Defence Industries: West Midlands

Josh Newbury Excerpts

Wednesday 19th March 2025 Westminster Hall

[Sarah Edwards]

I absolutely agree. We have to back British, we have to buy British, and we have to keep the west midlands in pole position, innovating and ensuring that companies working across civil and defence can get the maximum benefit from the new procurement contracts coming from the MOD.

A comprehensive review of the UK supply chain is essential to ensure that SMEs have visibility and fair access to Government contracts. Smaller businesses often struggle to break into large procurement processes dominated by major players, and access to funding is difficult. Again, the annual funding cycles were cited by Flare Bright and Gibson Robotics as problematic for growing SMEs in the evidence we heard yesterday.

[Josh Newbury (Cannock Chase) (Lab)]

I thank my hon. Friend for her generosity in giving way and for giving us the opportunity to discuss this important issue. She is clearly setting out the value of the defence sector in Tamworth, the villages and our region more widely. In Cannock, engineers at Briggs Equipment have extended the operational life of the RAF’s fleet of bespoke air-transportable forklift trucks by at least 10 years. This might not be the most high-profile equipment, but those specialist forklifts are being used for everyday logistics and for military and humanitarian missions as far afield as Cyprus, Ascension Island and the Falklands. Does my hon. Friend agree that such local businesses are essential to the wider defence supply chain, providing high-quality jobs, boosting skills and contributing to Staffordshire’s success?

[Sarah Edwards]

I absolutely agree, particularly with my hon. Friend’s shout out to his constituency and, of course, Staffordshire, which plays an important role. As hon. Members have said, we have a concentration of hard-working companies, and there is a benefit to their dual-use aspects. That is something we should push as a nation to ensure we get the most for all our regions.

RAND Europe, commissioned by the MOD in 2021, found that

“SMEs and mid-tier suppliers report difficulties accessing and engaging with both top tier suppliers and the MOD”.

Barriers included a lack of corporate functions and challenges in marketing their businesses to prime contractors. UK defence supply chains also struggled to attract non-traditional suppliers due to slow, inflexible and bureaucratic processes. It concluded that the MOD’s approach to contracting is seen as “inflexible” and disadvantageous to lower-tier suppliers, which “discourages innovation.”

Examples of how the MOD could support smaller suppliers and foster innovation were cited as being, in part, possible due to the defence and security accelerator programme, or DASA, because it creates a contract for revenue, which is vital so that firms can demonstrate to other investors that they are viable—grants cannot be treated in the same way. Can the Minister reflect on how the DASA programme could be expanded to align more closely with the challenges that SMEs face in developing products and solving problems?

The DASA programme has an element of mentoring, which those who have used it have cited as very valuable. The US also uses a model in which technical liaison officers scout for companies and then support them through the complex military procurement and due diligence processes. Has the Minister considered a similar scheme in defence industrial policy, and has he spoken with his colleagues in the Department for Business and Trade on how to align those goals for maximum impact?

Yesterday, the Business and Trade Committee heard that procurement towards capability might better suit the fast-paced environment that military technology now inhabits. Ukraine has shown that innovation is happening in weeks, not years, so the procurement need —rather than defined items—may in some circumstances foster better results. The strategic defence review will also be an important part of informing those decisions. It is a vital first step, taken by this Government, to ensure that we have the right force capability fit for the future and that, when we spend money, we spend it well.

It has been suggested that one large innovation hub could be created, establishing facilities for testing programmes that could then enable smaller companies to continue developing, leading to small-scale buying programmes that could later be scaled into larger ones. That sets a clear pathway that could be stewarded by an individual liaison. Those are some of the things the Committee has heard that we think could support the Government’s ideals.

The west midlands is showcasing the incredible potential of the UK’s defence industry as a driver of security, economic growth, innovation and skills development. Investing in reskilling and upskilling is crucial for those currently serving in the armed forces and the MOD, as well as for future-proofing our defence workforce. Building resilience in our supply chains by prioritising UK businesses, especially SMEs, in procurement decisions is essential. I thank the Members present for showcasing the work of their constituents, and of the companies in their constituencies, to support the defence industries. By making funding more accessible and breaking down barriers to entry, we can harness British innovation and ensure that our defence industry remains competitive globally.

The Government have taken decisive action by focusing on an industrial strategy that prioritises defence. Amid global uncertainty, we must provide calm and focus on developing security systems that prepare our nation for any eventuality. Including our regions in the strategy unlocks opportunities and high-skilled jobs that benefit local communities everywhere, including those in my Tamworth constituency. We have talent, expertise and ambition, and now we must make the right choices to unlock that potential.