Thousands of small businesses in the UK will receive new
government support to ensure they benefit from the historic
decision to increase defence spending to 2.5% of GDP. This
investment will protect UK citizens from threats at home, but
also create a secure and stable environment in which businesses
can thrive, supporting the Government's number one mission to
deliver economic growth.
The government has today announced its plans to launch a new hub
to provide small and medium enterprises (SMEs) with better access
to the defence supply chain and committed to set direct SME
spending targets for the Ministry of Defence by June this year.
This is a chance for small, often family-owned, firms to bring
their innovations, their agility and their expert workforce to
the task of strengthening Britain's defences. It will help create
new jobs, boosting the economy of small towns and suburbs in the
UK.
It follows the Government's historic uplift in defence spending
to 2.5% of GDP by April 2027, with a commitment to hit 3% in the
next Parliament. This investment in defence will deliver the
stability that underpins economic growth, and will unlock
prosperity through new jobs, improving the lives of people in
every corner of the UK.
The new hub and investment targets announced today will ensure
this increased spending directly benefits SMEs as much as
possible – supporting jobs, growth and innovation. This is a vote
of confidence in the prospects of up to 12,000 SMEs, supporting
them to raise finance and train workers with confidence. It marks
further progress to deliver the government's Plan for Change,
putting more money in people's pockets and rebuilding Britain.
The move is designed to boost the resilience of the UK's defence
industrial base and to seize the full power of rapid
technological change as part of the Government's forthcoming
Defence Industrial Strategy.
Nearly 70% of defence spending goes to businesses outside London
and the South East, bolstering local economies from Scotland to
the North West. However, only 4% of this spending went to SMEs in
2023-2024, which is why the Government is stepping up to provide
more support to SMEs and help them get their foot in the
door in the defence supply chain.
Prime Minister said:
“The UK's defence industry is a source of national pride. It
supports hundreds of thousands of good jobs up and down the
country and represents British manufacturing at its best.
“Increasing our investment in defence is not only bolstering our
national security, it is an opportunity to put more money into
working people's pockets and boost economic growth.
“By helping smaller businesses to access this money, we're making
communities across the UK better off and opening up more
opportunities to train for good, skilled, productive jobs.”
Defence Secretary MP said:
“This Government's historic increase in defence spending to 2.5%
of GDP by April 2027 will boost national security and make
defence an engine for economic growth throughout the UK.
“For too long small businesses felt locked out of defence,
but we've listened and we're acting. Today's announcement will
ensure that smaller firms benefit from increased defence
spending, attracting new suppliers and fast-tracking the
technologies of the future into the hands of our Armed
Forces.
“This a new era for defence and we will ensure it plays the
fullest part in our national economic growth."
The new Hub will work with suppliers across the nations and
regions of the UK to ensure that it fully meets their needs. This
will strengthen defence procurement through increased choice and
faster access to innovation. It will keep the UK at the forefront
of defence technology, improving the capabilities available to
our Armed Forces, the competitiveness of UK industry and growing
potential exports benefits.
Defence is an engine for jobs and growth in every nation and
region of the UK. In 2023-24, defence spending by the Government
supported over 430,000 jobs across the UK, the equivalent to one
in every 60. In the same year, the Ministry of Defence spent a
total of £28.8 billion with UK industry, with spending in the
East Midlands increasing by 30%, equivalent to £328 million, on
the previous year. Northern Ireland also saw a rise of 20%, with
other increases in Yorkshire and the Humber and the North West,
up 19% and 18% respectively. With increased support for SMEs and
the upcoming Defence Industrial Strategy, the Government plans
to increase this further.
