Growing strength: can Labour align Defence and Security with the drive for growth?

The much-anticipated – and much-trailed – Strategic Defence Review (SDR) was finally launched on Monday, providing an outline for how the Government intends to approach an increasingly complicated and risky world.

For the those in the defence, security and technology industry, there are still a significant number of questions, not least on whether the scale of the review’s ambitions meet the moment, and the timescales for implementing the recommendations. At 1 Horse Guards Road there will be intense discussion about when, and how, increased defence expenditure is funded.

Overall, military leaders appear to be comfortable with the direction that the SDR sets, and are assured at government commitments to fund the Ministry of Defence’s (MoD’s) Equipment Plan. Of course, the Government will also have to navigate recommendations to procure additional kit.

The SDR also provides some interesting insights into the thinking around the Industrial Strategy, due to be published alongside the Spending Review next week. Commentators have taken to describing the Government’s approach as ‘military Keynesianism’: using the defence budget to reinforce and expand the UK’s industrial footprint, and grow the economy. In attempting to harness defence spending as a way to kick-start growth, the Government will be looking closely at how industry can support the regions, small businesses and scale-ups.

As the Government fleshes this approach out, there will be plenty of opportunities for organisations to engage with the Government on how to make it work best. The relatively modest spending increases pencilled-in for the next couple of years mean that maximising the impact of additional spending will be critical to making the plans a success.

Opportunities do not just exist for those in the defence, security and technology industry. While announcements on new munitions factories grab headlines, they will not do much to shift the growth dial in an economy dominated by services. The Government will need to look at the wider defence ecosystem if it wants to see any significant return on investment.

Those in the research and innovation space should be looking to stake their claim. The SDR recognises the need to enhance the MoD’s investment in this space, as well as recommending a new body to support early-stage research in universities. Spending here would likely be more efficient than spending on manufacturing, as well as developing new capabilities that can be exported.

The Government will continue to finalise its plans for the economy, but this shouldn’t be considered the end of the conversation. Any Industrial Strategy, for instance, will struggle to get off the ground if energy prices remain cripplingly high. While the SDR may finally have been published, organisations that can produce a clear set of asks, which support the Government’s ambitions, will find that they have plenty more opportunities to engage. 

Contact the Luther team to discuss how you can be part of the debate: publicaffairs@luther.co.uk