WELSH defence and aerospace firms could be in line for a share of billions of pounds in new military spending after the UK Government published its long-delayed Defence Investment Plan.
The plan, announced on Tuesday, sets out how the Ministry of Defence will spend £298bn over the next four years, including £15bn of additional funding on top of last year’s Spending Review.
Prime Minister Sir Keir Starmer said the investment would transform the Armed Forces, strengthen national security and support more than half a million defence-related jobs across the UK by the end of the decade.
For Wales, the key question is whether the new money will translate into real contracts, skilled jobs and apprenticeships for Welsh companies, or whether the bulk of the spending will be concentrated elsewhere in the UK.
The UK Government says the Defence Investment Plan will boost Wales’s role as a site for the testing and development of autonomous technology and uncrewed aerial systems by industry and the military.
It will also fund the £50m Defence Growth Deal for Wales, announced earlier this year, which ministers say will help Welsh businesses gain direct access to defence contracts, support SMEs to grow and create a more level playing field with major defence companies.
The plan places drones, artificial intelligence, autonomous weapons and faster battlefield technology at the centre of future military investment.
More than £5bn will be spent over the next four years on what the Ministry of Defence calls a “drone transformation” for the Armed Forces.
That includes £650m for inexpensive expendable autonomous systems, including drones and uncrewed ground vehicles, to increase the lethality of the Army, Commando Force and Special Forces.
The plan also includes nearly £2bn for a new Digital Targeting Web, designed to connect the Armed Forces more effectively and allow faster decisions on the battlefield, supported by AI and software.
A further £790m will be spent on protecting the UK and overseas bases from air, drone and missile threats, including new radars, sensors, directed energy weapons and expanded counter-drone systems.
The Government has also committed £11bn to munitions and weapons, including long-range strike weapons, low-cost cruise missiles and one-way effectors. Ministers say at least six new energetics factories will be built by 2030 to increase the UK’s capacity to produce munitions.
Those commitments matter for Wales because the country already has a significant defence and aerospace industry.
The UK Government says almost 4,000 people in Wales are currently employed through MOD industry spending, with more than £1bn already spent with the Welsh defence industry.
Major suppliers with established locations across Wales include General Dynamics in Caerphilly and Merthyr Tydfil, Airbus in Broughton and Newport, Thales UK in Ebbw Vale, QinetiQ in Aberporth and BAE Systems in Glascoed.
Wales is also home to a wider supply chain of engineering, electronics, software, cyber security, manufacturing and research firms that could benefit from the move towards drones, AI and autonomous warfare.
The Defence Investment Plan now becomes the first major test of whether previous promises to grow Wales’s defence sector are backed by procurement decisions.
The £50m Wales Defence Growth Deal, launched in February, was designed to make Wales a UK base for next-generation autonomous technology.
It was presented as a way to support high-skilled roles, strengthen Wales’s position in surveillance drones and uncrewed systems, and help smaller companies get closer to Ministry of Defence contracts.
The Government says its Defence Office for Small Business Growth will also increase direct spend with SMEs by £2.5bn by 2028, a 50% rise, with Welsh businesses expected to be among those able to benefit.
There will also be a £182m defence skills package to strengthen the pipeline of engineering, digital and advanced manufacturing talent across the sector.
Secretary of State for Wales Jo Stevens said: “This government is determined to keep the UK safe. Our Defence Investment Plan will shape the future of Wales’s defence industry for years to come, protecting and delivering skilled well-paid jobs across Wales.
“Wales is at the forefront of the autonomous defence technology that our Armed Forces need and this investment will drive growth in this key sector.
“We are building and investing in Welsh expertise so Wales will continue to lead the way in the UK’s defence.”
The Prime Minister said the plan would put the security of the British public first.
Sir Keir said: “This record investment puts the security of the British public first, transforming our Armed Forces and giving them the funding and equipment they need to fight and defend our nation.
“The world is a more dangerous and volatile place, so it is only right we are boosting the number of troops on the ground, rebuilding ammunition stockpiles and investing in cutting edge technology to ensure we outpace our adversaries for generations to come.
“Every pound in this plan will work twice, delivering economic growth and opportunity for the British people, and supporting more than half a million jobs by the end of the decade, as well as reinforcing our national security.”
Defence Secretary Dan Jarvis said he had secured more money and made different choices for defence.
He said: “I know first-hand the importance of our Armed Forces having the kit and technology they need to do the difficult job we ask of them.
“I have secured more money and made different choices for defence. We will invest £298 billion over the next four years. That includes an additional £15 billion, of which most is extra day-to-day spending for training and improving availability of ships and aircraft to increase our war-fighting readiness.
“By choosing to embrace new technology, I am equipping our troops with the autonomous systems which will give them the edge on the battlefield.
“This extra money and these choices send a clear signal to our allies and our adversaries alike: Britain is stepping up on security.”
Chancellor Rachel Reeves said she had boosted defence spending to the highest level since the Cold War, adding that the plan committed almost £300bn over this Parliament to transform the Armed Forces.
The spending uplift will increase defence funding from £54bn a year under the previous government to almost £80bn a year by 2029, taking UK defence spending to 2.7% of GDP.
The UK Government says this puts Britain on track to meet NATO defence spending targets by 2035.
But the plan has arrived after months of delay and bitter arguments in Whitehall over whether the Ministry of Defence was receiving enough money to meet the scale of the threat.
Former Defence Secretary John Healey resigned after warning that the funding package fell short of what was needed to protect the UK and meet existing commitments.
Armed Forces Minister Al Carns also quit, saying the plan was not transformative enough in the face of rapidly changing warfare.
The Conservatives have criticised the plan as too little, too late, while the Liberal Democrats have said the Government has dangerously short-changed the Armed Forces.
Unions have welcomed the greater certainty, but warned that the test will be delivery.
GMB Union said the plan provided some stability after months of uncertainty, but said workers would judge it by whether it delivered secure jobs and investment.
Matt Roberts, GMB National Officer, said: “Today’s Defence Investment Plan provides some stability for a sector besieged by insecurity.
“The challenge now is delivery. Workers will judge this plan on real jobs, real investment, and real outcomes.
“We must rebuild our own sovereign capability, and strong defence depends on a strong workforce.
“Procurement must prioritise social value and public money must come with the right strings attached, fair pay, decent conditions, and trade union recognition.
“GMB welcomes renewed focus on defence investment, but the real test is whether this delivers jobs, skills, and secure work here in the UK.”
For Welsh industry, that delivery question will be crucial.
The Welsh defence sector has long argued that Wales has the skills, land, airspace, coastline and manufacturing base to play a bigger role in the UK’s defence economy.
QinetiQ’s presence at Aberporth is particularly relevant to the drone and autonomous systems agenda, given west Wales’s long association with testing and evaluation.
BAE Systems’ Glascoed site in Monmouthshire is one of the best-known defence manufacturing sites in Wales, employing hundreds of people in munitions work.
General Dynamics UK has major operations in south Wales, including work linked to armoured vehicles, tactical communications and systems integration.
Airbus has a major presence in north-east Wales, while Thales, Safran, GE Aerospace and other firms are part of a broader high-value manufacturing and technology base.
There are also potential implications for west Wales.
Pembrokeshire is home to important military training infrastructure, including Castlemartin Range, while Manorbier has long been associated with air defence training.
Cawdor Barracks near Brawdy has also been the focus of separate Ministry of Defence plans for the proposed Deep Space Advanced Radar Capability project, known as DARC.
Any increase in spending on drones, surveillance, radar, electronic warfare, air defence or autonomous systems could raise questions about whether Welsh military sites will receive further investment or new roles.
There may also be interest in whether Welsh ports, marine engineering firms and coastal infrastructure could play any part in the development of uncrewed naval vessels and high-speed military craft.
The Defence Investment Plan includes a move towards what ministers call a more “hybrid” Navy, combining traditional ships with autonomous vessels, AI and uncrewed systems.
Plans include at least six new Common Combat Vessels to act as control hubs for uncrewed systems in the 2030s, alongside high-speed boats for Royal Marine Commandos.
For coastal areas such as Pembrokeshire, that raises a natural question: will maritime defence investment create opportunities for Welsh ports, marine services and engineering businesses?
The Government has also announced a new £50bn defence export facility through UK Export Finance, designed to help British defence firms win contracts across the world.
That could be important for Welsh firms looking to scale up and compete internationally, particularly if smaller businesses can access support rather than being locked out by larger prime contractors.
The plan also includes more than £8bn over the next four years for the Global Combat Air Programme, which will develop a next-generation stealth fighter jet for the RAF alongside Japan and Italy.
More than £63bn will be spent over the next four years on the UK’s nuclear deterrent, including Dreadnought and SSN-AUKUS submarines, a new warhead and other nuclear work.
A further £26bn over the next decade will go into Project Royal Oak, described by the Government as the biggest naval base upgrade for more than 45 years.
Although many of those programmes are not Wales-specific, ministers argue that the wider increase in defence spending will support jobs and supply chains across the whole UK.
Critics will want to see evidence of that in Wales.
Welsh Government has previously said Wales receives around 3% of total Ministry of Defence expenditure, with an ambition to increase that to 5% or more as overall defence spending rises.
The new plan will therefore be watched closely by ministers, unions, defence firms, universities, colleges and local authorities across Wales.
For Wales, the issue is no longer whether drones, AI and autonomous systems will become central to modern warfare. That shift is already happening.
The question now is whether Wales will be a serious part of that new defence economy, or whether it will once again be left fighting for a small share of UK military investment.
