Abstract
The macroeconomic impact of Brexit on the UK is the subject of vigorous debate, including the potential ramifications for security and defence. One aspect that has gathered only scant attention is the impact of Brexit upon defence industries. In general terms, the overall impact will depend upon what trade and customs arrangements for goods are eventually negotiated between the UK and the EU. More specifically, the UK is a major arms exporter whose main markets are beyond the EU and it could be argued prima facie that Brexit will have a relatively minor impact on this segment of the UK’s manufacturing. This would, however, be mistaken since key defence industries, most notably the aerospace industries, rely heavily on access to research and development funding, overseas expertise and, more often than not, they are part of multinational industries. The potential exclusion of the UK from EU defence research funding as well as from potential partnerships may well harm this critical sector of the UK’s economy. A more major concern remains the UK’s heavy exposure to U.S. contracts and further fluctuations in exchange rates, alongside the possible need for European industrial partners based in the UK to relocate or for UK companies to move to the EU, or at least to co-locate.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
This includes a maritime task group centred on the Queen Elizabeth II aircraft carrier; a land division with 3 brigades including a new Strike Force; an air group of combat, transport and surveillance aircraft and a Special Forces Task Group.
- 2.
Romania is likely to reach the goal in 2018, while Latvia and Lithuania have committed to reaching it as well.
- 3.
For example, the MoD estimated that the cost of the Trident successor programme to be £25 billion. By 2015 and the SDSR the cost had risen to £31 billion. One estimate puts the eventual cost as high as £167 billion (see SIPRI Yearbook 2016: Armaments, Disarmament and International Security, pp. 630–631).
- 4.
VEAT notices are those that apply to contracts awarded without prior publication, or to a contract by negotiated procedure without prior publication of a contract notice. In the event that the administrative court has not received an appeal within 10 days, the contract awarded without prior notice is not subject to review (this represents around 30% of the UK contract notices, but this still compares well to Romania and Italy where 71% and 80% of notices respectively were the result of a contract award without prior publication).
- 5.
This should not be confused with the identically named 2016 Airbus FCAS concept to provide the Bundeswehr with a potential successor to the Tornado. In this case the FCAS would be a manned system.
References
Berger, R. (2017). High Value Design: A Strategic Capability in the Global Competition for the Next Generation of Aircraft. Aerospace Technology Institute.
Black, J., Hall, A., Cox, K., Kepe, M., & Silversten, E. (2017). Defence and Security After Brexit: Understanding the Possible Implications of the UK’s Decision to Leave the EU. Compendium Report, RAND Europe.
Calcara, A. (2017). Brexit: What Impact on Armaments Cooperation? Global Affairs, 3(2), 139–152.
Chalmers, M. (2017, May). Still International by Design? RUSI Briefing Paper.
Defence Contracts Online. (2016). Brexit: The Impact on the Defence Industry. Defence Contracts Online. Retrieved from https://www.contracts.mod.uk/do-features-and-articles/brexit-the-impact-on-the-defence-industry/.
Deloitte. (2017). Impact of Brexit on the Manufacturing Industry: Aerospace and Defence. Retrieved from https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/manufacturing/deloitte-uk-brexit-ad-sheet.pdf.
Department for International Trade. (2018, March). UK Strategic Export Controls Lists. Retrieved from https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/685044/controllist20180305.pdf.
EEAS. (2018, February 18). Speech by Federica Mogherini at the Munich Security Conference. Munich.
European Commission. (2009, June 10). Directive 2009/43/EC of the European Parliament and of the Council of 6 May 2009 Simplifying Terms and Conditions of Transfers of Defence-Related Products Within the Community. Official Journal of the EU L 146.
European Commission. (2016). European Defence Action Plan: Towards a European Defence Fund. Brussels, Press Release, IP/16/4088.
European Defence Agency. (2016, June 20). National Defence Data 2013–2014 and 2015 (est.).
European Parliament. (2015, June). The Impact of the ‘Defence Package’ Directives on European Defence. Directorate-General for External Policies, PE549.044.
European Political and Strategy Centre. (2015, June 15). In Defence of Europe: Defence Integration as a Response to Europe’s Strategic Moment. EPSC Strategic Notes, Issue 4, European Political Strategy Centre.
Hollinger, P. (2017, January 4). UK Aerospace Industry Fears Loss of Leading Edge After Brexit. Financial Times.
House of Commons. (2017a, November 21). Oral Evidence: Leaving the EU Implications for the Aerospace Industry, Business, Energy and Industrial Strategy Committee. HC 380.
House of Commons. (2017b, December 19). Unclear for Take-off? F-35 Procurement. Defence Committee, Second Report of Session 2017–19, HC 326.
Koenig, N., & Walter-Franke, M. (2017, July 19). France and Germany: Spearheading a European Security and Defence Union? Policy Paper 202, Berlin: Jacques Delors Institute.
MacAskill, E. (2017, November 14). British Forces no Longer Fit for Purpose, Fomer UK Service Chiefs Warn. The Guardian.
Minford, P. (2017, August). From Project Fear to Project Prosperity: An Introduction. Retrieved from https://www.economistsforfreetrade.com/wp-content/uploads/2017/08/From-Project-Fear-to-Project-Prosperity-An-Introduction-15-Aug-17-2.pdf.
Osborne, T. (2016, June 20). Engine, Planform Begin Shaping Anglo-French UCAV. Aviation Week Network. Retrieved from http://aviationweek.com/paris-air-show-2017/engine-planform-begin-shaping-anglo-french-ucav.
Perry, D. (2017, March 10). Dassault Plays Down Brexit Fears over Anglo-French UCAV Project. Flight Global. Retrieved from https://www.flightglobal.com/news/articles/dassault-plays-down-brexit-fears-over-anglo-french-u-435036/.
Savage, M. (2017, October 14). PM’s Former Security Adviser Warns of Brexit Defence Cuts. The Guardian.
UK Department of International Trade. (2017, July 25). UK Defence and Security Export Statistics for 2016. Retrieved from https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/631343/UK_defence_and_security_export_statistics_2016_Final_Version.pdf.
UK Government. (2016a, April). HM Treasury Analysis: The Long-Term Economic Impact of EU Membership and the Alternatives. CM 9250.
UK Government. (2016b). Immigration Rules Appendix K: Shortage Occupation List. Retrieved from https://www.gov.uk/guidance/immigration-rules/immigration-rules-appendix-k-shortage-occupation-list.
UK Government. (2018a, March). National Security Capability Review.
UK Government. (2018b, July). The Future Relationship Between the United Kingdom and the European Union. Cm 9593.
Uttley, M. R. H., & Wilkinson, B. (2017). Contingent Choices: The Future of United Kingdom Defence Procurement and Defence Industries in the Post-Brexit Era. Global Affairs, 2(5), 491–502.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
Copyright information
© 2019 The Author(s)
About this chapter
Cite this chapter
Duke, S. (2019). Brexit, Defence Expenditure and Defence Industries. In: Will Brexit Damage our Security and Defence?. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-96107-1_3
Download citation
DOI: https://doi.org/10.1007/978-3-319-96107-1_3
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-319-96106-4
Online ISBN: 978-3-319-96107-1
eBook Packages: Political Science and International StudiesPolitical Science and International Studies (R0)