Will the UK Secure Steel and Ships in Procurement Reset?

The UK Government has outlined a new course for its procurement strategy, bringing steel production and shipbuilding back into focus as priorities for domestic investment.

Chancellor of the Exchequer Rachel Reeves is introducing new legislation that requires major public contracts to favour British-made steel and British-built ships.

Announced at the Labour Party conference in Liverpool, the policy marks a shift in how public money supports UK industry.

Instead of awarding contracts to overseas manufacturers, the Government now actively encourages local procurement, aiming to strengthen national supply chains and secure critical infrastructure.

Supply chains under pressure

Global uncertainty continues to test supply chains, with geopolitical tension and rising tariffs prompting many governments to reconsider their reliance on foreign materials.

For the UK, the result is a pivot towards localisation - bringing core industries back within domestic reach and reducing exposure to international disruption.

The Chancellor positions the shift as a direct response to both security and economic demands.

“We are putting Britain first," she says "empowering us to prioritise British-built ships and British-forged steel; strengthening our national economic security and creating manufacturing jobs here in Britain. Because where things are made, and who makes them, does matter.”

This prioritisation includes treating both shipbuilding and steel as critical national infrastructure.

The legislation is designed to create a more transparent, resilient procurement system while stimulating growth in domestic supply networks. The move also aims to protect and grow thousands of jobs, especially in regions that rely on heavy industry.

Earlier this year, the Government takes over operations at British Steel's Scunthorpe site, which supplies 95% of the steel used in UK rail. The site houses the only remaining 'virgin steel' blast furnaces in the country.

By securing this facility, the Government protects the UK's infrastructure supply and ensures domestic access to foundational materials for years to come.

Reeves adds: "There must be a future, there will be a future, for steel forged here on British soil.”

Rebuilding the fleet, locally

Shipbuilding will play a central role in this procurement reset. The UK’s naval legacy is long-established and the Government continues to invest in its future.

Around 95% of the UK’s trade moves by sea, making maritime strength essential for both economic and national security.

The Royal Navy remains key to maintaining peace along shipping routes, and government contracts reflect the need for modern naval capability.

New procurement includes orders for eight Type 26 frigates, labelled the 'City Class', produced by British defence company BAE Systems. These vessels are tasked with protecting the UK’s nuclear deterrent and aircraft carriers, reinforcing the country’s naval presence in strategic waters.

Procurement within the defence sector is now framed by competition and innovation. Contracts are structured to encourage domestic participation, stimulate industrial skills and maintain long-term value across the supply chain.

By focusing on local production, the Government avoids the pitfalls of outsourcing and instead drives home the benefits of industrial self-reliance.

Gary Smith, General Secretary of the GMB Union, says: “For generations, our fantastic yards have kept the country safe; from the ships that beat the Armada to those that sunk the Bismarck. This policy will reinvigorate the UK’s shipyards – and the communities built around them.”

The GMB calls the policy “incredible news for the UK’s proud shipbuilding sector” and frames it as a necessary intervention for long-term national gain.

Procurement as industrial strategy

By linking procurement with domestic production, the UK sets out a more strategic approach to sourcing steel and ships. The focus is no longer on headline cost alone but includes the value of job creation, community development and infrastructure integrity.

Prospect Union, which represents scientists, engineers and tech professionals, supports the change.

Mike Clancy, Prospect General Secretary, adds: “For too long our procurement system has been pointing in the wrong direction, fixated on headline cost and ignoring other factors such as supporting good quality jobs.

"Under the last government we saw important shipbuilding contracts go to foreign firms, while our own yards were desperate for work.

"A more strategic procurement process can promote long-term skills planning and lead to ambitious industrial partnerships.”

The reforms aim to deliver stability to sectors that have struggled to compete with international bidders.

By resetting the rules, the Government enables UK-based suppliers to compete fairly for high-value contracts while aligning procurement with broader economic policy.

Steel and shipbuilding are not only symbolic of British industrial strength, but they also underpin the infrastructure and defence systems the country depends on.