Letter from Major General Alan G Sharman,
C Eng, FIMechE—Director General, DMA, Hindhead, Surrey
Thank you for your letter of 1 February 2000
inviting the DMA to submit evidence to Sub-Committee C of the
House of Lords Select Committee on the European Union.
Having examined the questions that the Sub-Committee
will be considering, we believe that it would be appropriate for
us to comment only upon question 2c, relating to the Defence Industry.
United Kingdom's Industry is strongly of the
opinion that the creation of a European armaments industry is
contingent upon defence industrial rationalisation which, in turn,
is a matter best left to Industry and the consequence of market
forces. The role of Governments, encouraged by the EU, is to create
the market, most preferably by agreeing common requirements for
major equipment projects and standardisation. An attempt to "create"
a European armaments industry by intervention, subsidy or incentives
and the application of procurement policies based on "juste
retour" would not be welcome. The encouragement of a
free defence market in Europe, and one which accommodated the
United Kingdom's wish to maintain strong defence industrial links
with the non-European NATO nations, is our preferred outcome.
It must be observed that there is a precursor
to the developments that the question implies. If, as we believe
to be essential, industry must lead in further rationalisation,
the "technical feasibility" will be greatly assisted
by the full privatisation of all European defence companies and
an emphasis on competitiveness, rather than national interest.
That said, the EU's commitment to creating a
European defence capability does not require the creation of a
European armaments industry, laudable an aim or not as that may
be. The Defence Industry is increasingly global and, given a free
market and clearly defined requirements, is perfectly capable
of meeting the equipment needs of any new European defence structure.
4 February 2000
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