UK government launches new strategy to grow jobs, economy with focus on national security as ‘foundation’ of growth

Amid mounting regional and global threats by peer and near-peer competitors, the UK government is reprioritising the role of the nation’s defence industrial base at the centre of the nation’s deterrence capability, while also driving economic growth, boosting British jobs and strengthening national security.

The strategy aims to position the defence sector as a key driver of UK economic growth while bolstering domestic supply chains in critical industries like semiconductors and steel, as the UK government has already made a significant investment by acquiring a defence semiconductor factory in County Durham.

This new strategy will demonstrate how public investment and long-term certainty can attract billions in private sector funding into UK defence, while also mobilising private industry to address global security challenges.

Defence Secretary Healey said, “Our defence sector should be an engine for jobs and growth, strengthening our security and economy. That requires a defence industry that is better and more integrated – one that can keep our Armed Forces equipped, innovating at a wartime pace, and ahead of our adversaries.”

Recognising this shift in public policy, the UK’s defence industry has announced a series of major new investments, employment initiatives and facility developments, including:

• Helsing, Europe’s largest defence AI company, will announce plans to mass-produce thousands of new AI-enabled drones as part of its £350 million (AU$696.7 million) investment into the UK over the next five years.
• BAE Systems is set to announce thousands more recruits next year alongside a major new investment in skills.
• Babcock is set to announce almost 1,500 new early career roles with graduate and apprenticeship opportunities to support UK defence over the coming year.
• Rolls-Royce has opened a new office in Glasgow which will play a crucial role in attracting skilled employees and supporting regional growth, with the 120 new jobs it creates to support the delivery of major UK submarine programs.

A key driving force of this new strategy is addressing long-standing structural issues inherent in the UK defence capability development and procurement processes, including inefficient spending, skills shortages, a lack of focus on exports and long-term partnerships.

At the centre of the strategy is the government’s growth mission – bringing benefits to every region and nation in the UK. The defence sector already supports 1 in 60 jobs in the UK – 434,000 good, well-paid jobs, with the majority (67 per cent) outside London and the south-east.

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“We will develop this new Defence Industrial Strategy with industry, with innovators and with workers. We will mobilise the private sector to help face down global threats, direct more public investment to British businesses and create jobs and growth in every nation and region of the UK,” Secretary Healey said.

The new strategy will be shaped with the defence industry identifying opportunities to innovate at speed, with the resilience to deter aggression by adversaries, able to seize the opportunity presented by the technologies of the future, while growing the UK’s share of the exports market.

Secretary Healey added, “National security is the foundation for national stability and growth. We are sending a signal to the market and to our adversaries: with a strong UK defence sector we will make Britain secure at home and strong abroad.”

The UK government has stated its primary mission is to secure the highest sustained growth in the G7 – with good jobs and productivity growth in every part of the country – and with more than 200,000 UK jobs supported through spend with the defence industry, the new strategy will have a key role to play in this.

Under this government, there has been renewed confidence in the UK defence industry, including Rheinmetall committing a new factory which will see the UK manufacture artillery gun barrels for the first time in 10 years, using British steel produced by Sheffield Forgemasters.

The last Defence Industrial Strategy was published in 2021, before Russia’s full-scale invasion of Ukraine. The new Defence Industrial Strategy will align with the Strategic Defence Review.

The Defence Industrial Strategy is commissioned by the Defence Secretary and will be the sector plan for defence in government’s wider industrial strategy. the Ministry of Defence and the Department for Business and Trade will work to ensure the Defence Industrial Strategy and upcoming Trade Strategy is complimentary.