Rolls-Royce shares rise as Burnham pledges investment in British defence
Shares in London-listed defence firms including Rolls-Royce and Babcock rose on Thursday morning after Prime Minister-to-be Andy Burnham pledged to drive investment into Britain’s defence industry.
The Makerfield MP said strengthening Britain’s defence will be his “first priority” if he enters Number 10 – as he is expected to later this month – but insisted he would “ensure we back British workers and businesses”.
FTSE 100-listed Rolls Royce led Thursday morning’s gains, rising two per cent to 1,426p, while Babcock, BAE and Qinetiq also rose on the market open.
Writing in The Times, Burnham set out a series of foreign policy pledges which he claimed would strengthen the UK’s resilience against external shocks like the closure of the Strait of Hormuz and the Russia-Ukraine war.
“The global picture is darkening and we must take concerted action to enhance our resilience, starting at the local level,” he said.
Defence spending can boost growth, Burnham says
The former Mayor of Greater Manchester added: “As prime minister, my priority will be protecting the UK by boosting defence spending, reviving local industry and strengthening our alliances.”
Burnham’s pledge to double down on defence investment comes just weeks after Sir Keir Starmer delivered the delayed defence investment plan (DIP) as one of his last acts as Prime Minister.
Defence secretary John Healey and armed forces minister Al Carns resigned from Starmer’s government in the lead up to the publication of the plan, which left Burnham with a £5bn funding gap to fill.
Earlier this week, former Nato secretary general Lord Robertson warned that Britain needs to be “woken up” to the threat of war.
The UK’s allies were “disturbed” by the delay to the DIP, which he said was “unconvincing” despite setting out plans to increase military spending by £15bn over the next four years.
Burnham to ‘level with public’
Burnham appealed to the lives of working people as a reason to invest in “hard power,” referring to soaring energy bills and food prices caused by the wars in Iran and Ukraine.
“And when hackers brought Jaguar Land Rover to a standstill, it was workers in the Midlands who paid the price, with thousands of jobs at risk and nearly £2 billion wiped from our economy. But Britain is not powerless in the face of these threats,” he said.
Burnham said he would “level with” the British public over the amount of money needed to meet the UK’s pledge to spend at least 3.5 per cent of GDP on defence by 2035.
The former Manchester mayor added that reducing Britain’s dependency on foreign defence is “critical for both our economic and national security”, adding that he would build closer ties with European countries on defence.