AOAV: all our reportsMilitarism examined

Potential political bias in the UK’s defence industry examined

Executive Summary
The UK’s defence spending has seen unprecedented increases under Prime Ministers Boris Johnson and Rishi Sunak, with the UK today the largest defence spender in Europe. AOAV’s analysis reveals a substantial Conservative bias in the distribution of defence sites and spending, with the benefits heavily concentrated in specific regions. As the general election approaches, the Labour Party, while supporting continued high defence expenditure, may see major gains in Conservative seats hosting major arms manufacturers.

In 2020, Prime Minister Boris Johnson announced the largest programme of investment in British defence since the Cold War, committing an additional £16.5 billion above annual increases in defence spending. This was promised to enhance the UK’s global influence, unify and level up the country, and safeguard its people and way of life against increasingly sophisticated adversaries. Continuing this, Prime Minister Rishi Sunak revealed plans to allocate 2.5% of the UK’s GDP to defence by 2030: an additional £75 billion over the next six years.

These commitments, often faced without major political opposition, have served to firm up the United Kingdom’s status as the largest defence spender in Europe. However, leading think tanks such as the Royal United Services Institue and Chatham House have expressed skepticism about the feasibility of this “dramatic” 2.5% target, suggesting it would require £87.1 billion annually for defence by 2030, a figure deemed “essentially unachievable without significant cuts to government services elsewhere.”

Despite the government’s nearly quarter-trillion-pound defence expenditure since 2020, there has been little critical analysis of the political biases in current spending practices. Understanding potential Conservative bias in regional defence spending is crucial, especially with the upcoming General Election and the possibility of a Labour government taking power. An examination of where Conservatives allocate defence funds and how Labour plans to alter these practices is vital for comprehending MOD expenditure, which remains a significant driver of the UK’s economy.

The Economic Significance of Defence
Defence spending is, the Conservative party argues, vital in supporting the United Kingdom’s domestic manufacturing sector and the broader economy.  Whilst some critics have questioned this claim, government estimates indicate that Ministry of Defence (MOD) contracts and funding supported 406,000 jobs in the UK in 2021-22, equating to one in every 70 UK employees.

Approximately £25 billion, or half of the MOD’s overall budget, is spent directly with UK industry, which amounts to £370 per person in 2023. However, the benefits of UK defence spending are not evenly distributed across the country, either geographically or politically.

For instance, in South West England, the MOD employs 97,000 people and spends over £1,000 per individual, whereas Northern Ireland sees only 3,000 employees and £100 per person.

The MOD collaborates with numerous private industrial partners in the UK, paying at least £50 million to seventy different holding companies last year. Of these companies, eight received over a half-billion in funding, including BAE Systems (£4.5 billion), Babcock (£2.4 billion), and QinetiQ (£1 billion) (see chart).

The billions of pounds annually allocated to defence contractors stimulate economic growth and provide employment in the regions where they operate. However, the process by which these companies choose their operational locations remains opaque and insufficiently scrutinized.

Regional and Partisan Bias in Existing Defence Sites
A detailed analysis of MOD-supported sites operated by the top ten domestic defence contractors in the UK reveals a significant Conservative bias in the allocation of defence locations. This analysis highlights that the economic impact of these sites is heavily concentrated in specific regions. There is no claim that this bias is, however, deliberate (i.e. the consequence of corruption).

We report on this merely to alert the fact that – at present – Conservative constituencies appear to be proportionally more likely to both harbour defence sites and to receive substantial MOD funds for defence production. There is no claim that this is the consequence of a deliberate allocation of funding based on party lines.

We found that the MOD’s top ten defence contractors have manufacturing bases across approximately 130 locations within 94 parliamentary constituencies.

Conservative MPs represent 67% of these constituencies, compared to just 16% represented by Labour. This disproportionate distribution indicates a political bias in defence spending compared to the overall parliamentary composition.

Moreover, when you examine the top 20 constituencies (with two or more arms manufactures present), 14 were held by Conservative MPs and just three by Labour. 

If you look at predicted voting data, however, those 20 seats could suffer major shifts on July 4th. The predictions suggest in a new era of Starmer, 13 could be run by Labour, and just two stay in Conservative hands.

It is small wonder the Labour chief wrote in the Mail: “With Labour, the defence industry will be hardwired into my national mission to drive economic growth across the UK.”  

What is clear is that certain constituencies currently benefit significantly from multiple defence contracting sites, accessing multiple streams of MOD income. For example, Conservative MP Jack Lopresti’s Filton and Bradley Stoke constituency hosts eight MOD sites, while the current Minister for the Armed Forces, Leo Docherty, has five defence sites in his Aldershot constituency.

The SNP’s overrepresentation in this data is largely due to the concentration of dockyards and submarine manufacturing facilities in remote areas along the Scottish coast.

Government plans to increase defence spending offer direct economic benefits to MPs with MOD sites in their constituencies. This distribution suggests that Conservative MPs and their constituents stand to gain the most from increased defence investments. Despite this, the relationship between increased defence spending and benefits for Conservative MPs has rarely been scrutinised in depth and is largely absent from public discourse on the consequences of defence spending increases.

The tendency for arms companies to operate in Conservative districts extends beyond a few MPs with a plurality of contractors in their districts. Using open-source geographic data on sites operated by the top ten defence contractors and UK Parliamentary Constituencies, AOAVs’ interactive map visualises the concentration of arms company sites in Conservative districts, particularly in the South-West and Southern Scotland. Beyond a few urban districts housing cybersecurity or satellite operations, most domestic defence manufacturing, and consequently MOD expenditure, is concentrated in Conservative-represented districts.

While defence spending may provide overall economic benefits as a domestic subsidy, it is evident that the current government has a vested interest in increasing defence spending, which disproportionately benefits the Conservative party.

With an election looming, it is crucial to examine Labour’s perspective on defence spending from both theoretical and practical angles.

Labour on Defence: Diversification and Nationalisation
Given the apparent bias in the distribution of defence sites and the Conservative Party’s aggressive increase in defence spending in recent years, one might expect the Labour Party to advocate for reduced MOD funding. However, Labour fully supports bolstering the role of the defence industry in the UK economy. In April, Keir Starmer declared his support for reaching the 2.5% GDP defence spending target by 2030.

Despite this alignment on spending targets, Labour is critical of how the Conservative government has allocated defence funds. Labour argues that the Prime Minister’s plan lacks clarity on funding sources and raises concerns about the significant cuts to civil service employment needed to meet the 2.5% target. Labour MP Kevan Jones has accused Conservative governments of cutting the defence budget by over £8 billion from 2010 to 2020, asserting that the current commitment does not fully compensate for these reductions.

Labour has stopped short of directly accusing the government of bias in defence site allocation. However, MPs like Mick Whitely (Lab) and Rob Roberts (Ind) have voiced concerns about the scarcity of MOD sites in “left-behind towns in the north and midlands,” advocating for a more balanced distribution of defence jobs and investment across the UK. David Doogan (SNP) further criticised the regional bias, highlighting that defence spending in South West England surpasses that in Scotland, Wales, and Northern Ireland combined.

Thirdly, Labour condemns the Conservative government’s tendency to import materials and defence products from international actors, particularly the United States. Mick Whitely (Lab) argues that this practice undermines British industry, resulting in lost taxes, GDP growth, and high-skilled jobs. Labour has adopted a “British Built by Default” stance on defence manufacturing, aiming to reduce MOD expenditure abroad and more robustly support domestic industry.

In recent parliamentary debates, Labour politicians have reiterated their support for robust defence spending while outlining three main grievances with the current MOD under Conservative leadership.

Labour accuses the MOD of irresponsible and unrealistic spending projections. This critique was echoed in a 2023 Defence Committee report, which described  MOD spending as “highly bureaucratic, overly stratified, far too ponderous, with an inconsistent approach to safety, very poor accountability and a culture which appears institutionally averse to individual responsibility.” Labour aims to match Conservative defence spending but seeks to improve the efficiency and accountability of the MOD and its contractors.

Labour also criticises the government’s focus on high-tech, future-focused defence projects at the expense of supply chain stability and industrial capacity. John Spellar (Lab) highlighted that prioritising platforms and cybersecurity over munitions and accommodations has led to a shortage of industrial capacity, skilled personnel, and production facilities. Labour advocates for expanding low-tech defence manufacturing across the UK to bolster the country’s industrial base and potentially increase MOD sites in Labour constituencies.

Should Labour win the upcoming election, defence spending in the UK is unlikely to decrease.

Rather, the focus of that spending is expected to shift. Labour plans to expand investment in UK defence manufacturing and aims to distribute new manufacturing sites more equitably across the Union, addressing regional disparities and fostering economic growth.

Regardless of the outcome of the General Election, defence spending increases seem an inevitable consequence of perceived global instability and the general consensus around the UK’s military might. Labour is unlikely to back down from its promises to increase spending, not least because voters themselves are largely in support of high defence expenditure. It is clear that this framing is relatively impervious to criticism and few MPs are willing to argue – like Jeremey Corbyn – for a light touch approach to defence issues. 

A recent report by polling firm Redfield and Wilson indicated that a majority of voters in both parties support a high level of defence expenditure, and even found that the average voter trusted the Labour Party more than the Conservatives on defence and national security. 

For the foreseeable future, then, defence will remain a major priority issue on each side of the political aisle. It is not surprising that Labour has refrained from levying formal accusations of political bias in defence contract issuance against the incumbent government, but it also seems clear that over a decade of Conservative control has resulted in a numerical imbalance of defence sites and spending.

The result of this inequity, however, has not resulted in Conservative pro-defence rhetoric juxtaposed with a dove-like Labour party- instead, it seems that Labour is enthusiastic about defence not only because of the popular support it provides but also the perceived untapped economic benefits of military-industrial investment distributed across a wider area of the United Kingdom’s economy. 

Whether this promise translates into real life prosperity is one thing. Whether a UK economy pivoted to arms production is a noble and ethical thing is another matter altogether.