Britain’s Economic and Military Dividend from Supporting Ukraine

Britian confronts a fundamental strategic choice regarding Ukraine that will shape its and Europe’s security for decades. Russia’s invasion exposed critical weaknesses in NATO’s deterrent posture and the fragility of Europe’s conventional capabilities. The question confronting British policymakers and the public is not whether Britain can afford to support Ukraine, but whether it can afford not to and risk the security environment that would result from a triumphant Russia.

Britain is providing aid to Ukraine – but in doing so it is also investing in its sovereign interests and defence. This matters profoundly for how policymakers, parliament and the public should assess British commitments of ‘up to £21.8 billion in support for Ukraine’ and consider the ‘UK-Ukraine 100 Year Partnership Declaration’ across sectors including defence, technology and trade. The British Government’s moral reasoning for supporting Ukraine is convincing and well established, however, Ukraine is also degrading Russian military capacity, buying time for the reconstitution of Britain’s defence industrial capabilities and positioning Britain as an indispensable security partner at a moment of considerable international uncertainty regarding the US commitment to European defence.

Every pound invested in Ukraine today benefits Britain and potentially saves substantially larger expenditures later. These economic and military dividends justify Britain’s commitments not as altruism but as advancement of core national interests.

Alistair Carns, the UK’s Minister for the Armed Forces, recently described Ukraine as standing ‘at the forefront of European security’ and explicitly outlined how British security was fundamentally interconnected with Ukraine. Framing Britain’s role as providing aid suggests charitable obligation that competes with domestic priorities, whilst recognising it as strategic investment transforms the calculus. The question of whether to support Ukraine in resisting Russia is one of the most significant decisions that Britain has had to make since the end of the Cold War.

Economic Return – The Defence Industrial Dividend

The most quantifiable benefit from supporting Ukraine manifests through Britain’s defence industrial base as procurement chains ensure orders go increasingly through domestic manufacturing. A £1.6 billion contract with Thales to manufacture lightweight multirole missiles in Belfast will support 700 existing jobs, whilst BAE Systems and Sheffield Forgemasters secured a £61 million contract to produce artillery barrels for the first time in almost two decades. Restoring industrial capabilities that had atrophied following decades of declining national investment, catalysing a manufacturing renaissance in regions historically dependent on heavy industry. These contracts represent sustained employment in sectors that also generate secondary economic activity through local supply chains and service economies.

Critics reasonably observe that Britain should have been placing these contracts regardless of the war in Ukraine, however, this misunderstands the adaptive nature of defence procurement. The need of expeditionary capabilities to fight counter-insurgency campaigns and ‘wars of choice’ rightly saw prioritisation away from conventional warfighting stocks and capability production. Supporting Ukraine gives the political and fiscal impetus to reverse this trend, at a pace and scale that would otherwise be impossible, outside of direct British involvement in war.

The broader industrial impact extends across multiple sectors. Government investment of £1.86 billion in ammunition production factories creates 1,000 jobs across at least 13 locations, with overall defence spending reportedly supporting over 430,000 jobs nationally. Critically, 68% of defence expenditure flows to regions outside London and the Southeast, which will begin to redress longstanding economic imbalances whilst building capabilities essential to national resilience. This geographic distribution matters not merely for social economic equity but because it embeds Britain’s ‘defence dividend’ back into communities with relevant manufacturing skills and ‘brownfield’ industrial sites.

The financial model that underpins Ukrainian procurement differs fundamentally from traditional aid programmes through its structure of sovereign investment. The UK-Ukraine Defence Industrial Support Treaty expanded eligible equipment categories funded through £3.5 billion in export finance, effectively channelling British support through domestic manufacturers whilst establishing commercial relationships that extend beyond immediate wartime requirements. Ukrainian procurement funded through British export credits requires sourcing from British supplies, ensuring that taxpayer commitments return through employment, corporate taxation and enhanced dual-use industrial capacity. This creates a virtuous cycle wherein support investment strengthens British manufacturing capabilities whilst meeting Ukrainian operational requirements.

Though precise figures regarding what percentage of committed support actually circulates through British industry remain commercially sensitive, the financing structure through export credits and tied procurement arrangements ensures that a substantial majority represent domestic economic activity rather than cash transfers. This distinguishes support to Ukraine from humanitarian or budgetary support, which likely involve direct financial transfers with minimal British industrial benefit. Instead, this approach effectively converts security assistance into industrial policy, addressing both Ukrainian battlefield requirements and British manufacturing ambitions simultaneously.

Military Benefit – Reconstituting British Defence Capabilities

Britain’s military ambitions extend substantially beyond current capability. The Chief of the General Staff has directed the Army ‘to double then triple the fighting power of our land forces, by 2027 and 2030’ whilst the Royal Navy and Royal Air Force pursue equal optimisation and modernisation goals. Supporting Ukraine provides a mechanism to reconstitute critical capabilities whilst concurrently deterring and degrading Britain’s adversaries. The 2022 invasion exposed severe deficiencies in European conventional forces and, as a House of Lords committee concluded, ‘represented a failure of NATO’s deterrent posture’ and ‘exposed fundamental weaknesses in both UK and NATO military strength’. Addressing these weaknesses requires practical learning from those experienced in contemporary peer-level conflict and financial investment.

Ukraine functions as a proving ground for British equipment and doctrine under conditions impossible to replicate through exercises. Britain has trained over 60,000 Ukrainian personnel under Operation INTERFLEX, providing British instructors invaluable exposure to lessons from modern warfare’s operational realities. These lessons directly inform Britain’s own force development, particularly regarding the integration of autonomous systems, electronic warfare and dispersed manoeuvre under persistent surveillance and mass precision fires. The Strategic Defence Review 2025 explicitly references Ukrainian experience in its commitment to ‘increase lethality while on the path to rebuilding mass and endurance’.

The practical learning from training Ukrainian personnel complements Anglo-Ukrainian industrial partnerships that deliver military benefits as well as economic commitments. Technology sharing agreement between Britain and Ukraine enables joint development of ‘advanced military weapons and ammunition manufacturing capabilities’, exemplified by the new air defence interceptor drone. Project OCTOPUS is a system that ‘will be mass produced in the UK’ and deployed to Ukraine at a predicted production rate of ‘thousands per month’. Britain gains access to Ukrainian battlefield innovation catalysed by wartime pressure, whilst Ukraine benefits from British industrial capacity – that grows as demand does – with technical expertise protected away from the frontline. This partnership model proves particularly valuable because Ukrainian adaption occurs at a pace impossible in peacetime, where procurement timelines extend for years and operational testing is necessarily constrained.

The most significant military dividend is that supporting Ukraine degrades Russian military capacity without British casualties. Supporting Ukraine is not an alternative to domestic defence spending but a force multiplier for it. Fundamentally, Britain either assists Ukraine in degrading Russian military power now or faces reconstituted Russian forces threatening NATO territory within years. As one report describes it, the war is ‘asymmetrical attrition’ that has the potential to change ‘Moscow’s strategic calculus’ and ISW analysis suggests Russian military reconstitution following any sustained ceasefire ‘will create a force capable of threatening NATO interests and European security’ in five years or more. Alarmingly, some also assess it ‘could very likely conduct limited offensive action against NATO’ in as little as two years. These timelines depend upon assumptions regarding Russian industrial mobilisation, sanctions effectiveness and domestic political stability, yet even conservative projections suggest relatively rapid capability restoration.

Every Russian tank destroyed in Ukraine, every Russian casualty, every Russian aircraft shot down diminishes the force potentially threatening British and European security in the future.

Support to Ukraine is not just Altruism it is also Strategic Calculation

Britain defends itself by defending Ukraine. As one senior officer noted, ‘Ukraine’s security is Britain’s security’ and public opinion demonstrates remarkable resilience in agreeing. Recent Ipsos polling revealed both commitment and recognition with six in ten Britons still favouring the ‘UK’s role in providing economic, humanitarian, and defensive military assistance to Ukraine’. The public already sees an intrinsic link between British and Ukrainian security, this needs to be strengthened and deepened by understanding the dividends of an enduring Anglo-Ukrainian partnership.

Britain’s prominent role in supporting Ukraine reinforces its contribution to NATO’s deterrence across its eastern flank. British leadership and commitment as one of the leading donors to Ukraine has galvanised international support and placed it at the forefront of European defence and security; however, it is but one element of NATO’s broader deterrence architecture. Ultimately, Britain’s long-term security depends upon its credible and capable collective defence within NATO Article V as well as supporting Ukraine. Safeguarding Britain’s future depends upon regenerating the ‘strong, credible defence capabilities’ of its armed forces.

© RUSI, 2025.

The views expressed in this Commentary are the authors', and do not represent those of RUSI or any other institution.

For terms of use, see Website Terms and Conditions of Use.

Have an idea for a Commentary you'd like to write for us? Send a short pitch to commentaries@rusi.org and we'll get back to you if it fits into our research interests. View full guidelines for contributors.