UK Government Increases Export Finance Support for Defence Sector
Chancellor Rachel Reeves announces £2 billion boost to UK Export Finance lending capacity to enhance defence exports and support domestic growth.
Chancellor Rachel Reeves has announced an increase in the lending capacity of UK Export Finance (UKEF) aimed at bolstering the UK's defence industry, coinciding with a wider strategy to stimulate economic growth across the country.
The UKEF's lending capacity will rise from £8 billion to £10 billion, providing significant support for British defence companies engaged in international markets.
This initiative is designed to assist domestic firms selling defence equipment, including missiles, aircraft, and armoured vehicles, by expanding financing opportunities for foreign buyers of UK goods.
In the fiscal year 2023-24, UKEF supported 650 exporters, which led to the preservation of approximately 41,000 jobs across the UK.
The increase in funding comes as the UK Government plans to raise its defence expenditure to 2.5% of Gross Domestic Product (GDP), a shift associated with reductions in the international aid budget.
In her statements, Chancellor Reeves emphasized the necessity for a strategic response to evolving global security challenges, asserting that the enhanced lending capabilities would not only strengthen the defence sector but also contribute to national security and economic stability.
Business Secretary Jonathan Reynolds echoed the importance of a robust defence industry for national security and economic resilience, noting that the initiative will allow UK defence firms to showcase their expertise internationally while boosting job creation and domestic economic performance.
Scottish Secretary Ian Murray remarked on the potential benefits for Scotland’s defence sector, highlighting that local firms would have opportunities to capitalize on the new funding, which could lead to job growth and economic development in the region.
However, Shadow Defence Secretary James Cartlidge raised concerns about the pace of Labour’s procurement strategies, calling for a more robust domestic order book and emphasizing the need for urgent action to support the domestic defence industry following delays in prior spending decisions.
He stated that timely procurement is essential to ensure the UK meets its defence commitments, particularly in support of Ukraine.
The UKEF's lending capacity will rise from £8 billion to £10 billion, providing significant support for British defence companies engaged in international markets.
This initiative is designed to assist domestic firms selling defence equipment, including missiles, aircraft, and armoured vehicles, by expanding financing opportunities for foreign buyers of UK goods.
In the fiscal year 2023-24, UKEF supported 650 exporters, which led to the preservation of approximately 41,000 jobs across the UK.
The increase in funding comes as the UK Government plans to raise its defence expenditure to 2.5% of Gross Domestic Product (GDP), a shift associated with reductions in the international aid budget.
In her statements, Chancellor Reeves emphasized the necessity for a strategic response to evolving global security challenges, asserting that the enhanced lending capabilities would not only strengthen the defence sector but also contribute to national security and economic stability.
Business Secretary Jonathan Reynolds echoed the importance of a robust defence industry for national security and economic resilience, noting that the initiative will allow UK defence firms to showcase their expertise internationally while boosting job creation and domestic economic performance.
Scottish Secretary Ian Murray remarked on the potential benefits for Scotland’s defence sector, highlighting that local firms would have opportunities to capitalize on the new funding, which could lead to job growth and economic development in the region.
However, Shadow Defence Secretary James Cartlidge raised concerns about the pace of Labour’s procurement strategies, calling for a more robust domestic order book and emphasizing the need for urgent action to support the domestic defence industry following delays in prior spending decisions.
He stated that timely procurement is essential to ensure the UK meets its defence commitments, particularly in support of Ukraine.
