Luke Pollard MP Delivers Keynote Speech on Defence Readiness and Industry at Mansion House Security Event

Lady Mayor, thank you ever so much for hosting this event today. Good afternoon, everyone. It is truly a pleasure to be here with you.

Gathered under this roof are numerous leaders and decision-makers essential for igniting the next wave of defence innovation required to ensure our nation’s safety and support our allies. I appreciate you dedicating your valuable time to be present.

I am honoured to serve as the warm-up act for my friend, the Ukrainian Ambassador. Over the past two years, I have spent considerable time in Kyiv, and the bravery exhibited by the Ukrainian people is a testament to their resilience. We must honour this courage not merely through words but by providing tangible support—whether for their frontline, their nation, or their innovators. This support extends beyond merely sending equipment; it encompasses forging partnerships, innovating, and collaboratively developing new technologies.

I recognise that many individuals in this room are engaged in practical efforts that significantly impact our friends in Ukraine, and I extend my gratitude for your contributions.

Adapting to a Changing Geopolitical Landscape

We convene at a time when global geopolitics is increasingly fragile, disruptive, and in flux. This necessitates the development of an entirely new framework for warfighting and deterrence, which hinges on innovation and the introduction of novel weapon systems that can transform the battlefield.

Indeed, the manner in which the United Kingdom would engage in conflict today is fundamentally different from the approach taken when Putin initiated his full-scale invasion of Ukraine a mere four and a half years ago. By supporting Ukraine, we are learning vital lessons that compel us to reconsider how the United Kingdom conducts its operations.

Our most pressing mission presently is to overhaul Britain’s defence posture and accelerate innovation. Currently, some of the most critical advancements in defence are emerging from tech startups and scale-ups—agile enterprises that are adept at capitalising on opportunities and driving rapid change. Thus, our challenge today is straightforward: how can we enhance our ability to identify, fund, and energise the most creative minds and enterprises to ensure that the best technology reaches our armed forces and our allies as swiftly as possible?

Revolutionising Defence Procurement

It has been just over two years since this government assumed office, inheriting a defence programme that, quite frankly, was ill-equipped to confront the threats we now face. We are progressing towards warfighting readiness, but this requires us to cast aside the comforting familiarity of outdated practices in Britain—where we polish old systems and vainly hope they will safeguard us. If our technology and equipment cannot perform in Ukraine, I do not want it within our armed forces. This presents a significant opportunity for new technology, innovative thinking, and advanced weaponry to emerge. In developing new technologies, we must focus on the conflicts of today and the battles of tomorrow.

Our supply chains are crucial to this transformation. Those within our supply chains understand the painfully slow, wasteful, and costly procurement processes the Ministry of Defence (MOD) previously employed. We are actively changing that, especially for small businesses and scale-ups with remarkable products that have often struggled to find appropriate buyers within the MOD.

Since then, we have established a new blueprint for a fundamentally different military and procurement approach. We published our Strategic Defence Review, Defence Industrial Strategy, and Defence Investment Plan to create a more resilient and warfighting-ready military, underpinned by a world-class supply chain. We are integrating industry at the heart of defence as a fundamental enabler of our objectives—not only to enhance our national security but also to foster success and prosperity by generating high-quality defence jobs, skills, and opportunities across the country.

Fostering Growth Through Defence Spending

Previously, I was encouraged by the MOD press office to assert that defence is an engine for growth in every interview. With Andy Burnham in Downing Street, I now advocate for re-industrialisation, yet the fundamental truth remains intact. Investment in defence creates good jobs and opportunities, particularly for our youth, and we should not hesitate to vocalise this truth. Defence spending is indeed a catalyst for growth, a means of re-industrialising, and an avenue for creating opportunity—all while ensuring our safety.

To enhance our nation’s security and success, we must generate more high-quality defence jobs, skills, and opportunities. In this endeavour, small and medium-sized enterprises (SMEs) and scale-ups play a pivotal role. We have reformed our internal processes, appointing a new National Armaments Director, Rupert Pearce, who brings corporate expertise and energy to our procurement methods.

We have also established the Defence Office of Small Business Growth to eliminate barriers to entry, reduce red tape, and implement a 50% increase in spending from the MOD with medium and small-sized firms by Summer 2028—translating into an additional £2.5 billion for SMEs by reforming our procurement processes to facilitate their entry into our supply chain.

Building Regional Networks for Defence

We have rolled out our SME Action Plan, outlining our commitments to be accountable for these changes and supporting start-ups, scale-ups, and other companies in their growth journeys. Crucially, assisting small firms in navigating funding routes is essential to maximising their potential. At a national level, our Defence Office for Small Business Growth provides guidance on these pathways, streamlining processes and clarifying entry points as necessary.

I am particularly pleased with the success of regional defence and security clusters, which are expanding across various regions, fostering tailored support for businesses and creating localised networks of major suppliers, devolved and local governments, while providing a platform for investors to engage and support them.

Ukraine has demonstrated the capacity to innovate at a remarkable pace driven by the exigencies of their ongoing conflict. As we learn from Ukraine’s example, defence must leverage Britain’s resources not only from the tech and engineering sectors but also from finance, consulting, and academia to inspire and implement the changes we require. Finance, as you can appreciate, is pivotal to our discussions today.

Harnessing Private Capital for Defence

The government is already increasing defence spending. Naturally, as a defence minister, I would welcome even more funding. However, the opportunities for defence investment extend beyond taxpayer contributions. It is essential to attract private capital and utilise the institutions, networks, and structures of the City of London to draw more private investment into defence, thereby creating jobs and enhancing deterrence. Public investment will remain integral to our mission as we expand our defence capabilities. Yet, in a more perilous world, we must build our capacity now rather than solely awaiting the anticipated increase in defence funding over the next decade.

This is why the Defence Investment Plan outlines priority areas for immediate and future investment, providing investors with clarity regarding which technologies and defence sectors the government intends to support and where we seek private sector investment.

We must also strive to ensure that Defence and our investment community communicate effectively. Currently, there is a risk that we sometimes speak past one another. By using the same language and relevant data, we can enhance our ability to deliver results.

Creating New Partnerships for Defence

Historically, Britain has thrived when government, industry, and finance collaborate effectively. Our task today is not to reinvent the financial sector but to forge a new partnership that is relevant to our current era.

The potential benefits of this collaboration are substantial—not only in terms of a stronger national defence and security but also in fostering a more innovative defence sector and a burgeoning market that aids re-industrialisation while providing opportunities to export to our allies. It is important to note that it is not solely the United Kingdom investing in defence; our NATO allies and others across the globe are doing the same.

In the Defence Investment Plan, we announced the establishment of a Defence Investment Unit to provide investors with a clearer interface with defence and to equip defence with the financial expertise necessary to transform priorities into market-facing propositions.

Following this year’s Autumn Budget, we will unveil the Defence Finance Investment Strategy, which will establish a clear framework for government and responsible private capital to collaborate in support of security, resilience, and growth. In December, we will also host a defence investment summit aimed at translating strategy into execution, bringing together government, industry, and investors to accelerate the flow of capital into priority defence capabilities.

Transforming Defence Innovation Today

Before I conclude, I wish to emphasise that this is not a theoretical exercise. These developments are occurring right now, and we must facilitate their increased frequency. In May, 13 British startups were awarded contracts of up to £4 million as part of the Defence Unicorn Fund programme. One of these, Kraken Technologies, which manufactures maritime uncrewed surface vehicles, has since raised $175 million in a Series B funding round, achieving a valuation of $1 billion. Another British company, Green Jets, has secured substantial funding from capital and was one of three firms selected by the Ministry of Defence to develop a low-cost drone interceptor. Both Kraken and Green Jets benefited from funding through the National Security Strategic Investment Fund and NATO Innovation Fund, while the British Business Bank also financed Kraken. Additionally, JET Connectivity, a small business specialising in 5G and 6G communications tools, was the only British firm selected for the procedures of NATO’s Diana mission track programme earlier this year, out of over 3,500 applicants.

This recognition of British