Defence Secretary Announces Priority for British Companies
Ministers will apply national security exemptions to prioritise British companies over foreign competitors in awarding defence contracts, Defence Secretary John Healey has announced.
Healey detailed plans to favour UK firms in procurement decisions amid ongoing pressure on the government to release its long-delayed defence investment plan.
Trade unions and defence industry representatives have warned that continued delays to the plan pose risks to British jobs, skills, and national security.
Chancellor Rachel Reeves has also voiced concern over the number of government contracts going overseas, urging cabinet ministers last month to increase efforts to prioritise investment within Britain.
Speaking at the GMB Union's congress on Tuesday, Healey said the chancellor was
"right recently when she said we need to buy British".
He outlined how his department plans to prioritise spending on UK companies and reform what he described as the "toothless" procurement system, calling the approach
"unashamedly pro-Britain".
Healey stated:
"The government will develop a new approach that looks to give credit in future defence contract decisions to British-based companies based on a genuine, substantive presence in Britain and long-term commitments to British communities and British supply chains.
As part of this drive, I can announce I will make greater use of national security exemptions for defence contracts - which allow the government to require certain capabilities to be built in Britain - supporting our UK industrial base and your members' jobs.
We will ensure that, in large defence contracts, there are provisions to require any significant sub-contracts to be placed with UK-based companies, or guarantee competitions so UK competitors aren't shut out."
The national security exemptions Healey intends to use are provided under the Procurement Act 2023. Contracts exempted on national security grounds are excluded from the law's formal competitive tendering requirements.
The government is also planning to develop guidelines to give British-based businesses an advantage in defence contract competitions, according to information provided to the BBC.
Healey added that if a defence contract is awarded overseas, the industry will be required to create jobs in the UK through what he termed a "British offset".
Key Sectors Highlighted for British Investment
This announcement follows a letter from Chancellor Rachel Reeves to every cabinet minister responsible for spending departments, urging them to "buy British" wherever feasible.
The letter identified key sectors including shipbuilding, steel, artificial intelligence, and energy infrastructure as focal points for British investment.
Reeves emphasised the need for a fundamental shift in government spending, citing current global tensions that underscore the importance of resilience in critical sectors.
Last week, the defence trade association ADS reported that British businesses were "really struggling" as they await the government's defence investment plan.
ADS chief executive Kevin Craven told the BBC:
"We have seen firms either moving out of the sector or changing direction and it will continue, no question about that."
Last month, British aerospace company Aeralis, which was developing a replacement for the Red Arrows fighter jet, entered administration.
The administrators cited a
"sustained period of pressure"on the company's cashflow due to
"continued delays to the UK defence investment plan, combined with geopolitical factors affecting sources of funding".
The defence investment plan was initially expected to be published in autumn 2025.
Last week, Healey stated that Prime Minister Sir Keir Starmer was
"determined to publish"the spending plan ahead of a NATO summit scheduled for next month.
However, internal government discussions continue regarding the additional funding required for defence, with reports indicating that the Ministry of Defence estimates it needs an extra £28 billion to meet its future commitments.
