Ministers are preparing to tilt a major new wave of defence spending towards firms with a substantial UK footprint, in a move that could alter how the sector is bought and built for years to come.
Defence Secretary John Healey is expected to unveil the approach alongside the long-awaited Defence Investment Plan, which is understood to set out about £15 billion of additional funding. The new framework is likely to give greater weight to companies that are genuinely embedded in ...
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Britain, rather than simply operating there in name.
Speaking at the GMB union’s congress, Mr Healey said the government would take a fresh approach to future contract decisions, giving credit to British-based companies with long-term commitments to local communities and supply chains. He also said the policy would be “unashamedly pro-Britain”.
The shift is expected to rely more heavily on national security exemptions already available under the UK’s defence procurement rules. Those provisions allow ministers to restrict competition where they judge it necessary to protect security interests or sustain domestic industrial capability. Government guidance on defence contracting says such exemptions can be used to ensure critical capabilities are built and maintained in the UK.
A notable feature of the proposed policy is that it is not limited to prime contractors. In larger deals, companies may be required to place significant sub-contracts with UK suppliers, or at least ensure British firms are not excluded from competition. Where an overseas company wins work, it may also be asked to create jobs in the UK.
For smaller and specialist suppliers, the direction of travel could be significant. Many have long argued that the defence market has been dominated by a handful of multinational primes, making it difficult for British SMEs to break through. If the government follows through, that balance may begin to shift.
The announcement also comes as ministers seek to reinforce the wider industrial base. In a separate move, the government has set aside £80 million to increase student placements in strategically important courses, part of an effort to strengthen the skills pipeline into defence manufacturing and engineering.
Taken together, the measures suggest a more interventionist stance from Whitehall: one that treats defence procurement not just as a buying exercise, but as an industrial policy tool designed to secure jobs, capability and supply-chain resilience at home.
Source: Noah Wire Services
