Douglas Carswell

06 FEB 2017

The MoD is letting a contractor cartel rip Britain off

Defence procurement is a mess. Most new equipment seems to be delivered late, over-budget, and partially defective. So why does the government keep going back to the same failed contractors?

Bad procurement has left big gaps in Britain's defences. As the Sunday Times revealed yesterday, we have spent billions on drones that can't fly, ships that can't sail, and tanks that can't be transported.

But are the contractors penalised for ripping Britain off?

Quite the reverse. After every fiasco, they get another, bigger contract. No failure goes unrewarded.

This isn't just incompetence. It's the result of bad policy.

Every government favours a tiny contractor cartel with operations in Britain. That oligopoly knows it can hold the government to ransom. It's called producer capture.

The supposed argument for protectionist procurement is that it maintains a strategic industry. But that's a myth.

Most British defence companies have long since been merged into pan-European conglomerates. Almost no equipment is produced solely in this country.

So when ministers talk about "buying British", they actually mean buying from across Europe – requiring the permission of half a dozen different governments. So much for industrial sovereignty.

But perhaps even protectionism doesn't tell the full story.

President Trump is not only the foremost protectionist in the Western world but the loudest supporter of bottomless defence spending – and he leads the country with the world's biggest defence lobby. Yet even he has called out price gouging by major contractors – and actually got them to cut costs.

It's depressing that our government can't summon the courage to do the same.

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