Don’t raise taxes, slash spending to fund forces, Burnham is warned
The IMF has urged the UK to fund higher defence spending by reducing other public spending, arguing that further tax rises or borrowing would be difficult to sustain. The advice highlights the choices facing the government as it plans to meet a higher Nato spending target while balancing defence and social security.
The UK currently spends 2.7 per cent of GDP on defence, up from 2.3 per cent since Labour returned to office, and is committed to reaching 3.5 per cent by 2035. IMF officials warned that taxes are already rising unusually quickly and that investors are sensitive to UK borrowing and fiscal policy; the article says the tax burden is forecast to reach 41.9 per cent of GDP by the start of the next parliament, compared with 38.2 per cent at the start of 2025.
- IMF says defence increases require choices about other spending.
- The UK aims to spend 3.5 per cent of GDP on defence by 2035.
- IMF officials caution against relying on higher taxes or debt.
New here? Start with this
Nato is a military alliance whose members agree to support one another if attacked. It has set higher defence spending goals, and the UK has committed to spending 3.5 per cent of its national income on defence by 2035.
The International Monetary Fund is an organisation that monitors economies and advises governments. Its warning reflects a budget choice: more money for defence would need to come from taxes, borrowing or cuts to other spending, including areas such as social security.
The debate matters because government spending choices affect public services, benefits and the country’s finances. The IMF says further tax rises or borrowing could be difficult to sustain, while investors watch how the UK manages its debt.
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Supporters of the IMF’s advice argue that a credible increase in defence spending is necessary to meet security commitments, and that funding it by reprioritising existing budgets would limit pressure on taxes and public borrowing. With the tax burden already forecast to rise and investors alert to the UK’s fiscal position, they see spending cuts as a way to make the commitment more sustainable.
The case against
Critics could argue that cutting other public spending to fund defence risks weakening services and social security that people rely on, while shifting resources away from urgent domestic needs. They may favour some combination of borrowing or tax rises, especially if the security case for higher defence spending is strong, and contend that the costs should be weighed against the consequences of underfunding both defence and public services.