London’s new defence playbook balances industrial growth with transatlantic ties

The recent Atlantic Council analysis looks at the United Kingdom’s sweeping defense and national security reforms, culminating in the launch of the new Defence Industrial Strategy (DIS), published earlier this month under the banner “Defence is an Engine for Growth.”

The document places defence at the heart of the UK’s industrial policy while reshaping procurement and industry relations in ways with direct implications for the transatlantic defence base.

Over the past few months, London has rolled out an unusually dense series of national security announcements: a new partnership framework with the European Union, the Strategic Defence Review, the National Security Strategy, and reforms at the Ministry of Defence. The DIS ties these strands together, redefining the role of defence in the economy and signalling a willingness to intervene more actively in industry.

Three elements stand out:

Defence as a growth sector

Unlike past strategies, the DIS explicitly recognises defence as a driver of the wider economy, employing 272,000 people — most outside London and the southeast — and now eligible for government programs such as skills development, regional investment, and infrastructure upgrades. A new Defence Growth Deals scheme could unlock significant funding, while UKEF’s lending capacity will expand to £10 billion, with £3 billion ring-fenced for defence exports. Access to the National Wealth Fund and British Business Bank support also promises new capital for industry growth.

Openness to UK-based companies, not just UK-owned ones

The strategy emphasises “UK-based industry,” reflecting a pragmatic view of the sector’s global nature. US-owned defense companies already employ more than 20,000 people directly in Britain, with another 94,000 supported in supply chains. While London is exploring a formal offset policy to strengthen supply chain resilience, officials point to Australia’s flexible model and past UK experience as signs this will not become protectionist or overly rigid.

Acquisition reform

The UK aims to accelerate procurement, cutting timelines for some projects to as little as three months. A new national armaments director will oversee all non-nuclear acquisitions in an end-to-end system, consolidating budgets and streamlining decision-making. Given public scrutiny of defense spending and pressure to prioritize resources amid the ongoing war in Ukraine, success in delivering faster, more efficient procurement will be politically essential.

The Atlantic Council notes that while skepticism about reforms is warranted — past UK acquisition overhauls have stumbled — the combination of geopolitical urgency, clear economic incentives, and structural changes may make this round different.

The new strategy not only reshapes how Britain equips its armed forces but also embeds defense firmly into the country’s industrial and regional growth agenda.

By Tamilla Hasanova