Starmer is in denial over defence spending
Keir Starmer’s dither and delay on defence spending is leaving Britain vulnerable in uncertain times, says Eliot Wilson
Trades unions have no monopoly on wisdom. They are advocates for the interests of their members, and they have been wrong just as often as government or big business over the years. But on this occasion, Sharon Graham, Unite the Union’s general secretary since 2021, has skewered Labour exactly.
Last week, thousands of Unite members in the defence industry gathered outside Downing Street to present a petition to the Prime Minister. It accused Sir Keir Starmer and his government of needless delays and dithering on military spending decisions, and implored him to protect jobs and skills, invest in British manufacturing and build in Britain. The petitioners argued that in such a fragile and dangerous global situation, and the unpredictability of the UK’s traditionally closest ally, the United States, “the case for buying British and investing in our own defence capability has never been stronger”.
Yes, they are concerned principally with their own jobs and wider employment in the defence sector – and why shouldn’t they be? But their plea is representative of a much wider sectoral problem, one they are right to raise, and the actions of the government are among the fundamental causes of the malaise. Simply put, Labour is ducking and deferring when it comes to the defence budget, and it is starting to damage the UK’s defence industrial base.
Britain is the second-largest arms exporter in the world, and the defence sector has a turnover of £81.2bn, supporting more than 300,000 jobs. London-based BAE Systems is the sixth-biggest defence company globally, and Airbus, Raytheon, Leonardo and Lockheed Martin have substantial UK footprints. But they need work, they need predictability and they need contracts. And procurement in the ministry of defence is a notorious shambles.
The government was scheduled to publish its Defence Investment Plan last summer, then last autumn. This is supposed to be the heart of the Defence Industrial Strategy: Making Defence an Engine for Growth, setting out procurement schedules, research, development and innovation requirements and plans for aligning government and industry. Rumours suggest it may now not appear until May, as Labour approaches its second anniversary in office.
Speaking outside Downing Street, Graham did not pull her punches.
“The government’s dithering must end… uncertainty about vital contracts are putting thousands of UK defence workers’ jobs in jeopardy. This is not the time for Treasury ‘bean counting’. We need decisive action to back Britain’s defence workers now.”
The MoD cannot claim that its hands are tied or that there are unknowable factors at work. The starkest illustration of the paralysis gripping Whitehall is the RAF’s requirement for a New Medium Helicopter (NMH). The project began in 2021, a contract notice was issued and four contenders selected in 2022 and bids were invited by August 2024. Boeing had withdrawn its initial plans, while Airbus and Lockheed Martin felt unable to submit competitive bids. This left Leonardo UK as the only contender when the deadline was due to pass 18 months ago.
The RAF retired its fleet of Westland Pumas, which the NMH is to replace, on 31 March 2025, so for the past 11 months it has had no medium-lift transport helicopters. Leonardo is ready to begin production of its contender, the AW149, at the old Westland factory in Yeovil. But the government has still not issued a contract.
Last November, Leonardo’s CEO, Roberto Cingolani, warned that, without the £1bn contract, it could be forced to close its facility at Yeovil, which employs 3,300 people. The following month, he raised the stakes: without the NMH contract, Leonardo’s entire UK presence, with more than 8,500 employees, might be at risk. From the MoD: “No final procurement decisions have yet been made. That outcome will be confirmed in due course.”
It is now reported that the Treasury will sign off on the contract, deep into the eleventh hour. It is the right decision, but anyone aware of the benefit of waiting so long should speak up.
Elsewhere, Aeralis in Bristol awaits a contract to replace the BAE Systems Hawk with its modular Advanced Jet Trainer. Airbus is anxious for confirmation that its facilities in Portsmouth and Stevenage will continue to produce the MoD’s Skynet communications satellite.
The government’s consistent, determined response is that defence spending will rise to 2.5 per cent by 2027 – not enough given enormous capability gaps – and an irrelevant boast of ‘the biggest sustained increase in defence spending since the Cold War”. But 10 to 15 small companies in the defence sector have already collapsed or closed their defence interests because of uncertainty over future work. The sector has started referring to the government’s “say/do gap”: ministers make eye-catching announcements followed by complete inaction.
Last month, my colleagues at Defence on the Brink and I wrote an open letter to the Prime Minister. We called for an increase in defence spending to five per cent of GDP, “providing the certainty our Armed Forces, industry and our long-standing allies need to deter aggression and secure Britain’s future”. Yet ministers know – they must know – that procurement is bedevilled by delays and overruns. Employers, workers and commentators are hoarse from shouting the obvious, but nothing seems to be having any effect.
The eruption of war with Iran over the weekend has shown that, in the end, conflicts are still determined by the violent clash of hard military power. Labour has been in office for nearly 20 months now, and has to realise there is no longer anyone else to blame. Sir Keir Starmer told the Munich Security Conference recently, “To meet the wider threat, it’s clear that we are going to have to spend more, faster.” We’re waiting, Prime Minister.
Eliot Wilson is an author and historian