Question to the Ministry of Defence:

To ask the Secretary of State for Defence, what assessment he has made of the potential impact of the difference in time horizons between venture capital of three to four years, and defence procurement cycles that exceed a decade, on private investment in the domestic defence sector.

Venture capital is only a sub-section of the capital available to support defence and our transition to warfighting readiness; venture capital is most suited to innovative, high-growth potential companies, not the large defence programmes with the longest timelines and procurement cycles.

Through Procurement Segmentation, as announced in the Strategic Defence Review and the Defence Industrial Strategy, we are establishing a ‘rapid commercial exploitation’ segment and distinct acquisition pathways which will enable a time-to-contract of three-months for innovative technologies, more closely aligning the timelines between investors and defence.

This will drive the investability and bankability of the defence sector, in parallel to the support offered by the newly established UK Defence Innovation and wider public financial institutions (for example, the British Business Bank).

The Defence Finance and Investment Strategy, to be published in Spring, will provide a comprehensive view of the measures to increase the available capital to improve warfighting readiness while also driving growth.