A spin of the wheel? Defence procurement and defence industries in the Brexit debates

Abstract

As the pro-Brexit and pro-Remain campaigns approach maximum velocity in the run-up to the in/out referendum on British membership of the European Union scheduled for 23 June 2016, vociferous debate continues over a range of critical issues. Few have been more hotly debated, along with the migrant crisis and the UK's economy, than the future of the UK's national security. Indeed, ever since David Cameron returned from Europe with his new deal, there has been something of a 'blizzard' 1 of claims and counter-claims concerning whether Britain's international status and ability to respond to existential threats, including the rise of the so-called Islamic State in Iraq and Syria (ISIS) and resurgent Russian nationalism, would be undermined by departure from the EU. 2 Those in the 'Remain' campaign essentially argue that leaving the EU would 'threaten' the UK's 'economic and national security'. 3 This was precisely the language used in a notable public letter to the Daily Telegraph from former chiefs of the armed services, claiming that Europe faces a series of 'grave security challenges' and that the UK is in a 'stronger' position to deal with them from inside the EU. 4 Those making up the 'Leave' campaign have argued the opposite, accusing Mr Cameron and their other opponents of egregious 'scaremongering' and 'Project Fear' tactics that exaggerate national security and economic risks if the UK were to exit the EU. 5 The UK's national security, then, is a central theme in the UK's debate over membership of the EU. One of the most important, but often overlooked, * The authors are grateful to Benjamin Kienzle for his comments on an earlier version of this article and to the two anonymous reviewers for their insightful suggestions. 1 Jon Hay, 'The Brexit fight is on: look to the big issues', Global Capital, 2 Feb. 2016, http://www.globalcapital. com/article/wbf49lhy8xxc/the-brexit-fight-is-on-look-to-the-big-issues. (Unless otherwise noted at point of citation, all URLs cited in this article were accessible on 6 March 2016.) 2 See e.g. Nick Witney, Brexit to nowhere: the foreign policy consequences of 'out' (European Council on Foreign Relations, Nov. 2015),

Contingent choices: the future of United Kingdom defence procurement and defence industries in the post-Brexit era

“…Whilst all this is true for numerous sectors and policy areas, the potential implications for the future of UK defence have been rarely discussed or thought through. Indeed, as we argued elsewhere before the referendum (Uttley & Wilkinson, 2016), defence has been rather overlooked in pre-Brexit policy and academic analysis and nor did it form a key part of the referendum debates or capture the public imagination. Indeed from the beginning of the campaign to the moment that the queues outside polling stations started to form, little was said on defence other than some rather loose claims, counter-claims and speculation about Britain's future security and "place in the world" if a Brexit were to occur (Whitman, 2016;Oliver & Williams, 2016;Witney, 2015;Daddow, 2015).…”

Post-Brexit EU/UK security cooperation: NATO, CSDP+, or ‘French connection’?

“…Britain is one of the few NATO members meeting the targets for defence spending and has consistently defended the pre-eminence of NATO as continental security provider. Moreover, defence–industrial collaboration between the UK and (the majority of) the EU27 could also continue using NATO mechanisms, since ‘UK defence acquisition policies can continue to embrace national ventures, joint equipment development, and other forms of defence technology transfers with EU and non-EU NATO allies, notably the US’ (Uttley and Wilkinson, 2016: 576). If a post-Brexit British government decides to maintain or expand its involvement in NATO operations, London would solidify its role as one of the major diplomatic and military powerhouses, to the benefit of the overall security of Europe.…”

Defence and security after Brexit: Understanding the possible implications of the UK's decision to leave the EU -- Compendium Report

“…Indeed, the real importance of the domestic market for UK firms may be even greater than these figures imply. Domestic industry also receives large contracts for services outsourced through the UK MOD's operations and maintenance budget, estimated to be worth 150 Uttley and Wilkinson (2016) 151 ADS Group (2016, 11) another €10bn. 152 (EU exports are considerably more important for the related civil aerospace sector, with…”

“…87 This could not only directly drive down future costs to the UK, but also potentially lead eventually to more global sales which would in turn further impact unit costs due to increased economies of scale. Furthermore, the 81 Taylor (2016) 82 UK Ministry of Defence (2015a) 83 Vallance (2016) 84 Uttley and Wilkinson (2016) 85 National Audit Office (2017) 86 Taylor (2016b) 87 Lockheed estimates do not include contracting and other provisions through which the UK MOD already hedges against currency fluctuations. In some instances, the fall in the pound could hurt industry's profit margins, rather than the MOD, if deals are signed with UK-based subsidiaries in sterling as opposed to euros or dollars.…”