British economy sees defence dividend as new figures reveal above inflation increase in spend with industry
Government spending in the UK defence industry grew by 6% in real terms to £31.7 billion, according to latest figures for 2024/25 published today.
Working people will feel safer and see the economic benefits of the record investment in defence the Government has delivered, new figures (MOD regional expenditure with industry 2024/25 - GOV.UK) reveal.
In a powerful boost to the UK economy, the figures which cover the 2024/25 financial year, show a 6% rise in real terms expenditure bringing the total to £31.7 billion.
In an increasingly unstable and volatile world, this includes a 21% uplift to investment in the Weapons and Ammunition sector after inflation, so the UK is resilient and responsive to any challenge.
The figures show how the Government is making defence an engine for growth, with increased investment creating jobs and opportunities in communities across the country to raise living standards and put more money in working people’s pockets.
The figures show an exceptional increase from the previous year, representing the highest level of defence investment in UK industry for over a decade. This substantial investment translates to £460 for every person living in the UK, up from £440 the previous year.
The benefits will be felt across the UK, with Yorkshire and Humber seeing the biggest percentage rise in spend, increasing by 30%, with London (18%) and the North West (15%) also seeing big increases.
Defence Secretary John Healey said:
This record investment shows how we are making defence an engine for growth, supporting jobs and prosperity for British working people and boosting businesses across the United Kingdom.
These new figures show how the defence dividend from our record investment is benefitting working people across the UK. It follows the launch of our Defence Industrial Strategy this week, which will provide the resilient industrial base that we need for the future.
This record spending directly supports the Government’s Defence Industrial Strategy, launched this week, which focuses on enabling the building of a resilient supply chain and supporting innovation across the defence sector.
Small and medium-sized enterprises continue to benefit from defence investment, with direct defence spending supporting innovation and growth in businesses across the UK. This reflects the Defence Industrial Strategy’s commitment to diversifying the supply chain and ensuring smaller companies can contribute to Britain’s defence capabilities whilst driving local economic growth.
Much of the Ministry of Defence’s global expenditure remains anchored in the UK, ensuring that taxpayers’ investment in defence translates directly into British jobs, skills, and economic growth. This includes both direct payments to UK industry and indirect spending through international agreements where work subsequently takes place in Britain.