UK Chancellor Orders Ministers to Prioritize British Firms in Four Strategic Sectors

Chancellor Rachel Reeves has sent a sharply worded letter to cabinet colleagues demanding they stop awarding government contracts to foreign companies in shipbuilding, steel, energy, and artificial intelligence. The directive, co-signed by Cabinet Office minister Chris Ward, signals a major shift in procurement policy for sectors now deemed critical to national security.

Reeves expressed frustration that too many high-value contracts have gone abroad, citing a £200 million deal for navy support vessels awarded to Dutch builder Damen and a £9 million refit of the research ship Sir David Attenborough given to a Danish yard. She also flagged concerns that a £1.9 billion upgrade to the Faslane nuclear submarine facility could slip to foreign bidders.

Under new guidelines expected this summer, Treasury and Cabinet Office officials will monitor contract awards and can override departmental decisions. The 2023 Procurement Act already allows ministers to exclude foreign bidders on national security grounds, but Reeves believes civil servants have been too focused on cost over nationality.

Critics warn that restricting competition could raise costs for taxpayers. But unions and some Labour MPs argue the UK has been too willing to send strategic work overseas. The move comes as Reeves jostles for position amid speculation about a potential change in prime minister, with allies insisting she should remain chancellor if Keir Starmer is replaced.