Philip Hicks
In the first article in this series, I suggested that the debate surrounding British rearmament is often characterised by a gap between strategic ambition and practical delivery. Governments announce new spending commitments, defence reviews set out ambitious programmes and ministers speak increasingly of urgency. Yet the critical question is not how much money is allocated. It is whether those resources can be converted into military capability at the scale and pace demanded by events.
That question has acquired added significance over the past year. The war in Ukraine continues to demonstrate that military power is not simply a matter of possessing advanced equipment. It is also a matter of sustaining operations, replenishing stockpiles, replacing losses and maintaining the industrial foundations upon which armed forces ultimately depend. What initially appeared to be a short-term challenge in supplying ammunition and equipment has evolved into a broader debate about industrial resilience, production capacity and the ability of Western nations to sustain prolonged competition.
Recent movements of American strategic bombers through RAF Fairford provided a useful reminder of both NATO’s military strength and Europe’s continuing dependence upon it. Such aircraft remain among the most visible symbols of deterrence. Yet their presence also highlights a broader reality: military capability is only one part of the equation. Beneath it sits something less visible but equally important, namely the industrial capacity required to generate, sustain and replace that capability over time.
For Britain, therefore, the most important defence question may no longer concern capability alone. It concerns capacity.
Capability versus Capacity
Throughout much of the post-Cold War period, British defence policy focused primarily on capability. The debate centred on the number of warships, combat aircraft, armoured vehicles and deployable formations available to the armed forces. Those measures remain important and will continue to dominate public discussion.
Recent events, however, suggest that capability tells only part of the story.
Capacity is something different. It concerns the shipyards capable of building the warship, the engineering workforce able to maintain it, the supply chains that support it, the infrastructure that sustains it and the industrial system capable of replacing it if lost.
Capability delivers military effect.
Capacity determines whether military effect can be sustained.
The distinction matters because modern warfare has once again become a test of industrial endurance as well as technological sophistication. Ukraine has demonstrated that advanced military systems remain important, but so too do production rates, stockpiles, logistics and manufacturing resilience. Across NATO, governments have found themselves asking questions that would have sounded surprisingly old-fashioned a decade ago. How quickly can output be increased? Where are the supply-chain vulnerabilities? Can skilled labour be found? How rapidly can industry adapt?
These are no longer economic questions that sit alongside defence policy. Increasingly, they are defence policy.
Deterrence and Industrial Power
Deterrence is often discussed through the lens of visible military assets. Analysts count ships, aircraft and missiles because they represent tangible measures of national power.
Potential adversaries, however, are interested not only in what a country possesses today but in what it can produce tomorrow.
The ability to repair battle damage, replenish stockpiles and expand production during a crisis forms part of the strategic calculation. A military that cannot sustain itself risks becoming less credible over time, regardless of its initial strength.
Industrial capacity therefore contributes directly to deterrence. It may be less visible than a frigate or fighter squadron, but it is no less important.
This is perhaps the most significant lesson emerging from Ukraine and from the wider reassessment of European security now underway.
Investing in Capacity
One of the more interesting features of recent defence policy is the growing emphasis on capital investment rather than simply equipment procurement.
Recent government figures show Ministry of Defence spending with Scottish industry reaching a record £2.53 billion annually, supporting more than 12,000 jobs. Alongside this, the Government has announced a £26 billion naval infrastructure programme, including more than £15 billion of investment centred on HM Naval Base Clyde and associated facilities.
These investments are significant because they target capacity rather than capability.
A procurement contract can deliver a frigate, a submarine or a weapons system. Capital investment determines whether the industrial base can deliver repeatedly, adapt rapidly and sustain capability over time. Dry docks, manufacturing facilities, testing infrastructure and workforce development programmes may attract fewer headlines than new platforms, but they often prove more important in the long term.
The question for Britain is therefore not simply whether it is buying enough equipment, but whether it is creating sufficient industrial capacity to support future requirements. AUKUS is often discussed as a submarine programme, but it is equally a long-term test of industrial capacity, workforce development and sovereign capability.
Scotland and the Geography of Defence
Scotland provides an interesting case study in the relationship between industry, infrastructure and national security.
The Clyde remains central to the Royal Navy’s future surface fleet, while Faslane continues to play a critical role as the home of Britain’s continuous at-sea nuclear deterrent. Recent investment reflects a growing recognition that industrial resilience underpins military capability. Warships cannot be built without shipyards, submarines cannot be supported without specialised infrastructure, and defence ambitions ultimately depend upon physical assets that require sustained investment over many years.
The concentration of so much strategic infrastructure in Scotland also serves as a reminder that defence policy, industrial policy and, at times, constitutional politics are often more closely connected than policymakers might prefer.
Beyond Shipyards and Munitions
Industrial capacity is often associated with shipyards, dockyards, steel and munitions factories. Those capabilities remain essential, but future military advantage is likely to depend equally on autonomy, advanced propulsion, software, batteries, artificial intelligence and uncrewed systems.
Across central and southern England, a specialist defence and advanced technology ecosystem is beginning to emerge. Linking the advanced manufacturing, innovation and logistics strengths of the West Midlands with the aerospace, engineering and technology clusters of Swindon, Bristol and the east of England, it combines established industrial capability with growing expertise in autonomy, software integration, electrification and uncrewed systems.
New entrants are also seeking to reshape how defence manufacturing capacity is created and scaled. Companies such as Isembard are developing software-defined manufacturing models designed to accelerate the production of high-precision components for defence, aerospace and advanced engineering applications. While at an early stage, such ventures point towards a future in which industrial resilience depends not only on the size of the manufacturing base but on the speed, flexibility and digital integration of production itself.
The significance lies not in any single company or programme but in the emergence of a connected ecosystem. Across the region, established aerospace and engineering firms increasingly sit alongside companies developing autonomous systems, advanced propulsion technologies, software and uncrewed platforms. More broadly, the corridor illustrates how future defence capacity may emerge from networks of suppliers, manufacturers, engineers, researchers and end users rather than from individual facilities alone.
Economists sometimes describe this as a “diamond” model of competitiveness, where advantage emerges through the interaction of skills, infrastructure, investment, suppliers and demand. Defence industrial capacity increasingly works in much the same way. The challenge is not simply inventing new technologies. It is creating the conditions in which they can be manufactured, scaled, certified, sustained and exported.
The Sovereignty Question
International comparisons help illustrate the scale of the challenge. European defence spending is rising rapidly, but remains fragmented across multiple national industrial bases, procurement systems and strategic priorities. By contrast, the United States combines defence spending in excess of $1 trillion annually with a defence industrial ecosystem designed to support sustained production, workforce development and surge capacity.
The lesson is not that Britain should seek to replicate American scale. It cannot. Rather, it underlines a more practical question: which sovereign capabilities are sufficiently important to preserve and expand domestically, and where should Britain rely upon allies and international supply chains?
Recent American efforts to strengthen the defence industrial base reflect a growing recognition that sovereignty cannot be achieved through policy aspirations alone. It requires long-term investment, industrial depth and the ability to move rapidly from innovation to production.
Britain’s circumstances are clearly different, but the principle remains relevant.
Beyond Spending Targets
Much public debate still revolves around defence expenditure as a percentage of GDP. Such discussions are important, but they risk obscuring a more fundamental issue.
Budgets are inputs. Military capability is the output.
The journey between the two can be long and uncertain. Procurement delays, industrial bottlenecks, workforce shortages and supply-chain constraints all have the potential to slow the conversion of financial commitments into operational capability.
This is perhaps where some of the criticism of recent defence industrial initiatives originates. The issue is not that investment has been absent. Significant commitments have been made to shipbuilding, naval infrastructure and sovereign capabilities. The question raised by critics is whether the scale matches the ambition.
There is an important distinction between strengthening capability and transforming capacity.
Britain is undoubtedly doing the former.
Whether it is yet achieving the latter remains an open question.
The Arsenal Question
Part I asked whether Britain was genuinely rearming or merely becoming more sophisticated in discussing rearmament.
Part II suggests that the answer may depend upon the relationship between capability and capacity.
Britain continues to invest in military capability. Warships are being built. Infrastructure is being upgraded. New technologies are emerging. Advanced manufacturing clusters are beginning to take shape. The harder question is whether Britain is investing at a comparable scale in the industrial capacity required to generate, sustain and replace those capabilities over time.
There is also a temptation to view autonomy, software and uncrewed systems primarily through the lens of affordability. In an era of fiscal constraint, cheaper autonomous platforms can appear attractive when compared with the cost of warships, combat aircraft or other major equipment programmes. Yet the lesson from Ukraine is not that legacy capabilities have become irrelevant. Rather, it is that military effectiveness increasingly depends upon combining traditional platforms with new technologies. The objective should be additional capacity and greater resilience, not the premature replacement of one with the other.
The strategic environment is becoming more demanding. Ukraine continues to consume military resources at scale. NATO seeks greater resilience. AUKUS will place additional demands upon Britain’s industrial base, from skilled labour and engineering expertise to infrastructure and long-term supply chains. European allies are also being encouraged to assume greater responsibility for their own security.
Against this backdrop, industrial capacity has re-emerged as a form of national power.
Perhaps the most important lesson from recent events is that defence policy and industrial policy are becoming increasingly difficult to separate. Military strength ultimately rests not only on what a nation fields, but on what it can build, maintain and replace.
Britain’s challenge differs from that of the United States, which can often solve problems through scale, and from that of the European Union, which must reconcile multiple national priorities and industrial interests. The question for Britain is more specific: can a medium-sized power retain the sovereign capabilities necessary to support its strategic ambitions while operating within much tighter financial and industrial constraints?
Part I asked whether Britain was genuinely rearming or merely becoming more sophisticated in discussing rearmament. Part II suggests that the answer may depend upon the relationship between capability and capacity.
Britain is investing. It is rebuilding elements of its industrial base. In some sectors, it is beginning to connect innovation, manufacturing and strategic demand in ways that would have been difficult to imagine a decade ago.
Yet the central question remains unresolved.
Britain may be reindustrialising.
Whether it is truly rearming remains the more important question.
If the answer depends on industrial capacity as much as military capability, the next challenge is determining which path Britain should follow to build that power in an increasingly competitive world.
Headline image External and internal perspectives on Anduril’s Arsenal-1 facility, taken prior to the announcement this week that Arsenal-2 will be a shipyard in Maryland. The company has plans in place for significant manufacturing in the UK. (Anduril Industries)
