The Chancellor has told her Cabinet colleagues that more deals need to be made with British firms.
Ms Reeves has sent members of the Cabinet a letter (Image: Getty)
Rachel Reeves has scrambled to stop vital contracts being awarded abroad. The Chancellor penned a letter asking departments to make sure more deals are made with British firms in relation to four critical industries – shipbuilding, steel, energy and artificial intelligence (AI). Ms Reeves told every cabinet minister in charge of a spending department: “Every secretary of state can and must lead this agenda within their departments if we are to deliver the change the public expect.” She added: “Therefore, it is disappointing that we are still seeing too many Government contract awards where this is not happening.
“We have instructed officials to take further steps to ensure your departments act in the wider national interest rather than solely focusing on narrow operational priorities.” The Chancellor is believed to be disappointed with a £200million contract for navy support vessels arranged with Dutch shipbuilder Damen, as well as a £9million deal to refit the research ship David Attenborough, given to Danish shipyard Orskov.
Ms Reeves wants more contracts to be handed to UK firms (Image: Getty)
Moreover, Ms Reeves is said to be dissatisfied that a £1.9billon contract to improve the Faslane shipyard, which services Britain’s nuclear submarines, could be arranged with a foreign company, as well as the prospect of turbines at a major offshore wind farm in the North Sea being made by Mingyang – a Chinese firm – the Guardian reports.
It comes as eight in 10 UK firms are suffering as a result of the Iran war, and a fifth of businesses are putting investment plans on hold because of the geopolitical uncertainty, according to a report.
The latest Barclays Business Prosperity index suggested that 80% of UK businesses reported a negative impact from the Middle East conflict.
More than two-thirds (64%) said energy and fuel costs were impacting on their business, with 34% hit by higher shipping and logistics costs and a third suffering supply chain disruption, the report found.
Manufacturers are also calling for reforms to the planning system to help boost economic growth,
Make UK said failure to improve the system risks failing to deliver ambitions such as industrial strategy, regional development and decarbonisation.
The business organisation’s research showed manufacturers’ widespread dissatisfaction with the current system, which it described as “not fit for purpose”, overly complex and leading to delays and increased costs.
A government spokesperson said: “For the first time, procurement of shipbuilding, along with steel, AI and energy infrastructure, will be recognised as critical for national security.
“We will also issue new guidance prioritising contracts for British business where necessary to protect our national security.”