Weekly Defence Rundown 23rd-29th June 2025

by CMS Team on 01 July, 2025

Headlines over the past week were consumed by the NATO summit and whether the new target of spending 5% of GDP would be agreed by the alliance, as members try to convince President Trump that NATO is a worthwhile alliance. An overall successful summit, questions will nevertheless be raised over how Sir Keir Starmer plans to raise the extra billions for defence, given the recent publication of the Spending Review.

In other news, in the biggest expansion of the nuclear deterrent since the end of the Cold War, the UK will buy a new squadron of 12 F-35A fighter jets that will be able to carry American B-61 nuclear gravity bombs.

Moreover, the Government shows no sign of slowing down on the release of strategies and reviews, as the Modern Industrial Strategy and National Security Strategy were published. The former details how eight sectors will drive growth across the UK (although we are still waiting for the in-depth Defence Industrial Strategy), while in the latter, British steel production is set to be classed as ‘critical’ to national security.

Defence Brief: Key Insights from the Week

UK and NATO allies agree to boost spending on defence and related areas to 5% of GDP by 2035 (Sky News)
Germany to hit NATO defence spending targets six years earlier than Britain (The Telegraph)
UK government to invest more than £500mn in quantum computing (Financial Times)
UK to expand nuclear deterrent with F-35A fighter jets carrying weapons (The Times)
Britain to prepare for enemy attack with practice drills (The Telegraph)
No 10 gags civil servants to stop them speaking out in public (The Times)
British steel production to be classed ‘critical’ to national security (The Times)

Modern Industrial Strategy:

On Monday, the Government published its Modern Industrial Strategy. Developed by the Department for Business and Trade, Secretary of State Jonathan Reynolds, announced that the Strategy would provide long-term stability to foster investment and make it easier for companies to do business in the UK.

The 10-year Industrial Strategy focuses on eight key sectors that will act as ‘engines for growth’: advanced manufacturing, clean energy industries, creative industries, defence, digital and technologies, financial services, life sciences, and professional and business services. While detailed strategies for five of the sectors were published, those for life sciences, financial services, and defence will be released ‘soon’. Meanwhile, investment pledges largely appear to be funding that has previously been allocated in the Strategic Defence Review and Spending Review.

However, in the 150-page document, defence was still mentioned 100 times. Key takeaways include:

Plans to make the UK Europe’s leading Defence exporter, by closing the gap for VC investment with the US by half.
10% of MoD funding on equipment to be spent on novel technologies.
Launch of UK Defence Innovation, with an initial £400 million budget.
Increased funding for the National Security Strategic Investment Fund (NSSIF), with a budget of up to £330 million by the end of the Spending Review period.
Additional £2.5bn committed to SMEs by May 2028.
Increase the maximum size of UK Export Finance’s (UKEF) financial portfolio.
To agree ‘Defence Growth Deals’ in Scotland, Wales, and Northern Ireland.

NATO Summit:

On 24^th and 25^th June, NATO leaders convened in The Hague amidst huge anticipation of what the summit would entail and doubts whether members would accept Secretary General Rutte’s ambition to raise the alliance’s spending commitment to 5% of GDP.

With briefings shortened to cater to Trump’s short attention span and comments made by the President on route to The Hague questioning the concept of collective defence and Article 5, no one quite knew what to expect from the two day summit.

However, through some serious diplomatic maneuvering and strategic flattery, Rutte can ultimately call the summit a success, with the US President reaffirming his commitment to NATO, even going so far as to say that the alliance isn’t a “rip-off”…

Other key takeaways from the summit include:

NATO members agreed to increase spending on defence and related areas to 5% of GDP by 2035. 3.5% will be allocated for core defence spending, while the remaining 1.5% can go towards “defence-related expenditure”.
For the first time since the Ukraine War, there was no specific condemnation of Russia and its illegal invasion of Ukraine. In a toned-down approach, the statement mentioned the “long-term threat posed by Russia to Euro-Atlantic security”.
Spain was accused by Trump of wanting “a free ride” after insisting that its planned increase in defence spending from 1.24% to 2.1% of GDP was sufficient.
Taking flattery to a new level, Rutte referred to Trump as “daddy” in reference to his handling of the Israel-Iran war.

Industry Latest:

GCAP JV named Edgewing and headed by Leonardo executive (Airforce Technology)
GM Defense teams up with NP Aerospace for British Army vehicle requirement (Shephard Media)
BAE and Avioniq trialling AI on Eurofighter Typhoon (Calibre Defence)
ICEYE to bolster Dutch space-based ISR with new SAR satellites (Calibre Defence)
Hanwha Systems, Northrop Grumman partner for IAMD (Army Technology)
BAE open huge new shipbuilding facility in Glasgow (UK Defence Journal)

Direct from Government:

Air Chief Marshal Sir Rich Knighton KCB ADC FREng appointed new Chief of the Defence Staff (MoD Press Release)
Operation Interflex reaches three-year milestone (MoD Press Release)
Front line drone technology to fuel UK – Ukraine partnership (MoD Press Release)

News from Further Afar:

The UK has reportedly been lobbying for Rolls-Royce to replace US GE Aerospace as the main engine partner on South Korea’s KF-21 fighter jet programme, in an effort to build ties and capitalise on the country’s booming defence sector. Hanwha Aerospace currently produces engines on the fighter jet under licence from GE. (Financial Times)
Donald Trump announced a “complete and total ceasefire” between Israel and Iran, following 12 days of air attacks and US B-2 bombers dropping 14 bunker-buster bombs on Iranian nuclear facilities. Despite both sides accused the other of breaking it hours later, the fragile ceasefires appears to be holding for the moment (The Times)
To meet its new 5% target, Italy will count the £11bn cost of a bridge to Sicily as defence spending (The Telegraph)
The Pentagon has revealed its fiscal 2026 (FY2026) budget, requesting $961.6bn from Congress. However, the Defense Department is yet to publish a 5-year spending plan, as is customary, raising questions over long-term funding for key projects, such as the Golden Dome or shipbuilding (Breaking Defense)

CMS Podcast of the Week:

RUSI Global Security Briefing | How should the UK approach European security?

Coming Up This Week:

This will be a busy week in Parliament for UK Defence, with the final House of Commons Defence Questions before summer recess being held on Monday 30^th June, while the Defence Committee are holding two sessions. The first will continue on their ongoing inquiry into the UK’s contribution to European security, while the second session is a one-off on the work of the Secretary of State for Defence. Members will hear evidence from SoS John Healey, David Williams (Permanent Secretary at the MoD), and General Dame Sharon Nesmith (Vice Chief of the Defence Staff).

Meanwhile, on Monday, legislation will be laid out to the House on the banning of Palestine Action, alongside two other terrorist groups. This will be followed by a debate in the House of Commons, where MPs will debate the draft order and subsequently vote on it.

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