Streeting has ‘total confidence’ in 3pc defence target but warns over PFI

Streeting has ‘total confidence’ in 3pc defence target but warns over PFI

Also in this email:

• Ex Defence Secretary Wallace warns over ‘irreversible damage’ to SkyNet contract
• Germany’s tank engine maker Renk buys David Brown
• New fabrication hall in Belfast to build Royal Navy supply ships

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Defence Secretary Wes Streeting said he had “total confidence” the UK will hit its 2030 target for spending 3pc of economic output on defence, but warned against using private finance initiatives to get there.

His comments come after Chancellor John Healey indicated at the weekend that the number was a target rather than a commitment and that the 2035 date for 3.5pc spending was the government’s firm commitment, leading to fears over a delay in ramping up military spending.

While in Berlin to meet German defence minister Boris Pistorius, Streeting told Poltico: “We deliver on time and on target.”

“I’m a big critic of PFI,” he added, saying that Britain “learned the lessons on PFI a long time ago and so the private finance initiative is not something we would repeat.”

Infrastructure was built across the UK using PFI under the Labour governments of Tony Blair and Gordon Brown. Under the schemes, private companies built schools, roads and hospitals using commercial funding, then charged the taxpayer to use them on long-term contracts.

It kept the expenditure off the government's balance sheet, but it ended up costing more because of the returns the companies demanded, plus the extra borrowing expense they incurred compared to cheaper government borrowing.

Streeting and Pistorius also discussed GCAP, the Anglo-Italian-Japanese warplane programme designed to replace Eurofighter for UK and Italy, while Japan will adopt it to reduce the country’s reliance on US fighter jets.

The collapse of Germany and France’s rival project to GCAP means Germany is now considering joining the London, Rome and Tokyo governments, although concerns have been raised that a fourth partner could dilute the work available to the other members.

Tokyo has also voiced concerns that the project could be slowed down by a new member joining. Germany joining would be a joint decision between the existing members.

Here’s what else you need to know before you start your day:

Spain’s Navantia opened a new fabrication hall in Belfast as part of its overhaul of the historic Harland & Wolff shipyard, which built the Titanic.

The £100m facility will build three new supply ships for the Royal Navy under the Fleet Solid Support programme and support 900 jobs. Another £57m has been invested in three other shipyards Navantia owns in the UK.

The firm is also overhauling Samson and Goliath, the two yellow cranes that dominate the skyline of Belfast’s docks

Germany’s Renk, which makes engines for tanks, said it bought Huddersfield-based gearbox maker David Brown Defence, a supplier to the Type 26 frigate programme.

“Through this acquisition, the Renk Group gains access to long-term naval programmes in the UK, Canada, Norway and Australia, as well as a broader presence in the Five Eyes countries,” Renk said. No sale price was given.

Leonardo will provide power and thermal management systems for the US Army’s high-energy laser weapon system.

The US is aiming to develop cheap, effective anti-drone laser weapons, joining the UK and other nations in racing to get the technology up and running. Dragonfire, a ship-based weapon, is being developed by MBDA, Leonardo and Qinetiq in the UK.

Also in the last few hours:

MoD

Former Tory defence minister Sir Ben Wallace has warned that handing the contract for the UK’s SkyNet military satellite system to Lockheed Martin would do “irreversible” damage to the UK satellite industry.

In a Twitter post, he said that when he was defence minister, a ministerial direction he issued was to keep the contract with its existing supplier, Airbus in the UK.

Worth reading in other news:

• Russian spy ship and landing vessel intercepted off Britain - Times
• While Britain Preps for Doomsday, Its Leaders Hoard Mascara and Sauvignon Blanc - Wall Street Journal
• ‘Desert Rats’ soldiers to train for peace in Ukraine - Telegraph

In the US:

Polls have opened for the midterm elections in the US, where predictions suggest President Donald Trump will lose control of Congress, casting doubts about his proposed $1.5 trillion defence budget getting approval.

A "Golden Dome" missile shield and a new generation of "Trump-class" battleships are among projects which the budget would fund.

Trump used much of his last speech before the election to tell voters about his achievement in renovating the Lincoln Memorial Reflecting Pool, spending 20 minutes on the project.

“The pool is now better and more beautiful than it’s ever been before, and we’re very proud of it,” he said. Sky’s Mark Stone called it “one of the most bizarre midterm-eve presidential appearances ever.”

"I've actually kept far more promises than I made. We've done much more than I promised," Trump also said. Unusually, he also hinted at doubts about victory.

"Usually, whoever the sitting president is, Republican or Democrat, good or bad, good president, great president, bad - for some reason, the sitting president doesn't win the midterms, but we gave this a very strong shot."

Talking point:

Scientists at Cern in Switzerland have detected signals from the “zeptoverse”, the world which can be measured in terms about 100 billion times smaller than an atom.

British-led researchers using the Large Hadron Collider observed a one-in-10-billion event where a subatomic particle called a beauty meson decayed to produce two smaller units called muons. Beauty mesons exist for less than two trillionths of a second.

“Physicists have been looking for this rare type of decay since 1984, before I was born,” said Dr Harry Cliff, who led the analysis team at the University of Cambridge’s Cavendish Laboratory, the Times reported.

Calendar

November 3, 2026, Uncrewed Systems Network Testing and Certification Conference, Swindon, UK
November 3–6, 2026, EURONAVAL 2026, Paris Nord Villepinte, France
November 4, 2026, Danish Aerospace Company Q3 Trading Update, Odense, Denmark
November 4–5, 2026, Readiness Europe – Defence Manufacturing Exhibition, Ulm, Germany
November 5, 2026, Rheinmetall AG Q3 2026 Financial Results, Düsseldorf, Germany
November 5, 2026, Leonardo S.p.A. Q3 2026 Results, Rome, Italy
December 2, 2026, BAE Systems plc Interim Dividend Payment & End-of-Year Operational Update, London, UK
December 3, 2026, Uncrewed Systems Network Funding, Investment and Exports Conference, Swindon, UK

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Rearmament is a free, daily newsletter packed with everything you need to know about the latest developments in the defence industry. It’s focused on matters in the UK and on the continent, as militaries and governments rearm.

Howard Mustoe, who writes it, is a former industry editor at the Daily and Sunday Telegraph. He has also worked for Bloomberg, the BBC and the Independent.

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