Joshua Stein reveals how defence contractors are booming while the rest of the British economy suffers from the impact of the Coronavirus crisis
The Ministry of Defence has forked out hundreds of millions of pounds to its favoured clients in 2020, in the face of the economic ruin caused by the COVID-19 pandemic.
A Byline Times investigation has revealed multi-million-pound contracts signed by the MoD surged by more than £30 million between April and July 2020, despite the economic toll of the Coronavirus pandemic.
In comparison to 2019, the ministry’s 10 top contractors – headed by BAE Systems and Babcock International – took in an extra £32 million worth of profits from contracts with the MoD.
The MoD paid the 10 companies a total of £712.4 million for contract work in just four months, in comparison to £679.6 million in the same period the previous year. Statistics firm Statista revealed that these 10 companies were the MoD’s “leading suppliers” in 2018-2019.
While contract data is vague, some of the expenditure has been traced back to the industry giants.
BAE Systems, which was the highest paid MoD contractor in 2018/2019, received £200 million worth of funding towards its dreadnought submarine work in the six months leading up to June 2020. Much of that period was spent under lockdown, which began in England on 23 March. The documents do not disclose when exactly the £200 million was spent on the submarine fleet.
The dreadnought submarines, expected to cost £7.2 billion by the end of production, will replace the Royal Vanguard class of submarines, which carry the UK’s nuclear deterrent.
Overall, BAE took £353.9 million of the MoD’s money between April and July, an increase of more than £45 million on the same period in 2019. The British security and defence firm – which refers to the MoD as its “main customer” in its most recent half year report – has been criticised repeatedly for exploiting the much-publicised ‘revolving door’ of government positions and the arms industry.
£569 million was spent on ventilators during the pandemic – in comparison to the £712 million spent on defence contracts with these 10 companies alone.
BAE’s chief lobbyist, Oliver Waghorn, previously worked as a special advisor to Conservative MP Liam Fox while he was Defence Secretary. Under Prime Minister Theresa May, Fox was then made International Trade Secretary, which involves managing trade regulations with other countries.
BAE continues to secure large contracts with countries including Saudi Arabia, which has been accused of human rights abuses in its proxy war in Yemen.
In August, the Campaign Against the Arms Trade (CAAT) said that “a disturbing number of senior government officials, military staff and ministers have passed through the ‘revolving door’ to join arms and security companies”.
“This process has helped create the current cosy relationship between the Government and the arms trade – with politicians and civil servants often acting in the interests of companies, not the interests of the public,” the CAAT report continued.
In total, BAE made £559 million worth of profit in the six months leading up to June 2020, according to its half year report.
Campaigners have called for the nuclear deterrent, also known as Trident, to be scrapped for moral and economic reasons, with the Scottish First Minister Nicola Sturgeon saying last year that she has “a moral objection to weapons of mass destruction”.
Byline Times’ investigation further suggests that the defence industry is a top priority for the Government. During the COVID-19 pandemic, the expenditure on these 10 firms dwarfed the Government’s expenditure on ventilators as the virus peaked.
According to a National Audit Office report published in September, £569 million was spent on ventilators during the pandemic – in comparison to the £712 million spent on defence contracts with these 10 companies alone.
Andrew Smith, a spokesperson for CAAT, which