Imminent risk of EU control of British defence procurement, industry and training

Below is the text of the submission which SDI UK made to the Committee, altered only by the addition of the names of the individuals who were described in the original submission by their job titles only.

Executive Summary

• A multitude of innocuous euphemisms now describes the looming EU military union
• Britain will remain the chief funder of EU military unification, as it already is
• Rather than there being ‘cuts’ in defence, our own money is being rerouted to Brussels
• EU military unification benefits the EU alone, giving its forthcoming treasury a tax base
• FCO, MoD and DExEU seniors all appear captured by the EU military unification agenda
• Advisory mechanisms for MoD to consult industry are stuffed with EU aficionados
• MoD’s senior for defence industry has admitted that our defence will be like Norway’s
• Royal Navy and Royal Marines continue to be embroiled in EU command structures
• Inevitably, after accomplishing the above Brussels will want control of officer training

Scope

Nearly a year has passed since SDI UK’s last submission to the Committee (December 2016) and the release of the SDI briefing sheet Overview of the accelerating EU absorption of the British military to form the EU military and a ‘nuclear defence shield’ (January 2017). Our focus of warning throughout the past year has been the looming risk of homologation of BAE Systems and the engine-building expertise at Rolls-Royce into a Continental or American conglomerate. This submission sets out the final remaining stages which it is anticipated will complete the now far-advanced process of EU military unification imminently. We now foresee ramifications for officer training as well as for the previously-mentioned procurement and industrial aspects.

It has long been our contention that the European Union requires absolute single-point control of the defence budget, and defence research and development budget, across its territory in order to assure the continuing viability of the euro in the near term and to have sway over a treasury and tax base of its own, arising from that defence budget, in the medium term. With this understanding, we view the increasingly often bandied-about (in Britain and in the Continental press) terms ‘interoperability’, ‘partnership’, ‘cooperation’, ‘abiding strategic interests’, ‘shared challenges’ and ‘a deep and special relationship’ as references to one and the same policy, which is EU military union, including the British armed forces and defence industry. Only in the immediate sense do these terms refer to joint responses to instability on Europe’s frontiers. The master policy precedes such threats by decades.

The mechanism whereby EU military union underwrites all future euro issuance is understood by us as follows. The EU has set its member states the target of spending 2% of gross domestic product (a huge sum when bundled across Europe) on defence. This is an initial threshold and will rise sharply towards US levels of military spending if and when the EU achieves its aim, or (put otherwise) shoulders the burden, of increasingly taking over overseas military deployments from the United States. That transition can also be described as the EU’s development from military unification to military union. The existing defence spending of Britain, and of the rump EU member states, is to be rerouted to a Brussels pot from (in our case) a Whitehall pot. Beginning a year ago, HM Government defence funding (provided as money creation by the Bank of England) has begun to pass, via HM Treasury, to the European Investment Bank and onwards to the European Defence Agency. Our money funds the EDA. There are no ‘spending cuts’ being perpetrated upon the Crown forces; the same British money as before is now EU-owned. Through this process, Britain ‘changes’ from being a major contributor to the EU’s unified military budget to being an equally large contributor to the EU’s unified military budget (i.e., no change at all for us). The benefit reaped by the EU, on the other hand, is a treasury and tax-raising powers. This military union is financially of equal importance with the prior currency union which has enabled it, and was envisaged as such by W. Averell Harriman of the Marshall Plan in 1948 [on p. 7 in the internal numbering of the 1971 transcript].

An Admiral, formerly Head of Service for the Royal Navy, recently submitted to us that ‘Brexit and the military are totally separate issues’. This error is the nub of the problem. It is crucial that we not exclude defence aspects in extricating ourselves from the European Union’s institutions and regulatory frameworks. Defence and defence procurement are inextricably linked to the national economy and sovereignty.

By outsourcing the supply of our military to a multinational corporation or conglomeration of corporations, which is Britain’s current policy by dint of not safeguarding our defence industry, engineering knowhow and domestic production of basic materials, we are making a nonsense of Brexit. A Parliament which does not control its military and fails to satisfy itself of the autarky of every aspect of that military is, as the Rt Hon John Redwood MP has correctly observed, a ‘puppet Parliament’. It is extremely troubling to see that when we and associates of ours correspond with Members regarding the monetary and currency aspects of defence industry, Members evidently pass the queries to party officials or financial advisors to receive boilerplate responses [four of many examples received were appended to the original submission]. We must draw the conclusion that Members are not looking at defence issues for themselves in the all-consuming framework of Brexit. The response of many Members on this most vital issue has patently been subcontracted to persons unknown.

The sovereign people were asked in the July 2016 referendum whether the nation was to leave the EU or remain in the EU. There was no mention, either on the ballot paper or in the preceding campaign, of an amendment, clause or condition that our military and defence industry were — or would later become — a separate issue. Any attempts to dupe, conceal or overlook this matter will be a betrayal of all concerned and will constitute the gravest kind of circumvention of Parliament.

Circumvention of Parliament

It has become painfully apparent to us that Members of Parliament have deliberately been provided by certain civil servants and political advisors with one perspective and one alone regarding the future of the Armed Forces and British defence industry after Brexit. There appear to be coordinated efforts to prevent Members from researching alternative possibilities for our military future or rival views of the current state of play.

Some civil servants are highly careful with their wordsmithing in order to keep the public and Parliament viewing Britain’s military future through a particular lens. On 12 September this year, the Department for Exiting the European Union published its policy paper Foreign policy, defence and development — a future partnership paper. The authors of its ‘Defence Industry’ section (p. 12, paras. 44-46) are notably coy about the running-down of British military assets and production capability in favour of the pan-European projects which they laud. One of the two examples of ‘world class capability programmes’ which this section holds up as exemplary, with British involvement, is Meteor, ‘a world leading air-to-air missile’ which MBDA UK receives the dubious privilege of designing, only to have the production runs made abroad.

What is omitted from that section is that the British energies that have gone into that project have been subtracted from the Royal Air Force’s and Royal Navy’s existing missile classes. The missile designers in question are bound by commercial non-disclosure agreements on top of their Official Secrets Act obligations, and so the knowhow and expertise of British missiles is by this means being trapped within a European syndicate. The Royal Navy’s ship-to-ship missile, Harpoon, and its (principally helicopter-borne) air-to-surface missile, Sea Skua, are both at the end of their service lives and apparently not being replaced by any British or American design as things stand. The final paragraph of the relevant section in the DExEU paper admits, ‘To date, much of European capability collaboration has taken place bilaterally between nations and in multinational groupings’. This is a nod towards the letters of intent and memoranda of understanding whereby British expertise is tied up for years and decades ahead in pan-European defence industry frameworks.

Even the introductory text (‘Details’) on the web page on which the above paper is hosted is concerning. Using the EU’s own parlance, it speaks of Britain spontaneously and gratis committing its ‘defence and security capabilities, global networks and influence’ towards the end of ‘cooperation on external action’ (the name of Ms Mogherini’s service), ‘working with and alongside the EU and third countries’. The latter is the EU’s term, used specifically in its defence planning forums, for non-member states in the EU’s vicinity which collaborate with its defence and security agenda. There is no sound reason why British civil servants, in DExEU of all departments, should be conceiving of European nations not in the EU as ‘third countries’. Whose perspective have they assumed?

The Norway option: a foregone conclusion

Two Parliament-circumventing Civil Service mechanisms in particular require scrutiny. It cannot be avoided that we point out that both are obviously networks of one opposition party when one looks at them. One network, which has already run its course, was centred around the recent former British Ambassador to the EU’s Political and Security Committee, Angus Lapsley, who as head of the foreign policy, defence, development and trade teams at our Permanent Representation to the EU was the principal civil servant who has agreed on Britain’s behalf to all the EU military unification initiatives in those domains thus far. This senior civil servant only joined the Foreign and Commonwealth Office in 1999 (the height of Euro-integrationism in Her Majesty’s Government) from the Ministry of Health and had previously served as private secretary to Mr Blair. Most of his FCO career was spent on EU work, including serving as ‘our man in Brussels’ liaising with what is now Ms Mogherini’s service, the European External Action Service. All his experience of defence and international security prior to being appointed to the directorship of that name at the FCO was learned from the EEAS. He also served (2012-2015) as Director of the European and Global Issues Secretariat at the Cabinet Office.

The other network, focusing on defence industry integration, resides chiefly at the Ministry of Defence, and its work is ongoing. The key level of this network is the International Strategy Forum of the Defence Suppliers’ Forum (DSF-ISF), which is best described as an MoD advisory panel. ISF is a sub-group of the Defence Suppliers’ Forum (‘DSF Main’). ISF’s membership is selected by the Secretary of State for Defence, or in its own words, ‘this is a closed group with membership dictated by the official Defence Suppliers Forum arrangements’.

Details are not readily obtainable, but it appears the International Strategy Forum is co-chaired by the International Relations Group of the MoD and the MoD’s Director of Science and Technology (job title also seen as ‘Head of International and Strategic Research’), Dr Bryan Wells. Dr Wells has also been a director of the European Defence Agency for the past two years.

However, the International Strategy Forum is in turn described on the website of ADS (see the lower 'breadcrumb trail' bar of the above ADS link) as one of the ‘Groups and Committees’ in membership of ADS. ADS describes itself, on its surprisingly low-key website, as ‘the Premier Trade Organisation for companies in the UK Aerospace, Defence, Security and Space Sectors’.

ADS has admitted to us that its policy team provides policy advice to the International Strategy Forum. In ADS’ words, the International Strategy Forum has been ‘instrumental’ in advising British ministers on EU military developments at European Council level. The ADS official who told us this, defence policy advisor Kelly-Anne Thomas, was until that appointment the Labour Party's International Affairs Policy Officer and also formerly a special advisor on defence to a pro-EU Member of Parliament, Vernon Coaker, who at the time was his party's spokesman on defence. She also served as researcher for Lord McConnell, the former First Minister of Scotland. Another of ADS’ key players, head of public affairs Duncan Sinclair, was formerly a parliamentary advisor to a notably pro-EU Labour MP, Chuka Umunna, then a frontbencher; prior to that, Mr Sinclair advised another Member of Parliament who has been completely in favour of European defence industry integration for Britain, Richard Burden.

It was recently put to Dr Wells at an MoD co-sponsored event for defence industries that the EU funding which he was encouraging British defence manufacturers to seek was contingent on agreements which the EU had advised upon, and which would mean that Britain would be ‘like Norway in defence’. Our records are that Dr Wells replied, ‘Yes, but that’s beyond my pay grade.’ Norway is the only non-EU member state with special status in the EU’s ‘Preparatory Action on Defence Research’. Crucially, it enjoys this privilege because it has acquiesced to the European Defence Agency, the EU’s Common Security and Defence Policy (CSDP), EU defence procurement directives, and EU agreements on its new defence funding initiatives SDIP and EDAP, including the European Defence Fund. Dr Wells' ‘yes’ indicates that he expects Britain to do the same, and that the MoD is making preparations for a Norway option only.

Our finding, then, is that the International Strategy Forum has close-looped the EU’s funding for defence industry integration into a command chain which runs from the MoD up to the European Defence Agency and which enjoys the practically exclusive privilege of advising the Secretary of State for Defence on these matters. It is run and funded entirely by pro-EU individuals. 50% of its board is run through EDA-allied companies (whose pro-EU military integration stance is obvious). The Secretary of State for Defence is effectively given lines to take by this network and has always approved them. Parliamentary scrutiny and oversight forms no part of the arrangement. It is not dramatic to assess that this network holds all the strings controlling the future of British defence industry. All the defence industry people recruited to ‘represent manufacturing’ in this arrangement are funded by the EDA. Our analysis is that ADS is dictated to by the private cabinet of the President of the European Commission. Even if one is not prepared to accept that analytical conclusion, it is obvious that the EU, as ‘he who pays the piper’, has the only voice in the current advisory arrangements, and that this prevents effective parliamentary scrutiny. Britain urgently needs its own voice in these arrangements as we plan our national industrial and military future after Brexit.

What is EU NAVFOR?

The DExEU paper referred to in paras. 8-10 above sets out that EU NAVFOR Somalia, alias Operation ATALANTA, was launched nine years ago now as the first mission of the European Union Naval Force and that Britain has commanded it throughout that time from Northwood. The suite of offices from which EU NAVFOR is commanded is located at Permanent Joint Headquarters (our national command for overseas operations!). It has, we are informed by a former Trident Admiral who is still in regular senior liaison with EU NAVFOR, a hundred staff, and is housed on the same corridor as the Royal Navy’s command. The DExEU paper promises (at the end of Box 2) that this force is ‘a strategic priority both the UK and EU partners will continue to share’ (i.e. after Brexit).

There are some basic questions which the public and Members of Parliament have not been provided with the frame of reference to pose regarding this development from nearly a decade ago. What is done at Northwood? What plans are made there? How many staff are there? Who is funding it? A reply from the previous Commander of EU NAVFOR directly to us confirmed that this facility at Northwood is but one of four EU military command-and-control structures already in place. The others are in Potsdam, Paris and Larissa (Greece). A fifth facility in Rome is sometimes mentioned. They have been opened very much without fanfare and are now held in a mothballed state, ready (according to our sources) to go operational within 24 hours of an order from Brussels.

Despite HM Government’s decision not to sign up to Permanent Structured Cooperation (PESCO) in Brussels on 13 November, EU NAVFOR now has a new Royal Marines officer commanding it from Northwood, Maj-Gen Charlie Stickland. (The history of British military officers commanding EU military structures goes back even further than EU NAVFOR, to the appointment on 1 March 2007 of Lt-Gen Leakey as Director-General of the EU Military Staff for a three-year term.) Is EU NAVFOR in effect a Trojan horse, a bridgehead into subsuming the Royal Navy wholesale?

Officer training

Presently, the nascent EU military force has no uniform of its own, although this has caused such awkwardness in ‘family photos’ at summits that one can be expected to be manufactured for the commanding officers as soon as political optics permit. This prompts the question of how esprit de corps will be formed among the new brother officers and how post-national loyalty and unified doctrine is to be inculcated in them. The necessary conclusion which we draw from this obviously looming issue for the EU is that there will be joint training of EU military officers, beginning at the highest ranks and inexorably trickling downwards, perhaps even as far as NCOs in due course.

We as yet have no documentary trail for this section, unlike the other sections of the submission, but this argument merely stands to reason. Armed forces within the EU and NATO, principally Belgium, and other European nations’ armed forces, such as Switzerland, have demonstrated throughout the twentieth century that a multilingual military force whose troops have differing conceptions of their national loyalties can be run tolerably effectively if at least the command above the level of individual units is done centrally in a single language and uses officers who underwent joint training. Any holder of military purse-strings at a level above that of an individual nation or ethnic group will insist on joint officer training, as borne out by military history since the empires of antiquity. (There is some degree of this phenomenon in embryo already, with the Marines of several northern European nations, including Britain, increasingly training together and being commanded in English.) With the EU in charge of officer training, all remaining military competence will slowly ebb from Britain to the Continent. Implementation of joint officer training will prove to be a freight train of bureaucracy over a decade or more.

Conclusions

The European Union is now pulling out all the stops in a six- or seven-decade-old, recently-resuscitated plan to unify all Europe’s national militaries, regardless of the nations’ status as member states or otherwise, into what is a single unit in financial, procurement and command terms, with single-point control from Brussels. This plan is now openly being coordinated with the leadership of that other Brussels-based body, NATO. Any geographically European country which acquiesces to these arrangements is agreeing to give up to Brussels its troops, military command, defence policy, officer training, defence industry, highest grades of engineering, manufacturing policy, capital budgets, procurement budgets and operational budgets.

Many Continental nations are well aware of this at government and media level and are not particularly fussed about it because they have never, in recent decades, aspired to any greater degree of independence than that, and/or have perceived that the world’s and Europe’s great powers will begrudge them anything more national than that. Even the most ‘Britain-like’ countries on the Continent, such as the Netherlands and Estonia, have such pervasive consensus across the political spectrum.

In Britain’s case, acquiescing to EU military unification means letting go of our means as a nation to express our cardinal values in the world and in our own neighbourhood, and for Parliament it surely means giving up all pretensions to evaluate and scrutinise the performance, readiness and objectives of our military at strategic or operational level, as these will have become a supranational competence. For us, this surrender will include our prime assets, rivalled only by France in our continent, of nuclear capability (our best quality) and the mass of our conventional assets (our unmatched quantity). It stands to reason that Continental nations, other than France, are much less het up about Brussels’ current objectives than we are. They have far less to lose.

European military union is, as Harriman stated in 1971 with reference to a vision in place as of 1948 (rejected by the Assemblée Nationale in 1954 but fostered within the MoD from the 1957 Sandys White Paper onwards), the pre-planned ultimate objective for our whole continent, and it leads seamlessly to a European tax union including us. The military union provides the subject of taxation and the currency union provides the means of taxation. Mr Tusk now has immediate and determined plans for an EU treasury, and that treasury will tax any geographically European state which permits it to do so, to the end outlined above. The catchphrase ‘boots to nukes’ pithily expresses this. EU military union is an entirely EU-owned, EU-controlled process and is all-encompassing. Therefore, if we do not as a nation say ‘No, no, no’ to EU military union now, we will lose command of our military, lose our manufacturing, lose the use of our golden share in defence industries, forfeit our national policymaking ability, and, to add insult to injury, have a tax bill imposed on us for the use of our own assets.

Recommendation

Numerous flag officers have made the point that the diversion of funding away from the British armed forces as an entity in their own right has increased inefficiency. This death spiral can only be reversed by increasing the British defence budget, which will serve the double objective of stabilising the military and reviving British industry, beginning with its vital ‘white heat’ sectors. Admiral Lord West and Admiral Sir Mark Stanhope have expressed this to your Committee with the metaphor of the need for a ‘steady drumbeat’ of shipbuilding contracts. HM Government has signalled its intellectual understanding of this call by dubbing the year just past the Year of the Royal Navy, a dubious claim.

That ‘steady drumbeat’ now needs to be raised in tempo and dynamics. Most importantly, it needs to be heard by British industry to resound louder and faster. More than any given absolute increment, the trend of raising defence spending will have the effect of spurring innovation in industry, putting the military back on an even keel. (Your Committee meeting of 14 November heard the specific warning from Admiral Sir George Zambellas that we were falling behind in military innovation.) To be a genuine safeguard against takeover, rather than a comforting catchphrase, HM Government’s golden share in our prime defence manufacturers inevitably has to be shored up by bolstering the predictable near-term future flow of payments to them. Otherwise, the law of the market will operate mercilessly upon these manufacturers.

The caveat to this recommendation must be that the Ministry of Defence cease its unqualified and uneconomic meddling in our defence manufacturers’ day-to-day business. BAE Systems and Rolls-Royce will have to revert to making, in timely fashion, market-relevant whole aircraft and whole ships and whole weapons systems on their own initiative, actively touting them to both HM and overseas governments. After we leave the European Union, we will sorely need these off-the-shelf defence products in order to sell them abroad to fund the ongoing research and development effort at home and to tackle unemployment, under-employment and de-skilling. Above partisan considerations, Brexit is agreed to have as one of its key themes the need to re-establish the nation’s client base. For that, we need products to sell. If HM Government continues ignoring the conceptual frame of EU military unification and if it dallies with PESCO, we will not only lose our military and defence industry but will be lopping off a leg of the table of state. President Reagan warned that ‘a nation that cannot control its borders is not a nation’; we submit that a country which cannot control its military is no longer a country. Privatising the military is not an option.

David J. Ellis, Strategic Defence Initiatives
Lt Cdr Brian J. Gerrish RN (Ret’d)
Alexander C. Thomson (GCHQ 2001-2009)

Monday 27 November 2017

Extracts from our December 2016 briefing which the past year’s developments have borne out:

4. We are locked into an EU and pan-European model which prevents us from producing our own equipment for our own Armed Forces, let alone for our customers worldwide.

5. [We currently have] a model in which the product is of decreasing quality and trading on its manufacturer’s past reputation after the engineering expertise working under that brand name has been hollowed out.

6. The core risk in and around the Equipment Plan is the risk (not theoretical but now one with a track record) of the procurers and acquirers being hoodwinked because they lack engineering expertise. The MoD no longer has engineering acumen.

15. The whole of defence policy across Europe is now geared towards managing defence on a pan-European basis […] The master policy since the Second World War has required European military union by means of a single-point budget.

16. The currently-serving British heads of services have been gearing up to do defence on a joint European basis, without the nation or even many MPs being aware of the fact. We are now facing the question, which can only be answered by being put to the people as a general election issue, of whether we wish to retain HM Armed Services on a national basis as a force able to operate on its own if needed.

26. The rump EU can be expected to respond cleverly and aggressively to our departure by announcing carefully-timed substantial defence spending. If Britain has lost her autonomous defence industry by that not far-off time, we will have ended up handing the EU our defence assets and then having to pay for them, since it will be the EU that decides where the capital budgets for defence are spent.