Starmer’s lack of defence: PM should face down his personal backbenchers on navy spending, says MAGGIE PAGANO

A new era of shipbuilding is opening up on the Clyde. 

Once home to the world’s biggest centre for steam and iron shipbuilding, with more than 200 yards at the turn of the 20th century, the Cutty Sark tea clipper, QE2 and Royal Yacht Britannia were all built here.

Today, the Glasgow shipyards are home to BAE Systems where the defence contractor is building Type 26 frigates, with work split between its Govan and Scotstoun sites.

BAE’s order book is bursting: there are five out of eight advanced anti-submarine frigates for the Royal Navy under construction, while the UK recently signed a £10billion deal with Norway for a Type 26 frigate, the biggest warship export deal ever.

In an unusual move, both the Australian and Canadian governments have bought the frigate’s designs too. Turkey has also signed up for Typhoon fighter jets.

All hands on deck: The Type 26 frigate HMS Glasgow under construction at dock at BAE’s Scotstoun shipyards on the banks of the Clyde 

To ramp up capacity, BAE opened a £300million gigantic complex at Govan – the Janet Harvey Hall – where it can build two warships side by side and undercover.

At Scotstoun, a new academy for lifelong training of its Naval Ships workforce has been created. More than 5,000 people now work on the Clyde shipyards, while thousands more are likely to be recruited over the next few years.

Although the UK is less than a third of BAE’s business, the Clyde’s renaissance is one of many factors behind its spectacular record sales, profits and order book. Shares rose 4 per cent yesterday

Investors who have shunned defence stocks for decades on ethical grounds must be feeling sore for having missed out now that defending the realm is in vogue and top of most governments’ priorities.

US President Donald Trump’s call for increased Nato spending, war in Ukraine, and tensions in Asia and the Middle East have concentrated minds on defence spending like never before. 

Indeed, BAE boss Charles Woodburn says the shift in how investors view the company has been noticeable – for two reasons.

First, because of the need for stronger defences. Second, because defence spending is also recognised as a long-term driver of economic growth, bringing skilled jobs, training and investment to communities.

BAE, which employs 50,000 workers in the UK, will hire 2,300 apprentices and graduates this year alone.

Yet the hot question is whether the Government will keep to its promise that defence spending will reach 2.5 per cent of GDP next year, and 3 per cent, then 5 per cent, thereafter?

At the moment, that’s not on the cards. And by the sound of the latest row over the defence budget ‘black hole’ raging between Rachel Reeves, the Chancellor, and the Ministry of Defence, it doesn’t look optimistic.

Who, though, is in charge?

Only a few days ago at the Munich Security Conference, Sir Keir Starmer stood

up and bragged about how the UK would build up ‘hard power’. That, of course, means the heavy stuff: armaments, weapons and hi-tech surveillance – all of which take years to plan and build.

Understandably, Woodburn, who is also chairman of the defence industrial joint council, has called for greater clarity.

That’s a tall order. It will only happen if Starmer finds his own hard power, and is brave enough to face down his backbenchers to keep to his promise.

Interest rate cut on the cards

Rachel Reeves is taking the biscuit when she claims credit for the fall in inflation to 3 per cent in January.

Or, as Kate Nicholls, chief of UK Hospitality, says if Reeves does want the Government to take credit, it should also acknowledge that it was Labour’s policies in the October 2024 Budget that drove inflation higher in the first place.

Although the fall is welcome, prices are still rising way above the European average, albeit at a slower rate.

In fact, inflation is still running at a full percentage point higher than in June 2024, before the election. Reeves claims credit for having brought inflation down because of lower energy bills (really), rail fares and prescription fees.

That’s simply not the case. Inflation fell mainly because of cheaper petrol, airfares and food due to lower oil prices and falling agricultural commodity prices worldwide.

Following the spike in unemployment, it’s looking odds-on that the Bank of England will trim interest rates next month in an attempt to revive the economy.

But that’s only sticking plaster.