Spending cuts to fund defence plans ‘will cost 10,000 UK jobs’

Keir Starmer’s decision to cut billions of pounds of infrastructure spending to pay for more defence equipment will end up costing the UK 10,000 jobs, according to an analysis of the government’s own figures.

- Kiran Stacey

The prime minister announced this week that he was putting an extra £15bn into defence investment in a bid to revamp the country’s armed forces and boost British manufacturing.

The long-awaited defence investment plan (Dip) was designed to cement Starmer’s legacy in foreign policy and security as he prepares to depart Downing Street. But it also raised questions about where the funding would come from, given £6.8bn is being raised by unidentified cuts to departmental investment programmes, and another £4.7bn is entirely unaccounted for.

The funding gap will now have to be solved by Starmer’s successor as prime minister, probably Andy Burnham. The new MP for Makerfield said yesterday that he would ensure defence spending commitments were properly financed if he entered Downing Street.

“I will take my responsibility to fully fund the defence spending plan seriously,” he told Andrew Marr on LBC radio, while also confirming that he had not been made aware of the shortfall in advance of Starmer’s announcement.

The analysis of the figures, by researchers at the Transition Security Project, shows that while the extra defence investment will generate about 10,000 jobs by 2029-30, taking the money away from other sectors will cost nearly double this amount.

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

Khem Rogaly, the co-author of the report, said: “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.