Small businesses will benefit from increased govt defence spending, Rachel Reeves says

SMALLER British firms will see increased government spending funnelled towards them to create more innovative weapons, Rachel Reeves said yesterday.

The Chancellor pledged to “fire up” the British defence industry.

Defence minister John Healy admitted small firms bagged just four per cent of MoD dealsCredit: PA

She argued the rise in military investment to 2.5 per cent of GDP came from spending cuts rather than Brits being saddled with further tax rises.

At a conference for manufacturing lobby group MADEUK, she said: “We now need to spend more money on defence to keep our country secure, to keep Europe secure.

“In fact, a strong defence sector is the bedrock of a strong economy.”

The Government has said it will review “single source” contract rules — where certain contracts are not open to competition over national security — and overhaul procurement rules to make it easier for smaller firms to win business from the Ministry of Defence.

Defence minister John Healy admitted small firms bagged just four per cent of MoD deals.

Ms Reeves said: “We want to stimulate innovation and innovation often comes from smaller firms, particularly between defence and technology.”

She said more money from the National Wealth Fund would be funnelled towards defence spending, alongside UK Export Finance.

The Chancellor added: “I want to make sure as we spend more on defence, it is used to support British jobs and British industry.”

Ms Reeves revealed she was working with UK defence companies on how to increase capacity and capability, and that a defence innovation hub will help smaller businesses benefit from the extra spending.

But she will not completely rule out foreign firms.

Keir Starmer must hike UK defence spending soon to have any credibility & ditching woke nonsense can help fund it

Ms Reeves added: “We’ll always need to buy things from abroad.

“I don’t want to pull up the drawbridge, but as we spend more on defence, I want that to benefit the UK economy.”

Rachel Reeves speaking at the Make UK Conference. — Rachel Reeves has promised the increase in defence spending will benefit innovative small businessesCredit: PA

APPRENTICE PLANS PUSH

RACHEL Reeves has said getting more young people into apprenticeships will help fix a skills-gap shortage in the manufacturing industry.

The Chancellor said that relaxing “absolutely crazy” rules on apprentices requiring maths or English qualifications is vital.

She said apprentice roles can create “both vocational and an academic route”.

CALL OF CHINA

CHINESE social media influencers could boost exports of British luxury brands.

Designer Paul Smith joined Anya Hindmarch, Jo Malone and Liberty at a Department for Business and Trade campaign launch yesterday.

Paul Smith reviewing materials at a table. — Designer Paul Smith at a Department for Business and Trade campaign launch yesterdayCredit: harry mckenzie-hjm productions

Hongjoong at the Paul Smith Menswear Fall-Winter show during Paris Fashion Week. — South Korean K-pop star Hongjoong at Paul Smith’s Paris fashion show in JanuaryCredit: Getty

Burberry used to rely on wealthy Chinese shoppers for around 40 per cent of revenue.

South Korean K-pop star Hongjoong was at Paul Smith’s Paris fashion show in January.

Last year the Chinese luxury market was estimated to be worth £43billion.

Trade Secretary Jonathan Reynolds hailed “China’s fast-growing appetite for our world-renowned products”.

BIGGER PAY GAP

WOMEN are more likely to be in low-paid work than men and the gap is growing, new research suggests.

Around 18.7 per cent of jobs held by women pay below the voluntary so-called “Real Living Wage”, compared with 12.6 per cent of those held by men, said the Living Wage Foundation.

Director Katherine Chapman said: “Despite progress in previous years, the gender low pay gap is widening again.”

The Real Living Wage is currently set at £12.60-an-hour and £13.85 for London.

UK firms in takeovers plunged at the end of last year, figures show.

The numbers of mergers and acquisitions fell to just 65 in December — a sharp drop from 151 in November and just over half the total at the end of the previous year, ONS stats reveal.

CONFIDENCE DIP

BRITAIN’S biggest maker of dips has warned prices will have to rise, after it settled strike action over pay.

Hummus giant Bakkavor resolved the dispute — which caused a taramaslata shortage last year — a day before it reported its results to the City, yesterday.

It said its cost base rose by £59million last year and it faced a further £15million national insurance bill.

The firm said it was already engaged with all the major supermarkets on “price recovery” — a phrase used for passing on higher prices.

SNACKING TRIPS DIP FOR BRITS

BRITS are snacking less and taking fewer trips to the supermarket than before the pandemic, stats show.

Consumers had 330million fewer “snack occasions” last year compared to in 2020, according to Kantar.

Checkout staff at an Aldi supermarket scanning groceries. — Brits are snacking less and taking fewer trips to the supermarket than before the pandemic, stats showCredit: Alamy

Meanwhile households are buying fewer ingredients as they want simpler meals and spend less time preparing dinner, research found.

It comes as food inflation remained steady at 3.3 per cent in the four weeks to the end of February with prices rising fastest in chocolate, juices, buyers and spreads.

Asda remains the worst performing supermarket with sales dropping by 5 per cent, while all its rivals have remained in growth.

Tesco’s sales rose by 5.8 per cent over the same period.

Lidl’s 8.1 per cent increase means that it is now growing at almost twice the rate of the 4.9 per cent growth reported by rival discount retailer Aldi.