‘With increased global instability, the government’s 2.5% defence target should not be considered a ceiling’

The EU and the UK were slow to grasp the long-term industrial implications of Russia’s illegal invasion of Ukraine in 2022.

In his speech to the Lord Mayor’s Banquet, the Prime Minister made clear that “the further Russian troops advance, the closer the threat becomes…so we must continue to back Ukraine and do what it takes to support their self-defence for as long as it takes.”

From an EU perspective, the mission has been further clarified by new EU foreign policy chief, Kaja Kallis, who said “The European Union wants Ukraine to win this war.”  These clarifications makes it even more vital there is a clear plan on what it will take for the UK and EU to provide the necessary weaponry to Ukraine.

The long delay in the last package of US support, finally confirmed in April 2024, had huge implications on the ground for Ukraine and clearly demonstrated the need for committed, connected and consistent defence manufacturing closer to the European front line.  After all, the UK and EU understand better than anyone the need for Ukraine to win to deter future Russia aggression on our doorstep.

READ MORE: ‘Six milestones, five missions, three foundations: Have Labour’s lists changed too much?’

Defence is already a key sector in the UK’s industrial strategy, with the MoD spending £28.8bn with UK industry in 2023/24 and supporting 329,000 jobs across the country, making it critical to regional economies.  This is particularly true in Scotland, home to the our nuclear deterrent, the defence of NATO’s northern air and sea border and a ship building industry on the Clyde and the Forth building frigates for the Royal Navy and our allies.

With global instability likely for the next decade, necessitating increased security and defence spending, there is a need and opportunity to develop the skills the UK will need to absorb that funding to maximise economic growth, while continuing to reset our relationship with European partners.

This week has felt significant for moves to join up defence and economic policy, with Politco speculating Germany will join Denmark and lift its opposition to joint EU borrowing to jumpstart the EU defence industry.

There has been speculation of a ‘coalition of the willing’ to support Ukraine with Freidrich Mertz, a possible next Chancellor of Germany, indicating a possible ‘contact group’ of Germany, France, Poland and Britain.  This would build on the Trinity House agreement (LINK) and provide an opportunity to continue our reset with European allies.

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In the UK, the announcement by John Healey of a UK Defence Industrial Council is the latest sign that this UK Labour government is mobilising British industry for our security and to support Ukraine in a way which supports our economy, building on work such as the loan fund to support Ukraine in buying the weapons it needs.

Something I have raised in Parliament already is that while we will hit the 2.5% target for defence spending after the failures of previous Conservative governments, we should make clear that this number should not be considered a ceiling.  

We must also ensure MoD funding is being spent for maximum impact, delivering a clear return on investment for the UK economy.  That is why the recent announcements on defence procurement programmes were particularly welcome and important, (REF).

So while there are a number of elements to securing success, if ongoing instability is to be a theme of the next decade and beyond, we must harness it as an opportunity to improve links with our allies, support our communities, create jobs and deliver growth and prosperity and work towards a more peaceful future.

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