But it has failed to leverage this enormous purchasing power to its advantage. As the only customer of defence equipment, the government is in a powerful position to dictate the terms of trade. Likewise, these private interests are completely hooked on a steady flow of taxpayer funds for their very existence. ![]() The harsh reality is that, no department of state in Whitehall is as dependent on the private sector, as is the Ministry of Defence. ![]() Consequently, the government has become reliant on the private sector for all its military equipment needs, including its subsequent upkeep, when in-service with the user. This is because the means of defence production, distribution and exchange is now exclusively in the hands of private interests, that is to say, the State is entirely dependent on for-profit organisations for the design, development, manufacture and delivery of new military equipment to the Armed Forces. When it comes to procuring defence equipment for the Armed Forces, the government has no option but to rely on the private sector, because it no longer has the ability to produce military equipment – as it used to do. What has been clear for many years is that public subsidies handed out to defence equipment manufacturers over several decades is the reason why they have failed so miserably, to deliver equipment to the Armed Forces which is fit for purpose, adequately sustained in-service and constitutes value for money through-life. Consider, for a moment, the market in defence equipment for which the government is the only customer. The problem with government markets is the endless subsidies handed-out to incumbent businesses, which insulates them from being usurped by agile and innovative SMEs and start-ups, thereby preventing wealth being spread about. It is fair to say that the State is the lender of last resort in normal times, but during this Covid-19 pandemic, it has become the first port of call for zombie businesses on the hunt for easy grants, loans and subsidies.
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