Shadow Work and Pensions Secretary Helen Whately (Image: Daily Post Wales)

       Tories demanded Labour slash the ballooning welfare budget to provide the boost defence as they warned: “The UK needs to be strong."

       Shadow Work and Pensions Secretary Helen Whately said: “The Government is spending more on sickness benefits than on defence. That is not the sign of a strong country.”

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       She warned that too many young people were being told they had conditions such as anxiety which made them unable to hold down a job, saying: "We are also telling a generation of young people that the normal ups and downs of life are a medical problem that means they can’t go to work." Ms Whately said Conservatives would support the Government if it introduced cuts to welfare spending - although such cuts are likely to provoke furious opposition from some Labour MPs.

       She called on Prime Minister Sir Keir Starmer to commit to increasing defence spending by 3% of GDP by the end of the decade.

       Incapacity and disability benefits currently cost ￡64.7billion but Treasury watchdog the Office for Budget Responsibility warns this is set to rise to ￡100.7billion by 2030.

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       Ms Whately said: "The reality is that some people are simply too ill to work. And in a compassionate society like ours, it’s right that we support people through that. But as is so often the case, a system set up through well-meaning and kindness has morphed into a something completely different.

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       "We are now signing off millions of people to a lifetime on benefits, accepting that they cannot and will not be able to pay their own way." She added: "These trends aren’t going away on their own. In fact, on current trajectory the bill for sickness benefits alone is forecast to increase to ￡100bn by 2029. That’s one and a half times the entire defence budget."

       Official figures show 2.8 million people aged 16 to 64 have dropped out of the workforce saying they have a long-term illness. They are not classed as unemployed because they are not looking for work, and the number is up from 2 million in 2019.

       Work and Pensions Secretary Liz Kendall is to set out proposals before summer to cut the benefits bill, with Labour describing the measures as a drive to ensure disabled people and those with health conditions have “the right to work”. The goal will be to cut benefits spending by up to ￡10billion according to reports.

       Prime Minister Sir Keir Starmer has announced that the UK’s overseas aid budget will be cut by around ￡6.1 billion to fund an increase in defence from 2.3% to 2.5% of GDP, around ￡5.9billion. He also set a goal of spending 3% of GDP on defence by the end of the next Parliament, but has not said how this will be funded.

       Chancellor Rachel Reeves vowed to help British firms “step up” and manufacture equipment for the nation’s armed forces as the Government ploughs billions of pounds into defence.

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       It follows warnings that the army has a shortage of basic equipment including ammunition.

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       Ms Reeves was unable to promise that contracts would all go to UK firms, but she told a manufacturing industry conference in London that she wants to “fire up Britain’s industrial base” to step up arms production, claiming the issue has been “ducked and dodged” by governments for too long.

       A defence “innovation hub” was being set up to help smaller businesses benefit from the extra military spending, she said.

       The Chancellor told business leaders: “We’ll always have a need to buy things from abroad. I don’t want to pull up the drawbridge, but as we spend more on defence, of course, I want to see that benefit the UK economy and UK jobs.”