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The Sovereign Capability Debate In Defence By Howard Wheeldon, FRAeS, Wheeldon Strategic Advisory Ltd.

I will not at this stage comment on the specific issue that led to my writing this piece today – the rather extraordinary ‘Times’ editorial yesterday under the heading ‘’Tank Trap’ but I have taken the view that it would be wrong of me to ignore the underlying aspects of the editorial piece itself.

The specific section of the ‘Times’ editorial comment that grabbed my attention yesterday can be found in the very last paragraph which read:

“The British may have invented the tank, but for much of the past century the Germans have built better ones. In a world in which the French supply a significant amount of Britain’s electricity, the Chinese build Britain’s nuclear power stations and Russia provides much of Britain’s coal, there should be no barrier to adding German-made tanks to Britain’s order of battle. What matters is what works best and costs least”.

So, where do I stand? I take particular issue with the last sentence above because I for one do not and have never believed that what works best is what costs least.

I rather suspect that had the MOD decided to acquire the 100 to 400 ‘second hand’ tanks from Germany that the separate ‘Times’ article written by Deborah Haynes refers as opposed to choosing as it sensibly has BAE Systems and Rheinmetall to be the preferred bidders for the assessment phase of the Vickers built Challenger 2 Life Extension Programme, the press would actually have gone into absolute uproar and rightly so in my view.

I make no argument had the issue been about buying ‘new’ tanks then German tanks are up with the best. Indeed, I have nothing but praise for German made tanks or German made anything come to that – a nation of brilliant engineers that they are. But why on earth would we in Britain even consider the idea of buying second-hand German made tanks, adding in the huge additional cost, risk and uncertainty of training Army personnel how to use them and importantly, learn how to maintain them with all the additional associated costs required of new safety systems, guidelines and other requirements when refurbishing a tank which, albeit following a far from easy entry into service back in the early nineties, is very well known and much loved by the Tank Regiment amongst others, that still does the job and that although long overdue investment and refurbishment, is well proven in service?

This tank issue and the paragraph quoted above from the ‘Times’ editorial fuels a wider debate on sovereign capability in relation to defence equipment, a subject that my own view is rather more simple and straightforward than some would make out. Firstly, I take the view that if we are able to design and manufacture defence equipment that we ourselves require for our armed forces in the UK and where there is also a potential for export that provided we own the Intellectual Property (IP) British companies be they subsidiaries of US or French companies or wholly British owned, should always be favoured over others that may offer a price that is less.

Secondly, I take the view that if we are no longer able to design and manufacture a piece of equipment capability that we require and that we as a nation are not prepared to invest in its design and manufacture and are not prepared to take any consequent risk, then we must acquire that capability from whoever can best provide it.

Ships, submarines and complex weapons apart where there are specific national interest reason for the UK to maintain research and development, design and manufacturing facilities, recent examples of where the MOD and British companies, be these subsidiaries of US and other foreign nations defence companies or wholly UK owned, have been prepared to invest in large projects are those such as the AJAX Armoured Fighting Vehicle capability planned for the British Army. Here, for example, Lockheed Martin at Ampthill, Bedfordshire are building the Ajax turret and the same company is also responsible for the hugely important Warrior upgrade programme as well. Meggitt Defense Systems, Thales, Rolls-Royce and other British companies are also engaged on Ajax.

But what happens when we need capability that do we no longer have the ability or willingness to design and manufacture ourselves for whatever reason including cost, that we do not own any specific IP and have no desire to take on necessary programme risk? Because we need the capability and because these days we also need to know that it is already ‘proven in service’ we must acquire that capability from abroad.

The recent purchase of 9 x Boeing P-8 Poseidon Maritime Patrol Aircraft and 50 Apache Attack Helicopters also from Boeing together with purchases of Airbus Voyager transport and refuelling aircraft for the Royal Air Force and Chinook Helicopters are very good examples of what is commonly termed these days, as buy-off-the-shelf capability from defence companies abroad. There is nothing wrong with this at all provided that we insure that we fight for the best deal possible. Remember too that buying new equipment capability from abroad almost always brings in investment from the selling company to support the MRO and training. I doubt that would be the case if second hand equipment was purchased.

There are literally thousands of British companies – small, medium and large – making and exporting sophisticated defence components, communications systems, radar and masses of other technology. For example and as if anyone needed reminding, as a Tier One partner in the Lockheed Martin F-35 Lightning ll, the UK in terms of manufacturing and MRO and particularly in the form of BAE Systems, Rolls-Royce, Northrop Grumman, Lockheed Martin UK itself, along with countless dozens of other British based companies, are all heavily involved in what is after all the world’s largest military aircraft programme.

Many British based companies, including BAE Systems, Rolls Royce, Thales, Selex, Martin-Baker are all heavily involved in the manufacture of the Eurofighter Typhoon, the BAE Hawk T2 Advanced Trainer jet plus of course, other large and very worthy airpower and maritime related projects. Raytheon and MBDA provide the bulk of the UK’s complex weapons requirement, along with Thales Air Defence in Belfast and they are all engaged in exports too. GKN Aerospace has grown substantially over the past ten years and its UK aerospace and defence subsidiaries play an important part in UK manufacturing. Neither, whilst I am on the subject, should I ignore the huge amount of support services provided by companies such as Babcock International and the excellent support that companies such as Marshall Aerospace and Defence Group provides in respect of maintenance, modification and design and indeed, manufacturing exports.

The choice is ours of course and what is of greatest importance is that whatever we do should be in our national interest. There may well be a better case to be made out that says we should invest more in our own future and I don’t disagree with that. We do need to make more of what we consume, perhaps we should not be allowing a foreign country such as China to finance and build a nuclear power station here and if we want coal, as we are sitting on so much, perhaps even if the cost of doing so is very much higher than buying from Russia, we should start mining more hear. These are all choices we have to make and we cannot completely avoid the issue of what’s best in terms of affordability. Neither of course can we afford to ignore the need to ensure we maintain sufficient skills and that we not allow ourselves to find that we no longer have the ability to design and manufacture anything that the nation needs as a priority.

We cannot turn the clock back and neither, because of the systems of finance and investment and failure to convince investors of the need to invest long terms as opposed to always looking for short term pay back convince companies to take on additional risk. As long as they have to keep looking over their shoulders at shareholders there will be little appetite to take on additional risk.

We do thankfully still have a lots of specialist engineering and manufacturing in the UK and we still have important industries such as aerospace, defence, pharmaceutical and many others. We still manufacture cars and big components and we have great companies doing this such as Jaguar Land Rover, GKN and JCB amongst others. We have a myriad of brilliant small and medium sized companies but sadly we have lost far too much of the necessary supply chain and we have rather a lot of assembly companies relying on imported parts.

The Growth partners, engineering and other academies set up with help from the UK government are all doing a great job in supporting their respective industries and there is no doubt that we need to invest more in research and development and in defence, support superb organisations such as DSTL and QinetiQ.

Sovereign capability is a choice. Governments that do not pour so much money into health and welfare as we have chosen to do allow themselves a far better choice of what manufacturing and design capability must be retained in their national interest. There is of course the capacity argument too meaning that for example, in defence there must be a sufficient level of sustainable demand to make it worthwhile. If there isn’t going to be that then best to buy from abroad.

CHW (London 5th January 2017)

Howard Wheeldon FRAeS

Wheeldon Strategic Advisory Ltd,

M: +44 7710 779785

Skype: chwheeldon




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