Credit boost for defence exporters welcomed - BCC

Further support for the defence industry has been announced by the Chancellor which will see billions of pounds unlocked for UK defence companies that export overseas.

UK defence exporters are set to benefit from £2 billion increase to UK Export Finance lending capacity, which Rachel Reeves said will unlock opportunities for UK defence exports such as missiles, aircraft and armoured vehicles overseas.

The uplift, which will increase UKEF’s lending capacity from £8 billion to £10 billion, will increase the competitiveness of this country’s defence industry, allowing UK exporters to grow their business through sales to UK’s allies around the world, and bolstering supply chains.

UKEF’s recent support for the defence sector includes an £8.8 billion guarantee for exports of air defence systems to Poland, support for the export of Typhoon aircraft to Qatar and support for the sale of ex-Royal Navy mine-hunting vessels to the Ukrainian Navy.

It follows the recent £1.6 billion commitment announced by the Prime Minister to supply thousands of advanced air defence missiles to Ukraine, which supports 700 existing jobs at Thales in Belfast.

Responding to the Chancellor’s announcement of extra finance for the UK’s defence exporters, William Bain, Head of Trade Policy at the British Chambers of Commerce, said:

“Defence and security are key sectors for UK manufacturing export companies. In 2023, defence export orders were worth £14.5 billion to the UK economy, with the focus on aerospace exports to European partners.

“This £2 billion uplift in the credit facilities of UK Export Finance takes the total on tap to support overseas sales of defence products to £10 billion. This will support jobs, boost an increasingly important sector of our economy and help UK firms meet growing defence procurement needs.

“Defence spending is set to increase among our key European partners, as well as to 2.5% of GDP here in the UK by mid-2027. Against this background, UK firms should be well placed to provide the hardware and services needed to strengthen our common security goals across Europe, and elsewhere.”