“The biggest sustained increase in defence spending since the end of the Cold War,” announced last week by Keir Starmer, will provide a huge boost to the prosperity and economic vitality of this area.
Spending on our military capabilities will rise from its current 2.3% share of the economy to 2.5% in 2027, and the Prime Minister added that he wants defence spending to reach 3% of gross domestic product during the next parliament.
It’s a seismic shift in investment and, if you’ll permit me to make a Party Political point, the last time investment was this high was under the last Labour Government.
As I suggested in last week’s column in these pages, there’s no doubt that this is needed given the threats our country faces and the volatility of world events.
Our armed forces are incredibly stretched as a result of years of underinvestment. I’m pleased to see the vital service they provide rewarded.
But there’s a second and much more selfish reason for us to be pleased with this announcement locally.
As home to the Army and birthplace of UK aviation respectively, Aldershot and Farnborough could receive substantial amounts of this £multi-billon extra investment. Some of the biggest names in the defence and aviation industries are based here, including household names like BAE and QinetiQ.
These companies are among those who have welcomed the additional investment and pointing out that it will, without any doubt, create more jobs in the UK. The majority of these will highly skilled and well paid. Salaries in the defence sector on average are 33% above the manufacturing average.
This alone will help to stimulate local economic growth but the trick will be to multiply the benefits by doing two further things.
Firstly, we have to grow the supply chains and make sure that small, local businesses can bid for contracts and capitalise on this investment. On this, I’m pleased to say that the government has announced plans to launch a new hub to provide small and medium enterprises (SMEs) with better access to the defence supply chain and committed to set direct SME spending targets for the Ministry of Defence by June this year. This is a chance for small, often family-owned, firms to bring their innovations and their expert workforce to the task of strengthening Britain’s defences.
And, secondly, we need to bolster our education and skills institutions so that more and more local people are in a position to take the jobs. The government’s expansion of apprenticeships in the UK will help significantly here.
Importantly, the extra defence money is not a one-off. The Prime Minister’s promise of sustained increases in investment will give companies the certainty they need to expand and the time we need to develop our skills base.
We can also expect to see new technologies developed in the country. This is vitally important, given the vagaries of the international situation. In this uncertain world we have to have home grown capabilities, rather than relying on products bought overseas.
I have already spoken to some of the local business leaders and colleges about how we can take advantage of this once-in-a-lifetime opportunity for our community. I look forward to telling you more as our plans take shape.
Alex Baker MP
