In a hard-hitting report that fired a shot across the bows of policy advisers in the Ministry of Defence who have been leaning towards US arms manufacturers, the cross-party Commons Trade and Industry Committee recommended looking to Europe.
Coming hard on the heels of revelations about mounting cost over-runs on the Eurofighter joint-European project, and reports of the growing influence within the MoD of David Hart, the independent adviser to Michael Portillo, the Secretary of State for Defence, the committee's report causes an embarrassment for ministers.
"While we believe that nothing should be done to prevent UK firms from collaborating with US firms where this is mutually advantageous, we regard greater European collaboration as crucial to the survival of the defence industries of the UK and other European countries."
To this end, said the committee in its first study of UK defence procurement strategy: "We recommend that the UK Government takes a more prominent role in creating a European defence market involving greater collaboration at government and company levels in R & D [research and development], production and marketing, with the aim of eliminating inappropriate duplication and subsidies."
It was essential, concluded the MPs, that the UK is a full participant in a European armaments agency proposed by France and Germany.
With MoD arms buying at present in disarray - the ministry is seeking a successor to Dr Malcolm McIntosh, the head of defence procurement, who is taking up a new post in Australia - and under severe pressure following a series of damning reports from the National Audit Office, the public spending watchdog, the committee report poses severe problems for Mr Portillo.
Recommendations like "Given the potential savings from the promotion of the European defence market, we would wish to see a more ambitious approach . . ." cannot be music to the ears of the avowedly Euro-sceptic Mr Portillo.
The committee's concern was prompted by a fall in Government defence spending of 25 per cent over the past decade and pressure being put on UK suppliers by the MoD, anxious to get more value for money.
Against that, companies were also having to compete with a US industry which has seen a number of takeovers and alliances producing greater savings and economies of scale.
With the US becoming an ever more aggressive exporter and countries of the former Soviet Union anxious to sell weapons in return for hard currency there was a risk, MPs said, that the UK could lose markets and "as a result, significant defence manufacturing capacity and capabilities".
It was vital, the committee said, that the Government "adopt a more active policy to secure fair access for UK firms to overseas defence markets and the removal of subsidies to foreign defence manufacturers".
The Department of Trade and Industry should be given a greater role in procurement and, "as a matter of urgency", complete a joint study with the Department of Employmentinto what happens to redundant workers from the defence industry.
The findings of the inquiry, which should concentrate on the loss to Britain of highly skilled scientists and engineers, should be reported to the House of Commons, the committee added.Reuse content