The UK Government has unveiled new support for small and medium enterprises (SMEs) following its historic commitment to increase defence spending to 2.5% of GDP. The move is expected to strengthen national security, drive economic growth, and create thousands of jobs across the country.
During a visit to JFD Global in Renfrew, Scottish Secretary Ian Murray met with staff and management to see firsthand how the company is developing cutting-edge submersible technology for the Royal Navy. His visit comes as the government rolls out new measures to ensure that SMEs—many of them family-run businesses—can benefit from the UK’s expanded defence investment.
Major Boost for SMEs in Defence Sector
The government has pledged to:
- Launch a new hub to help SMEs access the defence supply chain more easily.
- Set direct SME spending targets for the Ministry of Defence by June 2025.
- Increase SME involvement in defence contracts, ensuring smaller firms get a larger share of government spending.
The announcement follows the government’s commitment to raise defence spending to 2.5% of GDP by 2027, with plans to reach 3% in the next Parliament. This long-term investment will enhance the UK’s security while unlocking economic opportunities across all regions.
Strengthening Regional Economies Through Defence Spending
With nearly 70% of defence spending directed outside London and the South East, the government is ensuring that regional businesses and workers see the benefits of increased investment.
- Defence spending in Scotland totals £2.14 billion annually, including £32 million directly with SMEs, supporting over 11,000 jobs.
- In 2023-24, the Ministry of Defence spent £28.8 billion with UK industry, with regional boosts such as:
- 30% increase in the East Midlands (£328 million)
- 20% rise in Northern Ireland
- 19% and 18% increases in Yorkshire and the Humber, and the North West
Prime Minister Keir Starmer highlighted the economic and national security benefits of increased defence spending: “The UK’s defence industry is a source of national pride. It supports hundreds of thousands of jobs and represents British manufacturing at its best. By helping SMEs access defence contracts, we’re putting more money into working people’s pockets and strengthening local economies.”
A New Era for Defence Procurement
The new SME hub will work with suppliers across the UK’s nations and regions, ensuring that smaller businesses can compete for defence contracts and drive innovation. This will strengthen Britain’s defence industrial base, keep the UK at the forefront of military technology, and enhance global export opportunities.
A Thriving Future for SMEs in Defence
With the government’s Defence Industrial Strategy set to launch soon, the UK is positioning itself to seize new technological opportunities, boost manufacturing jobs, and fortify its national security.
This initiative marks a turning point for SMEs, offering them unprecedented access to defence spending, new business opportunities, and the chance to contribute to Britain’s long-term economic and security goals.
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