Buying British

The British government’s claims to have an open procurement policy are quite consistent with its pro-free-trade stance on other matters, but BAe Chairman’s Richard Evans’s privileged position as being able to "see Blair on request" would certainly put other companies at a disadvantage, and in 2001 it was reported that nearly 85% of the MoD’s procurement went through British companies, most of which are somehow connected to BAe Systems.

The rationale behind supporting BAe Systems as a British company has now become absurd, as it is now only 45% British-owned, and its largest shareholders are US-based, but relations between arms companies and the British government are so good that this doesn’t seem to matter. The well-oiled revolving door barely stops turning Sir Charles Masefield, Vice Chairman of BAe Systems, has been through twice. Formerly an employee of Airbus Industrie, in 1994 he was requested by the British government to return to the UK to take over responsibility for the UK’s international government to government relations on all defence exports. His BAe biography says that ‘In this role he reported to the Secretary of State for Defence and also had direct access to respective Prime Ministers, John Major and Tony Blair,’ which can’t have done BAe any harm when he put his industry hat back on again. Former Conservative Defence Minister Lord Freeman is Chairman of Thales plc and Director of Thales S.A., Thales being the second largest ‘defence’ supplier to the UK government. In September of this year, former defence secretary Michael Portillo became a non-executive director of BAe Systems. This may yet turn out to be one of the rare occasions when the politician turns out to benefit more than the company though, as BAe’s share price fell by 11p that day.

The House of Lords has quite a number of other members acting as consultants, shareholders and directors of various defence companies – see http//www.parliament.the-stationery-office.co.uk/pa/ld/ldreg/reg01.htm for more details.

France is at least more upfront about its connections, with Thales S.A. being 33 per cent owned by the French government.

However, the defence procurement market is relatively open in the EU overall, where over 50 per cent of defence equipment is bought from overseas, compared to the US, which only procures three per cent from foreign suppliers. Looking at the number of connections the US government has with arms companies, it isn’t hard to see why for example, Dick Cheney’s wife Lynne was a director of Lockheed-Martin, until her husband’s appointment as Vice-president made it a little embarrassing to continue. Donald Rumsfeld was a director of Gulf Stream Aerospace (now a subsidiary of General Dynamics), and the Deputy Secretary for Transportation, Michael Jackson, was vice president of Lockheed Martin.

For further connections – and there are plenty- see http://www.peace-action.org/enroninspace/bilked.html.

With acknowledgement to CorporateWatch : Newsletter.