Marshall should benefit from UK’s multibillion defence spend boost
Marshall in Cambridge, which excels in the defence sector, should benefit along the way but did not wish to comment publicly at this juncture.
Today’s uplift, which will increase UKEF’s lending capacity from £8bn to £10bn, will increase the competitiveness of the UK’s defence industry, allowing exporters to grow their business through sales to allies around the world, and bolstering supply chains.
UKEF's Direct Lending facility provides loans to other governments to buy goods and services from the UK. In 2023/24, UKEF issued £8.8bn worth of loans, guarantees and insurance to help grow UK exports, supporting 650 exporters of all sizes and 41,000 jobs across the UK.
This builds on UKEF’s strong record of support for the defence sector, which has recently included an £8.8bn guarantee for exports of air defence systems to Poland, support for the export of Typhoon aircraft to Qatar and support for the sale of ex-Royal Navy minehunting vessels to the Ukrainian Navy.
The latest boost also follows the recent £1.6bn commitment announced by the Prime Minister to supply thousands of advanced air defence missiles to Ukraine, boosting the UK economy and support 700 existing jobs at Thales in Belfast.
The spending upsurge, announced by the Chancellor on a visit to Scotland defence stalwarts, should be good news for all major UK defence-related businesses, especially exporters. Marshall in Cambridge is among them.
International trade is now the major part of the Marshall business and UK Export Finance can be a great help when selling to some countries. It is thought the renewed commitment to defence spend will be a major factor in the sale of the remaining ex-RAF C-130s, which would be great news for Marshall given its track record in servicing and enhancing the aircraft before they get back in the air.
Reeves said of the defence spending strategy: “The world is changing and we must bring about a new era of security and renewal that protects working people and keeps our country safe.
“This increase to UKEF’s lending capability is our Industrial Strategy in action, bolstering our defence industry and supply chains, creating jobs and driving growth across the UK.
“This is alongside an increase in our defence spending to 2.5 per cent of GDP. We are strengthening our national defence, kickstarting economic growth and delivering the stability we need to keep us safe.”
Business Secretary Jonathan Reynolds added: “A strong defence sector is vital for a Britain that’s both secure at home and strong abroad, and ensures a world where business can benefit from the economic security it brings.
“That’s why our Plan for Change has put defence at the heart of our Industrial Strategy, helping us drive growth while bolstering our national security for the long term.
“This new UKEF lending capability strengthens our support for the sector even further and will help our defence firms export the best of British expertise abroad while boosting jobs and growth at home.”
Scotland is a hub for the UK defence industry, home to companies such as Babcock and BAE Systems, and critical operations in Scotland have benefitted historically from UKEF support through guarantees for their international exports to global markets.
UKEF have previously supported Babcock with a £192m loan guarantee to finance the sale of two mine counter measure vessels to the Government of Ukraine.
Scotland's defence sector received £2.14 billion in UK Government spending in 2023/24, equating to about £390 per person, supporting around 25,600 jobs.