Foreign firms winning UK defence contracts worth over £50m must invest the same amount back in Britain under new rules

Defence Secretary Wes Streeting and Chancellor John Healey unveiled the "Offset Policy" at BAE Systems' Scotstoun shipyard in Glasgow, requiring overseas winners of defence contracts worth £50m or more to invest an equivalent value back into Britain. The rules, which take effect from April 2027 on a case-by-case basis, could mean a £100m contract triggers £100m in British jobs, apprenticeships, factory openings or technology transfers.

Streeting told BBC Breakfast the policy would deliver 'bang for the British buck' as defence spending 'does come at a cost to other things we'd like to spend money on'.

The announcement comes as the government faces scepticism over its ability to hit a 3% GDP defence spending target by 2030, with Labour defence chairman Tan Dhesi warning adversaries 'are not bound by fiscal years and spending cycles'.

Poland, Norway and the Netherlands already operate similar offset rules; the government says the approach will also help UK small businesses access global defence supply chains.