📋 Tender Overview
Further support for the defence industry is being set out by the Chancellor with billions of pounds unlocked for UK defence companies that export overseas.
HM Treasury, The Rt Hon Rachel Reeves MP, The Rt Hon John Healey MP, The Rt Hon Ian Murray MP and The Rt Hon Jonathan Reynolds MP
UK defence exporters to benefit from PS2 billion increase to UK Export Finance lending capacity, boosting growth and securing jobs in a priority sector.
Pipeline of UK orders for UK exporters unblocked, bolstering the supply chain and increasing our competitiveness in defence industry.
Demonstrates the UKs commitment to bolstering the defence industry, vital to UK national security - the first duty of any government - and growth; both central to the Plan for Change.
Further support for the defence industry is being set out by the Chancellor today which will see billions of pounds unlocked for UK defence companies that export overseas, driving economic growth and creating jobs across the UK.
On a visit to Scotland Rachel Reeves will announce a PS2 billion increase to UK Export Finances Direct Lending capacity for defence, which will unlock further opportunities for UK defence exports such as missiles, aircraft and armoured vehicles overseas.
The uplift, which will increase UKEFs lending capacity from PS8 billion to PS10 billion, will increase the competitiveness of this countrys defence industry, allowing UK exporters to grow their business through sales to our allies around the world, and bolstering supply chains.
UKEFs Direct Lending facility provides loans to other governments to buy goods and services from the UK. In 2023/24, UKEF issued PS8.8 billion worth of loans, guarantees and insurance to help grow UK exports, supporting 650 exporters of all sizes and 41,000 jobs across the UK.
This builds on UKEFs strong record of support for the defence sector, which has recently included an PS8.8bn guarantee for exports of air defence systems to Poland, support for the export of Typhoon aircraft to Qatar and support for the sale of ex-Royal Navy minehunting vessels to the Ukrainian Navy.
Todays news follows the recent PS1.6 billion commitment announced by the Prime Minister to supply thousands of advanced air defence missiles to Ukraine, boosting the UK economy and support 700 existing jobs at Thales in Belfast. This uplift will drive tangible increases in financial support for UK defence exporters by increasing the funding available for overseas buyers of UK defence goods and services, and is a central pillar of the governments upcoming Defence Industrial Strategy.
As set out in the Plan for Change, national security is the first duty of the government. In recent years, the world has been reshaped by global instability, including Russian aggression in Ukraine, increasing threats from malign actors, rapid technological change, and the accelerating impacts of climate change.
Todays announcement is part of how the UK is stepping up to meet this generational challenge.
Chancellor of the Exchequer Rachel Reeves said:
The world is changing, and we must bring about a new era of security and renewal that protects working people and keeps our country safe. This increase to UKEFs lending capability is our Industrial Strategy in action, bolstering our defence industry and supply chains, creating jobs and driving growth across the UK.
This is alongside an increase in our defence spending to 2.5% of GDP. We are strengthening our national defence, kickstarting economic growth and delivering the stability we need to keep us safe.
Business Secretary Jonathan Reynolds said:
A strong defence sector is vital for a Britain thats both secure at home and strong abroad, and ensures a world where business can benefit from the economic security it brings.
Thats why our Plan for Change has put defence at the heart of our Industrial Strategy, helping us drive growth while bolstering our national security for the long term.
This new UKEF lending capability strengthens our support for the sector even further, and will help our defence firms export the best of British expertise abroad while boosting jobs and growth at home.
Defence Secretary, John Healey, said:
A strong UK defence industrial base is essential for our national security, enabling us to rearm and innovate at a wartime pace.
British businesses will directly benefit from this increase in lending capacity alongside our historic decision to raise defence spending to 2.5% of GDP - the largest uplift since the end of the Cold War.
This will make our country more secure and ensure the defence sector is an engine for growth in every region and nation of the UK.
Scottish Secretary Ian Murray said:
We are entering a new era for our national defence and Scotlands world class defence industry is playing a big role in meeting that global security challenge. Scottish defence businesses - with their skills, expertise and innovation - have a huge opportunity to benefit from this PS2 billion in new lending.
That will mean a boost in skilled jobs and economic growth in Scotland and show the best of our world class industry abroad.
Whilst in Scotland the Chancellor will visit a defence company, following the governments commitment to increase spending on defence to 2.5% of GDP from April 2027, in recognition that the UK faces a period of profound change, with conflicts overseas undermining security and prosperity at home. This is alongside an ambition to spend 3% of GDP on defence in the next parliament, as economic and fiscal conditions allow, in order to keep the British people safe and secure for generations to come.
Scotland is a hub for the UK defence industry, home to companies such as Babcock and BAE Systems, and critical operations in Scotland have benefitted hi
