Wars can be useful to governments, and the horrendous conflict in Ukraine is so proving.
In his announcement of increases in U.K. military spending, Prime Minister Keir Starmer strongly referenced Ukraine and the threat from Russia and said the new “investment” will “create a secure and stable environment in which businesses can thrive, supporting the Government’s number one mission to deliver economic growth.”
He added: “The increased spending will sustain our globally competitive industry, supporting highly skilled jobs and apprenticeships across the whole of the U.K.”
Starmer sees the increase in funds to the military as part of Labour’s Plan for Change, its overarching economic growth strategy for Britain.
A few weeks ago, Foreign Secretary David Lammy echoed his prime minister in comments to an audience of arms firms about the extraordinary 100-year partnership between the U.K. and Ukraine. He said the new accord, which was signed in January, is “a platform for the U.K. defence industry” to extend military equipment to Ukraine.
Lammy added: “The U.K.’s defence industry is key to our growth and security by creating jobs, driving forward innovation and collaborating internationally.”
Britain’s supply of billions worth of military equipment to Ukraine is openly seen by the government as both boosting the fortunes of U.K. arms firms and promoting Labour’s whole economic growth strategy.
Giant U.K. arms firms like BAE Systems, Babcock and Thales U.K. will all likely benefit from increased military spending. They are already benefiting from new procurement contracts from the Ministry of Defence (MoD) as the U.K. gifts its current stocks of military equipment to Ukraine.
Much of U.K. military aid to Ukraine — which amounts to £4.5 billion this year — is really a subsidy to these arms firms.
Militarisation
Lammy viewing an air defence truck and kit used by mobile support teams on Feb. 5, 2025, during his trip to Kiev. (Ben Dance / Flickr/ FCDO/CC BY 2.0)
The government has made no secret of the fact that it wants to “make the defence sector an engine for U.K. growth.”
Defence Minister Luke Pollard says that supplying Ukraine with weapons helps with “bolstering our own defence industrial base — creating jobs and driving investment.”
“By deepening our ties with Ukraine’s defence industry, we are expanding [our] own industrial capacity,” observes Major General Anna-Lee Reilly, who coordinates the MoD’s military support to Ukraine. She adds that U.K.-Ukraine military collaboration is about “opening up opportunities for the U.K. defence industry.”
The government can be given full marks for transparency. Its new Defence Industrial Strategy, announced last December, openly seeks to increase U.K. arms exports and arms industry jobs “in every nation and region of the U.K.” whilst prioritising British arms firms for government investment.
Ukraine is central to this thinking. The government’s policy paper on the new strategy states: “Ukraine remains front of mind as this Government develops our new approach to its Defence Industrial Strategy: at this critical moment in the war, we must step up our efforts to supply military support and stand with Ukraine for as long as it takes.”
Ukraine already uses 17 different types of weapons and equipment made by BAE Systems, the U.K.’s largest arms company, such as Challenger tanks, armoured vehicles and ammunition.
Not only the war but the peace, when it eventually comes, will also be profitable. This year, Ukraine plans to spend a record $35 billion on arms production, with the U.K. financing the production of equipment such as air defence systems and long-range weapons in Ukraine.
Military Aid
Muzzle-view of the Challenger 2 main battle tank. (Ross Fernie /Defence Imagery, Wikimedia Commons, OGL v1.0)
The U.K. has already provided nearly £8 billion in military support to Ukraine since Russia’s invasion in 2022, with around 400 different capabilities sent to the country. This includes thousands of missiles and drones, over 10m rounds of ammunition, 14 tanks, as well as artillery guns, combat vehicles and naval vessels.
The £3 billion a year the government has pledged in military aid to Ukraine is additional to the MoD’s main budget and comes from the Treasury Reserve.
Equipment from the U.K. is either donated from existing U.K. defence stocks, purchased from British arms firms or else purchased from the surplus stocks of foreign governments.
This acquisition is either funded directly or coordinated through mechanisms such as the International Fund for Ukraine, of which the U.K. is also the administrator.
In addition, the U.K. is providing a £2.26 billion loan to Ukraine to enable it to “invest in key equipment, including British equipment,” the government says.
It’s no surprise that Ukraine has become a new, major market for British arms exports. In the 10 years up to Russia’s invasion in 2022, U.K. firms sold only around £35 million of military equipment. In the three years since the invasion, 2022-24, exports skyrocketed to £1.1 billion.
Replenishing Stocks
Zelensky, left, and Starmer, right, watching Ukraine Defence Minister Rustem Umerov and U.K. Defence Secretary John Healey sign the Defence Export Support Treaty in London in July 2024 (10 Downing Street/Flickr/ Lauren Hurley/CC BY-NC-ND 2.0)
One way the procurement system for Ukraine benefits arms companies is when the MoD replenishes British military stocks after gifting the same equipment to Ukraine.
In fact, the National Audit Office (NAO) estimates that the MoD will spend £2.7 billion on replacing equipment donated to Ukraine from U.K. stockpiles in the first two years of the war alone. The NAO further says that the MoD spent £2.4 billion on procuring equipment for Ukraine in 715 contracts, over the same period.
So desperate has the MoD been to get equipment to Ukraine rapidly that it has often given awards to arms firms through “non-competitive procurements with reduced oversight requirements,” the NAO says.
The U.K. has gifted hundreds of “lightweight multirole missiles” (LMMs) to Ukraine, which can be used against drones, helicopters or naval vessels. To replenish the U.K.’s own stocks, various contracts have been awarded to arms firm, Thales UK, which assembles the missiles at its factory in Belfast.
In July 2024, when the MoD announced an order for LMMs worth £176 million, Defence Procurement Minister Maria Eagle said “this contract is … a great example of how defence investment can support economic growth and sustain jobs in the U.K. for years to come.”
Last September Defence Secretary John Healey announced a further award benefitting Thales — a contract worth £162 million to supply Ukraine with 650 LMMs. The MoD said categorically: “This contract with Thales in the U.K. will further prime the world leading British defence industry to increase production rates, enabling future production to be ramped up.”
Thales has also received new orders from the MoD to supply Starstreak high velocity missiles and anti-tank weapons after that equipment has been gifted to Ukraine.
A Royal Marine, on right, carrying the Starstreak MANPAD Anti Air Missile during training at the U.S. Marine training center in Twentynine Palms, California, 2021. (Ministry of Defence/Flickr/Wikimedia Commons/OGL v1.0)
These contracts are especially noteworthy in that Thales is currently being investigated by the Serious Fraud Office for suspected bribery and corruption. The probe is reportedly over suspicions of corruption linked to arms sales abroad. Thales denies the allegations.
After the MoD gifts military equipment to Ukraine, it often awards repair and maintenance contracts to U.K. firms for the same weapons.
Earlier this month arms firm Babcock — another prominent MoD contractor —was awarded a multi-million pound contract to train Ukrainian personnel to maintain and repair military equipment including Challenger 2 tanks donated by Britain.
The supply of drones is another benefit to U.K. industry, highlighted by Britain being the largest provider of military drones to Ukraine.
When Rishi Sunak’s Conservative government announced a £200 million package of military support to Ukraine in February 2024 it stated that “the majority of this £200 million will be spent on U.K. domestic drone and component manufacturing and software development.
When Labour took office, the U.K. committed to supplying over £300 million of advanced drones to Ukraine. In July 2024 the MoD said that the international drone coalition — which is co-led by the U.K. and Latvia — “has rapidly deployed thousands of drones to support Ukraine whilst also boosting the U.K. defence industry.”
New Offices in Ukraine
The generous funding of arms corporations by the government, and ultimately the British public, is enabling them to set up new offices and ventures in Ukraine to deepen military collaboration in the future.
“It was British defence companies that were the first to open their offices here after the start of the great war,” Alexander Kamyshin, Ukraine’s minister of strategic industries, has said.
BAE opened a site in Ukraine in August 2023 to produce L119 field guns, and to build “a strong and sustainable technological defense-industrial complex,” the corporation’s chief, Charles Woodburn, announced while meeting President Volodymyr Zelensky.
Zelensky meeting with BAE Systems CEO Charles Woodburn in 2023 in Kiev after the U.K. company decided to open an office in Ukraine. (The Presidential Office of Ukraine,CC BY-NC-ND 4.0)
A few months later, the U.K.’s MoD announced a contract for BAE to maintain and repair the L119 guns the U.K. military had gifted to Ukraine.
BAE is also opening a new artillery factory in the U.K. to produce howitzers for Ukraine, with production expected to begin this year. This effectively reverses the company’s earlier decision to scale down artillery production in the U.K.
In addition, BAE was given a £190 million contract in 2023 to produce 155mm artillery shells for the British army after the U.K. had gifted millions of rounds of ammunition to Ukraine.
This “will significantly increase BAE Systems’ production capacity, delivering an eight-fold increase and secure increased sovereign capacity for ammunition for years to come,” an MoD official said.
Similarly, Babcock established an office in Ukraine in October 2023 and announced in May 2024 it was setting up an in-country engineering facility to repair and overhaul Ukraine’s military vehicles. The company is also training Ukraine’s air force pilots.
100 Years of Arms Exports
The 100-year partnership agreement between London and Kyiv has in its Article 1 a focus on strengthening “military and defence industrial capabilities, including force development and collaboration between their defence industrial bases.”
Its declaration calls for “developing advanced weapons and ammunition manufacturing capabilities,” deepening “cooperation on long-range strike capabilities, integrated air and missile defence and complex weapons stockpiles.” There is also mention of “joint arms exports to foreign markets.”
Zelensky personally met senior U.K. military figures and representatives of BAE, Thales U.K., Babcock and other British arms firms on a visit to London in July 2024. The U.K. has conducted no less than five military trade missions to Kyiv since 2023.
The first of those missions, in December 2023, resulted in new agreements with Babcock, BAE and Thales. Mark Goldsack, the U.K.’s director of defence and security exports said: “With agreements already signed with our defence industry, the work will help boost resilience for both our industrial bases for years to come.”
Goldsack is not joking. The U.K. has created a new market for its military industry and is apparently seeking to exploit it for the next hundred years.
Main photo: U.K. Prime Minister Keir Starmer giving his Plan for Change Speech in May 2024 © Kirsty O’Connor / No 10 Downing Street / Flickr, CC BY-NC-ND 2.0.
Source: Consortium News.
