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§ Policy Briefing · 09

Defence and Security.

Three per cent of GDP, credibly spent.

Strategic Context.

Geopolitical environment

  • Russia-Ukraine war has exposed European military inadequacy and reshaped assumptions about conventional warfare
  • China-Taiwan tensions continue to rise with real probability of kinetic conflict within the decade
  • AUKUS commits UK to nuclear submarine production at scale not seen since the 1960s
  • Middle East instability chronic; Red Sea shipping attacks show maritime trade is vulnerable
  • Cyber and hybrid warfare now permanent features; UK defence architecture partially adapted, significant gaps remain
  • NATO's European members have committed to significant spending increases; UK will be held to equivalent standard

UK defence industrial base

  • Genuine world-class capability in specific areas: submarine design and build (BAE Barrow), aero engines (Rolls-Royce Derby/Bristol), combat aircraft (BAE Warton/Samlesbury), electronics and radar (Leonardo, BAE Rochester), naval shipbuilding (BAE Glasgow/Scotstoun, Babcock Rosyth, H&W Belfast)
  • Significant weaknesses: ammunition production (catastrophically inadequate), armoured vehicles (Ajax programme has been a disaster), small arms (Accuracy International is tiny; most are imported), missile stockpiles (embarrassingly low)
  • Procurement system captured by consultancy layers and optimism bias; genuine reform overdue

Target: 3.0% of GDP by Y10, up from current ~2.3%. Phased: 2.4% Y2, 2.5% Y3, 2.7% Y5, 2.85% Y7, 3.0% Y10.

Core Policy Platform.

Headline Commitment.

3.0% of GDP defence spending by Y10. At projected GDP of ~£3.2tn, this equates to ~£96bn defence budget vs current ~£67bn. Additional spending £29bn/year at full scale, of which ~£18bn is attributable to new commitments and ~£11bn to existing trajectory/inflation.

Phasing schedule

  • Y1: 2.35% (~£75bn, modest uplift)
  • Y3: 2.55% (~£82bn)
  • Y5: 2.75% (~£88bn). +£6bn additional commitment vs baseline
  • Y10: 3.00% (~£96bn). +£18bn additional commitment vs baseline

Capital vs Revenue Split.

Defence spending is unusually capital-heavy. Equipment procurement (submarines, aircraft, ships, vehicles, missiles, ammunition) is capital investment. Personnel, operations, maintenance are revenue.

  • Y5 additional commitment of £6bn: roughly £3bn revenue (personnel, operations), £3bn capital (equipment)
  • Y10 additional commitment of £18bn: roughly £9bn revenue, £9bn capital

This capital weighting is fiscally favourable under the framework: major equipment programmes financed via dedicated defence infrastructure gilts against productive assets.

Personnel and Reserves.

Position: Rebuild armed forces personnel numbers and reserves capability.

Current state

  • British Army at ~73,000 regulars (down from 100,000 in 2010)
  • Royal Navy at ~30,000, chronic recruitment shortfall
  • Royal Air Force at ~31,000
  • Reserves at ~30,000, significantly below capability target
  • Cadet Forces (schools, community) significantly declined

Commitments

  • British Army restored to 85,000 regulars by Y10
  • Royal Navy to 35,000 by Y10 (supporting AUKUS submarine force expansion)
  • RAF stable at 31,000 but with skills mix shifted toward combat aviation and cyber
  • Reserves rebuilt to 45,000 by Y7
  • Cadet Forces expanded. Target 500,000 young people in cadet programmes by Y10 (current ~130,000), providing "something to be part of" for young men and women
  • Veterans support restored: housing preferences, employment, mental health provision

Costs: ~£3bn/year additional personnel costs by Y5, ~£6bn/year by Y10.

Equipment: The AUKUS Commitment.

AUKUS is the largest UK defence programme in generations and requires sustained investment through multiple parliaments.

Submarine production

  • SSN-AUKUS nuclear attack submarines at BAE Barrow, collaboration with US and Australia
  • Production rate target: one boat every 18–24 months at full capacity
  • Requires sustained industrial investment in Barrow, Rolls-Royce Derby (reactor cores), Babcock Rosyth (refit), supply chain across 400+ UK firms
  • 20-year programme horizon

Cost: AUKUS is the single largest capital programme in British government. ~£8–10bn/year capital at peak, falling to ~£4–5bn/year sustainment. Budget is partially already committed under existing plans but requires protection against cost overruns.

Ammunition and Missile Production.

The single most urgent defence industrial priority.

Current state

  • UK ammunition production is 1990s-scale and cannot replace stocks donated to Ukraine
  • 155mm artillery shell production: currently ~200,000/year; need multiple times this
  • Missile stocks: inadequate across categories (air defence, anti-ship, cruise, air-launched)
  • Supply chain for explosives, propellants, specialist metals heavily foreign-dependent

Commitments

  • Ammunition production capacity quadrupled by Y5: new facilities, expanded existing facilities (BAE Radway Green, Glascoed)
  • UK-sovereign missile programmes accelerated: Storm Shadow successor, air defence (ASTER follow-on), anti-tank (NLAW successor), anti-ship
  • Strategic stockpile targets published, met, and audited
  • Supply chain sovereignty: strategic materials (tungsten, cobalt, specialist explosives) recovered to UK or allied-only sources

Cost: £2bn/year capital for 10 years, plus ~£0.5bn/year revenue for maintenance of stockpiles.

SMR Naval Propulsion.

Strategic link: Rolls-Royce SMR civil programme and naval propulsion (PWR3 for Astute/Dreadnought, potential next-generation successor) share fundamental technology, workforce, and supply chain.

Commitments

  • Dedicated R&D funding for next-generation naval reactor technology
  • Rolls-Royce Derby facility expansion supports both civil and naval capability
  • Workforce pipeline from nuclear engineering programmes at Bristol, Manchester, Imperial feeds both
  • This is the single most efficient way to maintain UK nuclear sovereignty: civil and naval programmes subsidise each other's existence

Cost: R&D ~£300m/year additional; facility investment absorbed in AUKUS and civil SMR programmes.

RAF Combat Aircraft.

Position: Tempest (Global Combat Air Programme with Japan and Italy) protected and accelerated.

  • Commitment to Tempest in-service date no later than Y10 (2036)
  • BAE Warton and Samlesbury investment sustained
  • Rolls-Royce next-generation fighter engine (EJ200 successor) funded
  • Leonardo Edinburgh radar and electronics capability sustained
  • F-35 fleet maintained at committed numbers

Cost: Tempest programme ~£3bn/year at peak (already in defence baseline, needs protection rather than additional commitment).

Royal Navy Surface Fleet.

Position: Fleet size restored after decades of cuts.

  • Type 26 frigates (BAE Glasgow): full programme of 8 ships completed
  • Type 31 frigates (Babcock Rosyth): 5-ship programme completed, follow-on order for Type 32
  • Type 83 destroyer (Type 45 successor): programme committed, build starts Y5
  • Multi-Role Support Ship (MRSS): 6 vessels for littoral operations
  • Royal Fleet Auxiliary rebuilt. Support ships chronically inadequate

Industrial implication: UK surface shipbuilding supported across Glasgow, Rosyth, Belfast, Birkenhead. Maintains "sovereign warship" capability that collapsed in many NATO countries.

Cost: Naval shipbuilding programme ~£4bn/year capital at peak, sustained.

Army Modernisation.

Position: Rebuild armoured and mechanised capability with UK sovereignty where possible.

  • Challenger 3 programme completed (upgrade of Challenger 2, BAE Telford)
  • Boxer mechanised infantry vehicle programme (Rheinmetall BAE Systems Land, UK assembly) continued
  • Ajax: honest audit of programme, remediation or cancellation as appropriate
  • Artillery: new self-propelled gun programme (Challenger 3 hull derivative with UK-sourced gun)
  • Anti-air: medium-range air defence (Ground-Based Air Defence programme) prioritised given Ukraine lessons

Cost: ~£2bn/year additional capital Y5-Y10 for army modernisation.

Cyber, Space, and Electronic Warfare.

Position: Recognised as equal domain to conventional forces.

  • National Cyber Force funded and scaled
  • Space Command given real budget and capabilities (UK satellite programme, potentially including military launch)
  • Electronic warfare capability rebuilt. UK capability eroded since 1990s
  • GCHQ and related agencies protected and expanded
  • Academic partnerships for cyber/AI/quantum capability (Cambridge, Bristol, Manchester, Edinburgh)

Cost: ~£1.5bn/year additional by Y5.

Procurement Reform.

Position: End the consultancy capture of defence procurement.

Mechanisms

  • MOD procurement consultancy spend reduced from ~£800m/year to <£200m/year by Y3
  • Fixed-price contracts replaced with shared-risk arrangements where risk is genuinely uncertain
  • In-house procurement capability rebuilt. MOD has lost expertise to industry and consultancies
  • Equipment Plan published annually with honest cost estimates
  • Major programme reviews every 2 years, public-facing

Cost saving: £500–800m/year by Y5 via consultancy reduction.

The Brigade of Gurkhas.

The Brigade of Gurkhas has served the British Army for more than two centuries, has earned twenty-six Victoria Crosses, and has served with distinction through Iraq, Afghanistan, and every significant deployment this country has asked of them. A Gurkha earned the Victoria Cross in Afghanistan within living memory. Their service is not in question. What is in question is whether the state has treated them fairly in return. It has not. The platform corrects three specific failings.

Immediate family reunification rights for direct family. The spouse and minor or dependent children of any Gurkha veteran with four or more years of service receive automatic settlement rights in the United Kingdom, processed on standard family-reunification timelines with no additional income threshold. This applies to direct family only. Adult independent children, adult siblings, and extended family are out of scope. The principle is that a veteran who earned the right to settle in Britain earned the same right for the household they serve to support.

Pension uplift review in the first year of office. Gurkhas who retired before 1997 draw pensions calculated on the Indian Army pay scale rather than the British Army scale, and the partial uplifts since then have not closed the gap. A purchasing-power-adjusted uplift review will be conducted and published within the first year. The principle: a dignified retirement in Nepal does not require British-scale cash parity, but the current scheme falls short of that dignity threshold and will be corrected.

First-year audit of welfare and service conditions. A binding audit, with published findings, covering healthcare access for veterans and widows in Nepal, widows' pension provision (currently patchwork), and in-service conditions where complaints persist. Findings actioned within the same parliament.

The Brigade of Gurkhas is also the foundational precedent for the wider Commonwealth recruitment pathway that the 3% defence commitment depends on. Britain's reservist depth in an era of Russian rearmament and European full-scale conflict risk will rest on formalising and expanding the arrangements that have worked for two hundred years, not on pretending they are exceptional.

Costs Summary.

Additional commitments above existing trajectory.

ItemY5 revY5 capY10 revY10 cap
Personnel + reserves + cadets£3bn£6bn
Ammunition/missile production£0.5bn£2bn£0.7bn£2bn
SMR naval R&D£0.3bn£0.3bn
Army modernisation£1.5bn£0.3bn£2bn
Naval shipbuilding (above baseline)£1.5bn£0.5bn£2bn
RAF capability (Tempest protection)£0.5bn£1bn£1bn
Cyber/space/EW£1bn£0.5bn£1.5bn£0.5bn
Procurement reform savings−£0.5bn−£0.8bn
AUKUS sustainment above baseline£0.2bn£1.5bn£0.5bn£3bn
TOTAL ADDITIONAL£5bn£7bn£10bn£10.5bn

Adjusted estimates

  • Y5 revenue additional: £5bn (revised upward from earlier £3bn headline based on detailed policy)
  • Y5 capital additional: £7bn
  • Y10 revenue additional: £10bn
  • Y10 capital additional: £10.5bn

Industrial Policy Linkage.

Defence spending is industrial policy that comes with existing political consent. The workforce implications are enormous:

Direct employment in UK defence industry (~150,000 currently)

  • BAE Systems: ~35,000 UK
  • Rolls-Royce: ~15,000 defence-related
  • Leonardo UK: ~7,000
  • Babcock: ~18,000
  • Thales UK, MBDA UK, Cobham, Chemring, Ultra Electronics, and 800+ supply chain firms

Indirect employment through supply chain: ~500,000 jobs across the UK, concentrated in Barrow, Derby, Bristol, Warton/Samlesbury, Glasgow/Scotstoun, Rosyth, Belfast, Stevenage, Crawley.

Every £1bn of defence equipment spend at UK firms: approximately 7,000–10,000 FTE jobs created or sustained, concentrated in productive regions outside London/SE.

Commitment: UK content rules for defence procurement. Minimum 60% UK value added for all major programmes where UK industry has capability. Where UK lacks capability, sovereign capability development programme funded.

Strategic Framing.

Pitch to defence constituency: "We will properly fund the armed forces for the first time in a generation. Real personnel numbers. Modern equipment. Stockpiles that can sustain operations. Procurement reform so your money buys capability, not consultancy reports. 3% of GDP, phased, permanent."

Pitch to industrial constituency: "British warships built in British shipyards. British submarines at Barrow. British aero engines at Derby. British combat aircraft at Warton. The AUKUS programme will sustain British industry for 30 years. We will not let this country lose its sovereign defence industrial base."

Pitch to fiscal constituency: "3% of GDP by Y10 (2036) is achievable, affordable, and strategically necessary. We've set out the phasing, we've set out the capital/revenue split, we've set out where the savings come from. This is the defence commitment our allies expect and our security requires."

Pitch to youth constituency: "We are not bringing back conscription. But we are rebuilding Cadet Forces in every school that wants them, we are restoring the Reserves, and we are creating pathways from military service into productive civilian employment. If you want to serve your country, we will make that a real option again."

Pitch to regions: "Defence industrial policy is regional policy. Barrow, Derby, Rosyth, Govan, Belfast, Warton, Bristol — these are the places that build Britain's defence. We will make sure they continue to."

COMMON
Policy Briefing · 09 · v0.1
A country held in common.