UK Chancellor John Healey is set to place defence investment at the heart of the government’s industrial strategy, arguing that major defence projects can help strengthen domestic manufacturing while supporting economic growth.
In his first address to the Labour Party conference as chancellor, Healey is expected to outline what he describes as a “new age of industrialisation.” The strategy is intended to advance Prime Minister Andy Burnham’s broader ambition to rebuild Britain’s industrial base and generate new economic opportunities.
A key example will be major investment in Britain’s defence infrastructure. The government is expected to confirm plans for three new floating docks for the Royal Navy’s submarine facilities at HM Naval Base Clyde in Scotland. The project, known as Programme Euston, is designed to support submarine maintenance and upgrade facilities for future requirements.
Healey is expected to argue that directing more defence-related work toward British companies can serve both national security and industrial objectives.
“By backing British shipyards, we are not only boosting national security but also securing resilience in the industries that will drive growth today while building the capabilities the country needs for the future,” Healey said.
Defence as an Engine for Jobs
The focus on defence forms part of a wider economic strategy aimed at encouraging investment and creating employment. The government sees sectors such as defence and advanced manufacturing as potential sources of skilled jobs while also contributing to the broader industrial supply chain.
Healey has previously identified economic growth as a central priority for his tenure as chancellor. In a September speech, he emphasized advanced manufacturing and defence technology among Britain’s areas of industrial strength and highlighted the importance of investment, innovation and skills.
The government is simultaneously dealing with considerable pressure on the public finances. Ahead of Healey’s October 28 budget, higher borrowing and increased debt-servicing costs have reduced the room available for additional spending.
Defence spending is another significant consideration. The government has committed to increasing defence expenditure, while questions remain over how quickly spending will rise and how planned investments will be financed.
Rebuilding Britain’s Industrial Base
The defence sector is being positioned as one component of a broader reindustrialisation programme. Government ministers have argued that investment in domestic defence manufacturing can support companies across the supply chain, from shipbuilding and engineering to advanced technology and other specialist industries.
Defence Secretary Wes Streeting has similarly described defence spending as a potential driver of industrial renewal, emphasizing the government’s intention to support British companies where domestic industry can meet procurement requirements.
Healey’s conference speech therefore places defence projects within a wider economic narrative: using investment in strategic industries to strengthen domestic manufacturing capacity, support skilled employment and develop capabilities that can serve Britain over the longer term.
The approach comes as the government seeks to balance its industrial ambitions with tight public finances and commitments on defence spending. The scale and pace of the programme will depend on future budget decisions and the government’s ability to reconcile investment priorities with its fiscal rules.
