In July, the Defence Secretary John Healey announced a new Strategic Defence Review (SDR) that will “ensure Britain is secure at home and strong abroad”. George Robertson will lead the review, drawing on his considerable experience as a former defence secretary and Nato secretary general.
This is the fourth defence review in nine years. But, unlike its immediate predecessors, this review is intended to focus squarely on challenges facing UK defence, looking at the capabilities and reforms needed to counter the growing array of threats we face. In many ways, this SDR looks intent on replicating Labour’s last, published in 1998 and also overseen by Robertson.
We understand that it will seek a broad range of opinion. Robertson is leading a team of external reviewers that will engage thought leaders in government, industry, and academia, as well as our closest allies. Our defence depends on close collaboration with allies and industrial partners so this is vital. The views of industry matter, and it is also notable that the prime minister has appointed Maria Eagle as the first Minister for Defence Procurement and Industry. Looking ahead, from the perspective of industry, it is critical that the review addresses a number of issues.
At this year’s election, for the first time in many years, the UK’s homeland security was a significant concern for voters. YouGov polling during the election suggested defence and security was a greater concern than even education. Reflecting this unease, press and parliamentary attention has focused on critical defence capability gaps. In January, a select committee report, Ready for War?, highlighted the UK’s weak integrated air and missile defence, alongside concerns over the RAF’s combat and transport aircraft fleets and the Royal Navy’s ability to deploy its frigates and submarines.
We are living in an increasingly volatile world. The war in Ukraine continues, forcing our European allies to reassess fundamental assumptions. In the Middle East, multiple points of conflict offer the potential for escalation. In East Asia, China continues to test Taiwan through regular air and naval patrols. This prompted President Biden to reiterate US support for the island, in the event of an attack that would have global consequences.
The SDR must urgently set out how the UK will achieve the capability needed to counter threats to the UK’s security, and that of our allies. Taking integrated air and missile defence as an example, the review should set out a detailed acquisition roadmap, that offers reassurance and deterrence, thereby allowing meaningful progress to be made. Such roadmaps need to co-opt industry from the outset, if a full understanding of the technology and deliverability of solutions is to be reflected in plans.
Going further, the review should set out the government’s vision for a new era of industrial partnership that sees government and industry working together more closely to address joint challenges, develop workforce skills and build supply chain resilience. It should complement the government’s new Industrial Strategy and provide the private sector with long-term certainty. This will be needed to make the required investments to build the UK’s sovereign defence industrial capacity.
By supporting closer collaboration and co-development, government can seek to avoid the costly delays of past programmes that were too often specified in isolation. This matters as the SDR must also consider the current fiscal situation. The chancellor’s statement to parliament before the summer recess set out an unexpected shortfall in short-term public finances, adding further to public sector spending pressures that defence is by no means immune to.
While the UK faces more threats than we have seen for many decades, defence spending today is 2.3 per cent of GDP, compared to 5.5 per cent in 1984 and 3.4 in 1994. Looking back even further, the UK spent 3.7 per cent in 1938, 9 per cent in 1939 and 50 per cent of GDP at the culmination of World War 2 in 1945 – a cost we should clearly seek to avoid. Even if historical figures are not directly comparable, current spending levels look low, as the UK comes to terms with an increasingly contested and dangerous world. Moreover, there is strong evidence to support greater government investment in defence. Notwithstanding the reasons for strengthening national security, the defence industry makes a significant contribution to the country’s prosperity.
In 2023, the combined defence, security and space industries contributed £31.2bn to the UK economy, supporting 360,000 jobs, of which more than three quarters were located outside of London and the south east. In March this year, the global consultancy Bain & Co reported that every £1bn spent on defence generates £2.2bn of GDP. Public spending decisions are never easy, but the SDR should set out a clear case for increasing defence spending substantially beyond the current 2.3 per cent of GDP.
We need also to strengthen the UK’s international partnerships. The range of threats, and the pace at which they are evolving, emphasise the importance of international collaboration. Our allies provide important military contributions, especially through Nato. They can also strengthen our industrial base.
The UK has benefitted especially from the US’s significant R&D defence budget that has provided our defence with unique capabilities. For our own part, using a seed corn of US capability, Northrop Grumman has built a strong UK business that now provides critical sovereign capabilities to the government with many hundreds of UK employees, supported by a strong national supply chain.
International collaboration can also strengthen industrial resilience and capacity. The war in Ukraine has stretched supply chains and revealed production capacity constraints. For that reason, the UK and other Nato allies agreed on the Nato Industrial Capacity Expansion Pledge at this year’s Washington Summit. This aims to increase production capacity, enhance interoperability and remove trade barriers.
Aukus is a transformational opportunity to magnify allied industrial cooperation further. This year, the alliance looks set to deliver a package of reforms that will facilitate technology transfer by reforming export controls among the three countries. This will strengthen our defence and deliver new jobs as well as critical new capabilities much quicker.
Even since the previous Integrated Review was published in March last year, the global security environment has deteriorated further. The stakes have never been higher and the new review merits close attention. It is a critical opportunity to secure the UK at home and abroad, building the necessary support for the country’s armed forces and industrial capabilities through which we can deliver the defence capabilities that UK security needs.
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