Parliamentary Committees and Public Enquiries
Report: Foreign Involvement in the Defence Supply Chain
The Defence Sub-Committee yesterday published its report on Foreign Involvement in the Defence Supply Chain.
The report examines the extent of hostile foreign ownership in the defence supply chain and finds evidence of some involvement from undesirable countries. The Committee therefore calls on the Government to end its country-agnostic approach to foreign direct investment and to publish a list of countries it considers friendly, and from whom investment should be encouraged. The report concludes that all those countries falling outside of this list should be barred from investing in the UK’s defence supply chain, including China and Russia. The Sub-Committee argues that the Government’s current approach, could result in British high-technology and equipment aiding a potentially hostile military.
The Sub-Committee supports the introduction of the National Security and Investment Bill which provides much-needed screening of foreign direct investment. The planned Investment Security Unit, that sits within the Department for Business, Energy and Industrial Strategy, must draw on experience across Whitehall, including the Ministry of Defence, which should proactively feed into all the relevant assessment processes.
The report additionally finds that the financial pressure of Covid-19 has left some businesses in the defence industry vulnerable, increasing the risk of hostile foreign involvement in the defence supply chain through foreign takeovers. The Ministry of Defence must improve its communications with small and medium-sized defence enterprises that are currently struggling and clarify what support is available. The global supply chain has been compromised by the impact of Covid-19 and the Ministry of Defence must proactively encourage domestic alternatives for supply and shorten the supply chain.
Chair of the Sub-Committee on Foreign Involvement in the Defence Supply Chain, Richard Drax MP, yesterday said:
“Despite the Government demonstrating an understanding of the risks that foreign involvement in the defence supply chain poses, more should be done to maintain the integrity and autonomy of our defence industry. This heightened awareness of risks must lead to a tightening of regulations and a new approach.
“Whilst the National Security and Investment Bill represents a step in the right direction, the Government must provide businesses with further clarity by explicitly naming countries from whom investment is welcome. Investment in the defence supply chain from all countries that fall outside of an approved list, including Russia and China, must be barred. We cannot afford a laissez-faire approach to our national security and sovereignty.
“The economic reverberations of Covid-19 have only exacerbated pre-existing vulnerabilities in the defence supply chain, leaving many small and medium-sized defence enterprises struggling to cope. Although the Ministry of Defence offers some support for the companies contending with the tough economic climate, there is not enough awareness of the resources that are available.
“No British company should be left with the choice of either going under or accepting hostile foreign investment, and the Government must ensure that no one finds themself in this position.”
Latest News from
Parliamentary Committees and Public Enquiries
Committee wants more scrutiny of N. Ireland Brexit issues09/04/2021 14:05:00
The House of Commons European Scrutiny Committee has called on the government to provide it with more information, and in a timelier manner, concerning the December 2020 Brexit agreement with the European Union (EU).
New Report: Government has gathered momentum to act on food security, but must now find 'impetus'07/04/2021 11:05:00
Government Ministers mobilised their departments to prevent food insecurity during the covid-19 pandemic, but the impetus to do so must be sustained as the country re-opens.
Treasury Committee launches ‘Jobs, Growth, and Productivity after Coronavirus’ inquiry06/04/2021 11:25:00
The Treasury Committee recently launched a new inquiry into jobs, growth, and productivity after coronavirus.
Chair comments on the use of military sites for asylum accommodation01/04/2021 13:33:00
The Home Affairs Committee has published correspondence from the Home Office in relation to the use of former military sites, notably at Napier and Penally, for asylum accommodation.
MPs urge Government to seize tidal power potential01/04/2021 11:38:00
The Environmental Audit Committee (EAC) yesterday emphasised the substantial potential of the tidal power sector to contribute to the UK’s renewable energy mix.
Private rented sector needs roadmap out of lockdown to avoid debt crisis31/03/2021 13:05:00
Repeated, last minute extensions to the ban on evictions must be replaced by a coherent exit plan to help the private rented sector emerge from lockdown, the Housing Communities and Local Government Committee has found.
Common frameworks can strengthen the Union, says Lords Committee31/03/2021 12:05:00
The Common Frameworks Scrutiny Committee publishes its first report.
Report published on the impact of COVID-19 on courts and tribunals in England and Wales31/03/2021 09:05:00
The Constitution Committee publishes its 22nd report of the session and the first of three reports on the constitutional implications of COVID-19, focussing on the impact of the pandemic on courts and tribunals in England and Wales.