Defence Secretary John Healey Outlines Plan to Prioritise British Firms for Defence Contracts
Defence Secretary John Healey has stated that ministers will utilise national security exemptions to prioritise British companies over foreign ones when awarding defence contracts. This announcement comes as the government faces persistent calls to publish its long-delayed defence investment strategy.
Unions and defence sector companies have cautioned that the ongoing delay to this crucial blueprint jeopardises British employment, skills, and national security. Chancellor Rachel Reeves has also criticised the practice of awarding too many government contracts abroad, urging cabinet ministers last month to increase investment within Britain.
Speaking at the GMB Union's congress, Mr Healey affirmed the Chancellor's call to "buy British." He detailed his department's intention to prioritise spending with UK firms and reform the existing procurement system, branding the strategy as "unashamedly pro-Britain."
New Procurement Guidelines
Mr Healey explained: "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."
He added: "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."
These exemptions, outlined in the Procurement Act 2023, permit contracts to bypass formal competitive tendering rules when national security interests are involved. The government intends to establish specific guidelines to give British-based businesses an advantage in defence competitions.
Furthermore, Mr Healey stated that any defence contract "sent overseas" would necessitate the creation of jobs in the UK, a measure he termed a "British offset."
The announcement follows Ms Reeves's correspondence to all spending department ministers, urging them to "buy British" wherever feasible. Her letter highlighted sectors such as shipbuilding, steel, artificial intelligence, and energy infrastructure as key areas for British investment.
Last week, the defence trade association ADS reported that British businesses were "really struggling" awaiting the outcome of the government's defence investment plan. Kevin Craven, ADS chief executive, noted that firms were either leaving the sector or changing direction due to the delays. Notably, Aeralis, a British aerospace company developing a fighter jet replacement, entered administration last month, citing "continued delays to the UK defence investment plan" as a factor.
The defence investment plan was initially scheduled for publication in autumn 2025. While Mr Healey indicated that Prime Minister Sir Keir Starmer is "determined to publish" the plan before an upcoming NATO summit, internal government discussions persist regarding the additional funding required for defence, with reports suggesting the Ministry of Defence believes it needs an extra £28 billion to meet future commitments.
