Andy Burnham, the new UK Prime Minister, told the Farnborough International Airshow on Wednesday that his government would “reindustrialise the nation” together with growing defence businesses.
“We are going to honour our commitments on defence and use that investment to transform people's lives,” he said. “And we are going to work even more closely with our allies.”
Expectations are high that the new government will spend more money on UK defence than under Mr Burnham's predecessor Keir Starmer, a Labour expert on the sector has told The National.
Paul Mason, who has previously shaped the party’s defence industrial strategy, said that the extra billions needed to fund the UK armed forces would have to be found, given that a key reason for Mr Starmer’s downfall was his refusal to borrow.
Defence Secretary Wes Streeting on Wednesday endorsed a new British-drone system, Brontanax, to augment the fighting capabilities of fighter jets. In a speech, he said it was the start of autonomous air warfare.
“We’re investing £300 million in our Storm Fighter programme to develop an autonomous combat aircraft here in the UK,” he told the air show in the south of England.
“This launch shows the depth of industrial capability we have here in Britain to help deliver our ambition to become Europe’s first sixth generation air force,” he added.
-
Brontanax, an uncrewed Collaborative Combat Aircraft by BAE Systems, is unveiled at the Farnborough International Airshow. Getty Images -
Wes Streeting, Britain's new Defence Secretary, arrives at the BAE Systems stand. Getty Images -
General Atomics displays its unmanned combat aircraft called Dark Merlin. Reuters -
The Fursan Al Emarat display team perform. Bloomberg -
An A350-1000 by Airbus takes off. AFP -
Emirates airline President Sir Tim Clark speaks. Reuters -
A mock-up of the GCAP fighter jet at the Farnborough International Airshow. EPA -
A Lockheed Martin F-35A Lightning military jet flight display. Bloomberg -
A Joby Aviation eVTOL piloted all-electric vertical take-off and landing aircraft. Bloomberg -
A member of the British Army parachute display team, the Red Devils, takes part in a display. AFP
Investment returns
Mr Mason said that investing borrowed money in arms factories would create jobs and produce British-made goods that could be exported. His case has been echoed by defence industry leaders.
Under its Nato commitment, the UK is set to increase defence spending to 3.5 per cent of GDP by 2035. Mr Burnham said that by 2030 there would be half a million defence or aerospace jobs in the UK.
The deteriorating global security situation means that the new Prime Minister faces the same strategic challenges as his predecessor, alongside finding enough money for the Defence Investment Plan (DIP).
Disagreement over that plan – Downing Street offered the Ministry of Defence £13 billion rather than the £18 billion the ministry said was needed – led to the resignation of the previous defence secretary John Healey in June, a move that proved terminal for Mr Starmer’s premiership. Mr Healey is now Chancellor and well placed to deliver on the missing funds that triggered his walkout.
Threatening times
Mr Mason said last year's Strategic Defence Review had already demonstrated that current spending plans were insufficient to deliver Britain’s military ambitions.
“That review came back, and it said: look, it's going to cost you 3 per cent by 2030 and you're committed to 3.5 per cent of GDP by 2035, so get on with it. But the Treasury would not supply that money.”
Keeping defence spending at current levels would mean scaling back military ambitions, he said.
“Current defence plans are not doable on the money, so if the money is fixed at £13 billion, they will have to be ripped up,” he said. “Furthermore, the global security environment is deteriorating and the Atlantic alliance is fraying, so Andy [Burnham] will have to solve the exact same problems as his predecessor.”
Budget disputes
Former chancellor Rachel Reeves’s mistake, Mr Mason said, was insisting that any increase had to be funded by cuts elsewhere rather than through borrowing, in order to stick to fiscal rules.
“The conundrum was that the Treasury and the Starmer set-up had an effective rule that any money for defence had to come from somewhere else. They wouldn't borrow.”
He insisted there was a clear economic distinction between borrowing to finance day-to-day spending and borrowing to expand Britain's industrial base.
“There's no problem borrowing to invest in equipment that grows the economy. We are not against that, but for some reason the Treasury under Rachel Reeves became reticent to do so.
“The economic advisers around Burnham know this full well, that borrowing to invest, even in a country that's approaching £3 trillion worth of debt, is not a problem as long as you invest in UK research and development, UK technology using UK skills and creating UK jobs.”
But if it was spent on “foreign equipment” it then became “fiscally questionable”.
Ebbing influence
Britain also faces the prospect of losing influence within Nato if it fails to keep pace with European allies’ rearmament, Mr Mason said.
“Germany is for the first time spending more than Britain in absolute cash terms,” he said, arguing that international defence companies would choose to invest in countries committed to higher levels of military spending.
He added that modern defence investment, given the Ukraine war experience of cheap and plentiful drones, called into question spending on advanced technologies. “It involves moving away from big vulnerable platforms like warships towards more technologically enabled, cheaper kit that you can rapidly upgrade,” he said.
The argument that higher defence spending could also act as an economic stimulus has been echoed by defence manufacturers.
Trade unions said predictable defence orders directly translated into apprenticeships and skilled industrial jobs.
One senior MP, Geoffrey Clifton-Brown, has warned that without sustained domestic investment “small businesses are not able to survive, so the capacity will be less and that is likely to drive more production abroad”.
Burnham resilience
Mr Burnham's government will place greater emphasis on national resilience, Mr Mason said, drawing on the former Manchester mayor's experience following the 2017 Manchester Arena bombing and the Covid-19 pandemic. He said Mr Burnham viewed resilience as extending beyond military capability to communities and the ability to withstand cyber attacks and sabotage.
He said Mr Burnham had been “rock solid on Ukraine”, pointing out he had helped to establish the Unbroken Cities partnership with Lviv after Russia's full-scale invasion and said there would be “no difference” in Britain's backing for Kyiv under his leadership.
