With the publication of the Strategic Defence Review (SDR) and the creation of the new Defence Industry Joint Council (DIJC), there has been a growing conversation around “British” business. But what does that term really mean?
This is about more than just labels. The SDR rightly emphasises “prioritising UK-based business” and calls on Defence to “deliver for the UK economy while delivering for the warfighter.” If we’re serious about that ambition, we need to be clear about what it really means to be UK-based, particularly when national security and economic growth are at stake.
Multinational companies with UK subsidiaries contribute significantly to the UK economy and have a place in delivering value to the warfighter. They provide capabilities we cannot currently generate from sovereign companies and increase market competition that should ultimately put better technology in the hands of those that keep us safe. We want them here; we want them creating jobs; delivering cutting edge capability and adding to our ‘ecosystem.’ However, those contributions don’t make them UK businesses. Amazon has a large footprint in the UK and has created thousands of UK jobs. It plays a major role in everyday life. But no one would call Amazon a British company – and understanding this distinction matters. It’s not about excluding global businesses, it’s about being honest about control and national benefit.
Three fundamentals that matter in this context:
1. Autonomy in Decision-Making:
A UK business can act in the interests of the UK and not be beholden to foreign policy decisions or corporate edicts from abroad. Imagine a UK subsidiary of a U.S. company: if Washington imposes sanctions on a country but Westminster chooses to engage diplomatically, can the UK subsidiary engage or not? If the answer is no, then that business isn’t British in spirit or practice.
2. Where Tax is Paid:
If a company makes money in the UK, it should pay tax in the UK. Complex accounting practices, such as transfer pricing or offshore licensing, shouldn’t be used to shift profits elsewhere. A business that operates in the UK but declares profits in Denmark or Bermuda isn’t helping fund our public services, infrastructure, or future.
3. Where Expertise and IP Reside:
Skills and innovation are national assets. If the company’s design, engineering, R&D, and software teams are in the UK and its intellectual property is developed in the UK, then it’s building long-term value for the UK. But, a “UK” company that merely distributes products designed and made in Germany, where all the real expertise is, contributes far less to the UK industrial resilience or economic independence.
To make Defence a true engine for economic growth, we must invest genuinely in UK based businesses. We need companies that can act independently in the national interest, employ and train British talent, develop British technology, and reinvest in the UK economy. These businesses aren’t just suppliers, they are strategic assets, forming the foundation of a sustainable and sovereign defence ecosystem. We have immense potential and we need to start converting it.
It’s time to be bold and principled about what we mean by “UK businesses.” Let’s back the companies that are British, not just in address, but in action, in values, and in impact. This should be at the core of the Defence Industrial Strategy.