Resetting the UK-EU Relationship (European Affairs Committee Report)

Lord Moynihan of Chelsea Excerpts

Thursday 26th February 2026 Lords Chamber

[Lord Moynihan of Chelsea (Con)]

My Lords, before commencing, I, too, protest the four-minute limit—hardly enough time to clear one’s throat, although quite a few noble Lords seem to have happily breezed through it. Given that time limit, I shall discuss only one matter: the so-far aborted—as described by the noble and gallant Lord, Lord Stirrup—negotiations to join the SAFE project.

In the face of a changed world, the UK, the EU and the US must work together in an adult way to ensure that the West has the best possible defence capabilities, avoiding national self-interest or mercantilism. Yet the European Commission, in classic mode, demanded that Britain should pay an entrance fee of up to nearly €7 billion before it could join SAFE. As the noble Lord, Lord Ricketts, put it, that was totally unreasonable. Canada paid €10 million: 1/700th of that. Allegedly, we could get it all back in contracts, but there were no guarantees whatever that we would get any contracts at all. I found no published analysis from the Commission, HM Treasury, the MoD, RUSI, the IFS or any parliamentary committee demonstrating how that €7 billion outlay could ever be recouped. Contra the noble Lord, Lord Liddle, EU member states do not pay: au contraire, France is given—loaned—€16 billion for SAFE. So why, as the noble Lord, Lord Kerr, asked, should we, an equal partner in this, pay?

It is not just the money. There are profound contractual problems with SAFE. The EU demands exclusive design authority and strategic autonomy, likely compelling UK firms to transfer their proprietary technical know-how to the EU. Cash equal to 10% of our entire annual defence budget would be handed over, with no guaranteed return, loss of valuable IP and no reciprocal market opening, for the privilege of becoming merely a subcontractor, allowed to take no more than 35% of any contract. Yet Europe is irreplaceably dependent on the UK’s defence capability. We have capabilities that no EU member state can replicate: nuclear, intelligence, surveillance, target acquisition, advanced air combat, long-range strikes, air-to-air refuelling and submarine-building expertise that is unmatched in Europe.

As the noble Lord, Lord Jay of Ewelme, just said, the UK’s defence relationship with the United States, including Five Eyes, is key for us and for Europe, across virtually every capability. AUKUS, for example, includes co-operation with the US on AI, quantum, cyber, hypersonic and electronic warfare. That relationship with the US is highly important for our economy too, with over 20,000 direct and 94,000 indirect jobs with US-owned firms.

So why is France—for it is France, not Germany—trying so hard to ensure that we refuse to join, or to extort us if we do? Does it not care about the existential threat to western Europe? These safe negotiations embody a view that is hostile to creating the best possible defence for Europe, treating the UK not as an equal partner in this important task but as a supplicant to be fleeced. If this is how the EU allows itself to behave on defence, how can we expect it will behave in the negotiations on SPS or energy? Let the Government, let our country, beware.