Instability in the Middle East, as well as Europe’s worst land war in decades, have contributed to a heightened sense of political conflict and geopolitical insecurity. In this context, the defence sector is more crucial than ever. Below, David Lockwood, chief executive of Babcock, and president of the ADS, the UK trade association representing the Aerospace, Defence, Security and Space sectors, discusses what this all means for the new government, the British defence industry, and the strategic review.
How do you view the role of the UK defence industry in the current geopolitical context?
The UK defence industry couldn’t be more important. Today’s world is increasingly unstable; we have all seen multiple flashpoints appearing around the globe, not only in terms of conflict, but around the climate crisis and the need to improve energy security. Our home-grown defence industry has a crucial role to play in helping our new government address these rising global security requirements.
No government has the bandwidth to confront every issue the country faces on its own. It needs proper collaboration with industry – across multiple sectors, not just defence – to ensure that it can achieve its core mission of sustainable economic growth and better outcomes for frontline services, whether that’s for our justice system, our energy supply, or our armed forces.
When we think about growth, the defence sector is fundamentally important. We are a significant employer in the UK, providing over 160,000 well-paid, highly skilled jobs and apprenticeships. Over the last ten years, the industry has grown over 36 per cent. In the last year alone, we contributed over £12bn to the economy.
The industry is also at the forefront of developing the cutting-edge technologies which add long-term value to the economy. Cyber defence systems, artificial intelligence, and autonomous systems – all essential for modern warfare – generate intellectual property and enhance the UK’s international reputation for world-leading research and development.
Our sovereign defence industry is also a key part of the UK’s role in Nato and other international alliances. The UK is one of the world’s leading defence exporters, with £9.5bn of exports in 2023. This is critical not only to boosting the economy, but to strengthening diplomatic ties with allied countries. We’ve seen just how vital this is through our support for Ukraine, where the industry has worked closely with government to demonstrate the UK’s commitment to upholding international law and supporting allies in times of conflict.
What outcomes are you hoping to see from the government’s Strategic Defence Review?
I think the most important outcome will be recognising industry as an integral partner in the defence enterprise. Without industry, our armed forces simply won’t have the capabilities they need. We want to create an environment in which industry and government can work hand-in-hand to build the long-term strategic partnerships that are essential to delivering more efficiently, both in terms of time and cost.
Many defence capabilities are delivered in partnership with the incredible and innovative companies working in our sector – from prime contractors to small and medium-sized enterprises. Our industry is geared towards collaboration. But a few programmes – mostly the larger, more complex ones – have faced multiple challenges over the years, and this is something that government and industry need to tackle together.
And many of our programmes are long term, so it’s crucial that the government provides consistent demand signals so that we can better invest together in the infrastructure and skills we need. Prevarication and a reluctance to commit to the capabilities the country needs ends up costing more in the long run, and risks us losing vital skills in key areas.
The threats we face are here, now, today. So we also need clear recognition from government that it’s not just about new kit; ongoing support is often more of the cost of a capability than the build itself. It typically takes years to develop and deliver new products, so increasing the availability and capability of the assets that already exist is more important than ever. The discussion around how we adequately budget to sustain capabilities is going to be a critical part of the Strategic Defence Review.
We’ve seen this with the Continuous at Sea Deterrent (CASD). Whilst new submarines are being built, the current ones are ageing, placing an even greater importance on through-life support. I am incredibly proud of the work Babcock does to support CASD. It is the most important thing we do, and our people work incredibly hard to deliver those submarines back to the Royal Navy as quickly as possible.
Overall, I’m optimistic. The new defence frontbench have already shown themselves willing to listen and engage with industry in a positive way. Their commitment to investing in British companies first will allow the UK’s sovereign industrial base to rebuild and invest to deliver the capabilities our armed forces need for decades to come.
Given its importance, it would perhaps also be helpful if there was a common understanding of what was meant by sovereign defence industry – a definition that captured the requirement for a resilient domestic industrial base with the necessary skills, technology, intellectual property, investment, and infrastructure required to sustain it.
You mentioned investing in skills – how important will this be to the future of the defence industry?
It couldn’t be more important. As a sector, we are known for having a high percentage of skilled and specialised employees. We need to keep investing to secure a pipeline of people who can deliver the future capabilities we know we’ll need.
Like many sectors, we have been facing a shortage of skills. We need people with a range of skills to keep developing and delivering solutions in areas like cybersecurity, engineering, and advanced manufacturing. Working on how we can attract people to the sector is always at the front of my mind. We launched the Babcock Skills Academy at our Devonport facility last year and are already seeing benefits from that. Our apprenticeship and graduate programmes are always oversubscribed. We need government to ensure there are enough college training places, as well as consistency in policy.
Babcock is a people business. We want to have the right people, with the right skills, in the right place so that we can deliver the critical capabilities the UK needs, both now and in the future.
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