Prime Minister to announce largest military investment in 30 years

Photo shows: BAE Systems' F35
BAE Systems F35 landing

The government is to roll out the biggest programme of investment in British defence since the end of the Cold War.

The Prime Minister set out a £16.5 billion increase above the manifesto commitment over four years. The government has already pledged to increase defence spending by 0.5 per cent above inflation for every year of this parliament. On existing forecasts, this is an overall cash increase of £24.1 billion over four years compared to last year’s budget.

It will also cement the UK’s position as the largest defence spender in Europe and the second largest in NATO.

The importance of the defence sector across our region cannot be overestimated. In 2018/19, the South East and South West of England accounted for 51 per cent of total expenditure and while this proportion of total MOD expenditure has remained consistent over the past six years, the split between these two particular regions has varied each year due to fluctuations of contract payments over time.

The South East did close the gap on the South West in 2018/19 owing to it seeing the greatest nominal increase in MOD expenditure out of all regions from that in 2017/18, while at the same time expenditure in the South West fell over this period.

The largest single in-year contract payment in 2018/19 was in the South West with MBDA at £453 million for a through life enabling contract for complex weapons. MBDA is a joint venture between three European leaders in aerospace and defence: Airbus (37.5%), BAE Systems (37.5%) and Leonardo (25%).

In the South West, MOD expenditure supports one in every 60 jobs, according to government figures. The West Midlands observed the largest drop in jobs supported from 2017/18 having fallen by 14 per cent. A decrease of 950 jobs in education and training related jobs came after expenditure in this area had reduced from £54 million in 2017/18 to £5 million in 2018/19.

Referring to the latest investment announcement, the Prime Minister, Boris Johnson, said: “I have taken this decision in the teeth of the pandemic because the defence of the realm must come first.

“The international situation is more perilous and more intensely competitive than at any time since the Cold War and Britain must be true to our history and stand alongside our allies. To achieve this we need to upgrade our capabilities across the board.

“This is our chance to end the era of retreat, transform our Armed Forces, bolster our global influence, unite and level up our country, pioneer new technology and defend our people and way of life.”

The government plans to use the funding to boost the UK’s investment in cyber and space, and address weaknesses in the country’s defence arsenal that cannot be allowed to continue.

The government will establish a new agency dedicated to Artificial Intelligence, the creation of a National Cyber Force, and a new ‘Space Command’, capable of launching our first rocket in 2022.

This will be underpinned by the investment of at least £1.5 billion extra and £5.8 billion total on military research and development and a commitment to invest further in the Future Combat Air System. This reverses the systematic decline in this crucial area in the last thirty years, creating new advances which surmount the old limits of logistics and go beyond military use with a vast number of civilian applications such as autonomous vehicles and aviation.

The government says that these projects are expected to create up to 10,000 thousand jobs annually across the UK.

The Defence Secretary, Ben Wallace, said: “This is excellent news for Defence, and provides us with the financial certainty we need to modernise, plan for the future and adapt to the threats we face. It demonstrates the Prime Minister’s recognition of how important Defence is to our resilience and to the reputation of the United Kingdom. Over the next few months I will set out in more detail our ambitious agenda for Defence.”

Today’s announcements mark the first outcomes from the Integrated Review of the UK’s foreign, defence, development and security policy. The full conclusions of the Integrated Review will be announced in the new year.