Yorkshire MP urges firms to invest in defence industry

They claimed that perceptions around environmental, social, and governance (ESG) rules have prevented investment, and called for these to be clarified.

The pair said: “With Russia mobilising its financial system to sustain its illegal war, we must act swiftly to support peace and stability in Europe.”

Now the FCA has confirmed there is nothing in the regulator’s rules to prevent defence investment.

In a statement on its website, it said: “There is nothing in our rules, including those related to sustainability, that prevents investment or finance for defence companies.

“Our sustainable finance rules apply to firms providing financial products and services as well as some listed companies.

“They do not require financial institutions to treat defence companies differently because they are in the defence sector.”

Mr Charters and Ms Baker said: “It is an extremely positive and welcome step that the FCA has confirmed its own rules should not prevent investment in defence.

“We hope more financial institutions will now reflect on this much-needed signal from the FCA and review their approach so that our defence industries receive the investment needed to safeguard our national security, support Ukraine and create jobs across the UK.”

It comes after major players in the defence industry said it needs to “move quickly” to get on a war footing and provide a deterrent alongside the Armed Forces

Andrew Kinniburgh, director-general on defence at manufacturing body Make UK, recently admitted that the industrial base is “not yet on a war footing”.

“I think we need to move quickly to try and get to there, where we have spare capacity and surge capacity in the supply chain,” he told the Defence Select Committee.

“I think it’s a huge deterrent and we need to move much more quickly to establish surge capacity.”

Chancellor Rachel Reeves recently promised to cut red tape to make it easier for the Government to buy military equipment.

Ms Reeves said she wants to “fire up Britain’s industrial base” to step up arms production.

The FCA said the Treasury is currently “finalising the scope of the regulatory regime for ESG ratings providers”. Following this, the regulator intends to consult on proposed rules later in 2025.

Sir Keir Starmer will today announce the Government is axing the Payment Systems Regulator to try and boost economic growth.

This will get folded into the FCA, which the Prime Minister says will make it easier for firms.

Sir Keir said: “For too long, the previous Government hid behind regulators – deferring decisions and allowing regulations to bloat and block meaningful growth in this country.

“And it has been working people who pay the price of this stagnation.

“This is the latest step in our efforts to kickstart economic growth, which is the only way we can fundamentally drive-up living standards and get more money in people’s pockets.”