"........what about licence production of the right kit though? Do we have the clout to buy and build from abroad, or is it simply politics that keep us struggling with inadequate kit?"
The only significant licensing arrangement I've had dealings with is Sea King, from Sikorsky. (Insisted on long ago, and paid for, by MoD. Politics). God, we suffered. Nothing wrong with the aircraft itself, but we were tied to expensive, long lead, spares. We were a minor user, so bottom of the food chain every time. Could never predict when spares would arrive, and to what standard - regardless of what contracts said. Cost a fortune, and eventually we bought it out (cheaply, as luck would have it).
In my experience, the real problem with buying from abroad is the procurer (usually DPA in the first instance) seldom learns from experience to set up UK based support facilities in advance. Time and again that has been the solution to support problems. In avionics especially, by all means buy abroad but never, never, agree to anything being supported abroad. Your turn round times go out the window. Never mind the prime equipment, the first thing in the contract is a maintained set of secondary masters and an agreement that we appoint a UK Design Custodian. Works every time. (Ask your typical MoD PM to explain that one. Most wouldn't know what it means). That's why a little company in Gateshead called Joyce Loebl are so highly thought of. They specialise in supporting US-built kit for us, faster, better, more cheaply. (Heard that slogan somewhere before). Never once let me down in nearly 30 years. Neither have Westlands actually.
We used to have to submit a "Crown Eagle" to explain why we were not recommending French companies in the tender list. I once wrote "Because the only one who could possibly do it is crap, and WILL let us down". Produced historical evidence, and the contract went to the UK company I recommended, who delivered on time. As a result, RN SK6s actually flew for most of the 90s. (You'll never know how close you were to not!). The source of the problem? A single component bought from the US. The company (Westinghouse) pulled the plug with no warning. Low volume, didn't want to know. The UK company did the business - and gained much more because of their ingenuity.
Yes, I agree there are UK companies with poor track records, but MoD PMs used to have the authority to deal with them. That is, don't give them contracts if they let you down more than once. (That doesn't mean to say Joe Bloggs' with 20 factories is blacklisted because one factory didn't deliver - just that one factory, or perhaps that one product range. More often than not they'd ask what we thought they could do to improve, they'd implement change, and it's back on the list). Upset industry nowadays and it's disciplinary action. I'd say most companies deliver what is specified and what we are prepared to pay for. If you specify low, and don't have money - well that's not entirely their fault.