In her Spring Statement, chancellor Rachel Reeves offered billions to help arms industry profiteers with one hand, while taking billions away from chronically ill and disabled people with the other. And she promised to put the business of death and destruction “at the heart of our modern industrial strategy”.
Rachel Reeves: we will feel the ‘benefits of defence spending’, apparently
Labour Party chancellor Reeves argued that, “as defence spending rises, I want the whole country to feel its benefits”. But there are strong reasons to believe that’s just smoke and mirrors.
Arms companies are already raking it in thanks largely to the proxy war in Ukraine and Israel’s genocide in Gaza, profiting from people’s pain as politicians play games with their lives. And Reeves has now confirmed prime minister Keir Starmer’s previous dystopian promise to “increase defence spending to 2.5% of GDP” by “reducing overseas aid to 0.3% of gross national income” and thus oversee the:
biggest sustained increase in defence spending since the end of the Cold War
This is perhaps an attempt to please the US as the superpower seeks to push other members of its NATO alliance to significantly increase their defence pledges. Or it could be Labour’s payment for receiving “£4m from [a] tax haven-based hedge fund with shares in oil and arms” that “stood to profit” from the Gaza genocide.
War gives arms companies the opportunity to increase profits, with the help of a crony government
Reeves kept talking about instability in the world, probably referring to the US-backed bloodshed of Ukraine and Gaza, and claimed:
A changing world presents challenges, but it also presents new opportunities, for new jobs and new contracts in our world-class defence industrial centres.
She added that this would mean “putting an extra £6.4bn into defence spending by 2027” and giving “an additional £2.2bn for the Ministry of Defence in the next financial year”. Then she outlined steps she would take to:
boost Britain’s defence industry and to make the UK a defence industrial superpower
You may want to contrast Reeves centring an arms trade industrial strategy with Labour’s previous promise under Jeremy Corbyn’s leadership to make a Green Industrial Revolution a “top priority“.
Part of becoming “a defence industrial superpower”, Reeves said, will entail spending on “drones and AI-enabled technology” (like the ones that have terrorised Palestinians in Gaza).
And she topped her grim promises off by revealing that the government:
will provide £2bn of increased capacity for UK export finance, to provide loans for overseas buyers of UK defence goods and services.
Profiteers of death smile
UK governments have long engaged in corporate welfare, with billions of pounds of taxpayer money transforming into profits for arms shareholders. Britain’s biggest arms dealer BAE Systems, for example, gave shareholders £7.4bn in around nine years under the Tories while getting 21% of its international revenue from contracts with the Ministry of Defence.
BAE stocks, as with other big arms firms, have been soaring ever since the proxy war in Ukraine began in 2022 and Israel’s genocide in Gaza began in 2023. But Starmer’s government helped to push these stocks to a new high at the end of February 2025 with his promises to boost ‘defence’ spending. That was the case for BAE and fellow UK operators Leonardo and Raytheon.
Arms lobbyists have long been discussing the potential of Britain’s arms industry, but US president Donald Trump’s recent approach to Europe has helped to create a rush to enhance military spending.
Rachel Reeves: neither the only way, nor the best
A few places in Britain do indeed depend on the arms industry. But as Common Wealth researcher Khem Rogaly has insisted:
Policy choices have left communities dependent on military contracts because of divestment from public services and civilian industry.
Nonetheless:
the connection between military spending and job creation has weakened over time. Despite falling as a share of GDP, Britain’s military budget has grown in real terms since the early 1980s – the height of the cold war – yet at the same time more than half of jobs in the military industry have been lost. The military sector is increasingly a hi-tech employer that relies less on manufacturing and more on IT and engineering jobs in the south of England.
There is another way, though, because:
Modelling in the US and continental Europe suggests that investment in public services, environmental protections or renewable energy creates more jobs and more economic output than military contracts.
Instead of going down the path of increasing military spending, then, mass investment in public services and the planet would be a much better focus to have. But the corporate cronies in this government seem much more interested in pleasing their wealthy donors than actually investing in a positive, hopeful future.
Featured image via the House of Commons
