UK PM Pledges Jobs and Growth from Defence Spending Boost
Prime Minister Sir Keir Starmer has pledged a “defence dividend” from the UK’s largest sustained defence spending increase since the Cold War. Speaking at the London Defence Conference on VE Day, Starmer outlined a £13.4 billion year-on-year boost to rebuild the UK’s industrial base and create jobs across the country.
The investment will support shipbuilding in Scotland, missile production in Stevenage and Belfast, artillery manufacturing in Sheffield, and vehicle development in Wales. Starmer described the defence sector as “the engine of national renewal.”
He also announced a £563 million contract for Rolls-Royce to maintain engines for the RAF’s 130 Typhoon fighter jets, securing jobs in Bristol and other regions.
UK Manufacturing Rises to £153.1B on Shipbuilding, Aerospace Growth
UK manufacturing output rose to £153.1 billion in Q1 2025, a £1.9 billion increase from the same period last year, driven by significant growth in shipbuilding and aerospace, according to the Office for National Statistics.
Ship and boat production surged 60% year-on-year to £2.8 billion, while aerospace output climbed 17% to £7.7 billion. Combined, the automotive, aerospace, and transport equipment sectors reached £33.4 billion in Q1, up 6.4% from 2024. highlighting the UK’s strengthening position in high-value manufacturing.
UK Secures 99-Year Control of Diego Garcia Military Base
The UK has signed a landmark treaty with Mauritius, securing 99 years of continued UK-US operations at the strategic Diego Garcia base. The agreement safeguards vital intelligence, counterterrorism, and global defence capabilities across the Indo-Pacific, Middle East, and Africa.
Backed by the US, Canada, Australia, New Zealand, and India, the deal prevents foreign military access, establishes a 24-nautical mile exclusion zone, and averts legal challenges that could have disrupted operations.
Defence Secretary John Healey called the base essential to UK security. The £3.4 billion agreement ensures uninterrupted access to this key military hub for generations.
QinetiQ Secures £1.5B MOD T3E Contract Extension
QinetiQ has secured a £1.5 billion five-year extension to its agreement with the UK Ministry of Defence to deliver and modernise Test, Trials, Training, and Evaluation (T3E) services. The deal supports over 1,200 jobs and 825 suppliers, including 590 SMEs, across key sites in the UK.
The contract covers weapons testing, pilot training, and maritime calibration, with a focus on digitalisation and SME access. It also supports emerging tech trials like high-power lasers and autonomous systems, ensuring the UK Armed Forces maintain a technological edge.
Rheinmetall to Build £400M Barrel Plant in Telford
The facilities will deliver next-gen military training through the UK Military Flying Training System, strengthening both defence readiness and local economies.
Rheinmetall will invest over £400 million to establish a large-calibre barrel manufacturing facility in Telford by 2027, creating 400+ jobs and reviving UK sovereign defence production. The Gun Hall will support British Army modernisation, NATO supply and UK exports using British steel and advanced manufacturing.
Part of Rheinmetall UK’s wider expansion-including Boxer and Challenger 3 production and a new HQ in Bristol-the facility strengthens national resilience and local industry. CEO Armin Papperger called it “a statement” of the UK’s return to global defence leadership.
MOD Awards £300M Aircrew Training Contract
The UK MOD has awarded a £300M contract to Ascent Flight Training to train 140 RAF and Royal Navy aircrew annually under the new FIRCTS programme.
The eight-year deal will use advanced simulators at RNAS Culdrose and RAF Cranwell, reducing live flying and cutting emissions. The investment sustains 68 jobs and injects £180M into the UK supply chain.
Training starts in 2027 and supports platforms like Poseidon, Rivet Joint, and Protector drones, ensuring modern ISTAR capability and frontline readiness.
MBDA Invests £200M to Create 700 UK Defence Jobs
MBDA is investing £200 million to expand its missile manufacturing site in Bolton, creating 700 skilled jobs. The move follows the UK-EU Defence Pact, boosting access to a £150bn EU defence fund.
Part of a wider £500m UK commitment, the expansion will double MBDA’s Bolton footprint by 2028 and support its £10bn export goal by 2032. The investment also grows its apprenticeship and SME supply chain, reinforcing the UK’s defence sector and local economies.
Babcock Wins £70M UK Military Training Contract
Babcock has been awarded a £70 million contract to build new aircrew training centres at RAF Cranwell and RNAS Culdrose under the UK’s £300 million FIRCTS programme.
Part of a wider deal led by Ascent Flight Training, the project will support RAF and Navy personnel training, create 68 skilled jobs, and inject £180 million into the UK supply chain.
UK Set to Join €150bn EU Defence Fund
The UK is in talks to join the EU’s €150bn SAFE defence fund, part of a new UK-EU security partnership unveiled at a London summit. While not yet eligible for funding, the UK expects access within weeks, unlocking major opportunities for its defence industry.
The deal could lift the current 35% cap on UK components in EU joint defence projects and enable full participation in EU procurement. The partnership also includes coordinated support for Ukraine and regular defence dialogues.
MoD Plans £12M Support Deal for Carrier Weapons System
The UK Ministry of Defence plans a £12 million contract to support the automated weapons handling systems on Queen Elizabeth-class aircraft carriers.
Covering spares and in-service support from June 2026 to May 2031, with a possible two-year extension, the deal ensures continued operation of the Highly Mechanised Weapons Handling System (HMWHS), which speeds up aircraft rearming with minimal crew. The opportunity targets suppliers with naval and automation expertise.
BMT and BAE Partner for Anzac-Class Support Bid
BMT and BAE Systems Australia have formed an exclusive partnership DSC-West, to bid for the sustainment of the Royal Australian Navy’s Anzac-class frigates.
Centred at the Henderson maritime precinct, the team combines BMT’s engineering expertise, BAE’s decades of Anzac support, and Australian Maritime Technologies (AMT), now part of BMT. AMT brings deep platform knowledge and ties to original designer ThyssenKrupp Marine Systems.
The partnership offers an integrated, low-risk model for through-life support, aiming to deliver long-term performance, certification, and sovereign capability. A contract decision is expected later this year.
Forcys Delivers Mobile Underwater Defence System
Forcys has delivered its Sentinel IDS Expeditionary Trailers to a long-standing defence customer. Developed with Wavefront Systems, the mobile system offers rapid deployment of intruder detection sonar, identifying divers up to 1,000m and UUVs up to 1,500m.
Ideal for remote or forward operations, the trailer-based solution provides underwater security without fixed infrastructure. Forcys is showcasing the system at CNE 2025 in Farnborough.
Anduril to Lead UK eVTOL Defence-Civil Flight Team
Anduril UK will lead a consortium with Archer Aviation, Sky ports Drone Services, and Atkins Realis to develop dual use eVTOL and BVLOS flight capabilities for civil and defence use in the UK. The team will adapt Archer’s Midnight aircraft for logistics, surveillance and urban mobility missions.
Anduril will handle integration, autonomy and command systems, Archer supplies the aircraft, Sky ports provide BVLOS expertise and Atkins Realis oversees regulatory compliance. The initiative supports the UK’s Future Flight Challenge and aims to strengthen defence, boost innovation and create UK jobs.
Skynet 6A Reaches Key UK Assembly Milestone
The UK’s Skynet 6A military communications satellite has successfully completed module coupling at the National Satellite Test Facility—its first such assembly on UK soil. Built by Airbus, the satellite offers triple the capacity of Skynet 5 and will enter service in 2027.
It now proceeds to final testing in Stevenage, with environmental trials set for later this year. The milestone strengthens the UK’s sovereign defence communications through the 2040s.
UK Startup Launches Ramjet Artillery Round
Tiberius Aerospace has unveiled Sceptre, a 155mm ramjet-powered artillery round with a 150 km range and sub-5m precision. Designed for NATO howitzers, it reaches Mach 3.5 and 65,000 ft altitude, avoiding EW threats.
Powered by multi-fuel liquid propellant, it uses AI guidance for GPS-denied environments. Tiberius calls it a “10X solution” for long-range, low-collateral strikes.