Improved EU defence procurement collaboration could deliver meaningful boost to UK industry
Commenting on the UK’s joint defence procurement partnership with the Netherlands and Finland, Emily Sawicz, Director and Industrials Senior Analyst at RSM UK, said: “Improving access to the EU market could provide a meaningful boost to the UK defence and manufacturing industry. Many of the components that underpin defence production rely on pan European supply chains, and reducing friction at the border would help ease bottlenecks, cut lead times and stabilise input costs.
The UK’s ambition to significantly expand defence spending comes at a challenging time for the sector. Increasing investment towards 3% of GDP presents real opportunities to revive a manufacturing base that remains weaker than its pre-pandemic position, but persistent supply chain, capacity and financing constraints threaten to limit the impact.
“Leading UK defence businesses are already operating under strain, with major contractors holding record backlogs and delivery delays across Europe underscoring the fragility of the industrial base. At the same time, SMEs struggle to access credit due to banks’ risk appetites, ESG concerns and the high cost of defence R&D, restricting the pipeline of innovation and specialist capability.
“A more seamless trading relationship would also widen market opportunities for UK defence SMEs, allowing them to scale more easily and attract investment. As Europe collectively increases defence spending, closer integration with EU procurement and R&D ecosystems would position the UK to capture a greater share of growth and accelerate the sector’s ability to meet rising demand.”