Burnham pitches jobs boost from US$11.2 billion fund for submarines

ANDY Burnham will put youth employment at the heart of his approach to defence investment on Thursday (Jul 30) as he unveils the next tranche of funding for Britain’s Dreadnought submarine programme.

The UK’s new prime minister will announce £8.4 billion (US$11.2 billion) investment in the BAE Systems-led programme, which will see four new nuclear deterrent submarines complete sea trials and enter service with the Navy early next decade, according to a statement from his office. 

“Keeping this country safe is the first responsibility of any government - but security is not only about what we build, it is about who builds it, and who benefits from it,” Burnham said. “British money, spent on British workers, British firms and British skills, in the places that were written off for forty years.”

While the submarine programme was already in progress and the funding was set to be announced before Burnham entered office, it feeds into promises he has made to re-industrialise the country, prioritise British firms in government procurement and boost opportunities for young workers. 

The prime minister has also indicated he wants to spend more on defence but hasn’t committed to reaching 3 per cent of economic output by 2030 that his Chancellor John Healey has previously called for.

Some £5.9 billion of the spending announced on Thursday will go to BAE, with the rest directed toward the wider supply chain. The cash forms part of the £63 billion that was earmarked for the UK’s nuclear deterrence in the defence investment plan earlier this year. 

Burnham aims to focus on how investment in Britain’s domestic defence sector can help tackle rising youth unemployment.

If successful it could act as a feedback loop, because Burnham has hinted he wants to fund defence spending through welfare savings. Government investment in the project will support some 22,000 apprentices through 2035, Burnham said. 

On Tuesday, the premier outlined plans to expand the availability of technical qualifications to those aged 14 and over in an effort to provide more routes into the jobs market for young Britons. That comes as he seeks to tackle a surge in joblessness among 16- to 24-year-olds to 16.4 per cent, the highest in a decade.

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Now, the prime minister and Defence Secretary Wes Streeting are seeking to make a social justice case for defense, arguing that the sector should be at the centre of plans to shift from university degrees to more technical apprenticeships. 

On Thursday, Burnham will also announce a new apprenticeship programme to help young people in the North-west of England access skilled employment opportunities.

His office described it as a “trailblazing” initiative though it will only help small- and medium-sized firms recruit and train 30 apprentices across the next three years.

The cost of the Dreadnought programme has been estimated at £31 billion, with a £10 billion contingency also having been set aside.

As of March 2024, £17.4 billion had been spent on the project, with £3.37 billion of the contingency fund accessed, according to the House of Commons library. The Ministry of Defence didn’t respond to questions over the funding, including whether the new investment is being lifted from the contingency fund. 

The first two boats in the programme have been mostly built, with the remaining two still in the early construction phase. The success of the Dreadnought programme is a key signal to the US and Australia that Britain is capable of delivering on its submarine commitments, with AUKUS also reliant on the same UK industrial base. BLOOMBERG