In 2023, annual global military spending reached $2.4 trillion, the highest level on record.^[1] The UK’s military budget that year was the sixth highest of any country, consuming a larger share of GDP than France, Australia, Italy, Germany, Spain or Canada.^[2] There is now cross-party consensus in Westminster to increase military spending to 2.5 per cent of GDP and, in July 2025, the government’s Strategic Defence Review will set out a roadmap to this target. In the 2023 financial year, the government spent more than half of its £63 billion military budget on the procurement of weapons systems and services, an outlay that maintains a sprawling domestic industry to produce military equipment.^[3]

Drawing on 21 extended interviews with current and former workers in the UK’s military industry, this report explores a pathway to redirect productive capacity from this military industrial base towards addressing the climate crisis and deepening economic resilience instead. This alternative strategy would repurpose parts of the UK’s military industry and build on the tradition of proposals by labour movements — most famously by shop stewards at Lucas Aerospace in the 1970s — to convert military production towards civilian sectors, in this case green manufacturing. 

Even without accounting for the planned increase of military spending to 2.5 per cent of GDP, the Ministry of Defence (MOD) will spend £288.6 billion on equipment production and support programmes to 2033, which it projects to be £16.9 billion over budget and acknowledges is not affordable.^[4] At present, approximately three quarters of the military equipment budget is spent on a domestic industry that exists to supply the MOD and the UK’s arms export customers.^[5] Historically the most significant customers of weapons produced in Britain have been Gulf monarchies; 23 per cent of the UK’s arms exports went to Qatar alone between 2019 and 2023.^[6] As set out in the 2021 Defence and Security Industrial Strategy, the maintenance of the UK’s military industrial base is designed to meet political objectives, primarily to play a “global role” and meet “global responsibilities”.^[7] This is not an industrial strategy designed for the defence of UK territories, but to maintain a global military force — or “balanced and credible nuclear, conventional, cyber and space forces, and a clearly communicated willingness to use them in the place and at a time of our choosing” — as well as to build military capability for a wide range of allies.^[8] 

To build public consent for increased spending on the military industrial base, politicians often lean on economic arguments. The Defence Secretary John Healey has suggested that jobs in the military industry produce greater economic benefits than in other sectors while outlining his intention to make the Ministry of Defence (MOD) an “economic department”.^[9] On the contrary, the military industry is not of inherent economic value, as asserted by Healey, but the beneficiary of an active industrial strategy that has been less available to civilian manufacturing sectors since the early 1980s. The UK’s leading military contractor BAE Systems, for instance, only paid 14 per cent of its £2 billion research and development (R&D) budget in 2022 with the rest of the bill covered on its behalf by government customers.^[10] As explored in detail below, the state subsidy and support provided to military companies operates to the benefit of the private investors that own them. Rather than a set of national or publicly-owned companies, the Ministry of Defence procures equipment from an “asset manager arsenal” — a landscape of multinational contractors, many of which are owned by the same few global investment firms.^[11] 

The level of public investment and resource afforded to military firms is politically pertinent in the context of climate crisis, in which the coordinated deployment of existing capital stocks, productive equipment and skilled labour towards the energy transition is of planetary importance. Given the state’s role in steering industrial capacity towards the military industry, there is an opportunity to repurpose production in the context of a wider economic transition, one that has long term benefits for the sector’s workers, communities and the national economy. 

To understand the viability of an alternative use for the industrial capacity and skills within the military industry, Common Wealth conducted extended interviews with workers on their experiences of the sector, the potential of industrial repurposing and the policy interventions that would be necessary to deliver it (see the Methodological Annex for further information). Through these interviews and two visits to military industrial sites conducted with trade union representatives, a picture emerged of the technological feasibility of transitioning production. The interviews revealed four sites at which limited production for green industries is already taking place, even without the state coordination needed to accelerate a more comprehensive transition. Interviewees also described the adjacency in skills between naval shipbuilding and manufacturing for green energy production or green transport while others suggested that their skills in aerospace engineering could provide R&D capacity to support transitions elsewhere. Almost all interviewees were in favour of their firms expanding production into green sectors to some extent — a larger recent study indicated that these views are held by a strong minority within the industry — although they conceived of this process in different ways, from a diversification plan to support military production to a wider process of conversion.^[12] Together, the interviews indicate that there is a base of capacity and skills within the military industry that could be redeployed towards addressing the climate crisis.

The interviewees also made clear that for a transition to be successful it would require a reordering of state priorities, the redirection of public investment that is currently directed towards the military sector and the use of public procurement of green energy or transport products to coordinate the transition. This report outlines three major benefits to repurposing military production in this way: first, it could provide the basis of a “just transition” in a major industrial sector that directs skills and capacity towards climate goals while providing long term security to workers; second, it would offer an effective means of addressing the carbon footprint of the UK’s military and military industry which was greater than that of sixty countries in 2017-18; third, it could support a comprehensive review of military objectives to align with the defence of the UK rather than the global projection of force and ensure that redundant military capacity is repurposed towards essential climate goals.^[13] To realise these benefits, and to deliver a successful industrial transition, the UK government should take forward the following three policy priorities: 

[.num-list][.num-list-num]1[.num-list-num][.num-list-text]Establish Lucas Holdings, a publicly-owned off-balance sheet company independent of the MOD, to coordinate and lead the repurposing process.[.num-list-text][.num-list]

Lucas Holdings would include national and local governance roles for workers and their trade unions to direct the transition. It would acquire industrial sites in strategic clusters — for instance a shipyard and a nearby aerospace R&D facility as set out in the interactive map that accompanies this report — drawing from existing military procurement spending to invest in conversion projects. Lucas Holdings would additionally have the means to invest directly in repurposing projects itself and to draw on public research capacity from universities to support workers in developing alternative plans. 

[.num-list][.num-list-num]2[.num-list-num][.num-list-text]Use the public ownership of energy generation and transport to ensure demand for the repurposing process.[.num-list-text][.num-list]

Existing programmes such as Great British Energy, and public bodies such as Transport for London and ScotRail, should support transition clusters using coordinated procurement. Through the alignment of green industrial strategy these public bodies can provide demand for products from Lucas Holdings’ industrial clusters. The strategy of Lucas Holdings would be coordinated towards the needs of these public firms. 

[.num-list][.num-list-num]3[.num-list-num][.num-list-text]Deliver a strategic review of military commitments and military industrial strategy.[.num-list-text][.num-list]

Conduct an independent review to understand where military procurement commitments are designed to maintain overseas intervention capabilities and where they are essential for national defence. This review would redefine the UK’s military objectives around national defence and overseas retrenchment. The strategy would redirect weapons procurement spending to support a new industrial strategy, for instance through the repurposing of industrial projects that focus on power projection against China or exports to countries that have recently committed war crimes, such as Saudi Arabia and Israel.^[14]

Those lobbying for greater military spending often lean on domestic economic arguments to sell the case for the global projection of the UK’s military power. But these arguments are thin: the UK’s military industries are viable only because of constant public investment and industrial capacity developed through public resources can serve an alternate range of purposes. Sections of the arms industry should be repurposed for a green industrial strategy. This report demonstrates that such a shift is technologically feasible, socially necessary and welcomed by workers. By repurposing military production sites, we can use existing industrial capacity to help onshore green supply chains and meet vital climate targets.

To read the full report, click here. To view the interactive map accompanying this report, click here.