(1 day, 6 hours ago)
Commons ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
Chris Coghlan (Dorking and Horley) (LD)
Thank you for calling me to speak, Madam Deputy Speaker. I also thank the Minister for his time today—he has a very distinguished record of military service.
My grandfather, Austin Coghlan, was told that he was too old to serve in the war, so he lied about his age and joined the Navy. On one convoy, he sailed into Havana, met a girl in naval intelligence and, after seven days, married her. He moved fast with Grandma, because he knew he was a lucky man.
But he also did not expect to survive. That he did was in many ways due to the codebreakers of Bletchley Park, who diverted convoys away from U-boats. In the process, the codebreakers invented the world’s first computer, Colossus, which went on to power the economic development of the post-war world. The spillover effect from publicly developed military technology to private sector civilian use is one of the most powerful forces for economic growth. We can use it now.
I commend the Government’s decision in the Budget to borrow, jointly with our allies, and invest £5 billion in dual-use military technology. It is a great start. We now need the confidence to scale it, knowing that even with extra borrowing, the debt-to-GDP ratio will fall as a result of higher growth. The London Business School’s Paolo Surico has shown that innovations that are funded by the Government, but taken forward by the private sector, develop productivity and economic growth that is eight times larger than for innovations funded by the private sector alone. Just look at how innovations in military train technology have led to disruptions in civilian industries, from 3D land mapping and crop monitoring to rapid cost-effective manufacturing. UK Government support for nuclear submarine technology has led Rolls-Royce to develop small modular nuclear reactors for civilian use.
I would like to know whether the Government are open to scaling their £5 billion initial investment. With annual £2 billion increments over 10 years, academic research suggests that, along with improvements in AI, we could choose to double our annual growth, to fulfil our NATO defence spending commitments and, together with our allies, to secure liberal democracy.
British politicians in the 1930s were labelled guilty men because they failed to prioritise defence over the deficit. My grandfather’s generation paid the price. As a reservist, an infantry officer and an MP, I want to ensure that our generation does not.
The Minister for Veterans and People (Mr Calvin Bailey)
I thank the hon. and gallant Member for Dorking and Horley (Chris Coghlan) for securing this debate and for his continued interest in the role that research and development can play in strengthening our national security and economy. He spoke passionately about his grandparents, about the impact of technology during the war and about the innovations that brought about the victories that ensured our democratic freedoms in the nation we both grew up in. It was a powerful testament to his commitment to democracy. I will share with the hon. Member how highly the Department spoke of him and his work in the run-up to this Bill debate. As a member of the Treasury Committee and a steadfast advocate for innovation-led growth, he has made a valuable contribution to this discussion.
This debate comes at a particularly important moment. The world is becoming more contested, more technologically competitive and more uncertain. Emerging technologies, from artificial technologies and quantum computing to advanced cyber capabilities and autonomous systems, are transforming the character of warfare and the nature of economic competition. In this environment defence research and development is not a luxury; it is a necessity. It is how we maintain operational advantage and keep our armed forces ready to face the challenges of the future. More than military capability, it is a catalyst for economic growth, industrial resilience and technological leadership.
Innovation must sit at the heart of our national security strategy and our growth agenda. In the 2025 strategic defence review, we set ourselves the goal of the UK becoming a technologically enabled defence power innovating in priority areas, including AI, cyber, space and quantum at a wartime pace. Building on that, the defence industrial strategy recognised that investing in our innovation ecosystem is not simply a security imperative, but a significant opportunity to create jobs, as the hon. Member made very clear. It is central to growing businesses and strengthening our regional economies. Most recently, the defence investment plan provided a clear direction of travel for defence spending. It sent a signal to industry, investors and research institutions about the technologies and capabilities that we intend to prioritise. The plan marks a shift towards readiness and resilience at scale. It combines high-cost and low-cost equipment and integrated networks that make the most of crewed and uncrewed platforms.
That commitment must be backed by investment. In answer to the question about whether we are scaling productivity, the Ministry of Defence’s research and development budget will exceed £2 billion in 2026-27 and will rise in each subsequent year. Defence R&D expenditure reached approximately £3.1 billion in 2024-25, representing a significant real-terms increase on the previous year.
Chris Coghlan
I would be grateful if the Minister could comment, as far as he is able, on the extent to which we are integrating R&D with Ukraine.
Mr Bailey
Perhaps I will come on to that point shortly.
Small innovative firms are the bedrock of UK innovation. They are also the bedrock of our commitment and delivery in Ukraine. Ensuring that they have every opportunity to access defence opportunities is a priority for this Government. That is why, as part of the root-and-branch modernisation of the Ministry of Defence, we are establishing UK Defence Innovation, a new team with a ringfenced annual budget of at least £400 million and planned investment of £1.6 billion by 2030. UKDI is helping up-and-coming enterprises to develop new technologies and move them more rapidly into service, maximising the military and economic impact of that investment.
UKDI is part of our new National Armaments Innovation organisation, which unites our development accelerator with the Defence Science and Technology Laboratory, under the leadership and co-ordination of a three-star director general. DSTL continues to play a vital role in defence research, working with industry and academic partners to look beyond the immediate horizon at threats and opportunities from emerging areas, such as quantum, engineering, biology and future computing. Alongside that, we are bolstering the links between Government, industry and academia. The Defence Universities Alliance is bringing together universities and defence to accelerate research, develop skills and increase the commercialisation of new technologies.
At the heart of this agenda are people. We have committed £182 million to defence skills initiatives, supporting education, training and workforce development throughout the country. This investment will help improve science, technology, engineering and mathematics participation, increase capacity in the education system, and ensure that people have the skills they need to succeed in the defence sector. We are investing in defence technical excellence colleges and supporting hundreds of doctoral researchers working on technologies that are vital to the country’s future prosperity and security. We are securing the highly specialised workforce needed to develop and support future nuclear submarine and deterrent programmes, with £290 million committed to developing nuclear skills that support recruitment and training across the defence nuclear enterprise.
I am surprised not to hear an intervention from my hon. Friend the Member for Barrow and Furness (Michelle Scrogham).
The sector supports around 440,000 jobs and more than 24,000 apprenticeships across the UK. We are creating even more highly skilled, highly valued defence innovation employment opportunities, which will benefit communities for decades to come. Those are not confined to London or the south-east; they can be found in cities, towns and communities across every region and nation of the United Kingdom. We have launched defence growth deals, backed by £250 million, in Plymouth, Yorkshire, Scotland, Wales and Northern Ireland. These partnerships are designed to attract further investment, strengthen local industrial capability, support innovation and create long-term economic growth. By aligning defence investment with regional strengths, we are helping to ensure that the benefits of defence spending are shared across the whole country.
Strengthening British exports is key. From day one, we have been clear that this Government view defence through an international lens. The UK has been one of the world’s leading defence exporters over the past decade, with defence exports worth £14.5 billion in 2023, and defence R&D has played an important role in securing that position. Continued investment in research and innovation, and our role in transformational programmes such as AUKUS and the global combat air programme, ensures that British companies remain internationally competitive.
Chris Coghlan
On the international point, does the Minister agree that borrowing jointly with allies is a great way of not only reducing our credit risk in borrowing for investment in defence R&D, but building our relationships and the middle power alliance?
Mr Bailey
I could not agree more with the hon. Gentleman. I was grateful to see the commitment that the Chancellor made to the multilateral defence mechanism and the efforts that we are making with partners, particularly Finland and other peer nations, to scale money and bring in private capital. I look forward to hearing your comments and views on the defence finance strategy.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Minister, no “you” and “yours”, because you are speaking through the Chair. Please try to rephrase that.
Mr Bailey
Thank you, Madam Deputy Speaker—of course, I was referring to your views on the defence finance strategy, which I will take back to the Minister for Defence Readiness and Industry. That strategy will arrive in December, and will be a staple part of making sure that we can deliver the defence investment plan and the strategic defence review.
Of course, we recognise that defence R&D is not a silver bullet for the economic challenges facing the UK. It must form part of the broader strategy, encompassing greater oversight and fiscal responsibility. New funding for infrastructure and a fresh perspective on private wealth funds and venture capital is essential, as the hon. Member for Dorking and Horley made clear. However, innovation investment can provide a golden opportunity to advance two fundamental national objectives—I think these are the points that the hon. Member was making—by strengthening both our security and our growing economy.
I will leave hon. Members with an example to illustrate that point. The UK’s DragonFire laser weapon programme did not emerge overnight. It is a product of more than two decades of investment in advanced weapon science and technology led by our scientists at DSTL and delivered in partnership with MBDA, QinetiQ and Leonardo. That long-term commitment and partnership has produced a world-leading directed-energy weapon—one capable of downing drones at a cost of £10 per shot, compared with the hundreds of thousands and, in some cases, millions of pounds that conventional air defence systems cost.
The programme is backed by a £316 million contract to accelerate delivery of the capability to the Royal Navy and is sustaining about 560 skilled jobs and 30 apprenticeships across the UK, from Scotland to the south-west. DragonFire demonstrates the hon. Member’s point. It demonstrates why defence R&D matters. A sustained investment in science creates the knowledge, skills and industrial capacity that allows the UK to develop transformational military capabilities. It grows new sectors, supports high-value employment and strengthens our sovereign technological base.
DragonFire is a powerful example of how investment in defence research and development can deliver military advantage and economic growth for decades. It supports British scientists, engineers and innovators. It creates highly skilled jobs, drives productivity and strengthens regional economies. It attracts private investment and helps secure the UK’s place as a leading technological nation in an increasingly competitive world, and it ensures that our armed forces have the capabilities they need to meet the threats of today and tomorrow.
The Government recognise the critical importance of making the UK a technologically enabled defence power and ensuring that the economic benefits of innovation are felt in every postcode. Once again, I thank the hon. Member for securing this debate and commend the House’s continued interest in this important subject.
Question put and agreed to.