Will Brexit Damage our Security and Defence?

The macroeconomic impact of Brexit on the UK is the subject of vigorous debate, including the potential ramifications for security and defence. One aspect that has gathered only scant attention is the impact of Brexit upon defence industries. In general terms, the overall impact will depend upon what trade and customs arrangements for goods are eventually negotiated between the UK and the EU. More specifically, the UK is a major arms exporter whose main markets are beyond the EU and it could be argued prima facie that Brexit will have a relatively minor impact on this segment of the UK’s manufacturing. This would, however, be mistaken since key defence industries, most notably the aerospace industries, rely heavily on access to research and development funding, overseas expertise and, more often than not, they are part of multinational industries. The potential exclusion of the UK from EU defence research funding as well as from potential partnerships may well harm this critical sector of the UK’s economy. A more major concern remains the UK’s heavy exposure to U.S. contracts and further fluctuations in exchange rates, alongside the possible need for European industrial partners based in the UK to relocate or for UK companies to move to the EU, or at least to co-locate.

Brexit is often looked at in terms of how it will impact British interests but without apparently acknowledging that it is the UK, not the EU, that is the demandeur in these negotiations. This chapter therefore presents five possible benchmarks against which the UK’s demand for a unique relationship with the EU in security and defence might be measured against. It concludes by observing that the UK is important to the EU’s security and defence, but not as important as it thinks. It also observes that the UK needs the EU for aspects of its own security and it is not therefore a matter of only considering British interests but also of appealing to the security interests of the EU and its members as well. Finally, the idea that the UK can exert more influence through NATO, as a quasi-proxy for any influence it may lose via the EU on security and defence matters, is flawed. The UK is likely to lose influence in both the EU and NATO. A bespoke relationship with the EU does not mean an agreement that will privilege the UK beyond any other non-EU partners. It is in the interests of both parties to find an equitable agreement since it is not in the interests of the EU to have an enfeebled and introverted UK on its doorstep. Nor, by the same token, is it in the interests of the UK to obstruct closer security and defence cooperation at the European level.