I think the british have the technical know how, but they don't have the economic strength anymore to undertake such massive tasks. A typical military aircraft nowadays can take 20 years or more to develop, and production runs of 100 aircraft or less are the norm. not many countries, let alone companies can afford that sort of investment in time and money.
The mistake the british are making, in my opinion is tying itself to the European "star'. more like an albatross really