Scottish Secretary Ian Murray has voiced strong support for the UK Government’s initiative to bolster small and medium enterprises (SMEs) within the defence sector, following a landmark commitment to increase defence spending to 2.5% of GDP.
During a visit to JFD Global in Renfrew, a company specializing in cutting-edge submersible technology for the Royal Navy, Murray engaged with management and staff to understand their contributions to national security and technological advancements. His visit coincided with the government’s announcement of new measures designed to enable thousands of UK SMEs to benefit from increased defence investments.
Strengthening National Security While Driving Economic Growth
The enhanced defence budget aims to safeguard UK citizens while fostering a stable business environment that supports economic expansion. Scotland’s defence sector is globally recognized for its innovation and high-tech capabilities, playing a crucial role in both military operations and economic development.
“Visiting JFD in Renfrew was a real pleasure. The work they do in developing state-of-the-art defence technology is essential for protecting military personnel and our allies,” Murray stated. “Scotland’s defence industry is among the best in the world, contributing not only to national security but also to economic prosperity and job creation.”
He reiterated Prime Minister Keir Starmer’s commitment to strengthening the nation’s defence posture, emphasizing Scotland’s pivotal role in this effort. “The Prime Minister has made it clear—we must enhance our defence capabilities. Scotland’s world-class defence industry will be integral in meeting this challenge.”
New Government Hub to Support SMEs
As part of the government’s drive to expand SME participation in the defence sector, a new hub will be launched to improve access to the defence supply chain. Additionally, direct SME spending targets for the Ministry of Defence (MoD) will be set by June 2025, ensuring that increased funding directly benefits small businesses.
This initiative presents a significant opportunity for SMEs, particularly family-owned enterprises, to contribute their expertise, agility, and innovation to Britain’s defence efforts. The government believes this move will spur job creation and economic development in smaller towns and regions across the UK.
The expansion of SME support aligns with the government’s broader Plan for Change, which prioritizes national security while fostering economic growth. Currently, the MoD spends approximately £2.14 billion annually in Scotland alone—£32 million of which is allocated to SMEs—directly supporting over 11,000 jobs.
Boosting Investment and Innovation in the Defence Industry
The latest measures follow the MoD’s Defence Industrial Strategy consultation, which seeks to deepen collaboration with industry stakeholders, address shared challenges, and drive technological innovation. The government’s Brand Scotland campaign will further amplify the global presence of Scotland’s defence industry, positioning it as a leader in world-class defence technology exports.
With the commitment to increase defence spending to 2.5% of GDP by April 2027—and a target of 3% in the next Parliament—this funding boost is expected to create long-term economic stability while reinforcing the UK’s defence infrastructure. Nearly 70% of UK defence spending currently benefits businesses outside London and the South East, with new initiatives ensuring SMEs gain a larger share of procurement opportunities.
Government Leaders Endorse SME-Centric Defence Strategy
Prime Minister Keir Starmer emphasized the importance of defence investment in strengthening the economy. “The UK’s defence industry is a source of national pride, supporting hundreds of thousands of jobs and showcasing British manufacturing excellence. By increasing our defence budget, we are not only enhancing national security but also putting more money into the pockets of working people.”
Defence Secretary John Healey echoed these sentiments, highlighting the government’s commitment to creating a more inclusive defence industry. “For too long, small businesses have struggled to access defence contracts. We’ve listened and are taking decisive action. Our increased defence spending will ensure SMEs receive greater opportunities to contribute to national security while driving economic growth.”
The new SME-focused hub will work closely with suppliers across the UK to streamline procurement processes, enhance choice, and accelerate access to cutting-edge defence technology. This approach will fortify the UK’s defence industrial base, improve military capabilities, and unlock new export opportunities.
Defence as a Key Driver of Economic Growth
In 2023-24, defence spending supported over 430,000 jobs across the UK—equivalent to one in every 60 jobs. The MoD’s total industry spend reached £28.8 billion, with notable increases in regional investments: a 30% rise in the East Midlands (£328 million), a 20% increase in Northern Ireland, and respective growth of 19% and 18% in Yorkshire & the Humber and the North West.
With increased SME support and the upcoming Defence Industrial Strategy, the government aims to amplify these benefits, ensuring that investment in national security translates into widespread economic prosperity.
This latest move underscores the UK Government’s commitment to making defence a cornerstone of both security and economic renewal, reinforcing the country’s resilience in an evolving global landscape.
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