Budget: 'Portsmouth not being sidelined' despite city being absent from Healey's defence investment speech
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Various policies relating to defence were outlined in the budget, though some concerns remain
Portsmouth was noticeably absent from the Chancellor’s budget speech on defence reindustrialisation - but a city MP is insistent that the home of the Royal Navy is central to the government’s future.
John Healey used part of his speech in the House of Commons today (October 28) to outline further investment in the armed forces. He told politicians that the defence industrial base would be expanded, with local areas set to be transformed through various projects.
While listing geographic areas, Portsmouth and the south coast were not mentioned. “I will ensure this record defence investment works twice, for our national security and British jobs and business,” Mr Healey said.
“Places across all four nations - Barrow, Rosyth, Aldershot, Plymouth, Belfast and Glascoed - reindustrialised and transformed. Security for our nation, jobs for our people, fresh hope for people delivered for Britain by this Labour government.”
Portsmouth North MP Amanda Martin dismissed any concerns and said worries about the city being side-lined were “nonsense”. She added: “The Budget contains significant good news for defence and Portsmouth is already benefiting from investment in HMNB Portsmouth.
“The Government has also made its commitment to Portsmouth very clear. Andy Burnham came to the naval base in his first week in office to announce defence funding, while Louise Haigh chose Portsmouth’s Griffon Marine Shipyard for her first official visit as First Secretary of State to announce changes to procurement.”
What support have been provided to Portsmouth so far?
The main area of investment in Portsmouth came in the Defence Investment Plan (Dip). HMNB Portsmouth will see £3.9bn worth of upgrades under Project Royal Oak to fix “long-standing” problems. More jetties and berths will be installed, with a new oil jetty also being constructed.
Alongside upgrades to existing sites such as the Fountain Lake Jetty, money will also be put towards regenerating accommodation and welfare infrastructure for HMS Nelson, building a business park to develop capabilities for the hybrid navy, adding a new skills development centre, facilitating enhancements to the Warfighting Centre and other improvements.
Even with this investment, bases in Devonport and Clyde will see a higher share of the £26bn set aside for Project Royal Oak. The city was also overlooked for other investment opportunities.
Despite being named as part of the Defence Universities Alliance, the University of Portsmouth was not handed a share of £80m worth of grants for university placements in courses linked to the defence sector.
South Hampshire College Group (SHCG) also had its bid to become a Defence Technical Excellence College rejected, missing out on a share of £175m. The group covers Fareham College, the Civil Engineering Training Centre (CETC) and Centre of Excellence in Engineering, Manufacturing and Advanced Skills Training (CEMAST) in Lee-on-the-Solent.
Then there are the worries around Airbus, one of the city’s largest employers. Final decisions regarding the SkyNet 6 WSS space satellite contract have not been made. If the competing bid for the £24bn contract from Lockheed Martin is preferred, hundreds of jobs at Anchorage Park will be at risk. During a recent visit to HMNB Portsmouth, Mr Burnham promised to reindustrialise Portsmouth and back its defence sector.
Ms Martin added: “Of course, we will keep pushing for more jobs, contracts and investment locally, including clarity on Skynet. But the fact Portsmouth wasn’t named in one section of the Budget does not mean the city is being ignored. Portsmouth is absolutely central to Britain’s defence future, and the investment announced shows that.”
What was announced in the budget?
Mr Healey confirmed that the £15bn Dip will be fully funded. This was after a £4.7bn spending gap was reported in the summer. According to the published Budget document, this will be funded through “reprioritisation of capital budgets”.
Departments across Government will be asked to reduce their capital budgets by 1% between 2027-28 and 2029-30 to raise some £3 billion. The remaining £1.7 billion shortfall will be made up from an “unallocated contingency in the Treasury’s capital reserve”, the Budget said. With this, spending on defence will rise to 2.7 per cent of GDP by 2027.
Mr Healey announced the government will aim to spend three per cent of GDP on defence by 2030. He confirmed that details on how to reach that target, and the Nato commitment of 3.5 per cent by 2035, will be set out at next year’s Spending Review.
Reaching the three per cent target by the end of the decade is estimated by the Office for Budget Responsibility to cost an extra £17.3bn in 2029-30. “I’m getting work underway to get there in a fiscally sustainable way,” he added.
“That will include looking hard at public spending, as I have done today to fund the Defence Investment Plan. This year, our defence budget is £14bn higher than it was in the Conservatives’ last year of government. I’m proud to have overseen the largest increase in defence spending since the end of the Cold War.”
An Innovative Defence Finance task force is being launched to look at alternative ways of raising cash “in more imaginative ways with the private sector and international allies,” Mr Healey added. Ukraine will receive an extra £10bn in economic and military support to battle Russia’s illegal invasion.
This will be based on loans, export finance guarantees, and half a billion in urgent military funding for this winter. Other announcements included Multilateral Defence Mechanism (MDM) negotiations starting with Finland, Poland and The Netherlands in an effort to boost procurement and investment.
The National Wealth Fund and British Business Bank will support dual-use technology and sovereign capability through £5bn in extra lending over the next four years.
Reaction
Conservative MP Kemi Badenoch said Mr Healey did not meet his pledge and was making troops more unsafe. The chancellor previously resigned as defence secretary over the level of funding in the Dip.
“He should have set out a plan for three per cent today,” she said. “So now he is the man who is increasing risk to personnel on operations, he is the man who is making our country less safe, he has failed his own test. This is on him and no-one will ever forget. If he had any decency he would resign again today.”
MP for Havant Alan Mak, Conservative, said: “Labour’s Budget raises taxes on people across our region to pay for more welfare, but ignores the Havant Constituency and the Portsmouth area when it comes to defence investment.
“We have a proud record of defence manufacturing, skilled workers and longstanding support for the Armed Forces so it’s a kick in the teeth for Labour to both ignore our region whilst at the same time failing to commit to spending three per cent of national income on defence by 2030 making our country less safe.”
Ukrainian president Volodymyr Zelenskyy urged the Chancellor not to delay hiking defence spending. He told the Sun newspaper: “Can the United Kingdom trust Russia or not? If not, defence needs to be 100% the priority. My advice to John is don’t delay. Sorry John … but it’s important to be direct.” Mr Healey had earlier in parliament said Mr Zelenskyy told him the extra funding made his day.
Discussing defence spending, Nato secretary general Mark Rutte posted on X: “The UK role in transatlantic security is vital and I welcome this move to put Britain on a credible path towards meeting the commitment made by all Nato allies in The Hague – to ensure we’re all investing what’s needed to remain ready (and) able to deter aggression, and defend our freedom and security.”
Lord Robertson of Port Ellen, author of the Strategic Defence Review (SDR), added: “John Healey is acting in the national interest – and has done exactly what he said was needed for defence in his resignation letter, by setting a headmark for three per cent in 2030.
“I am strongly in favour of innovative ways of financing defence – and this is a credible route to get more into UK defence. Today’s announcements strengthens UK leadership in Nato once again.”
Portsmouth South MP Stephen Morgan said: “Today’s Budget includes welcome news on defence investment, building on the investment Portsmouth is already benefiting from and reinforcing the city’s vital role in supporting the UK’s national security and the Royal Navy. The Prime Minister is committed to ensuring Portsmouth receives the investment, infrastructure improvements, and ongoing maintenance it needs and deserves as the home of the Royal Navy.
“Today’s announcements build on previous commitments to upgrade the naval base and reform defence procurement, helping to support the long-term future of our city’s defence capabilities. I will continue to campaign for investment in Portsmouth, championing our city’s contribution to national security and ensuring our city continues to receive the recognition it deserves.”