Labour 'won't cut civil service jobs' to boost MoD funding

Officials say there is no point in matching a Conservative Party commitment that doesn't stack up, according to report
Photo: Associated Press/Alamy Stock Photo

By Jim Dunton

02 May 2024

Labour Party officials have said there are no plans to use civil service job cuts as a way of funding increased defence spending if a government led by Sir Keir Starmer takes power after the next general election.

While the party has sought to closely shadow Conservative Party spending plans in recent months ahead of the election – which must take place before the end of next January – Labour sources said last week's defence pledge from No.10 would not be matched like-for-like.

Speaking in Warsaw on 24 April, prime minister Rishi Sunak said defence spending would increase to 2.5% of gross domestic product by 2030 under a Conservative government, a funding boost projected at £75bn over the period. Defence spending currently accounts for 2.3% of GDP.

The Treasury said the additional funding would come in part from proposals to reduce the civil-service headcount to pre-pandemic levels, effectively cutting 70,000 jobs. The Institute for Fiscal Studies think tank said cuts to public services would be required to meet the pledge.

While Starmer said his party would increase defence spending to 2.5% of GDP "as soon as resources allow", Labour has avoided setting a timeline.

According to a report in today's Financial Times, Labour Party officials described using civil service job cuts to fund a significant increase in defence spending as "fanciful".

One Labour source told the FT: “There’s no point committing at this stage to cutting the civil service in the service of costings that don’t add up.”

Last year, chancellor Jeremy Hunt said returning civil-service headcount to pre-pandemic levels was expected to save a net £2.9bn by 2028-29. The Treasury said the cost of increasing defence spending from the current 2.3% to 2.5% would be £4.5bn in 2028-29 alone.

Gemma Tetlow, chief economist at the Institute for Government, said claiming that savings from civil service efficiencies would pay for a hike in defence spending was a "line to take" for ministers in interviews, "not a serious plan".

"There is a case for making savings from the civil service, though it would be better to focus on how best to save money instead of setting arbitrary headcount targets," she said.

"But with the total civil service pay bill only amounting to around £20bn, this scale of staff cuts will make only a small dent in the much larger cuts that will be required to adhere to the government’s fiscal rules."

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