Shifting sands lead to acceptance of defence sector - it's time to embrace it

For decades, in Europe and countries such as Canada and Australia, defence has been shunned, regarded by much of the population and the investment community as something to be avoided. Its proponents were harbingers of death and destruction, on the wrong side of politics and, more recently, the ESG (Environmental, Social and Governance) divide. That has shifted dramatically. Defence manufacturers now top the stock market performance charts, enjoying a surge in popularity. Even so, for many the sector bears a residual taste. In the UK, those who sneer and shun point at Keir Starmer . There he is, the Labour Prime Minister, a former human rights lawyer, someone arguably to the left of Tony Blair, undoubtedly a person of conscience and principle. He’s been elected on a ticket to correct, as his supporters see it, the wrongs of Tory rule. That entails heavy spending on state health, education, social care and welfare. There’s no extra money to be had, so the emphasis is on cutting costs and taxing those who can best afford to pay. That drags a lagging economy, so a switch is made to growth. Suddenly, it’s all about investing and construction . Then, Donald Trump lands and the US reorders its foreign policy. European leaders are told America will no longer write a blank cheque for their nations’ protection, they must step up and the fighting in Ukraine must also end. Starmer responds by saying defence is the "number one priority of this government". He said it, he really did. There can be no greater validation. Add to that, the uncertainty and fear that is gripping the world and the head-in-the-sand approach is no longer an option. Not only that, Britain and its neighbours have let their military capacity dwindle. It requires boosting, and fast. In the UK, Starmer is scrambling around for the cash. So far, it’s to be collected from those areas of public finances that had been met with the glowing approval of those who scorned defence, from aid and development. This is public affirmation writ large. Domestically, defence companies tick the economic boxes – they provide jobs and training, their workers are highly skilled in all manner of disciplines, they’re heavily tech-based, their supply chains are long, extending to the smallest local and regional SMEs. Often, they’re in places blighted by post-industrial decline. This is an opportunity to rebuild, to help restore the lost industrial base. For those who still harbour misgivings, the new justification is drawn from the Roman writer Vegetius Renatus: "Si vis pacem, para bellum." If you want peace, prepare for war. Elsewhere in the world, they’ve long obeyed that maxim. Thanks to Trump’s forced realigning, Europe and those other places are now engaged in a hasty catch-up. It’s easier said than done and money is not the only problem. As military spending has been allowed to decline, so too has the accompanying infrastructure. Procurement is a slow, cumbersome process full of delays. Complaints when the equipment eventually arrives that it is not fit for purpose are commonplace. Britain has two new aircraft carriers, HMS Prince of Wales and HMS Queen Elizabeth II. Their deployment has proved to be one enormous headache, necessitating long periods in the maintenance dock when they should be out on the high seas, leading the naval fleet. They each cost £3.5 billion ($4.45 billion) to build, but so bad have been the technical problems there was increasing speculation they could be mothballed or sold to a friendly nation at a knockdown price. That’s vanished, and the push now is to get them up and battle ready. Likewise, one of the army’s pillar contracts was for the Ajax ‘mini tank’, built by General Dynamics in Wales. The vehicles were intended to enter service in 2017 but have only just arrived, eight years late, the result of a "litany of failures", according to the Commons Public Accounts Committee, including noise and vibration issues that injured the soldiers testing them. For the air force, the Eurofighter Typhoon is overdue for being replaced. It’s meant to be the Tempest, to be built by BAE, Leonardo and Rolls-Royce. The buyers lined up are Britain, Sweden, Italy and Japan. It’s so many years from fruition that the order has gone out for production of the Typhoon to be scaled up. Examples abound of similar protracted contracts and faults, so much so that some analysts claim the increased UK spending on defence of £6 billion will be absorbed entirely in getting orders and deliveries up to speed, not on adding to capability. Overall, there is another concern, which is that Britain and its allies have tended to focus their efforts on expensive kit, designed for what was perceived as the new, modern warfare. Ukraine has blown a hole in that approach, showing that boots on the ground really do matter, and with them come drones and artillery. What that means is that governments not only need to spend on hardware, they must also recruit and raise troop numbers. But funding is in short supply and again, the accompanying infrastructure is not there. In some nations, including Britain, there is even talk of introducing conscription for 18 year olds. While that would be anathema to many, it is seen as having the added merit of helping resolve social issues of youth unemployment, lack of skills and crime. Again, it is hugely expensive. It would, too, represent an enormous leap, necessitating societal change. The fact it is being aired, though, indicates just how much minds have been sharpened. In his inimitable fashion, Trump has upended what had become accepted orthodoxy.

Shifting sands lead to acceptance of defence sector - it's time to embrace it

Defence stocks may be booming as European countries increase financial support for Ukraine, but their chequered track record means speed bumps should be expected