Infrastructure Cuts to Fund Defence Could Cost UK Jobs
Keir Starmer’s decision to reduce billions of pounds in infrastructure spending to finance increased defence equipment procurement is projected to result in the loss of 10,000 jobs in the UK, according to an analysis based on government data.
The prime minister announced an additional £15bn investment in defence aimed at revitalising the armed forces and enhancing British manufacturing capabilities.
The long-anticipated defence investment plan (Dip) was intended to solidify Starmer’s legacy in foreign policy and national security as he prepares to leave Downing Street. However, it also raised concerns regarding the source of funding, as £6.8bn is expected to come from unspecified cuts to departmental investment programmes, with another £4.7bn yet to be allocated.
Job Impact Analysis by Transition Security Project
Research conducted by the Transition Security Project indicates that while the increased defence investment is expected to create approximately 10,000 jobs by 2029-30, the reallocation of funds from other sectors will result in nearly twice as many job losses.
These findings challenge assertions by Starmer and his chancellor, Jeremy Reeves, that shifting substantial government spending to the Ministry of Defence will enhance British employment.
Khem Rogaly, co-author of the report, stated: “The idea that military spending can provide a defence dividend is misleading: job losses will result from this latest funding settlement while the opportunity cost of military spending is sharp.
“Far more jobs are created when investing in public needs like health, education and addressing the climate crisis. This latest data suggests that the turn towards autonomous weapons and AI could also mean that military spending creates even fewer jobs per pound than before.”
Andrea Egan, general secretary of Unite, the UK’s largest trade union, commented:
“This timely analysis highlights how making cuts to government departments to bankroll more military spending will result in job losses. This costly and wasteful plan means extra cash for war and overseas interventions, but less for schools and hospitals.”
Government Response and Defence Investment Plan Details
A government spokesperson responded:
“Defence is an engine for growth – supporting 272,000 jobs and over 25,000 MoD apprenticeships. The plan will back British workers, businesses and innovation, generate economic growth, create nearly 60,000 new jobs and increase defence exports.
“But we are in a new era of threat, which demands a new era of defence, and crucially our defence investment plan will energise the transformation of our armed forces to rebuild war-fighting readiness and target our resources, ensuring we are ready to face future threats.”
Starmer unveiled the Dip on Tuesday following nearly a year of internal debate regarding the additional funding required for the military and its source. These disagreements culminated in the resignation of Jeremy Reeves shortly before the plan’s announcement.
Military leadership initially requested an additional £28bn over four years, but Starmer and Reeves agreed on an extra £15bn, much of which will be allocated to maintaining and upgrading the UK’s nuclear arsenal.
The announcement sparked controversy after it was revealed that £6.8bn would be cut from unspecified areas of other departments’ capital spending, with another £4.7bn to be allocated in the next budget.
Funding Shortfall and Future Leadership
The unresolved funding gap will need to be addressed by Starmer’s successor as prime minister, likely Andy Burnham. The new MP for Makerfield stated on Thursday his commitment to ensuring defence spending commitments are fully financed if he assumes office.
He told Andrew Marr on LBC radio:
“I will take my responsibility to fully fund the defence spending plan seriously,”
while also confirming he was not informed of the shortfall prior to Starmer’s announcement.
Departmental Cuts and Impact on Public Services
The government indicated that the largest cuts would come from the energy and transport departments, both of which have significant capital expenditure. Two road improvement projects have already been halted, and energy officials are considering reductions to initiatives such as home insulation and carbon capture and storage.
One rationale provided by Reeves and Starmer for increasing the defence budget at the expense of other departments was the creation of new British jobs. The prime minister stated:
“Every pound in this plan will work twice, delivering economic growth and opportunity for the British people, and supporting more than half a million jobs by the end of the decade, as well as reinforcing our national security.”
Job Creation Comparison Across Sectors
However, the Transition Security Project’s research, which originated from Common Wealth, a thinktank with close ties to Burnham, reveals that defence investment generates significantly fewer jobs compared to other sectors.
According to government calculations, increasing the defence budget by £25.2bn over six years will create an additional 60,000 jobs. This equates to 2.4 direct and indirect UK jobs per £1 million of government investment.
In contrast, data from the Office for National Statistics indicates that every £1 million spent on transport generates 11.5 jobs, while £1 million invested in energy and net zero initiatives creates 10 jobs.
This discrepancy implies that removing £2bn from other departments in 2029-30, as planned by the government, will result in nearly 20,000 job losses—double the number of jobs created in the defence sector.
International Supply Chains and Automation
Researchers suggest that the variation in job creation rates may be due to the highly international nature of defence supply chains, indicating that billions of pounds may be supporting jobs outside the UK.
For example, the government is investing over £2bn in new fighter jets capable of carrying nuclear weapons, which are predominantly manufactured in the United States. Additionally, the figures reflect the increasing automation in advanced defence manufacturing.
The Ministry of Defence has been contacted for comment.
