PARLIAMENTARY DEBATE
Defence Spending: Economic Growth - 15 December 2025 (Commons/Commons Chamber)

Mr Speaker, the House does indeed join in your sentiments towards all those who are suffering as a result of the attack at Bondi Beach. I know the whole House will also join me in offering condolences to the family and comrades of Lance Corporal George Hooley, who died in a tragic accident last week in Ukraine. He served our nation in distant and dangerous lands, and he did so with honour, courage and distinction. He was a natural, gifted leader who lost his life in the cause of freedom and peace.

Our historic defence investment comes with a fundamentally new approach. The defence dividend is already boosting British industry, British jobs and British communities. We have launched a £770 million defence industrial strategy to drive innovation, create British jobs and boost British skills. Today, we are announcing the defence technical excellence colleges competition, which has gone live, backed by £50 million. It will help us build the skills needed to tackle the threat posed by Russia and other adversaries.

When Jodrell Bank celebrated its 80th anniversary, we heard lots about its contribution to science and its 150,000 visitors per year, so does the Secretary of State share my excitement about the job opportunities that may result from repurposing Cawdor barracks in Pembrokeshire as a deep space advanced radar capability? Will he meet me to discuss job opportunities for manufacturers in my constituency resulting from that project, from the project for a new development site for the Windracers drone, and from other defence projects?

I do indeed recognise my hon. Friend’s excitement, as she puts it, about the opportunities created by the deep space advanced radar capability, the new drone developments and projects that we will bring to Wales. As we make defence an engine for growth, we are also putting the UK at the leading edge of innovation in NATO. I can announce today that in its first year, UK Defence Innovation will invest over £140 million in new drone and counter-drone systems to protect the UK homeland and allies in the face of increasing Russian drone incursions. That is backing British small and medium-sized enterprises, British micro-SMEs and British universities.

As the Secretary of State outlined, the new defence growth deals announced earlier this year promise exciting opportunities, particularly for young people entering high-skill engineering and new apprenticeship roles. North Wales already hosts world-class defence firms, such as Teledyne Qioptiq; what benefits, especially for economic growth and opportunity, can my Wrexham constituency and north Wales more widely expect as those deals are rolled out?

We are working with the Welsh Government, Welsh industry, companies like those that my hon. Friend mentioned, and Welsh academics and universities to work out the dimensions of a Wales defence growth deal. It will be one of five growth deals backed by £250 million in this Parliament. New drone technology autonomy will be the focus of this new defence growth deal.

When the previous Government slashed defence spending by £12 billion in their first five years, it left the defence of our nation hollowed out and underfunded. Now, Stoke-on-Trent and our world-leading ceramics sector, which makes vital components for aircraft, submarines and ships, stand ready to help rebuild the defence of our nation. Can the Minister set out how the Government’s largest sustained increase in defence spending will benefit companies and create jobs in my Stoke-on-Trent constituency?

I can indeed. My hon. Friend is right: not only is this the largest sustained increase in defence spending since the end of the cold war—spending committed by this Government—and not only are we delivering 2.5% of GDP for defence three years earlier than anyone expected, but this Government also said that we would direct more of our British defence investment directly to British-based businesses, and we are. In the last year, 86% of defence investment has gone to British-based businesses, which is 6% more in real terms than in the preceding year, under the last Government; in other words, it is an above-inflation increase.

As the Secretary of State knows from visiting my constituency, Stevenage hosts a thriving defence and space sector, with more than a quarter of satellites in space built in our town. Next month, Airbus Defence and Space will open Launchpad, a new facility in Stevenage giving small and medium-sized enterprises and start-ups space to work and develop technologies. Can the Secretary of State confirm that our innovative primes and SMEs will receive proper attention when the defence industrial plan is implemented?

I can indeed. My hon. Friend is right: his constituency hosts not only some important big UK defence primes, but many very small innovative firms. That is why, as a new Government, we said that we would set a new target for the proportion of defence investment going directly to British SMEs. We set up a new SME growth centre to help them deal with Government, which has previously been too difficult.

I call the Father of the House, Sir Edward Leigh.

I congratulate the Secretary of State on his efforts so far, but our efforts are still puny compared with those made when there was last a major threat, in the 1930s. In 1933, we spent just 2.2% of GDP on defence. Remember George Lansbury, the leader of the Labour party, who wanted to abolish the RAF altogether? By 1938, we were spending a massive 7%. Will the right hon. Gentleman commit himself to a whole new gearing-up of our efforts? He could start by recommissioning the RAF bases that were open in the 1930s, but have now been closed, such as RAF Scampton.

The right hon. Gentleman is right to point to the recent record—the 14 years of hollowing out and underfunding of Britain’s armed forces that my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) mentioned. I am proud of this Government’s investment of an extra £5 billion in defence in the first year, and our commitment to reach 2.5% of GDP by 2027. Our ambition is to reach 3% in the next Parliament, and alongside 31 NATO allies, we have signed up to spending 5% by 2035 on core defence and security, including national security.

Most of our allies and our industrial competitors have a system of offsetting to support their domestic defence capability, economy and jobs, and traditionally this country has had global by default. When will we see the detail in the defence industrial strategy that states that the Government intend to bring forward a programme of offsetting to match our competitors?

I am interested to hear that observation from the right hon. Gentleman, who of course was a Defence Minister for several of the 14 years during which his Government never moved to introduce any sort of offsetting policy. We are consulting on that now. We think offsetting has an important role to play in Britain’s future and the future of British industry. The consultation closes in the new year, and we aim to make announcements soon thereafter.

The world is rearming and rebuilding the defence industrial base at a rapid pace, and it is fair to say that the UK is starting to fall behind some of our NATO allies. Does the Secretary of State believe that the spending planned for 2027 to 2030 and onwards meets our needs and prepares us for war, should it arise?

I do indeed. The hon. Gentleman knows as much about defence as anyone else in this House, and I pay tribute to him for his work on the NATO Parliamentary Assembly delegation. The commitment this Government made in our first year to increasing defence spending by the largest sustained amounts since the end of the cold war is an historic move. Our commitment, alongside NATO allies, to increase to 5% of GDP what we put towards national security is part of strengthening the NATO deterrent and NATO defence; and our strategic defence review allows us to map out a way of making our forces more ready to fight and better able to deter.

We were told that the defence investment plan would be available before the Christmas recess. What day this week will it be announced?

We are working flat out between now and the end of the year to finalise the defence investment plan. Even though the hon. Gentleman is a new Member of this House, he will appreciate, from serving on the Defence Committee, the scale of the decisions that we need to make. He will also appreciate the scale of the problems that we face, including those to do with a programme of the last Government’s that over-committed, and was underfunded and unsuited to meeting the threats that we will face in the future.

I call the shadow Secretary of State.

On behalf of the Opposition, I join you in expressing our total condemnation of the horrific Bondi Beach terrorist attack, Mr Speaker. We must stand united in this House against antisemitism in all its forms. May I also offer our condolences to all affected both at Bondi and at Brown University, and to the family and friends of Lance Corporal George Hooley? We echo the Secretary of State’s sentiments about his service to our country.

I echo the question from the hon. Member for North Devon (Ian Roome). It is a very simple and specific question. Will the defence investment plan be published before the rise of the House on Thursday: yes or no?

The answer is simple, and it is the same one I gave to the hon. Member for North Devon (Ian Roome). We are working flat out between now and the end of the year to finalise the defence investment plan. The shadow Secretary of State of all people—having been responsible for deep problems, and programmes beset by deep-running failures, such as Ajax—will appreciate the scale of the challenges we face.

Is the Secretary of State seriously saying that he does not know his diary for the rest of the week? He could ask one of the other Ministers on the Front Bench, or one of the special advisers or officials. Surely he knows whether later this week—on Tuesday, Wednesday or Thursday—he will be giving the most important defence statement of the year. It is extraordinary that he does not.

To remind the House, in June the Secretary of State promised from the Dispatch Box that the defence investment plan would be

“completed and published in the autumn.”—[Official Report, 2 June 2025; Vol. 768, c. 63.]

It is already late—just like the strategic defence review, the defence industrial strategy and the housing strategy. Does that not illustrate perfectly why the Defence Committee said that when it comes to war readiness, Labour is moving at a “glacial pace”?

The House will know to take no lessons from the right hon. Gentleman. When he was in government, his munitions strategy was often promised and never published. His drone strategy had more pictures than pages—and no funding. His Government’s defence funding plan was published as an election gimmick just weeks before the election and was never delivered in 14 years. We are working flat out between now and the end of the year to finalise the work on the defence investment plan.

I call the Liberal Democrat spokesperson.

We signed the European Union security and defence partnership in May. We committed ourselves to negotiating with the European Union for access to the SAFE funding arrangements. From the start, we recognised that there would need to be a financial contribution from the UK, but we also said from the start that SAFE needed to be good value for money for British taxpayers and British industry. It did not meet those tests. We were unable to reach a deal with the European Union, but we will continue to back Great British defence industrial firms as they sell into Europe, and we will strike bilateral deals that allow us to do a great deal more beyond the SAFE programme in the years to come.