Committee publication · Correspondence · 2 September 2025

Letter from Lord Coaker relating to questions raised on the UK's economic security in response to the Strategic Defence Review, 27 August 2025

From: Business and Trade Sub-Committee on Economic Security, Arms and Export Controls

Summary

Lord Coaker, Defence Minister, responds to the Business and Trade Committee's questions on UK economic security raised in relation to the Strategic Defence Review. He directs the Committee to the National Security Strategy (24 June 2025) as the primary framework, outlines principal threats including hostile state activity and economic coercion, and describes the Ministry of Defence's role via its Defence Economic Security and Statecraft Directorate in assessing and countering economic security risks.

Key findings

The National Security Strategy, not the SDR, is the key government document on economic security as part of national security.
Principal threats include hostile state activity, strategic competition, economic/technological vulnerabilities, terrorism, organised crime, and climate/health/demographic shocks.
From a defence perspective, key economic security threats are investments in sensitive military companies, acquisition of defence supply chain firms, export of sensitive material, surveillance opportunities, partnerships with academic institutions in sensitive tech, and economic coercion restricting access to critical materials.
Economic tools can operate as sub-threshold or hybrid actions, blurring legitimate business purposes with national security impact and often coordinating with cyber or information operations.
The MOD established the Defence Investment Security Team in 2017, expanded it into the Defence Economic Security and Statecraft Directorate in 2021, and transferred export control support responsibilities into this Directorate in July 2025.

Tone

Factual

Topics

economic-securitydefence-policynational-securityarms-export-controlsinvestment-security

Key actors

Lord Vernon Coaker, Liam Byrne MP, Lord Robertson, Ministry of Defence, Business and Trade Committee, National Security Strategy

Notable line

“… these threats requires a whole-of-government response. As a result, the National Security Strategy, published by the Government on 24 June 2025, rather than the SDR …”

Key Quotes

“In recent years, there has been significant growth in the use of a range of economic levers to undermine the national security of the UK and its allies.”
— Lord Vernon Coaker · describing the evolving threat landscape

“Ensuring that we have effective tools to manage economic security risks is an important element in achieving the Government's objective of secure and resilient growth.”
— Lord Vernon Coaker · on balancing openness to investment with security management

“Identifying the intent and origin of economic actions that impact national security can be challenging, as they may operate from a state level down to the actions of individual companies or investors.”
— Lord Vernon Coaker · on the complexity of detecting economic security threats

“They are therefore strong candidates for sub- threshold or hybrid action. Q4.”
— Lord Vernon Coaker · on economic tools as potential hybrid warfare mechanisms

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Source · parliament.uk record ↗