Burnham shouldn’t push out Europe from defence

It looks increasingly likely that Andy Burnham will be taking over from Keir Starmer as Britain’s new Prime Minister, with a change of power perhaps only a few weeks away.

New leadership presents an opportunity to change some important policies and we are starting to hear more from Burnham and those around him regarding their plans for government. Much of it is reasonable, including a focus on economic growth and a desire to devolve more power to the different regions and nations of the UK. Other ideas are unlikely to be real winners, but probably won’t do any harm either, such as the concept of a secondary seat of government, the ‘No.10 North’, to be based in Manchester.

Some other ideas, however, are more concerning. One particularly striking example is the apparent desire to boost British defence by pushing a ‘Buy British’ agenda, to the exclusion of European and American firms.

The appeal of it is simple. The defence budget is sizeable and will keep growing in the near future as we come to terms with a more dangerous world. For a country desperate to generate growth at home, directing that spending into our national defence firms looks like a win-win. But to try and rearm purely as an exercise in national autarky will not work.

To see the problem and devise a proper solution, we need to start from a correct diagnosis. The idea that what our defence policy has been missing is a focus on national champions could not be further from the truth. In reality one of our great challenges is that standard practice here and across Europe is for national governments to give preference to their own firms – just look at the contracts that Germany gives to Rheinmetall, that France gives to Dassault or that Britain gives to BAE Systems. Defence procurement is not all that competitive in Europe because of the endemic national favouritism, giving rise to inefficiencies and higher costs.

This problem has been partly covered up by the role of the United States, which has used its massive budget to deliver defence commitments to Europe for many decades. European armies could get away with inefficiencies because we were only filling gaps in an essentially American operation.

Now we are expected to provide more of Europe’s defence for ourselves, and with limited cash available to do so. Getting the most from our defence procurement is therefore going to be vital. To make that happen, we will need more competition in the sector, not less. To deliver that competition we will need to leverage the scale of the European market, as only then can we have a sufficiently large number of highly competent and experienced defence firms who could credibly be in competition with one another.

We also have to ask whether it is even realistic to imagine that a large portion of Britain’s rearmament can be carried out with only British firms. A ‘Buy British’ policy will need to be loosely defined if it is to survive against the reality that many firms are involved in pan-European supply chains, buying from and supplying to other companies across the continent, whether defence-focused or otherwise. A number of the largest defence companies in the UK are simply the local branches of European firms, like the Belfast missile factory, run by French company Thales. MBDA, the producer of the Storm Shadow cruise missile, is an British-Italian-French-German firm.

Even the EU’s efforts to promote more investment within the bloc’s own defence sector have faced internal criticism that it is not realistic to exclude American or Asian firms, as some capabilities are simply not produced in Europe today and would take time to develop. If ‘Buy European’, with its much greater scale, faces such limitations, then the situation will only be even more constricted for a ‘Buy British’ approach to defence procurement.

Rather than doubling down on the old routine of national preference, now is the time to deepen European cooperation, for European governments to club together and aggressively push our world-class defence firms to not simply rest on their laurels safe in the knowledge of easy money from their home states but to fight for every contract by pushing the limits of what they can offer in quality, speed and affordability. Not least, we must be able to build new industrial alliances with Ukraine’s growing defence sector, in order to gain their knowledge and experience and incorporate it into our own practices, both on and off the battlefield.

Of course we must admit that Britain does need to reassess its dependence on external suppliers of defence equipment. If the last ten years have proven anything, it is that any assumption can be quickly shown up as flawed and even a long-reining status quo may suddenly be overthrown. Our extensive reliance on America to provide the tools of our national defence is particularly in need of scrutiny as Washington seeks to disengage from Europe and a growing share of American political actors express their preference for doing deals with Europe’s enemies, without even pretending to consult us.

But Europe is not like America. We have already demonstrated how impractical it is to isolate Britain’s defence sector from the wider European network. Moreover, our neighbours have not given us cause to doubt their commitment to our shared bonds and pacts of mutual protection. In France, Germany, the Nordics, the Baltics – our European partners are as invested in our defence as ever, as we are in theirs.

Rather than seeing a conflict or a trade-off, a Prime Minister Burnham should aim to hit two birds with one stone. Through advancing projects to integrate Europe’s fractured defence market, we can boost our national security in a way that is practical and affordable, while we enhance our sovereignty by putting our faith in those countries who maintain their faith in us.