Unless you’ve been living in a cave for a few years, it will have been impossible not to detect the galvanising impact the worsening global security picture is having on Britain’s defence sector.
With a cluster of threats looming on the horizon and the post Cold War “peace dividend” firmly consigned to history, last year saw the highest value of British defence exports in over 40 years, exceeding £20bn in deals.
Defence spending last year was 2.3 per cent of GDP (around £66bn). It is projected to rise to £73.5bn by 2028/29, with a commitment to increase spending to 2.6 per cent of GDP by April 2027.
The UK is building new munitions and energetics factories, with at least 13 sites identified and at least 1,000 more jobs expected.
In late 2024, Defence and aerospace company BAE Systems announced it was establishing a new artillery development and production facility in Sheffield, with the facility being funded with investments of more than £25m.
Ministry of Defence (MOD) expenditure with industry has hit a record high of £31.7bn (2024/25), supporting over 460,000 jobs.
And submarine programs, naval sectors, cybersecurity, and AI-driven drone technology are rapidly accelerating.
The government’s new Industrial Strategy defines defence as a priority sector, directing investment to drive growth across UK regions, with significant “Defence Growth Deals” in places such as Plymouth and South Yorkshire.
The 2025 Strategic Defence Review highlights a shift to “warfighting readiness,” aiming for a 10-year investment strategy that leverages private capital to build the “factories of the future”.
A £5bn technology investment plan has been accelerated, allocating a dedicated £400m ringfenced budget for UK Defence Innovation to fast-track drone, AI, and cyber warfare capabilities.
Ongoing conflicts and geopolitical tensions have accelerated demand for UK-produced weaponry and technology.
We saw a stark indication of the scale of these developments last week, with news that 72 remote controlled Howitzer artillery guns (RCH 155) will be procured under a contract worth nearly £1bn.
This will be a trans-regional venture, with factories in the West Midlands, Yorkshire and the North West of England all involved in the manufacturing process.
The programme is expected to help create 100 new skilled jobs at Rheinmetall’s Telford facility, support 100 jobs at KNDS Stockport and back 300 jobs in the wider UK supply chain.
We have also recently reported on West Yorkshire-based North Defence releasing details of its latest production facility in Elland, alongside its significant growth in the military light mobility vehicle (LMV) space.
The new factory will complement North Defence’s existing site in Mytholmroyd.
The company’s MKII LMV (Light Military Vehicle) was developed based on operational lessons learned in Ukraine, where the manufacturer’s vehicles are in active service.
Deliveries are now underway into the EU and Ukraine, with production of these vehicles running from both Luxembourg and West Yorkshire.
In the South West, a long-awaited £1bn government contract to build military helicopters at Italian manufacturer Leonardo’s Somerset factory was confirmed in early March, a move which protects around 3,000 jobs.
Leonardo will build 23 military helicopters for the government at its Yeovil factory. The plant is now the UK’s only end-to-end rotary wing manufacturer.
In Scotland, a long-term funding commitment from the government has paved the way for £1.1bn in inward investment with Thales, securing export deals that should create and sustain around 500 jobs in Glasgow over the next five years.
Thales’ UK optronics business, which is headquartered in the city, currently supports nearly 2,300 jobs across its supply chain.
The latest export contracts include a partnership with Norway’s Kongsberg to supply thermal cameras and laser rangefinders into their remote weapon stations for armoured fighting vehicles, development of an artificial intelligence-enabled targeting and surveillance solution for the German military, and delivery of systems for the first Dreadnought class submarine and main sonar design authority and integrator part of AUKUS and Royal Navy Submarine support and export.
These follow a £10bn Norway Type 26 deal secured by the government last year – the biggest warship export deal in British history – which supports around 2,000 jobs in Glasgow.
However, it is worth noting that despite these seemingly intense levels of national defence industry activity, some prominent figures have stressed it is not enough.
Only last month, Lord Robertson, the ex-Labour defence secretary who wrote the government’s Strategic Defence Review, accused “non-military experts in the Treasury” of “vandalism” and of showing “corrosive complacency” towards defence matters.
He said: “We cannot defend Britain with an ever-expanding welfare budget. We are under-prepared. We are under-insured. We are under attack. We are not safe… Britain’s national security and safety is in peril.”
“Lip service is paid to the risks, the threats, the bright red signals of danger – but even a promised national conversation about defence can’t be started.”
And Lord Roberton is not a lone voice, with Lord Stirrup – chief of the defence staff during the Tony Blair and Gordon Brown premierships – warning that the UK is “badly exposed” and requires “a complete change of mentality” to put it on a war footing.
