BAE: Should we have a national sovereign defence business or not?

09 Oct 2012By Damian Reece - telegraph.co.uk

Whatever happens next to BAE Systems, we can no longer ignore the pressing role that Parliament must play in this saga.

Dick Olver and Ian King, chairman and chief executive of BAE, will no doubt have much to answer for in the way the UK's largest manufacturer has arrived at a strategic impasse, the true nature of which is only now becoming clear following the proposed merger with EADS.

But it's the company's immediate future that requires urgent debate. Despite the UK Government's insistence that the BAE-EADS talks were first and foremost a "corporate initiative", they have in fact been anything but. This has always been about European and US defence politics. But what happens to BAE goes to the heart of British national security. That's why the Government holds a golden share to veto developments that might threaten those interests. Yet Number 10 and the Ministry of Defence have assumed a "business as usual" approach to BAE's future, downplaying the hugely important political issues that lie just beneath the surface.

Whether BAE merges with a partner or is left to face the immediate future alone is now a profound matter of public interest.

MPs must have the opportunity to question ministers about the company's future. In doing so, given BAE's size and importance to the country's industrial base, they will raise crucial questions about the future of the UK's industrial defence policy, but also national policy more broadly on manufacturing and research and development.

Is it in the interests of the UK to have a national sovereign defence business or not? That's the fundamental question the Commons must debate and ministers must answer. For politicians such as Vince Cable the dominance of defence in UK manufacturing makes life uncomfortable, but it's time to confront the realities before it's too late.

The Government, especially being a coalition Government, cannot exercise its golden share, for or against, without a full Commons debate as soon as possible. The very real concerns on both sides of the House about the future of BAE must be heard. Recent weeks have shown that this is not a matter that can be simply left to BAE's board. There is too much at stake and the people of the UK have too much invested in this industry to let this situation go much further without proper political scrutiny.