Grant Shapps and Civil Service union clash over planned job cuts to pay for defence spending splurge

Grant Shapps and Civil Service union clash over planned job cuts to pay for defence spending splurge

The Government locked horns with union chiefs on Wednesday after vowing to fund an extra £75 billion for defence partly through thousands of Civil Service job cuts.

Tax cuts are still on the table despite the PM’s pre-election promise to raise defence spending to 2.5% of GDP and put the economy on a “war footing”, Defence Secretary Grant Shapps said, insisting that the hefty new investment would not come from new borrowing.

The money was promised by Rishi Sunak on a visit to Poland just weeks after Chancellor Jeremy Hunt cut 2p from National Insurance in his March Budget but was unable to find any new money for defence, to the strong disappointment of Conservative Right-wingers.

The PM headed on to Berlin on Wednesday for talks with Chancellor Olaf Scholz. They were expected to announce plans for joint development of remote-controlled Howitzer 155mm wheeled artillery systems to be fitted to armoured fighting vehicles, as both nations up their support for Ukraine against Vladimir Putin’s Russia.

Mr Sunak vowed the new spending by 2030 and to put Britain’s economy on a “war footing”in the face of threats from an “axis of authoritarian states” including Russia, China and Iran.

Former Defence Secretary Ben Wallace, who was consulted by the PM, said it might be paid for by removing a planned tax cut from the Conservatives’ election manifesto.

But Mr Shapps said on GB News: “That won’t happen. What we’re saying is that this is fully funded… it won’t require new borrowing or reversing anything that we’ve announced.”

Some of the money could be freed up by eliminating 72,000 jobs in the Civil Service to return it to pre-pandemic levels, the minister claimed. He said the Ministry of Defence headcount of bureaucrats could go down from 60,000 to 50,000 by 2028. The MoD employs about 4,000 civil servants in London alone.

“Given new technologies I don’t think that is really particularly extreme,” he argued of eliminating 10,000 positions, adding: “We want people on the frontline, not in the offices.”

But Public and Commercial Services (PCS) union general secretary Fran Heathcote accused Conservative ministers of seeking to “scapegoat” the workforce.

“It’s not right for our members to pay for a rise in defence spending with their jobs, so we’ll fight these proposals tooth and nail, just as we fought them under Boris Johnson,” she said.

“Our members work hard every day providing essential services to keep this country running and should be rewarded with a fair pay rise, not their jobs sacrificed as a pre-election gimmick.”

Mr Sunak had stated in recent weeks that the 2.5 per cent target was dependent on economic conditions. That remains Labour’s position, but Sir Keir Starmer’s party is now promising to conduct a strategic defence and security review in its first year in office to understand the resources required to meet the threats facing the UK.

Labour frontbencher Emily Thornberry said the Government had failed to explain where the money will come from.

“Hopefully, it’ll come in the near future, just like we’re hoping that they’re going to give us the details on the £46 billion that is going to cost them to get rid of National Insurance. They haven’t given us any details on that either,” the shadow Attorney General said.

“As we get closer to an election, we’re going to get more and more…they want to get to spend money, they need to tell us where the money is going to come from.”

Mr Shapps said he was “very disappointed” with Labour’s response. He said the PM would make the case for all Nato members to target 2.5 per cent of spending on defence, up from 2.0 per cent now, when he heads to Washington in July for the Alliance’s 75th anniversary summit.

Mr Hunt has been hinting at a further “fiscal event” before voters go to the polls this year, and is said to be looking at cutting stamp duty on property sales in a final autumn statement, possibly in September before an election in October or November.

Mr Wallace said Mr Sunak had phoned him before making the defence announcement in Ukraine’s neighbour Poland on Tuesday.

“Rishi doesn’t say anything on things like money without really going to the nth degree – more than I would,” the former defence secretary said on BBC Radio 4’s PM programme.

“So they have clearly, within No10 and the Treasury, identified some extra spending. This is only speculation – some of that could be not doing a tax cut that might have happened, some of that could be not spending more in another sector of government.”