02 Mar 25. Historic £1.6bn deal provides thousands of air defence missiles for Ukraine and boosts UK jobs and growth
Deal will create 200 jobs in Northern Ireland and provide 5000 air defence missiles missiles to Ukraine.
200 new jobs will be created and hundreds more supported at one of the UK’s leading defence manufacturers, after a £1.6bn deal was announced by the Prime Minister today to supply thousands of advanced air defence missiles to Ukraine.
The latest measures in the UK’s support for Ukraine to achieve peace through strength, the deal will also provide a major boost to the UK economy and support 700 existing jobs at Thales in Belfast, which will manufacture more than 5,000 lightweight-multirole missiles (LMM) for Ukraine’s defence. The deal will see production of LMMs at Thales’s factory treble and will also benefit companies in the Thales Supply Chain across the UK – putting more money in working people’s pockets.
It is the largest contract ever received by Thales in Belfast and the second largest MOD has placed with Thales, building on a previous contract with Thales, signed in September 2024 for 650 missiles. The first batch of missiles were delivered before Christmas, and this new contract will continue deliveries.
The deal comes after the Prime Minister announced the Government’s commitment to increase spending on defence to 2.5% of GDP by April 2027 and confirmed an ambition to spend 3% of GDP on defence in the next parliament, in order to keep Britain safe and secure for generations to come. This investment will be an opportunity to translate defence spending into British growth, British jobs, British skills, and British innovation.
The deal helps deliver on the Government’s pledge in its Plan for Change to improve the lives of people in every corner of the UK by growing the economy. By spending more on defence we will deliver the national security that underpins economic growth, and unlock new jobs, skills and opportunities across the country.
Prime Minister Keir Starmer said: “My support for Ukraine is unwavering. I am determined to find a way forward that brings an end to Russia’s illegal war and guarantees Ukraine a lasting peace based on sovereignty and security. I am also clear that national security is economic security. As well as levelling up Ukraine’s air defence, this loan will make working people here in the UK better off, boosting our economy and supporting jobs in Northern Ireland and beyond. By doubling down on our support, working closely with key partners, and ensuring Ukraine has a strong voice at the table, I believe we can achieve a strong, lasting deal that delivers a permanent peace in Ukraine.”
Defence Secretary John Healey MP said: “Three years since Putin launched his full-scale invasion, we are now at a critical moment for the future of Ukraine and the security of us all in Europe. We all want a secure and lasting peace. As today’s meeting has showed, the UK will continue to lead international efforts to support Ukraine in securing a ceasefire and durable peace. And we will not jeopardise the peace by forgetting about the war. This new support will help protect Ukraine against drone and missile attacks but it will also help deter further Russian aggression following any end to the fighting. This new deal delivers on the UK’s ironclad commitment to step up military support for Ukraine, whilst boosting jobs and growth at home. Today’s deal marks a historic step for industrial relations between the UK and Ukraine, building on the 100 Year Partnership signed recently by the Prime Minister and President Zelenskyy in Kyiv. The contract will enable Ukraine to draw on £3.5bn of export finance to acquire military equipment from UK companies, boosting both the UK’s and Ukraine’s defence industrial bases and support investment in further military capabilities.”
Ukraine has already put the highly capable LMM missile to use as part of its air defences where it has proven to be incredibly effective in protecting civilians and critical infrastructure from Russia’s bombardment. A £162m contract announced in September last year saw 650 LMM missiles supplied to Ukraine as an initial order to ramp up production – deliveries started in December 2024.
Thales Northern Ireland will deliver the contract – worth an initial £1.16bn with the potential for around a further £500m of work to be added – in collaboration with a Ukrainian industry partner, which will manufacture launchers and command and control vehicles for the missiles in Ukraine.
The contract has been placed by the MOD’s procurement arm Defence Equipment & Support on behalf of the Ukrainian Government, to be funded by a loan underwritten by United Kingdom Export Finance (UKEF) after a deal signed last year to allow Ukraine to draw on £3.5bn worth of support from UKEF to spend with UK industry.
As set out in the Plan for Change, national security is the first duty of the Government – and a strong economy is built on the bedrock of strong security. Increased defence spending will support highly skilled jobs and apprenticeships across the whole of the UK. Last year, defence spending supported over 430,000 jobs across the UK, the equivalent to one in every 60, and 68% of defence spending goes outside of London and the Southeast, benefitting every nation and region of the country.
Andy Start, DE&S CEO and UK National Armaments Director said: “The UK’s Defence Industry has supported Ukraine from the start of the war and this important contract underlines industry’s ability to scale up production at pace to deliver the world-class defence equipment Ukraine requires. “This contract is a critical next step in the work of Task Force HIRST in developing lasting partnerships between the UK and Ukraine’s defence industries. The substantial increase in LMM production capacity will benefit both Ukraine’s fight tonight, as well as the longer-term security of the UK. The deal marks the next milestone in the work of the MOD’s Taskforce HIRST and the first of a series of “mega projects” to be delivered for Ukraine, with the HIRST team working to build long-term relationships with Ukrainian industry to restore and modernise their defence industrial base, support its future defence and economic growth.”
Earlier this month, the Defence Secretary announced a new £150m military support package to support Ukrainian troops fighting Russia on the frontline, part of the UK’s unprecedented £3 billion annual pledge to Ukraine.
The UK has committed to spending £3bn next financial year to support Ukraine, with an additional £1.5bn from interest on seized assets through the Extraordinary Revenue Accelerator – taking the total to £4.5Bn. This will ensure Ukraine can achieve peace through strength and underscoring the new 100 Year Partnership between the UK and Ukraine.
(Source: https://www.gov.uk/)