Defence Committee Launches Inquiry into Foreign Involvement in the Defence Supply Chain
(Source: House of Commons Defence Committee; issued July 30, 2020)
LONDON --- The Defence Committee today launches its inquiry into Foreign Involvement in the Defence Supply Chain. It is expected that this inquiry will become a Sub-Committee, led by proposed Chair Richard Drax.

Scope of the inquiry

The inquiry and planned Sub-Committee will scrutinise the vulnerabilities of the UK’s defence supply chain following the Covid-19 pandemic, with a particular focus on the impact on SMEs and mid-sized companies. The Committee will assess the current level of foreign ownership, particularly ownership by companies with links to states which could have “ulterior motives”.

Additionally, the Committee will explore the current and planned regulatory regime for government intervention to prevent foreign ownership of defence, or defence related, companies. This inquiry will examine the proposed National Security Investment Bill, due to be debated in Parliament later this year.

The Committee welcomes evidence on the following:

-- What is the current extent of foreign ownership of the UK’s defence and security sectors?

-- What has been the impact of the COVID-19 pandemic on the defence and security supply chain, particularly the finances of SMEs?

-- Under what circumstance will the Government currently intervene to prevent foreign takeovers in these sectors and what changes does the planned National Security Investment Bill make?

-- Are additional measures required to protect UK Defence and Security technological advances?

-- How does the UK’s regime compare internationally and what can the UK learn from its allies?

Proposed Chair’s comments

Proposed Chair of the planned Sub-Committee on Foreign Involvement in the Defence Supply Chain, Richard Drax MP, said:

“The global economy is more interconnected than ever, and the defence supply chain is no exception to this rule.

“Our Armed Forces, and the wider population, rely on equipment and technology manufactured overseas and by foreign-owned companies within the UK. Through this reliance on international companies, we forfeit a degree of control, and must ask ourselves whether we are inadvertently allowing foreign actors access, or leverage, that compromises our national security.

“It is no secret that state actors are employing increasingly creative and covert methods to gain intelligence and to exert influence.

“Covid-19 has exacerbated vulnerabilities in the defence supply chain. In the wake of the pandemic, many small and medium-sized companies are struggling to stay afloat, and a foreign buy out may be the only available lifeline.

“This inquiry will scrutinise the kinks in the defence supply chain, attempt to understand its frailties, as well as where there may be heightened exposure to manipulation by states with ulterior motives.”

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