Page 52 - Five Forces of Americanisation Richard Hooke 04072025 final post SDR1

The UK Defence Industry in the 21 Century
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The Five Forces of Americanisation

reinforcement of the logic informing a large number of factory closures and industrial and business
improvement programmes underway but building trust and confidence in what President Eisenhower
had called a nation’s “Military-Industry Complex” did not feature in the government’s defence
management doctrine. MoD procurement was the tool used to precipitate change. Competition policy
the main driver.

But Defence Reform stood awkwardly alongside the government’s active promotion of UK defence
exports and the opportunities for trade that this unlocked, from civil aerospace, construction and
agriculture to leisure and healthcare (notably in the Middle East, South Korea and in South Africa). In
1985, the UK government-appointed Al Yamamah prime contractor, British Aerospace (“BAe”, now
BAE Systems or BAE) started delivering military aircraft and other defence equipment to Saudi Arabia.
This contract provided a platform from which the UK could promote its diplomatic, defence and trade
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capabilities, championed by its Prime Minister, Margaret Thatcher . Promoting foreign competition in
its domestic defence market therefore seemed contradictory. It did not suggest any guiding political
principal or doctrine, let alone any faith in UK industry.

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A meeting on 27 July 1987 between British Aerospace (BAe) CEO Admiral Sir Raymond Lygo and
Chief of Defence Procurement (“CDP”), Peter Levene (now Lord Levene), was scheduled to discuss
the Air Launched Anti-Radiation Missile (ALARM) programme with the MoD’s Controller Aircraft
and the BAe Dynamics MD also present, but it also reinforced what was then an emerging new
MoD principle. BAe should no longer rely on being awarded the next UK combat aircraft prime
contract. Or any prime contract. Like all defence programmes in future, it would be open to
international competition. It could, for example, be French- or American-led. Levene also wanted
to inspect the company’s accounts to check the extent to which, in his view, the MoD was
subsidising BAe’s investment in civil aircraft (Airbus, regional and corporate).
It was a provocative meeting, especially as the topic wasn’t on the agenda (though this wasn’t
unusual, given the prevailing climate in which discussions between industry (particularly those
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involving Sir Raymond) and government officials took place in the wake of the “Westland Affair”
a year earlier) but the logic was very clear.
(Author’s contemporary notes)

Footnote: BAE didn’t open its civil aircraft books but it did head off the UK government’s bid to
leave the Airbus Industrie partnership, even though it had to take legal action to do so. As
important, it set the tone for the interactions between the MoD and industry over the next three
and half decades
Back in 1987, defence industry leaders were preparing for post Cold War consolidation and reduced
government spending but believed that they would be involved in managing a process of change that
had started with British Aerospace’s (BAe) privatisation. There was already tension between a Prime
Minister (Margaret Thatcher) seemingly committed to an American-orientated way forward
(suggested by her support for a US solution to UK helicopter manufacturer Westland’s financial
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problems) and a defence and aerospace industry which, emboldened by winning Al Yamamah, the
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world’s largest export contract, pushed hard for a European approach .
MoD procurement policy therefore became the crucial element in the industry’s restructuring. It set
the combative tone of the next 35 years.
(Former Chief of Defence Procurement) “Lord Peter Levene, who advised Thatcher and saved
the Canary Wharf regeneration, discusses his life among the powerful.”
Lord Levene has expressed his puzzlement at not being appointed CEO of GEC, succeeding Arnold
Weinstock in the late 1990s: “I don’t know if (GEC Chairman, James) Prior was antisemitic, which
is quite possible. Or whether a lot of people in business who I had beaten up didn’t like it.” ”:
(The Jewish Chronicle, April 2019)
It seems unlikely that House of Lords’ International Relations Committee’s 2019 aims to improve
agility in the industry and prompt “a culture shift around risk” would have been achieved through a

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07/07/2025 Richard Hooke 2025