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MOD Needs To Better Embrace Defence Exports By Howard Wheeldon, FRAeS, Wheeldon Strategic Advisory Ltd.

 

 

 

 

 

While it was good to see the Secretary of State for Defence Gavin Williamson confirming some of the actions that the MOD intends to take following on from recommendations made last year by former Defence Procurement Minister and Member of Parliament for Ludlow, Philip Dunne in the ‘Growing the Contribution of Defence to UK prosperity’ report I am far more concerned by what was missing from Mr. Williamson’s announcement than by what was actually said.

Searching through what was an interesting and well-rehearsed announcement heralding a package of measures aimed at driving productivity and innovation forward, while the statement that accompanied the announcement mentioned orders from the MOD to MBDA and a number of other contract awards I note that the sentence that should have said that the Government intends to provide a much greater level of assistance for defence exports was missing.

Covering a range of measures built around encouraging innovation Mr. Williamson said that “These announcements demonstrate the progress that we are making in our commitment to boost Defence’s contribution to national prosperity”. He went on to say that that “Our world-class defence sector operates at the very forefront of innovation, supporting 260,000 jobs and increasing economic growth throughout the UK” and that that “The MOD is playing a central role in the Government’s Modern Industrial Strategy and prosperity agenda, ensuring the UK remains a world-leader in defence technology in the years to come”.

No one is doubting the sincerity behind the prosperity based announcement but Mr. Williamson needs to remember that the majority of the 260,000 jobs that he mentions and of the continuing investment in the skills base takes place in the larger defence primes such as BAE Systems, Thales, Lockheed Martin, Rolls-Royce, Cobham, Meggitt and other who are engaged building naval ships, submarines and military aircraft such as Typhoon, Hawk and components for the F-35 Joint Strike Fighter, armoured vehicles and so on. They are the here and now and it is they that need the support from the UK Government that allows them to win big exports.

I absolutely agree that we must actively encourage new ideas, new technologies and innovation to be created right across the defence sector by small, medium and large companies alike. Productivity matters and we need to ensure that we are efficient and competitive as well. But whilst it is right that the MOD should encourage and support the creation of new technologies that can and will play a part in our longer term industry future the MOD also needs to increase its efforts in regard of the here and now – large collaborative product campaigns such as Typhoon and those that will hopefully follow it such as Team Tempest.      

I had hoped that from an air domain export perspective we might by now have been reaping more rewards from change that took place within the MOD in 2015. What occurred then was that following a significant amount of pressure from industry the government lead in export campaigns of hugely important campaigns such as the Typhoon combat jet together with complex weapons manufactured in the UK by MBDA and Raytheon and that bring in an average of around £8.5 billion to the UK economy annually was moved back to the MOD from what was then the Business Department and where it had effectively been since 2009.

The rationale for the switch back in control of Typhoon and complex weapons export campaigns from the Business Department was in my view rightly based on the belief that the MOD is best placed to offer unique benefits to would-be buyers of large air domain equipment – these including for instance, exchanges, advice, doctrine and training and also that the MOD would be better placed to enhance the long term capabilities and sustainability of the equipment with various international governments with whom we have long worked with in regard of defence exports. Another factor is that the MOD would be better placed to foster the need for increased interoperability of equipment sold. 

The problem didn’t exist until 2009 when Prime Minister Gordon Brown made the ridiculous decision to transfer responsibility of the highly successful Defence Export Services Organisation (DESO) away from the MOD to UK Trade and Industry (UKTI – now the Department for International Trade) where it had been since its foundation in 1965.

It is important to remember in this debate that as far as defence exports are concerned there is only ever one customer – governments. At the time of the reversal of responsibility of Typhon and complex weapons back to MOD responsibility in 2015 I note that the then Secretary of State for Defence, Michael Fallon said that “The government’s priority is to boost our export successes in what is an increasingly competitive marketplace”.  

Although it got off to a slow start it is right to point out that for a relatively short period of time 2017/18 the MOD really did appear to embrace the new role that it now had playing a leading role in Typhoon and complex weapon exports and in understanding that many would-be government purchasers of UK defence equipment required government to government arrangements. When initial problems had been sorted Peter Watkins and his team in the MOD are to be congratulated for the hard work and effort that they put in and that were certainly not without success.

I may be wrong of course but why is it that somehow I sense that the new leadership (Peter Watkins retired at the end of 2018) of MOD Exports Policy might be being driven away from supporting collaborative based campaigns and where, in a bid to win against aggressive international competition, a bold bidding process that can win business for the UK is required? I hope that I am wrong but the vibes that I am getting from within the MOD suggest that my fears may not be unfounded.

If I am correct and if my sense that an unfortunate renewed lack of appetite has appeared on the part of those responsible in the MOD for leadership and commitment in the quest to win large defence equipment export business for the UK this needs to be very quickly reversed. It is winning business such as this that keeps skilled personnel in jobs, affords the training of the next generation of people that we require in defence equipment manufacturing and that allows companies engaged to put large sums into research and development in order to create the innovation environment and prosperity agenda that we need.

Growing national prosperity on the back of what is still a very large UK defence industrial sector is a fine ambition and I am in no way attempting to knock it. But unless we look after the here and now and better support the products that we have got and that will continue to serve us well in the years ahead and that allow new concepts and ideas such as Team Tempest to be created there may not be a UK defence industry left to create the innovation and prosperity that we all desire. 

So, bottom line is that this is no time for the MOD and the Government to retrench a position back to policies of non-commitment and reduced effort to support campaigns and government to government arrangements that had typified the 2009 to 2015 period. Even allowing for the various number of changes in senior personnel at the MOD and through this perhaps, a shortage of necessary available intellect, my view is that unless the MOD get its act together very quickly I fear that it will be the US, France and Germany that will be the defence winners of the future. 

CHW (London –  18th March 2019)

Howard Wheeldon FRAeS 

Wheeldon Strategic Advisory Ltd,

M: +44 7710 779785

Skype: chwheeldon

hwheeldon@wheeldonstrategic.com

@AirSeaRescue  

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