Labour’s strategic defence review could be delayed until as late as the autumn, industry sources fear.
The news comes as incoming US president Donald Trump piles pressure on Nato allies to pull their weight by increasing how much they spend on defence.
The sweeping review was announced by the new Labour government soon after it took power in the summer and was initially expected to be announced in the spring this year. It will outline the state of the Armed Forces and Government defence priorities.
But the delay to key military decisions risks hampering Britain’s ability to defend itself amid warnings that jobs could be at risk unless the Government speeds up the announcement.
It has also raised fears defence spending could be squeezed amid growing pressure on UK public finances due to soaring borrowing costs. The Mail on Sunday revealed this month that the Treasury could delay meeting Labour’s pledge to raise defence spending to 2.5 per cent of gross domestic product until after the next Election.
That would leave the Armed Forces short changed at a time when Russia’s war on Ukraine and China’s sabre-rattling over Taiwan is raising tensions.
Flying the flag: The RAF Typhoon display team aircraft Blackjack over the White Cliffs of Dover
Samira Braund, director at defence industry body ADS, said: ‘Ultimately industry needs a clear demand signal to be able to deliver.
‘The clarity and certainty of the demand translates into workforce issues, as funding allocated in peaks and troughs does not provide a conducive environment for sustainability.
‘This has meant in the past that when the Government wants to place orders and see defence production ramp up, the sector no longer has the workforce to spring into action.
‘Clarity on the pipeline can help to mitigate this.’
America’s allies including the UK will come under pressure from Trump to raise defence spending as he takes office tomorrow and addresses the World Economic Forum in Davos later this week. Trump has been demanding that Nato members raise military budgets to 5 per cent of GDP.
Currently Nato members must spend at least 2 per cent.
The Prime Minister launched the strategic defence review to bolster the Armed Forces and ensure defence spending is ‘responsibly increased’.
But it has prompted speculation that big projects such as Britain’s BAE Systems-led £12 billion Tempest fighter jet programme could be thrown into jeopardy.
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