Reeves to announce £2bn defence boost to secure more orders from allies
The government has pledged an extra £2bn to support UK defence exporters in a bid to unlock more orders from international allies.
This increases the lending capacity of the UK Export Finance’s (UKEF), the country’s official export credit agency, to £10bn.
The UKEF’s Direct Lending scheme provides loans to other countries, which allow them to purchase goods and services from the UK.
Last year, it issued £8.8bn in loans, supporting 650 exporters and 41,000 jobs, and provided funds for nations such as Poland, Qatar and Ukraine.
Chancellor Rachel Reeves is set to announce the additional funds during a visit to Scotland today.
The Treasury said it hopes to boost the competitiveness of the country’s defence industry and allow UK exporters to expand supply chains across the world.
As defence sectors boom across the globe from heightened geopolitical tensions, Reeves said the increase for the UKEF will help “kickstart economic growth” whilst “strengthening our national defence”.
The Chancellor said: “The world is changing, and we must bring about a new era of security and renewal that protects working people and keeps our country safe.
“This increase to UKEF’s lending capability is our Industrial Strategy in action, bolstering our defence industry and supply chains, creating jobs and driving growth across the UK.”
The news follows the government’s pledge to raise defence spending to 2.5 per cent of GDP from April 2027.
Business Secretary Jonathan Reynolds said: “This new UKEF lending capability strengthens our support for the sector even further, and will help our defence firms export the best of British expertise abroad while boosting jobs and growth at home.”
Scottish Secretary Ian Murray said: “We are entering a new era for our national defence and Scotland’s world class defence industry is playing a big role in meeting that global security challenge.
“Scottish defence businesses – with their skills, expertise and innovation – have a huge opportunity to benefit from this £2bn in new lending.”