UNIONS welcomed new Cabinet Office guidance today that British firms in key sectors will be prioritised for government contracts.

Contracts related to steel, shipbuilding, artificial intelligence (AI) and energy infrastructure will be used to back British industry amid rising concern about Britain’s vulnerability to international supply chains.

The measures include a new “public interest test” requiring Whitehall departments to consider whether outsourced contracts worth more than £1 million could be better delivered in-house.

The test is expected to cover 95 per cent of all central government contracts and follows Labour’s pre-election pledge to bring about the “biggest wave of insourcing of public services for a generation.”

TUC general secretary Paul Nowak said: “Today’s announcement that the government is committed to ending outsourcing by default is an important first step towards ending wastage of public money and rebuilding our public services.

“Ministers must bring our public services back in-house — public services should be run for public good, not for profit.”

Unite general secretary Sharon Graham said that the announcement shows the government “has been listening” to campaigns for a “buy British rule” for the steel industry as critical national infrastructure.

Civil servants’ union PCS general secretary Fran Heathcote said: “This could be a turning point if it leads to real change, but warm words won’t be enough.

“If the government is serious about its pledge to deliver the biggest wave of insourcing in a generation, then this step needs to be taken and it must be backed by proper investment and protection for workers.”

Charlotte Brumpton-Childs, acting national secretary of the GMB union, said the proposals were “common sense principles” and “a welcome step forward.”