Defence Spending Set to Favour British Business

Homeland June 10, 2026

Ministers look set to use national security exemptions to direct billions in new defence spending towards British companies – a landmark shift that could reshape the UK’s defence supply chain for a generation.

The UK Government is preparing to make one of the most significant shifts in defence procurement policy in recent memory, with ministers confirming plans to use national security exemptions to ensure that billions of pounds of additional defence funding is spent with British-based businesses rather than directed to overseas competitors.

Defence Secretary, John Healey is expected to set out the new approach imminently, with the long-awaited Defence Investment Plan – forecast to outline around £15 billion in additional investment – providing the financial framework within which the new ‘Buy British’ principles will operate. The announcement signals a decisive move away from open international competition on certain contracts, and towards a policy that explicitly credits companies with a genuine, substantive presence in Britain.

National Security Exemptions

Speaking at the GMB union’s congress, Healey confirmed that the government will make greater use of national security exemptions for defence contracts – legal mechanisms that allow the government to require certain capabilities to be built and maintained within the UK. The approach, he said, is designed to support the UK industrial base and safeguard skilled jobs across the defence supply chain.

John Healey told the GMB congress: “We 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.”

Critically, the policy extends beyond the prime contractor tier. Healey confirmed that, in large defence contracts, there will be provisions requiring significant sub-contracts to be placed with UK-based companies – or guarantee that UK competitors are included in competitions and not shut out. Where a contract is awarded to an overseas company, that business will be required to create jobs in the United Kingdom.

The Defence Secretary described the overall approach as ‘unashamedly pro-Britain’ – a phrase likely to resonate with the thousands of SMEs and specialist suppliers across the UK who have historically struggled to access defence contracts dominated by large multinational primes.

What Does This Mean for UK Suppliers?

For businesses operating in – or looking to enter – the UK defence supply chain, these developments represent a genuine opportunity, but navigating the landscape requires understanding both the policy framework and the procurement mechanisms through which contracts will flow.

The forthcoming Defence Investment Plan will define where the money goes: which capabilities, which platforms, and which programmes. Suppliers who position themselves ahead of that plan – understanding both the procurement routes available and the industrial priorities the government is seeking to support – will be best placed to capitalise on the spending that follows.

The expanded use of national security exemptions also changes the competitive dynamics for UK-based businesses. Contracts that previously went to market on a fully open international basis may now carry requirements that effectively preference British industrial capability. For companies who have invested in UK facilities, skills, and supply chain relationships, this policy direction is a significant development.

As the Defence Investment Plan is formally published and procurement pipelines become clearer, DPRTE will continue to provide the intelligence, connections, and insight that UK defence suppliers need to compete and win.

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