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.
It’s as the government announced its plans to launch a new hub to provide small and medium enterprises (SMEs) with better access to the defence supply chain and a commitment to set direct SME spending targets for the Ministry of Defence by June this year.
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.
Rawmarsh and Conisbrough MP and Defence Secretary, John Healey, said:
“For too long small businesses felt locked out of defence, but we’ve listened and we’re acting. This 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 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.
“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 the 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, which saw spending in Yorkshire up 19%. With increased support for SMEs and the upcoming Defence Industrial Strategy, the Government plans to increase this further.