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Chancellor Rachel Reeves is set to call for a major shakeup of procurement rules for the defence sector at a fireside chat later today at MakeUK's conference, as Ukraine-related interest in defence stocks ramps up.
She is set to call out governments of all stripes for “ducking and dodging” the decisions needed to bolster the UK's industrial base and unleash its potential to defend the country.
The proposed changes she will mention at the manufacturing-focused event are set to include reviewing single-source contract rules that govern the majority of defence contracts to incentivise faster delivery, and learning lessons from the successful and rapid procurement of arms for Ukraine, the Treasury said.
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"I am proud of our manufacturing sector, and the opportunities that it creates for the future – bringing more jobs and growth to parts of the country that have been ignored," she will say.
"For too long politicians of all stripes have ducked and dodged the decisions need to fire up Britain’s industrial base and unleash its potential to keep the country safe.
"We’re changing that by increasing defence spending and making defence a cornerstone of our industrial strategy to create jobs, drive growth and meet emerging global threats head on.”
The comments follow a commitment by the UK government to help Ukraine against Russian invasion in the wake of the US's decision to suspend military aid for the war.
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"We are pausing and reviewing our aid to ensure that it is contributing to a solution," a White House official told CBS News.
The US is the biggest funder of Ukraine's war effort, but Volodymyr Harvylov, a former Ukrainian deputy defence minister, has said that Europe can fill the gap.
“Europe will be capable to support Ukraine instead of US,” he told Radio 4’s Today programme earlier.
Defence stocks such as BAE Systems (BA.L) and Rolls Royce (RR.L) have rallied this week amid rising geopolitical tensions and pledges to increase spending in that area.
In the last five days, BAE Systems stock has risen more than 17%, while Rolls-Royce is up 28%.