Was there a Cold War, British Military-Industrial Complex?

The US Context
On January 17th 1961, President Eisenhower gave a final, televised speech to American public ⁽¹⁾. A renowned and generally respected military leader and politician at the end of his career, he took that moment to warn the public about the emerging power of the US Military-Industrial Complex:

“… A vital element in keeping the peace is our military establishment. Our arms must be mighty, ready for instant action, so that no potential aggressor may be tempted to risk his own destruction… Until the latest of our world conflicts, the United States had no armaments industry… [now] we annually spend on military security more than the net income of all United States corporations…

“… In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.”

That was a very strong warning from the out-going President.

However, the prevailing, almost paranoid, need to prevent any possibility of a ‘sneak attack’ like Pearl Harbor in the future, and the positioning of the Soviet Union as an existential threat to the survival of Western democracy, combined to make it almost politically-impossible for national-level politicians to resist the procurement of newer, high technology weapons.

There are many accounts of the inter-relationships in the US between the private companies manufacturing those weapons, the military leaders who sought or could be enticed by them, and the politicians who had to pay for them. I will not dwell on those accounts here, but it is enlightening to note the immense sums of money that were spent by the US on defence:

• 1961 – Around 8.8% of GDP ⁽²⁾.
• Spending remained at about 7% of GDP until 1971.
• From 1971 to 1990 spending averaged at 5.7% (range 4.8 – 6.6%).
• Thereafter it fell towards 2.9% in 1999 (the ‘peace dividend’ from the end of the Cold War).

For an economy the size of the US, in real terms the $dollar investment in defence has been immense.

So, was there a corresponding British Military-Industrial Complex?

The answer seems to be ‘yes’, ‘no’ and ‘who knows?’

The UK had been ravaged by World War 2 and left with a national debt of 270% of GDP (circa £27bn ⁽³⁾). In order to retain a seat at the ‘top table’ of international affairs, it was then forced (by the US ‘Atomic Energy Act of 1946’) to develop its own nuclear weapons from close to a standing start.

Under those conditions, was the money available for a British military-industrial complex to develop in the manner that Eisenhower had warned against?

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From 1960 the overall trend of UK defence spending versus GDP is a fairly good match for trends in US spending, with UK spending running at around 1-2% less per annum.

This correlation perhaps arises from a combination of the overall trends of global geopolitics, the UK’s decline as a ‘Great Power’ with a compensating spend on nuclear weapons, and the subsequent close ‘special relationship’ with the US.

UK and US spending trends were similar, but the UK spent less in both absolute and relative (to GDP) terms since it simply did not have the same cash resources available for defence.

Purchasing Polaris and then Trident nuclear missiles meant that a large part of the UK’s conventional defence spending could be offset by the threat of the nuclear deterrent. The global reach of submarine-launched ballistic missiles (SLBMs) meant that the defence of the realm could be pulled back closer to home.

Still, significant sums of money were still being invested in defence by the UK government… and that created the potential for some commercial abuse of ‘the system’.

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Consider BAE Systems. This private company was formed in 1999 by the merger of Marconi Electronic Systems with British Aerospace, creating a dominating arms manufacturer in the fields of aerospace, defence electronic systems and naval systems. Since 1999, turnover at BAE has increased from £8.9bn to £18.3bn ⁽⁴⁾ in 2019, when it made £1.5bn in profit.

The British American Security Information Council (BASIC) wrote to the House of Commons Select Committee on Defence in 2006 ⁽⁵⁾ saying they had estimated that 50% of all significant defence contracts went to BAE in 2005. This tends to support their assertion that competitive tendering for defence contracts is an illusion, and that BAE is essentially a monopoly-supplier.

Former Foreign Secretary Robin Cook said that “I came to learn that the chairman of BAE appeared to have the key to the garden door to No 10… I never knew No 10 to come up with any decision that would be incommoding to BAE.”

There had been earlier controversies over the ‘Westland Affair’, which saw private companies and the UK government squabbling over how the failing helicopter manufacturer should be rescued from financial failure.

Michael Heseltine’s (Secretary of State for Defence) first plan was to let the company fail so that GEC and BAE could salvage the viable parts of the business. His next plan was for a European consortium of aerospace manufacturers to invest in the company, but that was bidding against interest from the US  helicopter manufacturer Sikorsky, who were preferred by the Prime Minister, Mrs Thatcher ⁽⁶⁾. Domestic politics blended with UK-US international relations and private sector manufacturers’ needs in a messy affair that tainted Mrs Thatcher’s leadership, seeing both Heseltine and Leon Brittan (Trade and Industry Secretary) resign from the front bench.

Examples like these show how the problems of a potential military-industrial complex sit above party politics.

Meanwhile, the publicly-known failures in defence procurement have at times been profound:

• Blue Steel,
• Blue Streak,
• TSR-2,
• Type-45 destroyer turbine problems,
• lack of appropriate infantry kit during the Iraq War,
• problems with the Snatch Land Rover,
• … the list goes on and on.

These are examples that come to be known – there will be many hidden cases, like the Chevaline Penetration Aid Carrier (PAC) that was added to UK Polaris missiles at a cost of circa £935 million (by 1979), but hidden from Parliament/public knowledge until revealed by Francis Pym (Secretary of State for Defence) in 1980.

I was disappointed to find that the true nature of Cold War UK military procurement, and the appearance of any British military-industrial complex, is almost impossible to determine. Much of the information that would be needed is either shielded behind National Security interests (kept secret) or held as commercial secrets of the private companies involved. Historians have typically not paid attention to the political-economic aspects of UK defence procurement ⁽⁷⁾, and so the story has not been clearly told.

Perhaps the story will unfold for future generations as historians turn their eyes to this question and the veil of secrecy lifts with the passing of time.

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References

1 – “Farewell Radio and Television Address to the American People” – President Eisenhower, 17th January 1961 – https://www.fordlibrarymuseum.gov/library/document/0011/1683358.pdf

2 – The World Bank data – https://data.worldbank.org/indicator/MS.MIL.XPND.GD.ZS?locations=US&name_desc=true-US

3 – “Post-World War II debt reduction” – Office for Budget Responsibility – https://obr.uk/box/post-world-war-ii-debt-reduction/

4 – “BAE Systems” – https://en.wikipedia.org/wiki/BAE_Systems

5 – “Memorandum from British American Security Information Council (BASIC)” – House of Commons – https://publications.parliament.uk/pa/cm200506/cmselect/cmdfence/824/824we05.htm

6 – “Westland affair” – https://en.wikipedia.org/wiki/Westland_affair

7 – but see “The British military-industrial complex in history: the importance of political economy” – David Edgerton – The Economics of Peace and Security Journal, Vol 3 no. 1 (2008) – ISSN 1749-852X