Time to Talk up the ‘D’ word
Research shows most UK inward investment teams shy away from the defence sector
The PM’s new pledge to substantially boost defence spending means an increase of at least £13.4 billion more will be spent every year on UK defence and security from 2027.
Last year the UK spent £53.9 billion on defence. It’s already a massive sector that is key across manufacturing supply-chains and technological innovation. The new commitment means spending will rise to 2.6% of GDP by 2027, once the contribution of intelligence services to defence had been factored in.
This announcement comes as a new defence strategy is being prepared and with a much-anticipated Industrial Strategy being finalised, which identifies defence as one of its eight target sectors.
The national imperative is clear and it’s time for local and regional teams tasked with economic growth to prioritise the defence and security sector as well.
But from research done by Breeze Strategy this week, there’s a long way to go.
We surveyed the websites of 30 leading inward investment agencies in the UK covering cities and countries from Aberdeen to Cornwall.
While most of the eight sectors from the Industrial Strategy white paper (Invest 2035) are well represented as targets for investment, there is one glaring omission - defence and security.
Not one single inward investment agency has identified defence as a key target sector and only 3 teams mention it as part of their aerospace offer.
The highly skilled jobs on offer from defence projects should make it an attractive target, with international collaboration among key allies likely to increase.
Recent project announcements have included:
- In February 2025, the UK and Norway announced negotiations on a new defence pact aimed at combating the threat from Russia in the Arctic. Norway and the UK will further develop their cooperation to detect and prevent malicious acts and sabotage against critical underwater infrastructure.
- In January 2025, the first Boxer armoured vehicle was unveiled by Rheinmetall BAE Systems Land (RBSL). The Boxer programme provides a significant boost to British industry, supporting around 400 skilled jobs and apprenticeships in Telford and Stockport, and a further 1,000 across the UK supply chain.
- In December 2024, Britain's biggest defence firm, BAE Systems, announced 350 new jobs in Essex, Hampshire and Kent following an investment of £1bn on education, training and skills.
- In November 2024, Britain and Germany signed a "landmark defence agreement" aimed at boosting security, investment and jobs. Under the agreement, German defence company Rheinmetall will open a new factory in the UK to manufacture barrels for artillery guns – supporting 400 jobs.
- In September 2024, Italian defence group Leonardo committed to invest £435 million in its UK sites, supporting 8,000 jobs, including work on establishing a ‘Single Site Logistics Hub’ at its helicopter production facility in Yeovil.
- In July 2024, the Government set out Britain’s commitment to the trilateral defence and security partnership between the UK, United States and Australia known as AUKUS. The AUKUS submarine programme will generate 7,000 additional British jobs. At its peak, there will be over 21,000 people working on AUKUS programmes in the UK supply chain.
- In March 2024, the Ministry of Defence’s Unity contract with Rolls-Royce is expected to create at least 200 new jobs in Cardiff and Glasgow. The eight-year agreement, valued at around £9 billion, consolidates research, design, manufacturing, and in-service support for the nuclear reactors powering the Royal Navy’s submarine fleet.
In 2023-2024, the Ministry of Defence spent the following across the UK:
£7.1bn in the South East
£6.9bn in the South West
£3.8bn in the North West
£2.1bn in Scotland
£2.1bn in London
£1.6bn in the West Midlands
£1.5bn in the East of England
£1.4bn in the East Midlands
£910m in Wales
£630m in Yorkshire and the Humber
£380m in the North East
£240m in Northern Ireland
In the light of the announcement to prioritise national security and increase defence spending to 2.6% of GDP by 2027 and to 3% in the next 10 years, it is time for economic developers to put as much effort and resources into defence and security, as they have in other sectors like Creative Industries and Net Zero.
Too many councils have been afraid to talk up defence and security as a key driver of economic growth, but without it, there will be no speaking up at all.
There also needs to be a serious examination of the various local initiatives to promote trade and investment links with the BRICS states that are increasingly seeking closer military cooperation. The UK has strong global allies and they are in Washington, Canberra and Berlin - not Moscow and Beijing.
Today’s threats could not be more visible and real. It’s time to step up and support the one sector that protects all the others.