Defence industry branded 'a desert' amid concerns over helicopter deal

Britain's defence industry is "a desert" due to a lack of Government orders, according to critics as it was warned a helicopter factory faced closure with the loss of thousands of jobs unless a contract was awarded soon.

Leonardo Helicopters in Yeovil, Somerset, was the only bidder for the UK's £1 billion "new medium helicopter" contract, which was opened for competition in February 2024 by the previous administration, but the Ministry of Defence (MoD) has yet to confirm the deal.

Ministers have said the final decision on the award would be taken as part of the wider defence investment plan (DIP), the publication of which has been delayed.

The Yeovil site accounts for 3,300 direct jobs, supports a further 12,000 in the regional supply chain, and is said to be worth £320 million to the local economy.

Challenging the Labour front bench in Parliament, Tory shadow defence minister Baroness Goldie said: "Since this Government came to power, despite rhetoric, reviews and pledges, MoD orders have effectively dried up. Out there is a desert in the defence industry.

"That uncertainty is unnerving for the industry, with a stark warning from Leonardo that the helicopter factory at Yeovil is at risk of closing unless it receives orders.

"An invisible defence investment plan will certainly not keep it open. Can the Minister confirm whether the new medium helicopter programme started under the previous Government is still going ahead or has it been scrapped? If it has been scrapped, how will the Government secure the factory at Yeovil?"

Responding, defence minister Lord Coaker said: "She will know that the final decision on the award of the new medium helicopter contract will be made through the wider defence investment plan."

He added: "With respect to what she said about the defence industry being a desert, the Government have signed 1,000 major defence contracts since July 2024, 86% of which have been with British companies.

"Many contracts relate to lethal capabilities and are not published for national security reasons.

"We are spending billions of pounds on British industry.

"We want to grow its capacity and are doing all we can to support it.

"However, on her specific question about Leonardo, that will have to wait for the defence investment plan."

Liberal Democrat Lord Fox pointed out Yeovil was the UK's "only sovereign capability for full helicopter construction" and stressed the need for "a solid workflow".

But Lord Coaker said: "I cannot say any more than that the final decision will be contained within the defence investment plan.

"The only thing that I will say to him is that we are spending billions of pounds on the defence industry, and that amount of money is increasing."

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