Chancellor Rachel Reeves has signalled she will resist the clamour to raise taxes to pay for increased defence spending in the face of rising global threats to UK security.
Ms Reeves said she had already hiked the burden on taxpayers substantially and “would prefer not to have to do that again”.
Faced with increasing worries about threats from Russia, Iran and China, and under pressure from US president Donald Trump, Nato countries have ramped up defence spending over the past five years, but the UK has been slower to do so than many other nations.
The armed forces are thought to be facing a financial black hole of around £28bn over the next four years.
Former Nato chief and Labour grandee Lord Robertson on Tuesday accused the government of “corrosive complacency” on military spending. The ex-defence secretary accused “non-military experts” in the Treasury of “vandalism”.
Several other defence figures have also sounded the alarm about Britain’s unpreparedness for potential war. Lord Stirrup, the former Chief of the Defence Staff, warned that the UK is “badly exposed” and needs a decade to rebuild its defences.
Nato has revised its forecasts for UK defence spending this year downwards, from 2.4 per cent to 2.31 per cent.
But Ms Reeves insisted she had “provided the biggest uplift of defence spending since the end of the Cold War”.
At a summit of the International Monetary Fund in Washington DC, she said: “National security always comes first, and I will always do the right thing as chancellor to protect our country.”
She pointed out she had taken money from the overseas development budget to increase defence spending.
She added: “The biggest beneficiaries of my spending review last year were the NHS budget and the defence budget. Both of those saw big uplifts reflecting the choices that we’re making as a government.
“We are working through the defence investment plan. It’s a 10-year plan, so it is important that we get it right and we’re spending the money on the right things.
“There’s a lot of focus on the quantum of the money, but actually what is more important is how that money is spent and whether it is meeting the defence needs that we have as a country, and we’re working through that detail at the moment.
“Obviously, we’re working through a range of options, but my two budgets have both increased taxes substantially, and I would prefer not to have to do that again.”
Pointing out the Iran conflict had increased government borrowing costs, she said: “We already spend one in every £10 of what government spends on servicing the debt.
“And if we increase that debt further, we’d only be increasing how much we’re spending.”