The UK government has announced bold new targets aimed at accelerating the production of ships, weapons, and equipment for the Royal Navy, Army, and Royal Air Force. The initiative forms part of a wider “engine for growth” package intended to strengthen national security and boost the defence sector.
Labour politician John Healey, who is set to become the first Defence Secretary to close the London Stock Exchange on 13 May, outlined the plan. He said the war in Ukraine highlights the importance of a strong military supported by a robust defence industry.
Healey stated:
“The war in Ukraine confronts us with the truth that a military is only as strong as the industry which stands behind it. I’m here today, at this most crucial time, to help forge a new partnership between industry, innovators and investors. UK Defence is open for business and together we can make Britain secure at home and strong abroad. National security is at the heart of our Plan for Change, and is essential for economic security, investor confidence and social stability.”
Discussions have already taken place in Portsmouth involving Royal Navy personnel, defence industry leaders, and MPs, focusing on supporting businesses and protecting high-skilled jobs. The government has committed to prioritising British firms for defence contracts. A recent Ministry of Defence report showed that small and medium-sized businesses supported by the MoD attracted nearly £600 million in private equity investment.
The package includes four main commitments:
- Procurement reform to reduce the time taken to award contracts for major capabilities such as planes, tanks, and ships from six years to two. Upgrades to weapons and communications systems will be shortened from three years to about twelve months. Procurement cycles for drones and related software will be cut to three months.
- Enterprise agreements with software, data, and AI suppliers have been secured. Companies such as Adarga, Haedean, Oxford Dynamics, and WhiteSpace have won contracts worth up to £50 million.
- The establishment of a new innovation organisation, UK Defence Innovation, due to launch in July with a ring-fenced budget of £400 million for the current financial year, aimed at developing cutting-edge technology for the armed forces.
- The creation of a Defence Industrial Joint Council to encourage investment and deliver new jobs in the sector.
Current projects include the construction of new Type 26 and Type 31 vessels for the Royal Navy.
Daniel Maguire, Group Head at the London Stock Exchange Group, said:
“The defence industry plays a vital role in the wider UK economy, supporting jobs and creating long-term value alongside ensuring our national security. We welcome the government’s new measures and hope that LSEG can support initiatives designed to help unlock capital for companies, boost growth, and promote innovation.”
