British steel, shipbuilding, AI and energy infrastructure are set to take centre stage in government contracts under new rules designed to strengthen national security and back UK industry.

The Labour Government announcement means departments will be expected to prioritise British suppliers in key sectors, with a clear steer to use UK steel in major projects or justify why it is sourced from overseas. It follows growing concern about the fragility of global supply chains, brought into sharp focus by recent international instability.

Alongside this, a new Public Interest Test will challenge the long-standing habit of outsourcing by default. Departments will now be required to consider whether contracts over £1 million could be delivered more effectively in-house, with larger departments expected to set out plans for bringing services back under public control where it represents better value.

The reforms also place greater emphasis on community benefit. Firms bidding for public contracts will be encouraged to demonstrate how they will create local jobs, apprenticeships and skills, ensuring that government spending delivers tangible benefits for communities across the country.

The measures build on the Labour Government’s wider industrial strategy and recent Steel Strategy, aiming to boost domestic production, support jobs and strengthen supply chains in sectors critical to the UK’s future.

Luke Myer, MP for Middlesbrough South and East Cleveland and Chair of the APPG on Steel and Metals Related Industries, has long argued that government procurement should be used to back British industry.

Luke said:

“For too long, we have relied on global supply chains without asking what happens when they fail. This is about resilience, but it is also about fairness.

If British taxpayers are funding major infrastructure, that should mean jobs for British workers and orders for British industry. I have consistently called for UK steel to be used in our major projects, so this is a welcome step in the right direction.

For places like Teesside, where steelmaking is part of our identity and our future, this is about securing good jobs, strengthening supply chains and backing the industries that matter to our national security.”