Defence Implementation Road Map

Debate between Lord Spellar and Lord Beamish

Tuesday 10th November 2015 General Committees

[Mr Jones]

It is a pleasure to serve under your chairmanship, Mr Hanson. I stand before the Committee as a pro-European and I will be arguing for this country to remain a member of the EU, but the document before us today demonstrates how the EU is extending itself into areas that mean that it tests the patience even of Europhiles such as myself.

The debate around European defence is a long one. It goes back to the end of the second world war, the foundation of the Western European Union and the treaty of Brussels. We had arguments then about standardisation of equipment and pooling of defence capabilities across Europe. I agree that a cornerstone of our defence should be NATO, but even though this document reflects that, there is a way—I suspect that some Conservative Members will see this as another wicked plot from across the sea—of influencing the sovereign capability and decision making of this country. It is clear that defence matters should be for individual nation states in Europe to decide, and I understand that that is what the Government are arguing in their response to the document, but I have a problem with some of the things that are coming forward.

The first item in the document is that the Commission’s aim is to have an internal market for the defence industry. Thanks to the actions of the previous Labour Government, of which you were a member, Mr Hanson, we have one of the most open and competitive defence markets anywhere in the world. We have only to look at the companies that have now based themselves here or worked with existing capacity here to see why we have that open and competitive market. Finmeccanica, Thalys, Boeing and General Dynamics are just a few of them, and that is because the Labour Government’s approach was that our market should be open not just to Europe, but to the world. I argue strongly that this country, in terms of defence capability, has benefited from that process. The danger with the approach taken in this document is that we look at defence or defence manufacturing as though a fence can be put around it in terms of just Europe. That is not the case. It is a global, international market these days.

[Mr Spellar]

My hon. Friend rightly identifies some of the benefits from engaging with the wider defence industry. However, there has to be some payback for that—some degree of equity. Does he therefore share my frustration at the failure of the United States in this regard? Despite the fact that Brimstone is far and away the most effective weapon—it is favoured, actually, by the United States air force—it is being blocked within the system because of narrow industrial interests. Does that not cast a slight shadow over the wider co-operation that my hon. Friend rightly identified and welcomed?

[Mr Jones]

It does. My right hon. Friend and I spent a week in Washington trying to persuade US Congressmen and Senators to make sure that there was nothing wrong in ensuring that technology transfers should be a two-way street. The problem is that although a lot of claims are made about the US defence market being open and transparent, anyone with experience of it knows that protection is clear.

Such protection, however, comes up in Europe. The document talks about overcapacity in the European defence industries, but there is a reason for that: the protectionist policies of certain members, including France, Germany and others. They have not opened up their markets, not only not to US and international competitors, but also not to UK companies. There have been some good examples, as the Minister rightly pointed out, of good defence co-operation and manufacture between European nations and our own, which have been of benefit to not only those nations, but ours.

The objective, according to the document, of

“an Internal Market for Defence where European companies can operate freely and without discrimination in all Member States”,

is frankly pie in the sky. The idea that the French defence market or shipbuilding industry, for example, will be open to competition throughout Europe is unrealistic. A few years ago in Paris, when I was a member of the Defence Committee, I asked the Member for Brest whether she envisaged a French aircraft carrier being built anywhere other than Brest. She looked at me quizzically and said, “I don’t understand the question.”

The Commission is pressing forward in that area, and that has real dangers for our defence industries. It is not, frankly, an area in which the Commission should be getting involved. I fully support, as the Minister does, existing co-operation in the EU for operations that lie outside NATO or involving other countries, but that is where it should stay. If the market comes into our defence industries, that will block off a lot of the opportunities that this country has for co-operation not only with the United States, which is an important market, but with other growing markets around the world. For example, in the south-east Asian market, the easy transfer between civilian technologies and defence ones brings capabilities that could benefit our defence industries. If they are somehow locked out, because our procurement is restricted to Europe, not only will our defence industries suffer, but so could what is on offer to the men and women of our armed forces.