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Of 50 Years of DESO By Howard Wheeldon, FRAeS, Wheeldon Strategic Advisory Ltd.

mod26 Oct 16. Interestingly, not only is it seventy years this year since, having been vacated by the Royal Air Force, what we know today as Heathrow opened as London Airport but fifty years now since the airport was officially renamed Heathrow.

And talking of anniversaries, last evening at Lancaster House along with many from industry, military and past and present government, I had the great pleasure of attending the fiftieth anniversary celebration of what was, for the first forty-two years of its existence, known originally as the Defence Sales Organisation, later the Defence Export Services Organisation (DESO) and from 2008 to 2016 the UKTI Defence and Security Organisations and today, the Department of International Trade Defence & Security Organisation.

I have known, worked with and very much respected the work that this extremely valuable defence and security export support group have done over many decades now and I continue to provide whatever support that I can. Working together with industry, DIT DSO continues to bring huge benefits to the UK economy and long may that be so. With the support of the UK military as well as Government, DSO is perhaps the best and most successful industry partnership that I have personally ever known and had the pleasure of working with. Today, DSO works increasingly with the Defence Growth Partnership and to an extent with the relatively newly formed MOD Defence Export Support Group that have responsibility for export sales of certain large air platforms such as Typhoon and also for complex weapons.

Some years ago I said that agreeing to the formation of DESO was the best thing that Denis Healey ever did and I meant every word of it.

For the record, the Defence Sales Organisation (DSO) and whose name was changed to Defence Export Sales organisation in 1985 was set up in 1966 as part of a wider re-organisation scheme by the newly created Ministry of Defence (MoD) reorganisation. Specifically, it was felt by industry and government that UK companies were losing out to better supported foreign competition and that this would have negative effects on UK employment and the ‘Defence Industrial Base’. Early concern on this issue had begun to emerge in the Plowden Report of 1964/5 and it was already clear by then that export sales of UK made military equipment was declining as competition increased. It wasn’t just defence exports either as the UK share of the world aircraft market had fallen from 32% in 1959 to just 14% by 1964.

Industry had been raising the issue that more government support was required particularly as most if not all large defence sales are in effect government to government arrangement. Following Plowden Minister of Defence, Denis Healey was concerned enough in 1965 to commission Donald Stokes (later Sir Donald Stokes and for a time, chairman of British Leyland) to look at the issue and produce a report. The result of this formed an excellent basis for modernising the way in which government would support UK companies engaged in defence export sales. At its heart the Stokes Report recommended the creation of ‘a small yet very high powered central defence export sales support organisation within the MoD’.

Whilst very much smaller today than it was back in the 1990’s the Department of Trade Defence and Security Organisation is today headed by Stephen Phipson. As the 12th in a long line of DSO ‘Heads’ to have either been seconded or directly employed from industry Phipson has his work cut out to increase UK defence and security exports. Over the years the approach to managing DSO has changed and it would be wrong to ignore that ‘decision’ by Gordon Brown to moving the organisation away from direct MOD responsibility in 2008 caused more than a degree of angst. Nevertheless, since the Coalition Government formed the Defence Growth Partnership and which, working alongside industry and DSO, is already proving beneficial, noticeable progress in the UK’s approach to defence and security sales is being made.

Clearly, given the large number of jobs employed in the UK defence industrial sector and the overall benefit that the defence industrial base provides the UK economy in terms of important skills retention, innovation benefits to the Exchequer it is hugely important that the Government does all that it can to support defence and security exports.

The UK remains in the top three global exporters of defence equipment and it does so very responsibly. Trade in defence goods is of course very ‘globalised’ today which means that almost all countries will need to procure at least some of their legitimate capability needs from overseas suppliers. As I have said, the UK Government takes its export responsibilities very seriously and operates one of the most rigorous arms export control regimes in the world. Equally important though is that we should operate in absolute accordance with UN Charter, Article 51, which affirms every country’s right to defend itself.

In his address to those attending the excellent 50th anniversary celebration at Lancaster House last evening, Secretary of State for International Trade, the Rt. Hon Dr. Liam Fox reaffirmed the Government commitment to supporting UK defence exports. Undoubtedly these are more troubled times and with thoughts increasingly turning to a world post Brexit it remains imperative that we continue to support what we already have established here in the UK and that are considered our great strengths. Indeed, it is equally important that we grow them. Hopefully, the Governments Innovation Agenda which I will be writing on over the next week will provide further benefits as well.

Here’s to the next 50 years of DESO/DSO!

 

CHW (London (26th October 2016)

Howard Wheeldon FRAeS

hwheeldon@wheeldonstrategic.com

Tel: 07710-779785

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