Michelle O’Neill is wrong about defence spending

Michelle O’Neill, first minister of Northern Ireland, claims to be “incredulous” at a UK government deal for a Belfast factory to supply air defence missiles to Ukraine. The Sinn Féin vice-president said that “rather than buying weapons of war, I would rather see the money invested in public services”.

Well, wouldn’t we all? But investing in public services is not going to prevent Ukraine from being taken over by a Russian despot. Nor will it prevent Europe from being vulnerable to the same, because America is now run by a pro-Putin isolationist.

This is no longer an either/or game, and we are going to have to find the money from somewhere. Meanwhile, not far from Stormont, the Thales factory in Belfast now has an order for 5,000 air defence missiles worth up to £1.6 billion. Fulfilling it will involve recruiting another 200 staff.

This order will be just one part of the huge difference that increased defence spending is going to make to the British economy, and to the economies of much of Europe too.

The UK is taking money away from foreign aid and instead spending it at home – a controversial and arguably dangerous move. But it had to find a lot of cash quickly and it is going to be spending it in Britain and on British jobs. And well-paid jobs at that – defence sector jobs pay more than other manufacturing roles, £39,900 pa on average.

In Germany, the ridiculous limit on borrowing is being broken and that will allow the incoming government of Freidrich Merz to invest almost unlimited amounts in new weapons and equipment, something the German armed forces desperately need. There is also going to be another €500bn on infrastructure spending. For an economy that is already in the doldrums and now faces the prospects of Trump’s tariffs, this is a huge injection of Keynesian cash, which will help to kickstart the economy and move it away from a reliance on exports.

The general rule of thumb is that defence spending boosts growth by almost as much as it costs and this is before you count the improvements to technology, research and efficiency that cutting-edge manufacturing produces. It seems that we have suddenly remembered that not all state spending is a problem, many times it is the answer.

Countries across Europe are going to have to spend money now to make themselves ready for this brave new world that Trump is forcing on us. It is hardly surprising, therefore, that shares in European defence manufacturers have soared in recent days. Companies like Rheinmetall in Germany, Leonardo in Italy, Thales in France, Sweden’s Saab and British Aerospace are all booming.

There is an awful lot that needs doing and lots of companies out there that can benefit. Much of our defence infrastructure – from barracks and canteens to training facilities and repair shops – was allowed to crumble under the Tories and now needs repairing, maintaining or upgrading. That is a lot of work for builders, plumbers, electricians and roofers, mainly in the UK’s regions. More active defences also need more fuel, more repairs, more tyres and more transport; it is not just about weapons manufacturers.

That means a lot of the money necessary to start reversing 14 years of Tory cuts can be spent quickly and will have an immediate effect, creating new jobs.

Of course, we would all prefer to spend the money on foreign aid, education, health, OAPs and much more; but defence spending is not wasted money, it will improve our security, create jobs, and boost growth.

For a government that is struggling to implement the deep structural changes necessary to boost long-term growth prospects, this is a short-term shot in the arm that can only help.

It is a pity that for now the government lacks the political will to increase borrowing or taxes on the rich in order to do even more of it.