Infrastructure cuts to fund defence will cost UK 10,000 jobs, analysis finds
UK Prime Minister Keir Starmer's decision to cut infrastructure spending to boost defence investment will result in a net loss of 10,000 jobs, as defence creates far fewer jobs per pound than other sectors, according to a new analysis.
The UK government's plan to redirect billions of pounds from infrastructure to defence will ultimately cost the country 10,000 jobs, according to an analysis by the Transition Security Project. Prime Minister Keir Starmer this week announced an extra £15bn for defence investment to modernise the armed forces and boost manufacturing. However, the funding sources are unclear: £6.8bn will come from unidentified cuts to departmental capital spending, and another £4.7bn remains unaccounted for.
Researchers found that while the additional defence investment will create about 10,000 jobs by 2029-30, diverting money from other sectors will cost nearly twice that—20,000 jobs. According to government data, every £1m spent on defence generates 2.4 jobs, compared to 11.5 jobs for transport and 10 jobs for energy and net-zero initiatives.
Khem Rogaly, co-author of the report, said the idea of a defence dividend is misleading, as job losses will result and military spending creates fewer jobs than investing in health, education, or climate action. Andrea Egan, general secretary of Unison, the largest trade union, added that the plan means extra money for war and overseas interventions but less for schools and hospitals.
A government spokesperson defended the plan, stating defence supports 272,000 jobs and will create nearly 60,000 new jobs. Starmer unveiled the defence investment plan after nearly a year of internal disputes, which led to defence secretary John Healey's resignation. Military chiefs had requested an extra £28bn over four years, but Starmer and Chancellor Rachel Reeves agreed on £15bn, much of which will go towards maintaining and upgrading nuclear weapons.
The funding gap will likely fall to Starmer's successor, probably Andy Burnham, who pledged to fully fund the plan but admitted he was not told about the shortfall before the announcement. The biggest cuts will affect energy and transport departments; two road improvement projects have already been halted, and energy officials are reviewing reductions to home insulation and carbon capture schemes.
