National Defence Reboot & Fiscal Commitment
On 2 June 2025, Prime Minister Keir Starmer’s government published the Strategic Defence Review (SDR), a decisive re‑orientation of military priorities. Unlike previous white papers, this one accepts all 62 recommendations, signalling the most significant defence overhaul since the 1980s. It sets a pathway to increase defence spending from approximately 2.3 % of GDP to 2.5 % by 2027, while ambitiously targeting 3 % by 2034, though without legislative guarantees. The Institute for Fiscal Studies has warned that delivering the full slate will require an additional £68 billion over the next decade, raising questions about budget prioritization. Financial realities aside, the SDR directs £6 billion towards munitions in the current parliament and explicitly mandates the creation of at least six new ‘always-on’ munitions factories, supporting over 1,000 jobs. Meanwhile, funding is allocated to military housing upgrades (£1.5 billion) and a £400 million Defence Innovation Fund, highlighting procurement’s role as an economic engine.
SSN‑AUKUS Submarine Build‑Up
Central to the SDR is the expansion of the Royal Navy’s submarine fleet: up to 12 SSN‑AUKUS attack submarines, replacing the current seven Astute-class vessels and under development in collaboration with the US and Australia. Construction will take place at Barrow-in-Furness, with Rolls-Royce providing reactors from Raynesway, supporting plans to deliver one submarine every 18 months. These vessels are expected to deploy from the late 2030s, bolstering the UK’s Continuous At Sea Deterrent and underpinning industrial capability.
To reinforce nuclear deterrence, the review includes a £15 billion Astraea warhead replacement, a Cold War‑level commitment. The SDR also explicitly encourages UK engagement in NATO’s deterrence frameworks, including potential steps towards stationing US nuclear‑capable F‑35s. Defence stocks responded positively: shares in BAE Systems, Babcock and Rolls-Royce rose following the announcement, reflecting confidence in the procurement pipeline.
Missile Stockpiles & Factory Infrastructure
The SDR commits to acquiring 7,000 long‑range missiles and establishing a domestic “always‑on” pipeline of munitions factories, at least six new facilities to reduce reliance on imports during crises. This approach is rooted in lessons from Ukraine’s supply chain pressures and aims to fortify national resilience . The factories will support approximately 800 direct UK jobs, with downstream benefits for regional steelworks, electronics, and logistics sectors .
Digital Warfighting & Cyber Command
A key pillar of the SDR is digital modernisation. The “Digital Targeting Web”, supported by £1 billion in funding, is designed to integrate sensors, drones, and AI, delivering real‑time battlefield advantage . Plans include autonomous drone expansion and laser counter‑drone systems, with deployment due by 2027 .
Additionally, the formation of a Cyber and Electromagnetic Command caps the SDR’s digital pivot, a direct response to almost 89 cyberattacks in a year and the shifting nature of contemporary warfare.
Sources:
U.K. to Strengthen Nuclear Deterrence Under New Defense Strategy
UK must spend £68bn to modernise military, defence review suggests
