Extra defence funding could boost Lancashire manufacturing sector, says MHA advisor

A multi-billion-pound boost to defence funding announced in today’s spring statement could be a major fillip for the Lancashire's manufacturing sector, according to an expert at accountancy and advisory firm MHA.

Rachel Marsdin, tax partner at MHA, which has offices in Preston and Lancaster, believes the extra money will create jobs and lead to other knock-on benefits for the supply chain.

Defence spending had been due to rise to £2.9bn next year, but chancellor Rachel Reeves announced an additional £2.2bn increase for the sector. It will take military expenditure to 2.36 per cent of national income next year, with plans for this to rise to 2.5% by 2027.

Commenting on the spring statement, Rachel Marsdin, who advises businesses and entrepreneurs across the region, said: “Today’s statement from the chancellor was aimed more at setting the foundations for long-term sustainable growth, rather than short term tax and spending measures.

“There wasn’t a great deal of content in this statement for business owners to take immediate comfort from. However, the £2.2bn of extra funding for defence will undoubtedly provide an economic boost to major companies operating in this sector and their manufacturing supply chains in the region.

“It was heartening to hear the chancellor mention Barrow in Cumbria by name, but the other major centres like Samlesbury and Warton in Lancashire, and their wider manufacturing supply chains in the region look set to benefit from the extra money too.”

The chancellor used today’s spring statement to reiterate her commitment to only holding one major fiscal event per year, meaning any major changes to tax and spending policy will happen in the autumn budget.

MHA’s Rachel Marsdin added: “We have to hope by the time Ms Reeves delivers her autumn budget, things are looking rosier and the chancellor has more leeway to make changes that could deliver growth.

“In the meantime, my advice to business owners is keep making decisions based on good data and the conditions in their sector and try not to get too distracted by macro-economics and geopolitics.”