What's Happening?
The UK government has initiated a consultation process with the defence industry to implement the 'Back British' offset strategy. This initiative is designed to ensure that defence import deals provide direct benefits to British businesses. Announced
by Defence Readiness and Industry Minister Luke Pollard at the Defence Procurement Research, Technology and Exportability (DPRTE) summit in Manchester, the strategy requires foreign contractors to create job opportunities, invest in the UK, or engage local small businesses as part of their contracts. The consultation will last 12 weeks and aims to align with the Strategic Defence Review's objectives to foster new industry partnerships, transform procurement processes, and stimulate job growth across the UK. The Ministry of Defence emphasizes that this approach will particularly benefit small and medium-sized enterprises (SMEs), which are considered the backbone of the defence industry.
Why It's Important?
This consultation is significant as it represents a strategic shift in the UK's defence procurement policy, aiming to strengthen the domestic industrial base and support economic growth. By mandating foreign contractors to engage with local businesses, the strategy could lead to increased job creation and investment within the UK. This move is part of a broader effort to increase defence spending with SMEs by £2.5 billion by May 2028, as outlined in the government's Plan for Change. The initiative is expected to enhance the competitiveness of UK firms in global supply chains, thereby reinforcing the country's defence capabilities while simultaneously driving economic growth.
What's Next?
Following the 12-week consultation period, the UK government will finalize the framework for the 'Back British' strategy. This will involve detailed discussions with industry stakeholders to ensure the policy effectively supports the domestic defence sector. The establishment of a Defence Office for Small Business Growth is also planned for early 2026, which will further support SMEs in the defence industry. The outcome of this consultation could influence future defence contracts and the extent to which foreign companies are required to contribute to the UK economy.
