts made to other departments have already angered some MPs with Foreign Office minister Hamish Falconer objecting to the cancellation of road improvements to help his Lincoln constituency among those raising their concerns.

He said: “Following the Labour party leadership contest, I will be seeking an urgent meeting with the incoming prime minister, incoming chancellor and incoming secretary of state for transport to discuss this decision and explore whether there is a credible route forward for this vital project.”

A new YouGov poll has revealed that the public favour raising the very top rate of income tax for those earning £125,140 and above as a means of filling the defence spending black hole with a +43 per cent rating to fill the gap.

Raiding the middle 40p rate of income tax has a +20 per cent rating but cutting welfare has a +36 per cent rating and is in second place as an option to fund defence.

However, James Taylor, director of strategy at disability equality charity Scope, said: “A new PM will have many different options and ways of investing in defence.

“We don’t need to - and should not - balance the books on the backs of disabled people.

“The benefits system needs reform, but reform cannot become code for cutting support. Life costs more if you are disabled, and everyday living costs remain stubbornly high.”

Meanwhile, the chancellor has urged the future prime minister against borrowing more to fund defence, warning that this would harm Britain’s national security.

Writing in the Telegraph, she said the defence investment plan was possible becuase of her strict fiscal rules and warned Mr Burnham against breaking them, should be he move into No 10.

She said: “The funding for this is only possible because of the changes to the fiscal rules that I made two years ago.

“By preserving economic resilience, keeping borrowing costs down, and supporting growth, they enable us to spend what is needed to secure Britain.”

But a source close to Mr Burnham said that they would not be commenting on the problem “until we have the full picture.”

Sir Keir Starmer faced pressure from Conservative Party leader Kemi Badenoch over the defence investment plan at Prime Minister’s Questions, which he dismissed as “faux outrage”.

Ms Badenoch described the DIP as a “total dereliction of duty”, as she called for Mr Burnham to condemn it, following a suggestion from a minister that Mr Burnham only discovered he was facing the funding gap on the day it was published.

Speaking in the Commons, she said it “does not add up”, adding: “How can the Prime Minister possibly stand there and say that this is enough?”Sir Keir defended it, saying: “All people who know what is in the plan, and welcome it.”

He added: “Because of the decisions at the last budget, we’ve got headroom of £22 billion. That is precisely so we can take decisions like this.

“We delivered it outside a budget, outside a spending review, just like we did with the special educational needs – outside a budget, outside a spending review – just like the previous government did when they announced their five-year NHS plan in 2018 outside a budget, outside a spending review.”