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Banks which deny services to defence firms due to "woke" ESG concerns will face Government intervention, Business Secretary Jonathan Reynolds has vowed. The move is part of a broader shift in government posture that reflects growing recognition that financial access for defence firms is now a matter of national security, as tensions with Russia escalate. "This is a dangerous world, and we cannot be squeamish about supporting defence products which keep the world safe," he said during a visit to MBDA in Bolton, where many of Britain's frontline missile systems are manufactured.

Though the situation is improving, around one in ten small to medium-sized businesses still face problems accessing finance due to links with the defence sector. Recent cases include an industrial textile firm that makes covers for aircraft and naval equipment, which had its bank account shut for working with "defence, weapons, and arms" industries - despite having a healthy order book.

A British sniper ammunition firm supplying UK forces has also reported banking issues.

These situations stem from ESG (environmental, social, and governance) policies, designed to protect financial institutions from reputational damage linked to controversial sectors.

"Not every problem has been solved, and this is an issue that has particularly affected SMEs in a very practical way," Reynolds said.

"We have real support in parliament across the board on taking action. And we are sending a very clear message that we will work with industry to resolve any problems.

"If companies are experiencing issues, get them to us and we will intervene. We will absolutely get involved.

"We have to recognise that this is a societal issue but I am unequivocal here: no one in the defence sector should be denied access to finance or banking or core financial services through ESG criteria."

The UK defence industry is already worth around £12bn to the economy. But with the war in Ukraine dragging into a third year, and the risk of conflict between Russia and NATO rising, its importance is growing.

The government is focused on how its expanded defence budget - now at 2.5 percent of GDP - can better support British jobs and industry.

That begins with major firms like MBDA, which produces weaponry used by all three armed services and Ukrainian forces. These include the Sea Viper missile, credited with downing a hypersonic missile in the Red Sea; Storm Shadow cruise missiles, used by Ukraine to strike deep into Russia; and Brimstone, a highly accurate "fire and forget" missile.

MBDA is headquartered in Stevenage and jointly owned by BAe Systems, Italy's Leonardo, and France's Airbus.

Last week, the company announced a £200 million investment to create 700 jobs and open a third site at its facilities in Bolton, where it will produce 1,000 missiles for Poland under a long-term UK-Poland defence deal signed in January.

Speaking to the Sunday Express, Reynolds said: "A strongly defended Poland is an important part of our national security.

"The Poland deal will already include a huge expansion of the production here in Bolton, but will also include making sure there are facilities and capacities in Poland itself.

"This kind of Government to Government relationship means more jobs and capacity here in the UK."

He described the new Security and Defence Partnership signed at last week's EU-UK Summit as a central part of this vision.

"We should not be picking one market over others. We can improve our relationship with the EU and we can reach argent with the US as we have started to do," he said.

"Whatever people say about the US administration, President Trump has a point. It is a totally reasonable position for the US to take that Europe should be capable of defending itself.

"Our security sector can play a significant role in the capacity for Europe to protect itself, and it would be a massive missed opportunity for them and for us if we are not part of the £150 billion SAFE euro fund.

"We can do things that are not necessarily available in other countries and we want to play our part."

But it is not just big defence players who matter.

The UK has more than 10,000 SMEs in the sector -many producing niche platforms vital to modern warfare.

"We have seen in Ukraine that there is a new and different aspect of defence which is more akin to what we have seen in the tech sector, with an emphasis on drones and cyber. This will require a different approach - that means dedicated funding, more emphasis on innovation, diversification and a recognition the sector is smaller and there will be more competition and more success stories.

"These SMEs will be a really strong theme throughout defence sector."

Reynolds also acknowledged skills shortages in key areas such as welding, but said this must be tackled in balance with the government's promise to reduce immigration.

"We absolutely need to lower immigration. The public have seen a period of record immigration at the same time as a flatline economy - they're not in the mood to be taught." he said.

"But we shouldn't be fatalistic about saying we can't meet our economic needs."

Apprentices are part of the solution. MBDA already has 400 apprentices learning complex tasks too intricate for robotics.

"In addition, changes to the skilled visa eligibility and any exceptions to that for priority sectors will be drawn up based on our industrial strategy."

He added: "I see this as an investment in peace. Defence might be seen as expensive, but deterrence is a lot cheaper than the alternative - as we are seeing in Europe right now."

Make UK Defence Director General Andrew Kinniburgh said: "As champions of the UK defence supply chain, we want Britain to be the best place to innovate, invest and create jobs.

"Russia's invasion of Ukraine shows that defence investment is ethical - it enables Ukraine to defend itself with drones, missiles and armoured vehicles.

"It's disappointing that some banks still restrict SMEs from accessing finance.

"We want to work with government and the banking sector to unlock that potential and turn defence into a driver of growth across the country."

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