Industry representatives have lauded the announcement by the Government’s new Defence Industrial Strategy to create a new scheme to drive UK economic growth through a defence inward investment scheme when buying defence equipment from overseas.
The Defence Industrial Strategy, published today (8 September 2025) said that the MOD will launch a new defence inward investment scheme known as ‘offset’ next year – arguing that the policy “can be an effective way to create opportunities for firms to enter global supply chains, boosting the domestic industrial base, creating jobs and supporting economic growth”.
Director General of Make UK Defence Andrew Kinniburgh has described the announcement as a “major win for UK industry”.
The trade body, which represents over 700 SMEs in the defence industry, has been campaigning for the UK Government should draw inspiration from 53 other developed nations with similar policies such as Norway, Poland and South Korea and adopt a defence inward investment plan, or offset regime, as a central pillar to the UK’s growth mission and to strengthen our industrial capacity.
Earlier this year, Make UK Defence argued that such a scheme could allow up to 90% of the economic value of defence contracts going overseas to go back into the UK economy over a ten-year period, unless it was deemed necessary for national security reasons. Companies could achieve this in multiple ways such as creating new UK jobs, utilising UK supply chains with both large and small businesses, creating novel technologies and investing in skills training and apprenticeships.
Make UK Defence point to the successes other countries with similar policies such as Poland, which secured $6bn (£4.4bn) in inward investment following their F-16 acquisition in 2003. In 2023, the country also secured £200 million inward investment from the WILSA anti-aircraft and anti-missile programme.
The trade body now want to ensure the MOD utilises the new defence inward investment scheme to incentivise the utilisation of SMEs in the defence industry and to support industries supplying critical raw materials the Defence Industrial Strategy identified as critical to UK Defence, such as steel and semiconductors.
Make UK Defence Director-General Andrew Kinniburgh said:
“The MOD’s commitment to design a new defence inward investment plan – something Make UK Defence has spent months campaigning for – is a major win for UK industry.
“By adopting this plan, the Government will deliver more work for UK based companies, including primes, mid-tiers and SMEs, and help to fulfil the defence dividend – unlocking private investment in UK jobs, skills, and supply chains across the nations and regions.
“We look forward to continuing to work closely with the MOD to ensure the new defence inward investment plan delivers for all of industry, including SMEs, and boosts economic growth across the UK.”
