Government launches new support for SMEs benefitting from defence investment

Thousands of small businesses will receive new support to ensure they benefit from the decision to increase defence spending to 2.5% of GDP, the Government has confirmed.

This investment aims to protect UK citizens from threats at home, but also create a secure and stable environment in which businesses can thrive.

The Government has also announced 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 aims to help create new jobs and boost the economy of small towns and suburbs in the UK.

It follows the Government’s ongoing uplift in defence spending to 2.5% of GDP by April 2027, with a commitment to hit 3% in the next Parliament.

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.

Prime Minister, Keir Starmer, 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, John Healey 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.”