Just Say No

Starmer's Proposed EU Defence Pact Is Anti-Democratic, Unnecessary and Dangerous.

Our dear leader has had a very military couple of weeks. His aspirations to channel his inner Churchill will end badly – Starmer is more of a Quisling or Petain.

He exhorted us to hold street parties to celebrate VE Day, perhaps the greatest achievement of his predecessor. He even arranged for pubs to stay open longer - an odd way of remembering a time when beer was in short supply. (Beer was not rationed but was not a production priority so there were supply shortages. Many pubs limited consumption to a pint a person a day– a constriction unlikely to have been replicated in Wetherspoons last Thursday.)

Last week his government ordered an update of planning to deal with a nuclear strike by Russia .He then and went off to Norway to discuss the Joint Expeditionary Farce. (More on both on another day). With papers full or pictures of Two-Tier in military attire (when did Prime Ministers dressing up as soldiers become a thing?) and with the population and media drunk on alcohol and nostalgia, Two Tier sold them the dummy. The UK might gain access to the €150 billion EU rearmament fund. The price, closer alignment with the EU. Most of the mainstream has lapped it up. Allow me to prick some balloons.

Arms and The EU

The international arms trade is complex and statistics are often obfuscated. Note also that the international trade doesn’t include manufacture for domestic consumption. Recently the trade has been distorted by the war in Ukraine, which is now the world’s biggest arms importer. At the same time Russia’s exports reduced by two thirds as it diverted its output from its customers to the front line.

As it stands, the major arms exporters are the United States, France, Russia, China and Germany. The UK comes in at seventh (below Italy and above Israel) with 3.6% of the global arms trade. There are three countries who sell more weaponry than we do, despite BAe Systems being a major part of the US F-35 programme. (BAe is the only non-US company to participate and has a workshare of 13% to 15% in every jet produced – 1,150 and counting, worth some $16 billion revenue to BAe).

In terms of sales, i.e. exports plus domestic consumption, it’s a slightly different story. The UK and France annual sales are about €41 billion each, Italy sells €17 billion and Germany€11 trillion. (Note that the UK, Italy, Spain and Germany share Eurofighter revenue. The jet is still in production and still receiving orders.)

In short there is a strong EU arms industry, especially in UK (BAE Systems and Rolls Royce), France (Safran and Thales) and Germany (Rheinmetall, Thyssenkrupp). There’s also Airbus, which is somewhat incongruously registered in the Netherlands. Lower down the manufacturing food chain, most EU countries have a defence industry worth over €1 billion per year – perhaps simply making ammunition or simple weapons like the ubiquitous AK-47, still made in Bulgaria.

Notwithstanding the complexities and obfuscations it’s clear that Europe is more than capable of arming itself. The problem is that, to date, it hasn’t wanted to.

Pork Barrel Procurement

Complex weaponry comes with a hefty price tag. A modern combat jet is around £100 million, a tank £15 million and a decent frigate £500 million. Governments spending that sort of money want as much as possible spent in their own countries. If that proves impossible, they may impose “offset” conditions such as if we buy your missiles you must buy our pineapples and build us a juice making plant. One person’s offset is another’s corruption – the need for “local representation” can include appointing a halfwit son of a relative of whichever minister is signing as a local rep.

The economic reality is that spending taxpayer’s money domestically creates growth which may, in time and in theory, defray the tax burden of buying the weaponry in the first place. The EU’s €150 billion fund, part of an €800 billion, four year programme will raise money on the markets (i.e. borrow) to support the scaling up of EU member nations’ defence.

Defence procurement is conducted nationally, not by the EC. Where do you think a sensible defence minister, like all politicians most worried about re-election, will seek to place orders? Their own country, another EU country in a bit of tit for tat favour trading in Brussels or with the UK? Only if the equipment is unavailable from EU sources, or (more likely) the manufacturing consortium includes UK companies will the UK get a look in.

Four Years is a Short Time

The programme is limited to four years, although of course this could be extended at the whim of a commissioner. However that is offering the EU states opportunities to buy more of the same and, possible, to build more ammunition factories, as many are already doing . In the UK BAe Systems has invested £150M to increase its artillery ammunition manufacturing capacity sixteenfold. The expanded plant will be operational in 2026 as building factories, or even upgrading them, takes time. Of course this substantial expansion is measured against a low baseline, like most countries the UK has run down its armed forces and with that the domestic demand for ammunition. Moreover there is more to an artillery shell than the explosive filling – they also need casings, fuses, propellant and guns to fire them. The UK is particularly short of the latter.

Most defence equipment has a long lead time. When the British Army sent all its NLAW to Ukraine and then sought replacements they discovered that there was no spare capacity and that future production had already been sold to other armies. They may or may not have been able to buy the production slots from others. The point is that a wall of money and demand hitting an industry with a finite manufacturing capacity will create price inflation (and increased profits for the arms manufacturers).

Developing new weaponry is very time consuming. The Eurofighter took around 15 years from concept to delivery of the first aircraft. Notwithstanding the “AI and drones will fix it” school of military thought (a term used loosely), increasing EU defences spending means buying more existing weaponry, much of which is made (or part made) by the UK defence industry. If a country wants to buy more Storm Shadow missiles from MBDA, BAe is a shareholder and work partner. More Meteor missiles for your Rafael fighters President Macron? MBDA makes them too.

The UK doesn’t need a deal to participate in the EU’s increased defence spending. We’re already going to benefit because British companies are manufacturing much of the hardware that the EU will be purchasing.

“€150 Billion” Is Chump Change

Most of the EU’s 27 members have a military capability. The €150 billion over four years is just about a 10% annual increase on the EU’s annual defence spend of €326 billion. That’s total spending, which includes pay, fuel, barracks maintenance and the like. The NATO guideline is that just 20% of defence spending goes on equipment so Two-Tier’s much trumpeted €150 billion is in fact just €7.5 billion per year to spend on equipment. That’s more like thirty pieces of silver than a transformation to the UK’s defence economy.

What’s more, largely for the reasons outlined above, the UK already exports £16 billion of arms to Europe very year. That is three times the potential spending uplift. In fact it rather suggests that we’re going to take that money anyway as UK companies are already embedded in the supply chains of many European arms procurements, not just the Eurofighter and the F-35. The EU isn’t our biggest arms export market, it comes third, behind the Middle East and the United States. It may well become the fastest growing but we’re already deeply embedded in their supply chain.

While the EC might rule that the 10% uplift can’t be spent in the UK, the other 90% can be, and is. If Two Tier did nothing and signed nothing the UK would get its share of the EU’s increased defence spending. The “€150 billion” is a mirage or a fig leaf.

Starmer no doubt hopes that the UK would have access to the fund to underwrite the increase in defence spending that he has announced, increasing the pressure on his Chancellor’s plans. That is ludicrous – the UK can (and does) borrow from the markets itself. The UK’s (hypothetical) share of the (as yet non-existent) fund comes out at around £4 billion, or £1 billion a year. In the Treasury that’s know as a rounding error. It’s also a drop in the ocean in terms of the £12 billion or so annual increase in defence spending his government is committed to.

Far Worse Than Chagos

This benighted government has track record in signing things away for no good reason. Giving away the Chagos Islands to Mauritius and paying them to take them benefits no one but China (and costs Joe taxpayer another £90 million a year for 140 years). It may salve the conscience of those who live in the ivory tower of the world of the International Court of Justice (the principle judicial organ of the UN), but it makes no military, political or economic sense. The ICJ’s ruling is not even binding, it’s merely an “Advisory Opinion”. For reasons known only to David Lammy the UK has chosen to treat the ruling as binding, although such a treatment is in itself legal folly as it sets a precedent. Enough backbench Labour MPs might be finding their backbones to prevent this deal getting through the House of Commons or they might not.

Two Tier’s desire to get closer to Europe involves enacting the disastrous deal that effectively (and rightly) got Theresa May sacked. The European Defence Fund (whence the €150 comes) is part of a three legged structure that the EC hopes to impose on its member states. (the other legs are PESCO – the Permanent Structured Cooperation agreement - and the European Defence Agency. Joining those organisations is a de facto signing away of the exclusive control of British Armed Forces, as explained by Lt Gen Jonathan Riley here.

It gets worse. President Macron, the diminutive popinjay with delusions of being Napoleon (another director), now wants unfettered access to UK fishing grounds. The EU wants to foist a whole bunch of free movement on us, which Two Tier somehow thinks will make the working man in the UK wealthier (he’s wrong). He seems also to be accepting further unfettered free movement for EU youth and yet more open borders.

He’s undoing Brexit at the stroke of a pen.

Starmer isn’t a democrat, he’s a wannabe autocrat, a dictator. Over 17.4 million people voted for Brexit, just 9.7 million voted for Two-Tier’s Labour government and yet he intends to sign away control of our armed forces and borders and fishing to get “closer” to the EU that the British people have already rejected.

Starmer the EU junkie should just say no.

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