On the 20^th July this year, a Russian Navy frigate conducted live-fire exercises approximately 40 nautical miles south of Plymouth, in the English Channel. The vessel was shadowed by a Royal Navy ship and a French military aircraft. A week earlier, a separate Russian frigate had fired warning shots at a British yacht south of the Isle of Wight.

These are not distant signals picked up by intelligence. They are warships firing guns off the English coast. And the Royal Navy response required a French aircraft because we did not have enough of our own to spare.

Welcome to the state of the Royal Navy in 2026.

In 1991, the picture was very different. The Senior Service had 50 destroyers and frigates. Today it has only 11. Six Type 45 destroyers and five Type 23 frigates, most of which are ageing. Combine that with the two hilariously unreliable aircraft carriers the UK has, which spend more time in maintenance than at sea, and you wind up in our situation, where the UK had zero deployable carrier strike capability at points this year.

Adding to the general embarrassment, the Royal Navy has only 60 active and commissioned ships total. To command these, we have 134 admirals and flag officers, a ratio that would embarrass any organisation, and much higher than any of our allied partners such as France or the US. The Ministry of Defence also employs 57,445 civil servants, which is nearly twice the number of people serving in the entire Royal Navy.

We are top-heavy and underperforming. What rarely gets told alongside these defence statistics is that we did not just lose the ships. We lost the factories, the engineering expertise, the apprentices, the supply chains, the institutional knowledge and the communities that built them. The decline of the Royal Navy and the decline of British manufacturing are the same story told from different angles. In trying to save money through privatisation and outsourcing, we achieved neither defence efficiency nor industrial growth.

The Royal Ordnance Factories, publicly owned, were privatised in 1987 and subsequently acquired by BAE Systems. It is one of many. Defence Electronics, shipbuilding, aerospace design, one by one these sovereign capabilities were sold or allowed to atrophy on the grounds that the private sector does these things better. The private sector then consolidated, reduced competition, and settled into a comfortable arrangement of monopoly, returning significant profits to shareholders whilst delivery programmes run late and over budget. BAE Systems returned £1.5bn to shareholders in 2024, the very same year they were managing UK programmes years behind schedule. The MoD, as a captive customer, simply absorbed the cost overruns and you and I, as taxpayers, paid for both.

The 2% of GDP defence budget headline, which the government cites as evidence of adequate spending, needs a footnote. If you strip out the nuclear deterrent maintenance, military pensions and Ukraine support costs, conventional defence capability is actually likely to be well below the 2% headline figure. That is simply not enough when we are facing not only threats from hostile actors around the world, but also less reliability from our core allies.

The Liberal Democrats understand the threat from Russia and that post Ukraine, defence can no longer be a fringe issue. What we have not yet done is to propose a distinctive, credible answer to British naval, and broader military decline. Opposing cuts cannot be our strategy, we must come up with a unique model to challenge the situation.

My view is simple. We add in competition to the monopolies. This should be in the form of a sovereign development corporation, publicly owned and commercially independent, operating without shareholder extraction. All profits reinvested into capability and research. Staff paid competitively through performance bonuses funded from those profits, so we can attract the best engineering talent that currently emigrates to the US defence sector. I’d call this organisation DRAKE, after the man who understood that protecting British waters required a combination of state backing and genuine fighting capability.

DRAKE would inject some much-needed competition into the defence ecosystem. The Common Combat Vessel programme; six new hybrid warships announced in June 2026 would be an excellent first contract for it to compete for. Bringing in an extra player, who is motivated by providing value for money for the taxpayer without sacrificing the quality of delivery would give British shipbuilding a drumbeat it is sorely lacking.

Do not mistake this for nationalisation for its own sake. It is the model France uses with the KNDS, and what South Korea did with its shipbuilding industry before it became a global export powerhouse. The idea that the state can own a capability and run it commercially is not radical, it’s just something Britain stopped believing in during a period when we were told markets always know best.

As Liberal Democrats, we have an opportunity to own this new agenda. Britain needs to build more things again. Let’s start with ships.

* Ben Edginton-Thomas is a technology consultant who has spent over a decade delivering frontier technologies into startups, government and industry, with a focus on the UK's national security and defence sectors.