The British government may be saying as little as possible to upset Donald Trump but it is still frantically reassessing the UK’s place in the world, with implications for Ireland, North and South.
Much of this has manifested itself as a fresh debate over Brexit, directly and indirectly connected to defence.
The UK wants to participate in European rearmament. More importantly, it wants to boost its economy so it can afford its own rearmament and improve its global standing in general. Since 2021, it has slipped from third to 12th place within Nato on defence spending as a percentage of GDP. A target of doubling the current 2.4 per cent level by 2035 is considered both laggardly and implausible. Prime minister Keir Starmer has claimed defence spending will be “an engine of economic growth”.
Although defence can deliver long-term growth through technological advancement, and localised growth in regions with large defence industries, it is dead money on a short-term, national scale – spent on personnel and equipment that will hopefully never be used.
Military and political leaders have said the UK should cut its welfare bill to fund defence. While there may be good arguments for that approach, boosting growth is not among them. Welfare spending is the most effective form of short-term stimulus spending; UK growth is so low that diverting that spending to defence could trigger a recession. So a closer trading relationship with Europe is increasingly seen as vital.
Last month, UK deputy prime minister David Lammy suggested forming a customs union with the EU, arguing that this has delivered growth for Turkey. Last Sunday, Starmer clarified this will not be Labour policy as it would prevent striking independent trade deals, including with the United States – important for what little influence London has in Washington. Labour will instead pursue growth through closer alignment with the EU single market.
Neither a customs union nor single market alignment would remove the sea border between Britain and Northern Ireland – even together, they would not remove it completely. However, single market alignment is the most straightforward way to reduce frictions and the likeliest to be granted by the EU. Any progress the UK can make promises to ease tensions at Stormont, and it would simplify trade between Britain and the Republic.
Northern Ireland does not have a large defence sector, a fact that often causes surprise, given its successful aerospace industry. It receives just 1 per cent of UK defence procurement spending, the lowest of any region and one-third the national average. Remoteness from London’s incestuous defence establishment has been blamed.
But the potential of the region’s defence sector has attracted significant attention – it is the only aspect of Northern Ireland’s economy that stirs genuine interest in Britain. The wider aerospace, defence and security sector has doubled its annual turnover in a decade to over £2 billion (€2.3 billion). Ministers have pledged more investment, as have private companies. Merely bringing procurement up to the UK average would be transformative.
Defence spending may have its economic shortcomings but it is a political panacea.
Whatever happens with the UK’s relationships with the United States, the EU, Nato and the rest of the world, and whatever view anyone takes on these developments, almost everyone can agree that an urgent increase in defence spending is the correct response. Even Sinn Féin has been sanguine about the work arriving in Northern Ireland, welcoming the less overtly military contracts and saying nothing about the rest.
The Republic is now in a similar position: whatever happens to its international relationships and regardless of anyone’s positions on neutrality, there is a consensus that defence spending must rise. Ireland can afford it – the defence budget will double to €3 billion over the next two years. Up to a third of that will go to EU programmes and it is commonly believed almost none of this will be spent in Ireland, but that is not inevitable. The State has a larger aerospace and defence industry than is often realised, about the same size as that in Northern Ireland, and with at least as much potential. North and South share several specialisms, especially on cybersecurity, and complement each other on others. Could this be an area of co-operation across the Border and the Irish Sea?
The UK has been priced out of the EU’s big new defence procurement programme, although this is reportedly due to protectionism in Paris rather than Brussels. The UK needs partners, suppliers and customers and it would only have to find a few in Ireland to make a significant contribution to a developing industry.
The UK and Ireland are both being reminded of their fragile place in a dangerous world. It would be a serious political failure if that did not draw them closer together.