A new defence innovation body to harness UK ingenuity and boost military technology is set to be launched, as part of a drive to turbocharge innovation in defence and deliver growth as part of the Plan for Change.

In Wales, the Aerospace and Defence sector represents 160 companies and employs more than 20,000 people.

The Chancellor, Defence Secretary and Business Secretary have confirmed that a new UK defence innovation organisation will work with innovative firms to rapidly get cutting-edge military technology into the hands of British troops, and harness the ingenuity of the UK’s leading tech and manufacturing sectors.

This new unit, which will be launched at the Spring Statement, is a clear demonstration of how the Government is moving at pace to drive reform in defence and use defence as an engine of economic growth.

The Chancellor, Defence Secretary and Business Secretary met leaders from 15 British defence firms of all sizes at RAF Waddington in Lincolnshire, one of the RAF’s busiest stations with airborne intelligence aircraft and systems, to discuss how the new unit will operate.

Developed as part of Defence Reform, the biggest overhaul of defence for more than 50 years, the new body is set to simplify and streamline the innovation system within MOD. It will take a new approach by moving quickly and decisively, using different ways of contracting, to enable UK companies to scale up innovative prototypes rapidly by setting out a clear pathway, working with the Government, from initial production to manufacturing at scale.

As part of a defence innovation drive, the government will also look to enhance investment in defence start-ups and scale-up technology and capability, including through the National Security Strategic Investment Fund. Ministers will work with the venture capital and investment community, as well as industry, to leverage private investment in the technology of the future.

The meeting comes after the Prime Minister outlined the Government’s commitment to increase spending on defence to 2.5% of GDP from April 2027 and the Chancellor’s message to European allies at the G20 in South Africa to jointly go further and faster on defence.

The new innovation unit will help equip Britain’s Armed Forces with cutting-edge tech and grow high-tech British businesses in the defence tech ecosystem. It will take the lessons from the rapidly changing nature of warfare, as seen in the conflict in Ukraine.

Increased defence spending will support highly skilled jobs and apprenticeships across the whole of the UK. Last year, defence spending supported over 430,000 jobs across the UK, the equivalent to one in every 60, and 68% of defence spending goes outside of London and the Southeast, benefitting every nation and region of the country.

Backing the defence industry will protect UK citizens from threats at home but will also create a secure and stable environment in which businesses can thrive, supporting the Government’s number one mission to deliver economic growth.

Chancellor of the Exchequer, Rachel Reeves, said:

“The world is less certain than it has been for a generation. History tells us that government and industry must rise to meet these moments together. We need to invest in sophisticated, innovative kit and get it into the hands of our fighting men and women.

“In the world we face, national security and economic growth are going to go hand in hand. High-skilled, well-paid jobs across the UK will both make our country safer and put pounds in people’s pockets.”

Defence Secretary, John Healey, said:

“The world is changing, and defence is changing too. We will back the high-growth, high-tech UK defence firms of the future, to boost our national security and make defence an engine for growth.

“We will foster the UK as a defence innovation hub, funding and supporting firms of all sizes to take state-of-the-art technology from the drawing board to the production line, and into the hands of our Armed Forces.

“Defence has a crucial role to play in economic growth across the UK – built on the foundation of the largest sustained funding increase since the Cold War – to support thousands of highly skilled jobs.”

Business and Trade Secretary Jonathan Reynolds said:

“A strong, robust defence sector is vital for a Britain that’s both secure at home and strong abroad, and ensures a world where business can benefit from the economic security it brings.

“Nearly half a million UK graduates get good, well-paid jobs thanks to our aerospace, defence, security and space sectors. These are areas where the UK excels on the global stage, and where our innovation can add billions to the economy.

“That’s why our Plan for Change puts defence at the heart of our Industrial Strategy, helping us drive economic growth while bolstering our national security for the long term.”

Science and Tech Secretary, Peter Kyle, said:

“Britain’s science and research expertise has always played a role in keeping us safe, and still does: from inventions like radar and codebreaking machines in the 20th century, through to innovations around drone technology and cybersecurity, today.

“We are dedicated to making sure the UK tech sector has everything it needs to continue to thrive, and to keep playing a critical role in our national security.”
As set out in the Plan for Change, national security is the first duty of the government, and investment in defence will protect UK citizens from threats at home while also creating a secure and stable environment for economic growth.

Economic growth is central to the Government’s Plan for Change to put more money into the pockets of working people and will be a core objective of the defence innovation organisation.

The joint meeting with defence industry organisations comes on the final day of the consultation for the Defence Industrial Strategy, which will ensure a strong defence sector and resilient supply chains across the whole of the UK.

Andy Fraser, Saab UK Group Managing Director, said:

“Saab UK welcomes the announcement that the UK Government will increase defence spending to 2.5% by 2027, with a route to 3% in the next Parliament.”

“We live in a challenging world which requires industry and government in the UK to work together more closely. In the UK, we know that the defence industry benefits growth, investment and offers fantastic careers – while also helping to ensure the UK’s resilience. Saab UK has recently opened new facilities in the UK because we know that together we can achieve our aim to keep people and society safe.”