Chancellor says defence spending puts Northern Ireland 'at the heart of the UK’s industrial future' during Belfast visit
The Chancellor has used a trip to Belfast to highlight key economic pledges for Northern Ireland – as the government says increased defence spending will put the region at the heart of the UK’s industrial future.
Rachel Reeves was on her first visit to the province since she took charge of the nation’s finances, touring the Studio Ulster film production set and the Thales defence contractor in Belfast.
She said the creative and defence industries are key to economic growth here – and that the region is “brimming with talent and ambition”.
The government says its commitment to increase defence spending to 2.6% of GDP will “further secure” Northern Ireland’s “place at the heart of the UK’s industrial future”.
On her visit on Tuesday, the Labour minister confirmed a previously announced £310m for City and Growth Deals – as well as a new £137 million to combat terrorism, paramilitarism and organised crime. The government says the investment will “lay the foundations for long-term prosperity” in Northern Ireland.
Part of its UK-wide ‘Plan for Change’, Labour says its new investment on tackling gangs will unlock “safer streets and new economic opportunities”.
The Chancellor also announced a commitment from Thales of £100 million and up to 200 new jobs in Northern Ireland’s defence industry. The company has benefitted from UK defence contracts to support Ukraine in its defence of its territory from the Russian invasion.
First Minister Michelle O’Neill said earlier this year that she was “incredulous” that the government was spending money helping Ukraine’s military when it could instead fund public services. The Sinn Fein leader didn’t meet the Chancellor on her visit on Tuesday – instead she was be met by the deputy First Minister and the Finance Minister John O’Dowd.
Ms Reeves also said the government had secured the largest real-terms settlement for the Northern Ireland Executive since the Belfast Agreement, averaging £19.3 billion per year until 2029.
During her visit to Studio Ulster – home to what officials called the world’s most advanced virtual production studio – the Chancellor praised Northern Ireland’s creative sector, which is supported by £25.2 million of UK Government investment through the Belfast City Region Deal. The government says this investment “underpins Northern Ireland’s reputation as a global leader in film, TV, and digital innovation, supporting high-value, high-skill jobs and attracting international productions such as Game of Thrones and Line of Duty”.
Chancellor Rachel Reeves said: “Northern Ireland is brimming with talent and ambition, from cutting-edge film studios to world-class defence manufacturing. Today’s investments are about fixing the foundations for future prosperity – backing the sectors that will create good jobs, drive economic growth, and allow communities to thrive.
“This is a turning point. Every pound we invest here supports good jobs, strengthens our economy, and boosts the United Kingdom’s standing on the world stage, with Northern Ireland at its heart."
The Chancellor also visited Thales’ Castlereagh site, where she highlighted the defence sector’s role in supporting Ukraine and strengthening the UK’s security.
Thales’ £100 million expansion will see a third facility opened and create up to 200 new jobs, adding to the 900 skilled roles already supported by UK Government defence spending in Northern Ireland.
Secretary of State for Northern Ireland Hilary Benn said: “With world-class strengths including in advanced manufacturing, cyber, defence and the creative industries, and access to the EU market, Northern Ireland is perfectly placed to seize the opportunities ahead.”
“That is why we are committed to supporting Northern Ireland to fulfil its potential through the City and Growth Deals, our Industrial Strategy, local growth funding and the record settlement for the Executive of £19.3 billion per year, which is the largest in the history of devolution.”
Northern Ireland will also benefit from increased UK-wide research and development and aerospace funding, supporting 21,000 R&D jobs and 5,000 in aerospace.
Nigel MacVean, Managing Director, Integrated Air-space Protection Systems (IAS) of Thales in the UK, said: “I welcome the news of this increase in defence spending. The support for highly skilled jobs within the defence sector will help to empower us to accelerate innovation, expand our reach, and deliver even greater value to our customers and partners, both in the UK and with our internationally. We remain committed to driving excellence and making a meaningful impact with this strengthened foundation.”