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

Wes Streeting and Chancellor John Healey announced the new "Offset Policy" at BAE Systems' Scotstoun shipbuilding site in Glasgow, requiring foreign winners of UK defence contracts worth £50m or more to reinvest an equivalent value back into Britain through jobs, apprenticeships, factory openings and technology transfers. The rules will be applied by the Ministry of Defence on a case-by-case basis from April 2027. Streeting told BBC Breakfast the move would deliver "bang for the British buck" as defence spending rises put pressure on public finances.

A £100m overseas contract could trigger up to £100m in required UK investment in jobs, facilities or skills training.

Healey said the policy ensures '100% of the value creates new opportunities for workers and businesses here at home' when contracts go abroad.

Countries including Poland, Norway and the Netherlands already operate similar offset rules, and the government is targeting 3% of GDP on defence by 2030.