The UK Government has announced a major policy change aimed at strengthening British businesses, manufacturing and employment through new defence procurement rules.

Under the new Defence Offsets Policy, overseas companies securing qualifying UK defence contracts worth more than £50 million will be expected to deliver equivalent economic benefits back to the UK.

The policy, announced on 30 October 2026 by the Ministry of Defence and HM Treasury, is designed to encourage international defence contractors to invest in British jobs, apprenticeships, factories, technology and domestic supply chains.

The Government says the approach will help British manufacturers and small and medium-sized enterprises (SMEs) gain greater access to defence industry opportunities.

The announcement was made during a visit to BAE Systems' Scotstoun facility in Glasgow.

The Scottish defence sector already contributes approximately £2.5 billion to the economy and directly supports around 12,200 jobs.

The new policy could create additional opportunities for UK suppliers, engineering companies and skilled workers, while strengthening Britain's domestic defence manufacturing capabilities.

The initiative forms part of the Government's wider strategy to prioritise British industry and ensure overseas defence spending also generates economic benefits at home.