Britain’s defence revival starts with Rachel Reeves: Will she back British industry or waste the moment?

The Chancellor can either scatter a myriad of short-term fixes, which will without doubt have negative effects on some area of the populace — or turn Back British Industry into a mission that ties security to prosperity.

After years of flatlining productivity and shrinking manufacturing, Britain needs a growth plan rooted in making things again. And there is one sector that can do it faster than any other: defence.

Defence isn’t just about security; it’s about sovereignty, skills and self-reliance. It already accounts for roughly 2.3 per cent of GDP—some £66 billion a year —yet the Ministry of Defence’s own statistics show that 16% of its industry expenditure went overseas in the last year.

Every contract awarded abroad is a missed opportunity to train a British engineer, hire a British welder, or support a British apprentice. We are literally exporting our own potential.

Moreover, the pillars of national resilience - our energy systems, communications networks and data infrastructure - are indispensable to defence, national security and the wider economy.

That is why defence must be understood as a whole-of-nation endeavour, a point the Chief of the Defence Staff made unmistakably clear last week.

The challenge is not just how much we spend but how we spend it. Too often bureaucracy and risk-aversion turn defence procurement into a waiting game, which costs both time and money. Our allies and adversaries are innovating at digital speed, while we’re still tied up in paperwork.

The result? Brilliant ideas dying in “valleys of death” when “computer says no,” and throwing public money down the drain as we do it.

Across the Atlantic, Hegseth—speaking to US defence-industry leaders this month—laid out a blueprint Britain should heed. He attacked “an absence of urgency” and a “fundamental lack of trust” in traditional defence-contracting mechanisms and pledged sweeping reforms to speed delivery, empower acquisition executives with performance incentives and embed export-ready manufacturing into the supply chain - focus on speed rather than a culture of compliance shaped by outdated, risk-averse policy.

Hegseth’s message is simple: speed over perfection, competition over monopoly.

His reforms call for streamlining approvals for allied sales, breaking down barriers for start-ups and remodelling the supplier ecosystem so that innovation can rapidly flow from lab to factory—not stall in procurement purgatory.

Britain can learn from that. Platforms such as Tiberius Aerospace’s GRAIL are already showing the way—bringing Silicon Valley agility to the heart of defence manufacturing.

GRAIL uses live data to measure performance per pound, vet suppliers and open competition down to the component level. It gets capability built faster, keeps production on British soil and gives taxpayers better value, while providing transparency end to end.

Likewise, Cambridge Aerospace is proving that cutting-edge air-defence systems can be designed, tested and produced right here in the UK.

These firms don’t need hand-outs—they need a fair shot. If the government is serious about “Backing British Industry,” it should give preference to companies that manufacture here, employ here and innovate here.

Defence is one of Britain’s great engines of skilled work— it already sustains over 200,000 jobs directly and indirectly across shipyards, composites labs and advanced-engineering hubs. With the right procurement reforms and industrial incentives, that number could easily double.

From Barrow to Belfast, Coventry to Cowes, the defence supply chain can be the backbone of a new era of British productivity.

Hegseth’s reforms are worth borrowing because they recognise that we are not building for leisurely peacetime tendencies—we’re facing an industrial and strategic race. In the UK, we must treat defence procurement as an industrial strategy: buy British, build British, export British.

The United States has understood this for decades—spinning out GPS, the internet and drones from its defence ecosystem into trillion-dollar civilian industries.

Britain can do the same if it stops treating defence as a cost centre and starts treating it as a national accelerator for innovation, technology and jobs.

This is not about militarising the economy. It’s about mobilising it—using the same mindset that helped Britain lead the Industrial Revolution to lead again in the age of autonomy, AI and advanced materials.

Every ship built, every missile tested, every drone assembled on British soil is an investment in our national confidence as much as our defence. We should heed Mariana Mazzucato’s call for a mission-focused economy, in which governments set bold, inspiring missions to tackle large-scale societal challenges.

In an era of geopolitical turmoil and persistent “grey zone” attacks on UK businesses and territory, making resilience and defence the core of such a mission-led economy is no longer a choice – it is our last viable option.

“Back British Industry” must therefore become more than a slogan. It must be a mission—to keep British ingenuity, British production and British pride working together.

The tools are ready; the companies exist; the workforce is waiting. What’s needed is the will to spend smarter, move faster and build at home.

Because a nation that can defend itself can also renew itself. If we want to get Britain working again, we should start by building the tools that keep her safe.

To paraphrase Princess Leia - Help us Rachel Reeves - you’re our only hope.

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Blythe Crawford CBE is the former RAF Commandant of the Air and Space Warfare Centre, driving radical transformation of capability development in support of Ukraine.

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