Redirecting billions of pounds from infrastructure projects to defence spending could lead to the loss of around 10,000 jobs across the UK, according to new analysis based on government data.
Former prime minister Keir Starmer recently announced an additional £15 billion in defence investment aimed at modernising Britain’s armed forces and supporting domestic manufacturing. However, questions remain over how the package will be financed.
Under the plans, £6.8 billion is expected to come from cuts to departmental investment budgets, while another £4.7 billion has yet to be accounted for.
Research by the Transition Security Project found that although the extra defence funding could create around 10,000 jobs by 2029-30, reductions in spending elsewhere may eliminate nearly twice as many positions.
The findings challenge claims that increased military spending will boost employment and economic growth.
Khem Rogaly, 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.”
He added: “Far more jobs are created when investing in public needs like health, education and addressing the climate crisis.”
Andrea Egan, general secretary of Unison, said: “This timely analysis highlights how making cuts to government departments to bankroll more military spending will result in job losses.”
She added: “This costly and wasteful plan means extra cash for war and overseas interventions, but less for schools and hospitals.”
The government rejected the criticism, insisting defence remains a major driver of economic growth.
A spokesperson said: “Defence is an engine for growth – supporting 272,000 jobs and over 25,000 MoD apprenticeships.”
The spokesperson added that the investment programme would “create nearly 60,000 new jobs” while strengthening Britain’s defence capabilities.
The defence investment plan was unveiled after months of internal debate over funding levels and priorities. The proposals ultimately allocated an extra £15 billion to the Ministry of Defence over four years, although part of the package is expected to be settled in a future Budget.
According to government estimates, every £1 million invested in defence creates around 2.4 direct and indirect jobs. By comparison, the Office for National Statistics estimates that the same level of spending generates 11.5 jobs in transport and 10 jobs in energy and net zero projects.
Researchers argue that defence manufacturing is more reliant on international supply chains and increasingly automated production, reducing its impact on domestic employment.
David Edgerton, professor of the history of science and technology at King’s College London, said: “There is no reason whatever to expect military expenditure to generate more jobs than any other kind of expenditure.”
He added: “The defence dividend is broadly speaking a con.”