UK requires domestic benefits from foreign defence contracts
By the AFREEQUE newsroom, based on United Kingdom Treasury
The UK government will require foreign companies winning certain defence contracts to reinvest in the country through jobs, training, factories or technology transfers. The requirement could be worth up to the value of the contract and will apply to deals worth more than £50 million, according to the UK Foreign, Commonwealth and Development Office.
The UK will require foreign companies winning defence contracts worth more than £50 million to reinvest in the country, with benefits worth up to the full value of the contract, the British government announced on Friday. These benefits could include job creation, apprenticeships, factories, investment in British suppliers or technology transfers.
The government also said it would favour British companies when buying defence equipment. The new “offsets” policy is intended in particular to help small and medium-sized British companies access international supply chains and strengthen the country’s industrial base, according to the UK Treasury.
The measure accompanies the goal of raising defence spending to 3% of gross domestic product by 2030, before reaching the NATO commitment of 3.5% in 2035. In Scotland, the defence industry is worth £2.5 billion and directly supports 12,200 jobs. The government cites, among other examples, a £10 billion Norwegian contract for Type 26 frigates, which is expected to support 2,000 local jobs, and a £453 million contract for Typhoon radar systems, linked to 300 jobs in Edinburgh.
