Defence Secretary John Healey has announced that the UK government will use national security exemptions to give British companies priority over foreign rivals when awarding defense contracts. Speaking at the GMB Union's congress on Tuesday, Healey outlined plans to favor domestic firms in procurement decisions, calling the approach "unashamedly pro-Britain."
The move comes amid mounting pressure on the government to publish its long-delayed defense investment plan, which unions and defense firms warn is threatening jobs, skills, and national security. Chancellor Rachel Reeves has also urged ministers to prioritize British investment, noting that too many government contracts are currently going abroad.
Healey stated that his department would develop new guidelines to give British-based businesses an advantage in defense competitions. He emphasized that for large contracts, provisions would require significant sub-contracts to be placed with UK-based companies or ensure competitive opportunities for British firms. He also announced greater use of national security exemptions under the Procurement Act 2023, which allow certain capabilities to be built in the UK without adhering to formal competitive tendering rules.
"If a defence contract is sent overseas," Healey said, "the industry will be required to create jobs in the UK, in what I call a 'British offset.'"
The Defence Secretary's announcement follows a letter from Chancellor Reeves to all cabinet ministers, urging them to "buy British" wherever possible. The letter highlighted key sectors including shipbuilding, steel, AI, and energy infrastructure for focused British investment.
The defense investment plan, initially expected in autumn 2025, has faced delays. Last week, Healey said Prime Minister Sir Keir Starmer is "determined to publish" the plan before a NATO summit next month. However, internal disagreements persist over funding, with reports suggesting the Ministry of Defence requires an additional £28 billion to meet commitments.
Defence trade association ADS warned that British businesses are "really struggling" amid the uncertainty, with some firms leaving the sector or changing direction. Aeralis, a British aerospace company developing a Red Arrows replacement, recently entered administration, citing cashflow pressure from delays to the defense plan and geopolitical factors.