Yves here. This Brexit post gives me the opportunity to ask our estimable UK based readers to help calibrate an odd data point from my childhood.
I have not spent all that much time in London, and most of that was when I was seeing the world on the McKinsey plan in the 1980s.
On one visit, the mother of a good college friend (the mother was quite connected), had me drop in on a friend of hers, a jewelry designer who was becoming prominent (she’d just had a museum show). The mother mentioned that the designer’s husband was an arms merchant as casually as if she were saying he was a heart surgeon. Their house was in Kensington, which wasn’t anywhere near as tony then as it has become but the ginormousness of the building made up for that.
So the question: is London a place where being an arms dealer is a routinely-acknowledged-in-polite-company line of work?
By Lydia Noon is a freelance journalist. Her twitter handle is @lydia_noon and her website is here. Originally published at openDemocracy
While Brits have grown accustomed to turbulence in political fairyland, last week the action has moved from Whitehall to hotels, and the subject matter has been the UK’s future as cheerleader for free trade.
No less than six cabinet ministers attended Davos’ World EconomicTrade Forum, resulting in Britain’s first potential post-Brexit trade deal with Israel and, an announcement by the foreign secretary that £2.5 million would be pledged to support the UN peace process in Yemen, followed a day later by, rather embarrassingly, a swanky “arms dealers’ dinner” in London’s Park Lane with many on the guest list enabling the Saudi-led bombardment of Yemen.
And so, as the Brexit engine rumbles on, so does one of the most controversial and disturbing aspects of it: the dealings of the UK’s weapons industry with unscrupulous regimes.
Free trade agreements outside of the EU mean less regulation, and dodgy deals bode well for many countries in the business of buying weapons.
Business and Politics: Convenient Bedfellows
The Government has identified arms sales as a priority for the brave new world post-Brexit, and a global Britain, or arguably a more desperate Britain, looks set to invest in this sector. Europe accounts for few military contracts so there is little downside to the changing market, according to the UK’s trade group for arms companies, euphemistically called the Aerospace, Defence, Security and Space association (ADS).
“Europe will continue to be important, but there are perhaps other areas where there is now a bigger incentive to develop longer-term relationships. Brexit provides the circumstances and the catalyst for faster and more efforts”, said ADS in August 2016.
One of ADS’ members, British multinational BAE systems, is similarly nonchalant. The UK’s largest manufacturer says that Brexit is “just not that big a deal”, and is excited about frictionless trade. It is worth noting that the corporation’s main customers are Saudi Arabia, the US and the UK, with Europe only accounting for 8%eight percent of its income in 2017.
Theresa May set up five business councils in November 2018 in order for companies to advise her on “post-Brexit opportunities”. The chair of BAE systems, Roger Carr, along with Rolls- Royce chair Ian Davis, co-lead the industrial, infrastructure, and manufacturing council, which is to meet three times a year.
Meanwhile, ADS and its member companies, which include Airbus, missiles manufacturer MBDA and G4S, among others, invited MPs to meet them in parliament on 9 January, to plead the business case for voting for Theresa May’s ultimately doomed EU withdrawal deal, which was rejected on 15 January.
ADS chief executive Paul Everitt has spoken of the continued uncertainty of Brexit being damaging to business investment, forcing companies to implement costly contingency plans, while Airbus warned this week that the company could pull out of the country in the event of a no-deal Brexit, or perhaps even with one. It’s worth noting that Airbus, which manufacturers commercial and military aircraft, has been propped up by both British government and EU subsidies in recent years.
Taxpayer subsidies don’t end there. An extra £2 billion was allocated to the international trade budget last October to increase Britain’s presence across the world, of which touting arms deals is a large part.
A Very Brexit Race to the Bottom
In the 12 months following the 2016 EU referendum, Britain cleared export licences worth £2.9 billion to 30 countries with oppressive regimes – such as Bahrain, Azerbaijan and Uzbekistan – up almost a third on the previous year where export licences were granted to just 17 such countries, according to research by Campaign Against the Arms Trade and inews.
The UK’s weapons trade was worth a total of £74 billion in 2017, with exports reaching £41 billion, providing direct employment for 380,000 people.
At the DSEI arms fair in London, the largest of its kind in the world, that year, international trade secretary and staunch Brexit supporter, Liam Fox, insisted in his keynote speech that Britain had measures in place to allow “ethical defence exports”, worth £5.9 billion a year to the British economy.
Fast forward 16 months and Fox has just secured Britain’s first post-Brexit “in principle” trade deal with Israel while at the World Economic Forum in Davos, Switzerland. The announcement on 24 January comes after a mega year of trade between the two countries. Plans are afoot for trade meetings in London with Israeli government ministers in the coming months.
The UK’s increasingly closer ties with Israel include rising levels of arms sales. In 2017, the government issued a record £221 million worth of weapons licenses to British defence companies exporting missiles, sniper rifles and other equipment to the regime. These deals flew in the face of international conventions condemning Israel’s human rights violations against its Palestinian population and in the West Bank and Gaza.
Black Tie Dinner
On 23 January, the cream of Britain’s arm traders attended an annual black tie dinner at Grosvenor House Hotel in London. The ADS drinks reception and three-course dinner brought MPs, military figures and arms dealers together, with tickets costing £225 for members and £450 for non-members.
Government minister for trade and export promotion Rona Fairhead, and former Labour Home Secretary, Alan Johnson, spoke at the event, along with BAE Systems chief executive Charles Woodburn. The multinational company was also one of the sponsors of the event.
Rona Fairhead works with Liam Fox on the UK’s export strategy, and has spoken of her ambition to increase UK exports from 30 percent of GDP to 35 percent.
Alan Johnson, meanwhile, was quoted on the ADS event web page, which has since been taken down, saying that during his after-dinner speech, he would: “reflect on my time in Parliament, drawing parallels with programmes such as ‘Yes Minister and “The thick of it”.
Campaign against the Arms Trade and Stop the Arms Fair organised a demonstration outside the venue highlighting the complicity of the UK in Yemenis’ suffering. Chants of “Arms dealers feast while Yemen is starved” meant that none of the attendees could plead ignorance: over 14 million people risk starvation in the ravaged country.
Britain’s arms deals with Saudi Arabia garner a great deal of controversy: the government has issued £5 billion of licenses for military exports to the regime since it started bombing Yemen in 2015, and, despite widespread calls for an arms embargo from many politicians, campaign groups, Yemeni activists and members of the European Parliament, Theresa May’s government is undeterred.
Police pushed, pulled and dragged protesters out of the way as they disrupted the entrance of the largely middle-aged, white male guest-list. They formed protective lines around those attending, ushering them into the hotel in a show of misplaced loyalty, symbolic of the state’s ongoing support of repressive regimes.
On asking three men in black tie if they knew why people were protesting, one said that he worked in civil aviation; it had nothing to do with him, another, angrily: “you don’t know what you’re talking about”, while the third said that he made planes, not weapons.
There’s no hiding from the fact though that many of the 1000 UK-registered companies in ADS make and sell weaponry – whether to countries on watchlists or to countries compiling the watchlists. Some, like Northrop Grumman, also offer personnel support, in the form of training the Saudi military and providing technical services to the Ministry of the National Guard.
Supporting Yemen?
Wilfully detached from the horrors of war, obstinately focusing on what the electorate want to hear – job creation, British-made, contributing to the economy – those in the business of sustaining it must start listening to those affected by its consequences.
“All across Yemen people are suffering and dying. This is a very, very dirty war”, said Sarah, at the demonstration. From Aden, a city in southern Yemen, she has lived in the UK for 19 years. “I hope our voice can reach those responsible for what’s happening and I hope that they stop what they are doing.
I asked Sarah whether she’s worried that Brexit will increase the UK’s involvement in the onslaught on Yemen.
“I can’t say much about the politics, I can just say the human side. I hope it doesn’t get worse under Brexit, I pray to God it doesn’t. I know that the people have nothing to do with it and it is just some who are responsible for it – I hope that they will stop selling these weapons and look at the people that are dying.”
In an ill-timed move, the day before the arms dealers’ dinner, foreign secretary Jeremy Hunt announced an extra £2.5 million to support the UN peace process in Yemen. This brings the total amount of British financial support to Yemeni people to a paltry £570 million since 2015.
Hunt added that Britain would support the “deployment and coordination of demining and explosive ordinance disposal capacity in Hodeidah city”, explosives that may not – and should not – have been sold to the Saudi regime by the UK – but clarity on that, thanks to the government’s opaque licensing system, is near impossible to ascertain.
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Roosevelt said once that America was the Arsenal of Democracy but the UK is fast becoming the Arsenal of Authoritarianism. From my own understanding, British prowess with industrialization in the 19th century also led to it achieving an expertise with modern weaponry. And the British shipped weaponry around the world to all sorts of forces. Since factories usually supply more than an armed forces for that country can consume annually, export of those surpluses overseas has been a long standing practice. Arms manufacture became so embedded into British culture that George Bernard Shaw once wrote a play about this once called “Major Barbara” back in 1905-
https://en.wikipedia.org/wiki/Major_Barbara
Expect that post-Brexit, that British weapons will be seen all over the world as they will no longer have the EU looking over their shoulder. In fact I would not be surprised to see British weaponry going to places that will be in direct conflict of EU interests. I would predict that overseas sales will even trump the requirement of their own forces so that they will be in the same situation as the Ukraine was years ago i.e. a producer of good weaponry with little of it making its way into the Ukrainian armed forces. Between the City of London and the Treasure Islands, payment will not be a problem. The size of the exports may not be that great but in selling arms you are also selling political support and expertise. That, for example, is why Australia purchased the F-35 which is an aircraft ill-suited to local geography. It wasn’t the aircraft that was important but the purchase of future US support. And so it will be the same with any country purchasing British weaponry.
Thank you and well said, Kev.
One can see that with the UK contemplating bases, probably just facilities due to cost and the UK not having much of a pot to piss in, east of Suez for the first time since the withdrawal over the late 1960s and early 1970s. My father joined the Royal Air Force from Mauritius in the mid-1960s and was deployed in Singapore, Brunei, Hong Kong, the Maldives (being base doctor in Gan was not a bad posting) and Aden in that period.
With regard to what Major Barbara chronicles, I was surprised Christopher Clark’s admirable Sleepwalkers did not analyse the commercial and military-industrial aspects of the state rivalries.
With regard to the F35 for the RAAF, it’s the same in the UK with the F35 and replacement for AWACS. An Airbus / BAe alternative has been proposed, but the Ministry of Defence, headed by a clown, is pressing on with Boeing.
In this week’s press and on London transport, Boeing is advertising how it uses the UK for its 777, 787 and Chinook supply chains.
Thank you Colonel. I just recalled a story illustrating how powerful the weapons industry had become even a century ago. Churchill was talking about a Conference that he was at where it was being decided how many Dreadnoughts that Britain should build.
The Royal Navy was insisting on a high number but they were in a fight with the Treasury who spends money like it came out of their own personal pockets and only wanted a small number authorized. As Churchill wryly noted: “The Admiralty had demanded six ships; the economists offered four; and we finally compromised on eight.”
You know, Colonel you should really write your autobiography one day. From the snippets that you drop, it must be a ripper of a good story.
Clark’s book reflected, I think, the current view that such rivalries were not really important. For a long time, British historians clung to the view that Anglo-German naval rivalry had been a factor in the approach to the conflict, but it’s now clear that the Germans had essentially given up by 1914, and the British were aware of this. The idea that WW1 was sparked by commercial rivalries was popular at the time and after with those influenced by Marxist theory, but it turns out to have very little to do with how the war actually started.
Thank you, David.
London is the place which holds the bi-annual weapons trade fair. A very big event, although it mostly doesn’t have that much of a publicity.
I’m pretty sure that the weapon merchants are not ostracized in London, probably less so than in Europe – where in my experience they are usually not ostracized at all (as long as they are not too in-your-face we-sell-weapons-to-anyone).
Thank you, Yves.
With regard to arms dealing and its ancillary service, mercenary services, I would say it’s still not the done thing to talk about in polite society. There are euphemisms etc. to mask what goes on.
Kensington and Mayfair remain the areas where, at least, the intermediaries and perhaps the mercenary officers, often upper class and former officers from fashionable, not fish and chips, regiments, live and / or work from. Clubs are often where discussions take place.
You’re right about now tony Kensington. Two former colleagues who have lived there since the late 1980s, when they were junior bankers, say that one could not give away London property in those days.
With regard to Brexit, let me share some tidbits:
In addition to the negotiations with the Zionist apartheid enthusiasts, HMG was in talks with the Swiss government and has beefed up representation in Berne. Why CH? An informal G4 has been set up, comprising the UK, CH, Hong Kong and Singapore. The UK, led by the Treasury and Investment Association, taking up where the British Bankers’ Association left off, reckons that these four countries and, later the UAE and / or GCC, are the world’s bankers and can repulse any crackdowns led by the EU27. I have worked with the UK and Swiss personnel involved and used to organise the annual Anglo-Swiss conference from 2008 – 12, which morphed into the G4 in 2017. As per the thread about Singapore on Thames, HMG does think that it can hold the EU27 to ransom, especially with G4 allies.
I had a chat about Brexit, novation of contracts, booking centres etc. with a Germany based colleague yesterday afternoon. Our employer had been in talks that morning with officials in Berlin. According to him, the German government’s private view is that no deal Brexit is off the agenda and it can only be Brexit in name only or the revocation of Article 50. I was staggered by that, but said nothing.
At a talk on central bank independence yesterday lunchtime, the former deputy governor, Paul Tucker, did not think that Brexit was the biggest threat to the UK’s financial stability. He did not elaborate, but was full of interesting stuff. Redlife 2017 also attended. We’ll share the read out when relevant.
With regard to my parachute, I was interviewing to head the legal and compliance function for my employer’s Zurich and Geneva branches and its Swiss bank, essentially a private bank, but withdrew from the final shortlist when invited to a final interview in Zurich. Although my parents are well, they are getting on. We have no other family in the UK. If they were in Mauritius, there are relatives to help in case of an emergency. It would be more difficult if I am overseas. Three other colleagues, all children of immigrants like me, are in similar positions and have turned down escape routes.
Two people I know a bit have been offered escape routes by their employers to Spain, one in banking and the other in IT. The former will go to Madrid soon and wait for his wife and children to come in the summer. The other has just relocated to Barcelona. It was made clear that, regardless of what happens, their jobs are never returning to the UK. They seem OK with that.
Lets face it money doesn’t smell. And who is to cold shoulder arms dealers? In their own set they will be as welcome as the disaster capitalists, rack renting landlords, and gangsters. The only question is ” Do you have money?” not “where did you get it?”
Thank you.
https://www.zerohedge.com/news/2015-02-16/hsbc-bank-secret-origins-laundering-worlds-drug-money is a good overview. Some of the families mentioned remain prominent to this day. The Scottish ones are related to the Queen by way of her mother. They also own much of Scotland. One chairs my beloved Arsenal FC.
I am looking forward to the descendants of Papa Doc, Mobutu, Obiang, Bongo, dos Santos et al fraternising in such circles.
Musings:
Governments are the greatest builders of Arms, and the greatest destroyers of peace.
“Representative Government” is mostly a sick joke, along with “interfering with elections.”
Secret police are abolished, to be replaced with “intelligence community,” with so much secrecy that any concept of accountability by “the elected” is a hollow joke, especially with the elected’s full time commitment to raising money, instead of actually oversight and rule.
It is interesting that “fake news” surrounds the Government, its law enforcement and intelligence arms.
I do wonder if it is the bonanza they expect. Very little regulation on arms comes from the EU – its simply not considered part of the aquis.
But on the other side, its hardly a secret that most arms sales are not about buying weapons, its about buying influence. This is why the Gulf States are very much into international equality when it comes to arms – they buy equally from the US, Britain, France and Russia.
But a UK outside the EU is a much weaker entity in terms of international clout. Hence they can’t expect such big bribes in the form of arms exports in the future.
As for Yves question, I lived in London and never met anyone claiming to be an arms dealer (but thats not unlikely, considering my accent and the circles I moved in). However, over the years I met many quite posh Englishmen in varous parts of the world who would vaguely describe themselves as ‘traders’ of one sort or another, usually with foreign governments. Whispers around them would usually say something like ‘He’s former SAS/Para/MI6, you know’. Most I think were selling various forms of security, not necessarily in hardware form. One guy I knew used to say laughing that he was a ‘rocket scientist’ – I later found out he was a Royal Navy ballistics expert. He was on some vaguely defined long term leave and had spent much of it ‘as a tourist’ in Iran and various ‘stans.
The trick seems to be to let enough information out that if the listener is pontentially useful or a customer, they’ll ask a direct question. But it would be considered gauche to actually say you are into selling weapons or ‘services’.
Mrs May’s husband is an arms dealer in all but name.
Blair killed an inquiry into BAE bribery allegations,
Back in the day, Adnan Khashoggi, was always hobnobbing with the jet set and celebs and getting plenty of admiring media coverage in Britain. In fact, Churchill’s grandson, also called Winston, a very reactionary Tory, had an affair with Khashoggi’s wife.
Yes, the British establishment is very comfortable with arms dealing.
Thank you.
Jonathan Aitken, a former Tory MP and minister and convicted perjurer, had an affair with Soraya Khashoggi, an English woman from Leicester, and fathered her daughter Petrina. Petrina is good friends with Aitken’s daughters and looks like them. Aitken owned a merchant bank, Al Bilad, with Khashoggi and other Arab investors.
This has nothing to do with Brexit, it’s just another excuse for an outing for organisations like the Campaign against the “Arms Trade”, which is to the defence industry what the ERG is to the European Union. Asking a Yemeni refugee for an expert view on the influence of Brexit on UK export policies is not journalism.
There are a variety of national and unilateral export control regimes that the UK operates or is a member of. The official list is here.. Many of these (like the Australia group) are completely outside the EU framework, and even for the EU controls, the UK was a major player in developing them in the first place. It’s highly unlikely there’ll be any changes after Brexit.
The journalist can’t even understand her own sources. The £74Bn figure quoted is not the value of the “UK’s weapons trade”. As the link makes clear, it is the total turnover of the UK’s Aerospace, space, defence and security industries, the majority of whose production is for civil use. Defence exports don’t even figure in the top ten export industries. Likewise, to say Airbus manufactures “commercial and military aircraft” is quite misleading. It has one military project; the A400 transport aircraft.
It’s an example of a common political failure: the search for simple answers to complex problems. Since we can’t actually do anything too bring the war in Yemen to a conclusion, we’ll make ourselves feel better by pretending we can.
Thanks David, as you say there is little real connection with Brexit. Its also true to say I think that the UK’s tech position in armaments has declined greatly as its shipyards struggle even to build frigates for the Royal Navy and its reliance on the F-35 has killed off what remained of its aerospace research. Its notable that the new European fighter if it ever emerges looks like it will be Franco-German led, with the Spanish as junior partners, in contrast to the Typhoon and Tornado.
Just a point on Airbus – thanks to recent mergers and aquisitions it has a much greater military range than the A400 and may well lead the new European fighter.
Yes, the UK defence industry, as it used to be, hardly exists these days. In the 90s and after there were a lot of mergers between UK and French companies, with the French taking 51% of the equity. And guess where the factories were closed? A proportion of UK “exports” are now just earnings from minority shareholdings. You are right about Airbus: consolidation has gone further than I realised.
There seems to be a symbiosis between arms merchants and money laundering, although it seems unclear which follows the other. Wherever in the world the linen enters the laundry, much of it ends up in the UK. Large UK real estate transactions also correlate with both of those, especially in the Home Counties.
The UK seems happy to host arms merchants, but it does seem reluctant to offer them a formal passport. In a business where you’re only as good as your last deal, I suppose that conditionality is a good thing. I wonder if that leave to stay would be harder to come by if an arms merchant used Dutch banks or bought French real estate.
(My recollection was that Kensington and Chelsea were already quite tony during the Thatcher years.)
The UK is the home of Accuracy International who make what is arguably the best sniper rifle in the world, they are also] quite popular with long range target shooters and hunters.
I’d love to own one, but spending $10K on what would essentially be a toy is not in the cards.
It’s also interesting to see that the countries building and selling the most advanced weaponry are also among those who are most invested in spying on and disarming their general populace.
Lovely gun. This one sold for just 8625$ though so maybe you could get one at a garage sale or something. I would hope most of the users do not wear them out.
The EU should not have been such a tragedy. Merkel is giving desperate speeches now about how every country/member of the EU should give up more sovereignty to the EU as a governing body. To create a fiscal authority. That is probably the only thing that a will work at this point and it has zero chance of happening. And all the reasons for disintegration are surfacing: France is up to its eyeballs in arms deals and foreign wars in Africa and the ME; I can’t believe some German firms are not into it as well; Italy; Russia; Poland; Sweden – why not the UK? The Israel connection is no big surprise either because ever since it became obvious that the world would switch from oil to natural gas Israel has been focused like a laser on Gaza. Israel wants all those offshore rights, period. And the UK has gone into business with Israel (in fact announced it) in the formation of an energy hub in the eastern Mediterranean, located in Israel of course. This little consortium also includes SA. The whole writhing mess is a real snake pit. Prince Charles, to his credit, couldn’t stomach it anymore and retired from trade deal making and sword dancing with the Saudis. And the Donald was right there to pick up the baton. It’s about what it has always been about. Control and profit from essential resources. (This is alpha monopoly.) Sounds like an overwhelming imperative for the UK – one that justifies any and all nonsense gibberish to get out of the EU.
Hypocrisy on a fabulous scale. Administrations come and go with each blathering about how much they are concerned, so very, very concerned about the guns, terrorism, crime, violence, and other horrible things. Perhaps they might add some boilerplate about the children while speachifying on campaign.
One would think that after starting or supporting a number of recent unnecessary wars that they would either not ship mass death to horrible regimes or at least hide it better. You know, for the sake of the children.
But then money changes everything.