Delays to the Defence Investment Plan are discouraging global defence firms from investing in Britain, with industry warning that competitors such as the United States, Germany and Poland are benefitting instead, according to evidence given to MPs.
Speaking to the House of Commons Defence Committee, Make UK Defence Director General Andrew Kinniburgh said uncertainty over long-term spending is already shaping investment decisions. “We are in a global race to get money from the big defence companies. They have many options; they can go and invest in Germany, Poland or the US,” he said, adding that continued delays are effectively signalling that firms should look elsewhere.
Kinniburgh warned that while the UK is not explicitly turning investment away, the lack of clarity is having the same effect. “With us delaying and prevaricating on the defence investment plan, we are basically telling those companies, ‘Perhaps you should invest somewhere else.’ We are not saying that directly, but that is the indirect impact,” he told the committee.
The concern was reinforced by evidence that some firms have already relocated activity abroad. Kinniburgh cited a UK-based nanotechnology company that moved operations to the United States after struggling to secure investment and contracts domestically. He added that overseas governments are actively targeting British firms, offering incentives to relocate. “We have the US and other countries quite aggressively circling the UK… saying, ‘Come and stay with us. We’ll look after you,’” he said.
Industry representatives also pointed to a growing credibility gap with international partners. Fred Sugden of techUK said delays between government commitments on defence spending and the reality of contract flow are making it harder to attract inward investment. According to him, the mismatch is affecting both exports and the UK’s ability to position itself as a reliable destination for defence business.
The wider impact, witnesses argued, extends beyond large primes to the broader industrial ecosystem. Smaller firms are facing cash flow pressures, contract delays and in some cases closure, weakening supply chains and further reducing the UK’s attractiveness as an investment location. Samira Braund of ADS described the current environment as one of “paralysis”, with demand signals from government still unclear.
