JOHN Healey has been given a stark warning to slash spending to fund a military cash boost, the IMF says.
The Chancellor must be up front with voters that cuts across government departments must be carried out, the experts say.
The organisation admitted that “difficult trade-offs” were on the table as the tax burdens across Europe are already at a peak.
Mr Healey walked into the on-going row as he arrived at the IMF annual meeting in Bangkok today.
Labour is facing on-going calls to increase defence spending to three per cent of GDP by 2030 but will only set plans out next year.
The warning from International Monetary Fund’s Rodrigo Valdes who called for “urgent” spending cuts when pushed on where the money should come from.
He pointed to the tax burden already being high across the continent.
He said: “In general, Europe has relatively high revenue ratios. So the space for a lot more revenues is not easy.
“It distorts at the end of the day, so the discussion about the social contract behind spending is very, very urgent in the sense that… less spending… part of the new pressures that you will have from different sources.”
Labour is facing on-going calls to increase defence spending to three per cent of GDP by 2030 but will only set plans out next year.
The government is only committed to hitting the target of 3.5 per cent of GDP by 2035.
Chancellor resigned from the government as Defence Secretary in a row over defence cash.
Era Dabla-Norris, also of the IMF, added: “There are going to be difficult trade-offs. And then countries will have to assess carefully in communication and in dialog, in discussion with the public in terms of what the priorities are.
“What needs to come first, and what the governments have to spend on.”
Labour attempted to reduce the bill last year by just £5 billion but a backbench rebellion thwarted ‘s efforts.
Tory leader has committed to hitting the 3 per cent by 2030 and has accused Andy Burnham if kicking the matter into the long grass.
She announced last week a £10 billion “Brittania Shield” which will act like an Iron Dome which will act to protect UK skies.
