UK to require foreign defense contractors to invest in domestic industry

By Aysu Bicer

LONDON (AA) - The UK announced a new defense procurement policy Friday requiring overseas companies awarded major military contracts to invest in British jobs, businesses and industrial capacity.

Under the policy, foreign suppliers securing selected contracts worth more than £50 million ($68 million) will be required to generate economic benefits in the UK, potentially equal to the full value of their contracts, the Ministry of Defense (MoD) said.

For example, a £100 million contract could require the supplier to deliver up to £100 million in domestic economic benefits through job creation, skills development or industrial investment.

The policy, which will apply to selected procurements from April 2027, was announced by Defense Secretary Wes Streeting and Chancellor John Healey during a visit to BAE Systems' Scotstoun shipyard in Glasgow.

"Every pound we invest in defense should be judged by what it does for Britain. That's why we are backing British by buying British wherever we can," Streeting said.

"Even when that is not possible, we are acting to ensure that any investment brings jobs, skills and investment back home, strengthening our national security by boosting our domestic industry," he added.

The MoD said the initiative would prioritize domestic procurement while ensuring that purchases from overseas suppliers also support the UK economy.

A new Offset Authority will oversee agreements and monitor their implementation, with requirements applied on a case-by-case basis.

The ministry noted that Poland, Norway and the Netherlands already operate similar arrangements.

Further details were outlined in an offset policy paper published Friday.

Aysu Biçer