Infrastructure cuts to pay for defence will cost UK 10,000 jobs, analysis shows | Defence policy

Keir Starmer’s decision to cut billions of pounds of infrastructure spending for more defense equipment will cost 10,000 jobs in the UK, according to an analysis of the government’s own figures.

The Prime Minister this week announced the country would put an extra £15bn into defense investment to renew its armed forces and boost British manufacturing.

The long-awaited defense investment plan (Dip) is designed to strengthen Starmer’s legacy on foreign policy and security as he prepares to leave Downing Street. But it also raised questions about where the funding would come from, given that £6.8bn was raised due to unidentified cuts to ministerial investment programmes, with another £4.7bn left completely unaccounted for.

Analysis by researchers at the Transit Security Project shows extra defense investment would create around 10,000 jobs by 2029-30, but getting the money from other sectors would cost almost twice that.

The findings cast doubt on claims by Starmer and his chancellor, Rachel Reeves, that they are boosting jobs in Britain by reallocating the bulk of government spending to the Ministry of Defence.

Report co-author Khem Rogaly said: “The idea that military spending can deliver a defense dividend is misleading: This latest funding deal will lead to job losses when the opportunity cost of military spending is so high.

“Many more jobs are created when investing in public needs such as health, education and tackling the climate crisis. This latest data shows that the move towards autonomous weapons and artificial intelligence could also mean that military spending creates fewer jobs per pound than before.”

Andrea Egan, general secretary of Unison, the country’s largest union, said: “This timely analysis shows that cutting government departments to fund more military spending will lead to job losses. This costly and wasteful plan means extra cash for war and overseas interventions but less money for schools and hospitals.”

A government spokesman said: “Defence is the engine of growth – supporting 272,000 jobs and more than 25,000 Ministry of Defense apprenticeships. The plan will support British workers, businesses and innovation, creating economic growth, creating around 60,000 new jobs and boosting defense exports.

“But we are in a new era of threats that requires a new era of defense, and most importantly our defense investment plan will energize the transformation of our armed forces to rebuild combat readiness and target our resources, ensuring we are ready to face future threats.”

Starmer announced Dip on Tuesday after nearly a year of internal debate over how much extra money the military needed and where that money would come from. The disagreements resulted in the resignation of Defense Secretary John Healey, just as the plan was about to be announced.

Military bosses initially demanded an additional £28bn over four years, but Starmer and Reeves eventually decided to put in an extra £15bn, the bulk of which will be spent on maintaining and developing the UK’s nuclear weapons.

The announcement sparked a fresh row after it was revealed that £6.8 billion had been taken from unidentified parts of other departments’ capital expenditure and that a further £4.7 billion would be allocated in the next budget.

The funding gap will need to be resolved by Starmer’s successor as prime minister, most likely Andy Burnham. Makerfield’s new MP said on Thursday he was determined to ensure defense spending commitments were appropriately funded if he became prime minister.

“I will take seriously the responsibility of funding the full defense spending plan,” he told Andrew Marr on LBC radio, also confirming he had not been notified of the shortfall before Starmer’s announcement.

The government has said the biggest cuts will come from the energy and transport ministries, both of which have high levels of capital spending. Two road improvement projects have already been halted, while energy authorities are making reductions in schemes such as home insulation and carbon capture and storage.

According to Reeves and Starmer, one of the reasons for increasing the defense budget, even at the expense of other ministries, was to create new jobs in Britain. Prime minister he said on tuesday: “Every pound in this plan will work twice, delivering economic growth and opportunity for British people, supporting more than half a million jobs by the end of the decade and strengthening our national security.”

But research from the Transition Security Project from Common Wealth, a think tank with close ties to Burnham, shows that putting money into defense creates far fewer jobs than other sectors.

According to the government’s own calculations, increasing the defense budget by £25.2 billion over a six-year period would create 60,000 additional jobs. By this calculation, every extra million pounds worth of government investment will create 2.4 direct and indirect jobs in the UK

Other sectors create many more jobs per pound spent. Figures from the Office for National Statistics show that every million pounds spent on transport creates 11.5 jobs, while every million pounds spent on energy and net zero creates 10 jobs.

This disparity means taking £2bn from other departments in 2029-30, as the government plans, would cost around 20,000 jobs in total; This means twice as much as what is produced in the defense sector.

Researchers believe the different job creation figures may reflect the fact that defense supply chains are highly international, with the government spending billions of pounds creating jobs in other countries.

For example, the government is spending more than £2bn on new warplanes that will carry nuclear bombs, most of which are produced in the US. They also say the figures show the increasingly automated nature of high-end defense production.

The Ministry of Defense has been contacted for comment.