The delay in setting out how defence funding will increase is “unconscionable”, Kemi Badenoch said, as she called on John Healey to slash welfare spending and reduce Government borrowing in next week’s Budget.
Mr Healey resigned as Sir Keir Starmer’s defence secretary in a row over funding, saying that Britain must commit to spending a 3% share of the economy on the military in 2030.
But as Andy Burnham’s Chancellor, Mr Healey will not set out a path to the Nato target of spending 3.5% of gross domestic product (GDP) on defence by 2035, with 3% as a stepping stone at some point on that route, until next year’s spending review.
Conservative leader Mrs Badenoch said: “If, at this Budget, he does not find the money to get to 3%, John Healey has an awful lot of explaining to do.
“But we are hearing that the decision has been kicked into the spending review, and the spending review itself has been kicked into next autumn.
“If this is true, it is unconscionable.
“Britain is at risk. John Healey said so himself, and no amount of political difficulty should prevent us from responding to that risk.”
In a speech in Westminster she said the amount of extra money needed to get to 3% of GDP on defence is “less than a third of the increase in welfare since Labour came to office”.
Amid speculation Mr Healey will hike taxes on banks in next week’s statement, Mrs Badenoch warned that would increase mortgage costs and push up interest rates for business loans.
That would result in “fewer jobs across the country from all of those businesses which sack people or which never start up in the first place”.
And she mocked Mr Burnham over the Government’s announcement of a crackdown on people playing music on public transport.
“It’s very easy to announce that you don’t like people making noise on trains. That is a job for ticket inspectors, not the Prime Minister,” she said.
“If Labour’s plan is to kick tough decisions into the long grass, come out with tiny bits of micro policy, put up a few taxes, spend a bit more on welfare, and hope nobody notices before the next election, they are kidding themselves.”
She said the country had to “live within our means”, warning that the bond markets were already passing judgment on the Government’s ability to control spending.
Britain’s 30-year gilt yields – effectively the interest rate paid for Government borrowing – went above 6% this month “their highest level since 1998”, she said.
“That means that when we borrow a pound for 12 years it ends up costing us two pounds,” she said.
“The UK is now paying more to borrow than any other advanced economy.
“We are paying over 1% more than Greece and Spain. We are paying nearly 2% more than Germany.”
She added: “We have to stop borrowing so much. But instead of doing that, Labour are taking out loans to pay the interest on our loans.”
The Tories, she claimed, would implement more than £70 billion in savings, including major cuts to welfare spending.
Labour Party chair Bridget Phillipson said: “Kemi Badenoch is totally tone deaf on the economy. Under the Tories, debt rocketed, interest rates went up, while family finances and businesses were hammered.
“Yet Badenoch’s answer is reverse Robin Hood politics – giving tax breaks to the wealthiest while offering nothing to ordinary people. It’s the same old Tories.
“Labour has taken the fair decisions to reverse the Conservatives’ decline.
“The economy is growing, interest rates have fallen, and private investment has returned.
“We’re giving people breathing space on the cost of living and delivering everyday fixes to make life that little bit easier.”