Mr Speaker, the House does indeed join in your sentiments towards all those who are suffering as a result of the attack at Bondi Beach. I know the whole House will also join me in offering condolences to the family and comrades of Lance Corporal George Hooley, who died in a tragic accident last week in Ukraine. He served our nation in distant and dangerous lands, and he did so with honour, courage and distinction. He was a natural, gifted leader who lost his life in the cause of freedom and peace.
Our historic defence investment comes with a fundamentally new approach. The defence dividend is already boosting British industry, British jobs and British communities. We have launched a £770 million defence industrial strategy to drive innovation, create British jobs and boost British skills. Today, we are announcing the defence technical excellence colleges competition, which has gone live, backed by £50 million. It will help us build the skills needed to tackle the threat posed by Russia and other adversaries.
When Jodrell Bank celebrated its 80th anniversary, we heard lots about its contribution to science and its 150,000 visitors per year, so does the Secretary of State share my excitement about the job opportunities that may result from repurposing Cawdor barracks in Pembrokeshire as a deep space advanced radar capability? Will he meet me to discuss job opportunities for manufacturers in my constituency resulting from that project, from the project for a new development site for the Windracers drone, and from other defence projects?
I do indeed recognise my hon. Friend’s excitement, as she puts it, about the opportunities created by the deep space advanced radar capability, the new drone developments and projects that we will bring to Wales. As we make defence an engine for growth, we are also putting the UK at the leading edge of innovation in NATO. I can announce today that in its first year, UK Defence Innovation will invest over £140 million in new drone and counter-drone systems to protect the UK homeland and allies in the face of increasing Russian drone incursions. That is backing British small and medium-sized enterprises, British micro-SMEs and British universities.
As the Secretary of State outlined, the new defence growth deals announced earlier this year promise exciting opportunities, particularly for young people entering high-skill engineering and new apprenticeship roles. North Wales already hosts world-class defence firms, such as Teledyne Qioptiq; what benefits, especially for economic growth and opportunity, can my Wrexham constituency and north Wales more widely expect as those deals are rolled out?
We are working with the Welsh Government, Welsh industry, companies like those that my hon. Friend mentioned, and Welsh academics and universities to work out the dimensions of a Wales defence growth deal. It will be one of five growth deals backed by £250 million in this Parliament. New drone technology autonomy will be the focus of this new defence growth deal.
When the previous Government slashed defence spending by £12 billion in their first five years, it left the defence of our nation hollowed out and underfunded. Now, Stoke-on-Trent and our world-leading ceramics sector, which makes vital components for aircraft, submarines and ships, stand ready to help rebuild the defence of our nation. Can the Minister set out how the Government’s largest sustained increase in defence spending will benefit companies and create jobs in my Stoke-on-Trent constituency?
I can indeed. My hon. Friend is right: not only is this the largest sustained increase in defence spending since the end of the cold war—spending committed by this Government—and not only are we delivering 2.5% of GDP for defence three years earlier than anyone expected, but this Government also said that we would direct more of our British defence investment directly to British-based businesses, and we are. In the last year, 86% of defence investment has gone to British-based businesses, which is 6% more in real terms than in the preceding year, under the last Government; in other words, it is an above-inflation increase.
As the Secretary of State knows from visiting my constituency, Stevenage hosts a thriving defence and space sector, with more than a quarter of satellites in space built in our town. Next month, Airbus Defence and Space will open Launchpad, a new facility in Stevenage giving small and medium-sized enterprises and start-ups space to work and develop technologies. Can the Secretary of State confirm that our innovative primes and SMEs will receive proper attention when the defence industrial plan is implemented?
I can indeed. My hon. Friend is right: his constituency hosts not only some important big UK defence primes, but many very small innovative firms. That is why, as a new Government, we said that we would set a new target for the proportion of defence investment going directly to British SMEs. We set up a new SME growth centre to help them deal with Government, which has previously been too difficult.
I congratulate the Secretary of State on his efforts so far, but our efforts are still puny compared with those made when there was last a major threat, in the 1930s. In 1933, we spent just 2.2% of GDP on defence. Remember George Lansbury, the leader of the Labour party, who wanted to abolish the RAF altogether? By 1938, we were spending a massive 7%. Will the right hon. Gentleman commit himself to a whole new gearing-up of our efforts? He could start by recommissioning the RAF bases that were open in the 1930s, but have now been closed, such as RAF Scampton.
The right hon. Gentleman is right to point to the recent record—the 14 years of hollowing out and underfunding of Britain’s armed forces that my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) mentioned. I am proud of this Government’s investment of an extra £5 billion in defence in the first year, and our commitment to reach 2.5% of GDP by 2027. Our ambition is to reach 3% in the next Parliament, and alongside 31 NATO allies, we have signed up to spending 5% by 2035 on core defence and security, including national security.
Most of our allies and our industrial competitors have a system of offsetting to support their domestic defence capability, economy and jobs, and traditionally this country has had global by default. When will we see the detail in the defence industrial strategy that states that the Government intend to bring forward a programme of offsetting to match our competitors?