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Britain's defence scoreboard is hiding a strategic blind spot. The Government says 84% of defence contracts signed since July 2024 have gone to British firms. These are headlines designed to close a conversation. They should open one. The definition doing the work here is any company with a UK registered address. That includes global defence primes whose intellectual property, production authority, and boardroom decision-making all sit overseas.

Their UK presence is real and valuable. But counting them in the same statistic as a precision manufacturer in the Midlands or a technology SME in South Wales does not tell us whether defence spending is building industrial capacity that belongs to this country. It tells us what the Government wants us to hear. The deeper issue is strategic, not statistical. The test of whether a defence capability is truly sovereign is not where the supplier is registered today. It is what happens if the relationship changes.

If the intellectual property, the tooling, and the authority to continue production can leave the UK on a single board decision, then what the country has is not a sovereign industrial base. It is rented capacity on terms it does not control.

The Government's own Defence Industrial Strategy recognises the gap. It commits to increasing spending with SMEs by £2.5 billion by 2028. It established a Defence Office for Small Business Growth in January.

But that office is currently supporting just 30 firms, will not be fully operational until the end of this year, and the hard numbers tell a different story from the headlines: direct defence spending with SMEs in 2024-25 was £1.2 billion.

Set against a procurement budget running into the tens of billions, the gap between rhetoric and reality is difficult to ignore.

The small firms the strategy claims to champion are the ones that cannot relocate on a whim. Their workforce, their machinery, and their customers are here. They are British not by registration but by the fact that leaving was never an option. They are also the firms still waiting for the procurement simplification they were promised.

If defence spending is genuinely going to be an engine for growth, the Government needs a measure that distinguishes between companies that are in the UK and companies that are of it. Until then, 84% is just a number designed to make the job look done.