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Labour’s defence spending boost: Welsh SMEs to benefit, but questions remain

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THE UK Labour Government has announced a significant increase in defence spending, pledging to raise investment to 2.5% of GDP by April 2027, with a further commitment to reach 3% in the next Parliament. The move aims to support national security and drive economic growth, with Welsh small and medium-sized enterprises (SMEs) set to benefit from new spending targets. However, concerns remain over the effectiveness of the strategy in delivering long-term economic prosperity.

More opportunities for Welsh firms

Under Labour’s Defence Industrial Strategy, more money will be directed to SMEs, with the government setting new spending targets to ensure smaller firms gain better access to defence contracts. A new SME hub will also be launched to help businesses enter the supply chain more easily.

Currently, Welsh defence SMEs support an estimated 5,940 jobs. The government hopes to grow this number by increasing procurement from small businesses. Last year, £914 million was spent on defence contracts in Wales, but only 4% of direct Ministry of Defence (MOD) spending went to SMEs. Labour’s plan aims to reverse a decline in SME participation under previous governments.

Doubts over economic impact

Labour has positioned defence as an “engine for economic growth,” but some experts are not convinced. Critics argue that military spending often benefits large corporations more than small firms. Economic analysts suggest that investment in public services, infrastructure, and green energy could deliver greater returns for regional economies.

A report by the Institute for Fiscal Studies warns that increasing defence spending while adhering to Labour’s fiscal rules could divert funding from public services. With concerns growing over NHS waiting times and education funding, some question whether prioritising military investment is the best way to deliver economic stability.

Funding shift sparks criticism

The government has also faced backlash for reducing Overseas Development Assistance (ODA) from 0.5% to 0.3% of Gross National Income (GNI) to help finance the defence budget increase. Aid organisations argue that cutting foreign aid to boost military spending harms the UK’s global reputation and influence.

Challenges within the defence sector

Despite the optimism surrounding the new measures, structural issues in the UK defence industry could limit the impact on SMEs. The sector has struggled with budget overruns, delays, and supply chain inefficiencies, raising concerns about whether smaller firms will see meaningful benefits.

Some businesses have also paused hiring and investment plans due to uncertainty surrounding the Strategic Defence Review, which is ongoing. Industry leaders warn that without clear long-term procurement plans, SMEs may find it difficult to plan ahead.

Fiscal balancing act

Labour’s defence spending plans align with previous government targets, but how they will balance this increase with other spending commitments remains unclear. Chancellor Rachel Reeves has pledged to maintain fiscal discipline, but experts warn that significant defence increases could lead to cuts elsewhere.

The Office for Budget Responsibility has said that meeting both defence spending targets and public service commitments will be challenging without new revenue sources. This raises concerns about potential tax hikes or cuts in other departments.

Reaction from politicians and business leaders

Prime Minister Keir Starmer defended the policy, saying:

“Wales’s defence industry supports thousands of good jobs and represents British manufacturing at its best. Increasing our investment in defence is not only bolstering our national security but also putting more money into working people’s pockets and boosting economic growth as part of our Plan for Change.”

However, critics have raised doubts about whether the strategy will work. Former Conservative Defence Secretary Ben Wallace warned:

“Throwing money at the defence sector without fixing procurement inefficiencies will not deliver the promised benefits. SMEs need long-term stability, not short-term spending targets that may shift after the next election.”

A long road ahead

Labour’s defence spending plans present both opportunities and challenges for Welsh SMEs. While new funding targets and the SME hub could open doors, concerns remain over economic priorities, industry inefficiencies, and fiscal sustainability.

With the Strategic Defence Review ongoing, businesses will be watching closely to see whether the promised benefits materialise—or whether this initiative will fall short of expectations.

 

Community

Weather presenter spotted filming in Pembrokeshire

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A WELL-KNOWN Welsh weather presenter was spotted in Pembrokeshire as he filmed scenes for a new series celebrating the county’s coastline.

Derek Brockway, who has been a familiar face on BBC Wales since 1995, was in St Davids recently working on another instalment of his popular walking series along the Pembrokeshire Coast.

Local resident Thomas Tudor said it was “lovely” to meet the broadcaster during filming, posing for a photograph alongside his mother, Beryl Tudor, and sister, Bethan Thomas Price.

Brockway, who is based at BBC Cymru Wales in Cardiff, is widely known not only for his weather forecasts across television, radio and online, but also for his programmes showcasing Wales’ landscapes and coastal paths.

The latest filming in St Davids is expected to form part of an upcoming series highlighting the natural beauty and walking routes of Pembrokeshire, an area long regarded as one of the jewels in Wales’ tourism crown.

 

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Ministry of Defence

Defence families in Wales to save up to £6,000 under new childcare scheme

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A MAJOR new childcare support scheme for Armed Forces families will be rolled out across Wales from September 2026, the UK Government has announced.

The initiative is expected to save eligible families up to £6,000 per child each year, providing a significant boost to household finances amid ongoing cost-of-living pressures.

The scheme will be delivered through the Ministry of Defence’s existing Early Years childcare reimbursement system and will bring Wales in line with the level of support already available to forces families in England.

Today, 19/03/2026 The Secretary of State for Defence John Healey visited Dreghorn Barracks, Edinburgh, home to 3rd Battalion the Rifles. He met with families to launch a new scheme for Defence Families in Scotland, Wales and Northern Ireland.

Ministers say the move is part of a wider effort to improve recruitment and retention in the Armed Forces, with childcare costs identified as a key pressure affecting morale.

The new support will cover children from nine months old until they reach three years of age in Wales and Scotland, and up to four years old in Northern Ireland.

Defence Secretary John Healey MP announced the scheme during a visit to Dreghorn Barracks in Edinburgh.

He said: “Our Armed Forces families are at the heart of our nation’s security. As the demands on defence increase, it is right that we step up our support for those who serve.

“This offer will ensure more military families get the childcare support they need, wherever they are posted.”

Secretary of State for Wales Jo Stevens added: “Service families in Wales make huge sacrifices and deserve the best possible support.

“They contribute not only to our national security but also to the Welsh economy. This scheme delivers meaningful help with the cost of childcare.”

The scheme will reimburse the difference in early years childcare costs for eligible working families. To qualify, both parents must be in employment and meet the income thresholds required for a Tax-Free Childcare account.

Hundreds of families across Wales are expected to benefit.

The announcement forms part of a broader package of support introduced since July 2024, including improved military housing, the largest Armed Forces pay rise in two decades, and plans to strengthen the Armed Forces Covenant in law.

Further details will be provided in the coming months, with families encouraged to begin considering childcare arrangements ahead of the scheme’s launch.

 

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Community

Broad Haven volunteers secure ‘national asset’ status for nature reserve

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A SMALL stretch of woodland and former opencast coal mine has been transformed into a nationally recognised biodiversity site, in a major first for Wales.

The Slash Pond Community Nature Reserve has been awarded ‘Naturfa’ status, becoming the first community-managed site in Wales to receive the designation.

The recognition, confirmed by Deputy First Minister Huw Irranca-Davies, classifies the reserve as an “Other Effective Area-based Conservation Measure” (OECM). This means the volunteer-led work of the Support the Boardwalk group will now contribute directly to Wales’ 30×30 target – the global commitment to protect 30% of land, freshwater and sea for nature by 2030.

In a further boost, the site has also been included in the National Forest for Wales, recognising its role in strengthening a connected network of woodlands and habitats across the country.

Once a simple local walkway, the Slash Pond has developed into a thriving wildlife haven. The reserve now supports a wide range of species, including critically endangered European eels, otters, ten species of bat, and more than fifty species of birds, alongside diverse aquatic plants and insects.

Huw Irranca-Davies said: “These special places are a testament to the care and dedication of people working on the ground – securing a legacy for future generations. Nature can only thrive where habitats are resilient, protected and effectively managed.”

The new status is expected to unlock future funding opportunities, supporting long-term plans for maintaining the boardwalk, monitoring biodiversity and water quality, installing new signage, and expanding environmental education work with Broad Haven Primary School and the wider Havens community.

Andy Drumm, a volunteer with Support the Boardwalk, said: “We’ve always known how special the Slash Pond is, but this recognition puts it firmly on the map as a national asset. It’s a tribute to years of hard work and shows that local communities can lead the way in tackling the nature crisis.”

To mark the achievement, a Spring Family Fun Day will take place on Friday (May 9) from 1:00pm to 4:00pm at the Slash Pond car park.

The event will feature guided nature walks, pond dipping, a wildlife treasure trail, live music, and family activities including crafts and face painting. The official unveiling of the Naturfa certificate and new reserve branding will also take place, alongside the launch of a new book, From Culm to Calm: A History of the Slash Pond by local author David Meanwell.

Karen Riggs, a long-time volunteer, said: “This achievement belongs to everyone in Broad Haven who has supported the site over the years. We’re not just celebrating a new title – we’re celebrating what our community has built together.”

The day will also see the installation of new benches at the observation decks and the launch of a floating island habitat to support wildfowl and other bird species. Visitors will also be invited to share feedback on plans for an improved picnic area designed to withstand local flooding.

Naturfa is a Welsh Government initiative recognising areas outside traditional protected sites, such as SSSIs, that are managed in ways which deliver long-term benefits for biodiversity.

The Slash Pond Community Nature Reserve is managed by the Support the Boardwalk group in partnership with The Havens Community Council, and is maintained entirely by volunteers.

Further information and updates are available via the Support the Boardwalk Facebook page.

 

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