UK Industry Concerned by Policy Lag under New PM

With the UK set to get a new prime minister on Monday, the Farnborough International Airshow is opening in a political vacuum, raising widespread uncertainty across the country’s aerospace and defense sectors. Concern over potential changes to government policy will likely continue beyond this week, with further procrastination over key policies, such as how increases in military spending will be funded, being among the major headaches.

As things stand, it is unclear when or if Andy Burnham—Keir Starmer’s replacement in No. 10 Downing Street—will visit the Farnborough show this week as he forms a new administration, although some changes to the event’s schedule suggest he might make an appearance on Wednesday. Since the first staging of the event in September 1948, prime ministers have usually visited the industry’s marquee gathering.

Burnham’s absence may be forgiven by UK business leaders if he shows resolve in pushing three key government initiatives such as the Defence Finance and Investment Strategy. This is supposed to be the springboard for implementing the country’s Defence Investment Plan, released long overdue on June 30.

According to Kevin Craven, CEO of UK industry group ADS—which owns show organizer Farnborough International—his team has been seeking clarity from the government for months. “We need to see delivery on this,” he told reporters earlier this month, acknowledging Prime Minister Burnham’s likely absence from the airshow to be an inauspicious start to the industry relationship with the new government.

UK Industry Squeezed on All Sides

Craven said his members are having to contend with multiple pressure points including ongoing supply-chain disruption, difficulties accessing capital, and rising business costs. The changes at the top of the country’s government have disrupted efforts to secure help that it says is needed to improve competitiveness.

At a media briefing on July 8 to launch the results of the group’s latest industry survey, ADS chief economist Aimie Stone said the UK industry is still having to absorb the fallout from U.S. President Trump’s tariffs, which cost significant management time in addition to financial penalties that in some cases can now be reclaimed. The impact of the Iran war on the aviation sector is denting industry confidence and further inflating costs, while British companies also continue to rue countless missed opportunities 10 years on from the country’s Brexit vote to exit the European Union.

Closer to home, ADS has to pay attention to trends such as the UK's diminished public finances and inflationary pressures. On the positive side of the ledger, Stone said there are significant opportunities for companies to harvest their expertise in fields such as artificial intelligence, clean energy, and new dual-use aircraft that can be engaged in both civil and military use cases.

The new ADS data shows the UK aerospace, defense, security, and space industries generate revenues of nearly £110 billion ($149 billion). According to the group, this represents a 62% increase since 2015, and over the same period, employment in the wider sector has grown to 468,500 jobs.

As it lobbies for the more focused help it seeks from the UK government, ADS reported that its 2,000-plus member companies generated £46.8 billion for the country’s economy in 2025. Productivity across the sector now amounts to £99,900 per person, which is above the national average.