The Strategic Defence Review is billed as a 10-year stock of UK defence and strategic priorities and is read enthusiastically by contractors for tips on government spending planning.
This SDR was called by the Prime Minister when Prime Minister Kiel took office last July and was taken over in the shadow of the Ukrainian War.
This, released on Monday, highlights a shift towards “combat readiness” in response to the growing threat from “peer” enemies such as Russia and China.
What does SDR have?
While sectors such as cyber conflict and RAF are receiving investment, the Royal Navy stands out as a major winner.
The service will expand the fleet of nuclear-powered attack submarines from 7 to 12, and by the late 2030s, it will work with Orcus Allies and Australia to expand up to 12 new attack subs.
This alone accounts for almost half of the projection expenditure on weapon systems outlined in SDR.
However, the Navy’s focus will shift from expeditions, one of which boasts expeditions (one of which is two aircraft) designed to fight distant wars with low-tech enemies to services that are more focused on home defense.
Just like during the Cold War, the naval focus will protect the North Atlantic from invasion by Russian submarines under a plan known as the “Atlantic Fort.”
What about regular troops?
According to SDR, the Army’s target size remains the same. The current figure is around 71,000, and the SDR recommends a slight increase in personnel “if funds are permitted.”
Instead of a dramatic increase in military numbers, SDR recommends using technology, drones and software to “fatality 10 times higher.”
The UK must be a major technically-compatible defensive force with the “integrated power” to stop, fight and win through constant wartime innovation.
To do this, the mod will offer a “digital targeting web” especially £1 billion. It is artificial intelligence driven software designed to hoover battlefield data and use it to enable better and faster decisions.
What does SDR have?
Although Donald Trump was not mentioned in the name of the document, he was dealing with the global unpredictability caused by the US president diplomatically.
“The state is trying to restructure rules based on the international order that has dominated international relations since World War II,” he said. “A clear change in US strategic priorities highlights how urgent and different management of current strategic competition is.”
The new plan to arm the aircraft with tactical nuclear weapons introduced over the weekend was not mentioned in the SDR, but Defense Secretary John Healy told Sky News it was an “optional.”
This review recommended that “start discussions with the US and NATO on the potential benefits and feasibility of strengthening UK participation in NATO’s nuclear missions.”
What does it mean for the industry?
The review also promises new partnerships with the industry, including a “radical route and branch review” of procurement. New investments in new technologies and advanced manufacturing will help ensure that defence investments provide “both fighter jets and the economy.”
Details will be provided in the upcoming defense industry strategy, which is expected in the coming weeks, but UK defense companies could become one of the biggest corporate awardees from the extra spending pledged from priorities.
Lockheed Martin, the US, who manufactures the F-35 fighter jet, could also benefit from the UK following the purchase of more aircraft.
Defense technology players such as Helsing in Europe and Andrill in America want to ensure work on new programs focusing on new autonomous systems, including drones.
How did investors react?
Shares of contractors involved in building and maintaining the UK’s submarine fleet jumped on Monday after the government announced plans to expand it and expand the country’s nuclear deterrent.
The BAE system, which builds Royal Navy submarines, including a sharp class of nuclear-powered attack ships, has already invested heavily in expanding its convoy yards in the northwest of England.
The FTSE 100 Group, which produces around 80% of British military munitions, should benefit from the pledge to build six new ammunition factories around the UK.
Other companies involved in the submarine supply chain, including Rolls-Royce and Babcock International, are also in line with more work. Rolls-Royce, the FTSE 100 engineering group, has built a reactor supplying British submarines, while Babcock maintains and serves all the boats in the UK. Babcock’s shares on Monday rose more than 7% to an eight-year high.
Qinetiq, part of an industry team that also includes missile champion MBDA and Italian Leonardo, will also benefit from developing new cutting-edge laser weapons for the Ministry of Defense.
The pledge to invest more in long-range weapons should also benefit MBDAs owned by BAE, Leonardo and Airbus.
What does it mean in the long term?
Perhaps a 10-year review, but the fate of past SDRs suggests that its shelf life could be more limited.
The final SDR was released just four years ago in 2021, and in line with the strategic priorities of the time, it recommended a “strategic pivot into the Indo-Pacific region to counter and deepen China’s influence with allies such as Australia, India and Japan.”
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This SDR, carried out in the shadow of a full-scale invasion of Russia’s Ukraine, does not underscore the global scope of this type. While calling China a “permanent challenge,” the instead solid focus is Russia, which is a “immediate and immediate threat.” On the other hand, the focus is on the North Atlantic, not the Pacific Ocean.
“We previously reviewed Lionise’s UK industry, but failed to take the next step and did not invest,” said Clive Higgins, CEO of Leonardo in the UK.
“Defense Investment Plans must be properly funded to achieve the “wartime pace innovation” required for strategy. We must look at more agile and partnership-based sourcing, leveraging the UK’s market power for the benefit of our own land industry. ”
