Concerns in Westminster are growing about the impact that a string of recent takeovers will have on Britain’s sovereign capability. In recent weeks deals have been agreed by foreign firms to take over two leading UK defence manufacturers – Meggitt and Ultra – despite doubts about the impact such moves will have on the UK’s manufacturing ability. There are fears that it could mean that the next generation of aircraft for the iconic Red Arrows will not be built here in Britain.
Coventry-based Meggitt supplies wheels and brakes for fighter jets used by the Royal Air Force and is the subject of two bids from American firms Parker Hannifin and TransDigm for £6.3 billion and £7 billion respectively. Ultra meanwhile supported coalition forces in Afghanistan and faces a £2.7 billion bid from Cobham, owned by the US private equity house Advent. Already Cobham has acknowledged it could sell Ultra’s forensics and energy businesses, while ‘limited numbers’ of jobs may be lost.
The Red Arrows are due to upgrade their fleet in the next few years, having flown their current Hawk aircraft since 1979. Defence procurement minister Jeremy Quin last month confirmed that the planes’ out of service date remains 2030, with a decision on a replacement model not expected until 2023 at the earliest. BAE Brough, the site which previously manufactured the Hawk aircraft for the RAF aerobatics team, stopped manufacturing jets in 2020, instead switching to purely support and engineering.
It is feared that subsequent takeovers will only make it harder to manufacture replacement jets here in the UK. Advent have ruthlessly dismantled Cobham since taking it over 18 months ago, breaking it up into nine pieces and selling many of them off, including the once-prized air-to-air refuelling business. MPs on the Defence Select Committee have shared with Steerpike their concerns about the recent trend and hope that it will not prevent future Red Arrow jets from being built in Britain.
Richard Drax, a current member of the committee said: ‘Having chaired a sub-committee of the Defence Select Committee, which looked at the threat to our defence supply chain, especially from China, I am concerned that two more defence companies have been taken over. The takeover of Ultra by a private equity company is especially worrying, as these companies have a habit of breaking them up and selling them off at the best price they can attain.
‘Having left the EU, and living in an increasingly unstable world, it is vital that we do not allow our defence companies to be hoovered up by the Chinese, or anyone else, for that matter, and I include the US. Without a sovereign capability, we do not have operational sovereignty, which places our national security at risk. So far as the Hawk is concerned, I am aware that projects are under way to see if a British option can be delivered, and I hope this is the case.’
James Gray, a former member of the committee and ex shadow defence minister, said of the Red Arrows that there would be a ‘huge outcry if the replacement were to be built offshore, and I would certainly add my voice to it. It is a very real symbol of all that is ‘British’ and it must be built in the UK.’ Kevan Jones, a current Labour member of the committee who tabled the parliamentary question to Jeremy Quin, has called for ‘assurances’ that the replacement aircraft for the Red Arrows will be ‘UK-manufactured and UK-designed.’
Fellow member Tory Mark Francois meanwhile intends to use his seat his on the committee to examine the issue more broadly. He told Mr S: ‘The isolationist attitude of the Biden administration over Afghanistan has now thrown the whole issue of US takeovers of British defence manufacturers into stark relief. The Commons Defence Select Committee now intend to examine these proposed takeovers and to recommend whether or not they should be blocked by the Government, on grounds of maintaining our sovereign defence capabilities.’
A spokesman for the Ministry of Defence said that on the specific issue of the Red Arrows, a decision on a replacement aircraft will not be taken for at least two more years: ‘Any future procurement decisions will be made under the guidelines of our new Defence and Security Industrial Strategy, which sets out how we will sustain and grow the UK’s industrial capability critical for our defence and security.’ They added that: ‘Individual mergers and takeovers of companies are properly considered on a case by case basis.’
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