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Defence firm General Dynamics is positioned to benefit from a landmark £15 billion UK Government investment to modernise the Armed Forces.

The Defence Investment Plan, announced by Prime Minister Keir Starmer, will increase UK defence spending to nearly £80 billion a year by 2029.

The government named General Dynamics, which employs hundreds of people at its sites in Oakdale and Merthyr Tydfil, as a key supplier expected to support an expansion of the Welsh defence sector.

The investment includes £5.2 billion for a “drone transformation” program, which will fund autonomous systems and uncrewed ground vehicles. It also secures funding for the £50 million Defence Growth Deal for Wales to help local supply chains access major military contracts.

Around 4,000 people in Wales work in the defence industry, supported by more than £1 billion of annual Ministry of Defence spending. Ministers claim the new UK-wide funding package will create 60,000 jobs across the country by 2030.

Welsh Secretary Jo Stevens said: “Our Defence Investment Plan will shape the future of Wales’s defence industry for years to come, protecting and delivering skilled well-paid jobs across Wales.

“Wales is at the forefront of the autonomous defence technology that our Armed Forces need and this investment will drive growth in this key sector.”

Chancellor Rachel Reeves described the funding as the “highest since the Cold War”, while Prime Minister Keir Starmer said it “puts the security of the British public first, transforming our Armed Forces and giving them the funding and equipment they need to fight and defend our nation”.

Sir Keir continued: “The world is a more dangerous and volatile place, so it is only right we are boosting the number of troops on the ground, rebuilding ammunition stockpiles and investing in cutting edge technology to ensure we outpace our adversaries for generations to come.

“Every pound in this plan will work twice, delivering economic growth and opportunity for the British people, and supporting more than half a million jobs by the end of the decade, as well as reinforcing our national security.”

Labour MP Ruth Jones, who represents Newport West and Islwyn, welcomed the funding, which she said “will provide reassurance to the hard working staff in Oakdale and beyond as General Dynamics continues to provide vital support to our armed forces”.

The wider UK plan increases defence spending to 2.7% of GDP. Alongside autonomous technology, the multi-billion pound strategy funds nuclear submarine upgrades in Cumbria and Scotland, next-generation stealth fighter jets, and national ammunition stockpiles.