Rebecca Smith, Member of Parliament for South West Devon, has revealed that fewer than one in four (23 per cent) new MoD contracts in 2024-25 were awarded to Small and Medium-sized Enterprises (SMEs).

This news follows the resignation of Labour's Defence Secretary John Healey over inadequate military spending plans. Mr Healey’s resignation letter accused Sir Keir Starmer of only offering a 0.08 per cent increase in defence spending by 2030. Yesterday, at Prime Minister’s Questions, the Conservative Leader of the Opposition Kemi Badenoch challenged the Prime Minister on the delay in publishing the Defence Investment Plan – if the situation is alarming enough to prompt the resignation of a Secretary of State, it raises even more serious questions about the Government’s credibility on defence.

Rebecca Smith said: “We know from the innovation seen in Ukraine's defence sector that SMEs are essential to the swift development of new defence technology. Here in South West Devon, we have cutting-edge industry that is struggling under the weight of Labour's poor spending decisions, the delays to the Defence Investment Plan and regulatory incompetence. They risk reducing competition, stifling innovation, and weakening the UK’s defence industrial base. I urge the Government to remove the barriers facing SMEs, open up procurement routes more effectively, and ensure that smaller, innovative suppliers are given a fair and meaningful opportunity to compete for defence contracts.

“John Healey has done the right thing in resigning today - but now we need to see much of Labour's failing defence policy reversed, starting with their abject failure to invest in SMEs.”

SMEs are critical to the defence supply chain, providing specialised technologies, components, and innovation. Luke Pollard, the Minister of State for Defence, has previously claimed that, “Even as we finalise the DIP [Defence Investment Plan], we continue to back British jobs, British businesses and British innovation”. These figures fatally undermine that claim.

A Written Parliamentary Question by Rebecca Smith addressed to the Secretary of State for Defence asked what proportion of contracts signed by his department since July 2024 were with SMEs. This follows Miss Smith raising the question in the Commons Chamber, where the Minister was unable to provide an answer at the time, prompting her to follow up. The response, provided by the Minister of State for Defence Readiness and Industry, Luke Pollard, on 2nd June 2026, stated that:

“The number and value of new contracts let by Ministry of Defence (MOD) each year, including specifically with Small Medium-Sized Enterprises, is published annually as part of the MOD Trade, Industry and Contracts: 2025 report. In Financial Year 2024-25, the last year for which data is available, the MOD placed 2,398 new contracts, of which 559 (approximately 23 per cent) were with SMEs with a collective value of £876 million.”

As the Labour Government is once again thrown into chaos, defence SMEs are left waiting, and the UK’s plans to rearm continue to slip even further behind our European neighbours.