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UK DEFENCE EXPORTS – STARTEGIC POLITICAL NARRATIVE URGENTLY REQUIRED By Howard Wheeldon, FRAeS, Wheeldon Strategic Advisory Ltd.

Rafale18 May 15. In proffering congratulations to the French government for the great success that the nation has recently enjoyed with awards for the Rafale fighter jet from Egypt, India and Qatar it is huge disappointing to all those involved in our own industry that in the two countries that Eurofighter Typhoon was the direct competitor (India and Qatar) it was we that lost out.

The French government has been extremely active in supporting its defence industry win large new orders for Rafale. In the onslaught to win orders internationally the French Government all but side-lined the Rafale manufacturer, Dassault. It is certainly true that the more corporatist nature of the French Government and their willingness to embrace direct government to government deals made with the senior political leaders of nations looking to buy defence equipment has made it very much easier for them to succeed. We must learn from this and we must in my view change our whole attitude and approach to defence and security sales.

One may be entitled to ask at this point what the British government had been doing to help our own defence industry secure deals for Typhoon in India and Qatar. The honest answer would have to be not very much. Even allowing for the fact that the British did not lead in the India sales campaign, this was down to the Germans, should not be taken to mean that British involvement from an industry perspective had not been extensive. But from a British Government perspective involvement was minimal. True, the recent General Election campaign and the perceived need for political correctness and the attempt to keep defence out of the election debate may well have been something of a deflection for the British Government but is no excuse.

Moreover, our failure to win the campaigns in India and Qatar is to me an object lesson that we need to significantly raise our game and revise the strategic position that we need to have to succeed in the Gulf States region and also in India and Malaysia too. UKTI DSO and our defence industry does a brilliant job of course and new initiatives such as the Defence Growth Partnership can only but help.

But the reality is that we need a new plan and above all else one that ensures we are not afraid to embrace government to government arrangements in future. In addition to the existing long standing relationships that we have within the Gulf region we must be far more ambitious and look to extend our influence across other Gulf States and through wider parts of the Asia.

Is it all too late? The answer is no provided we have the will to succeed. Indeed, I see the appointment of Philip Dunne as Minister of State for Defence Procurement by the Prime Minister a week ago and who has been given responsibility for delivering not only the Equipment Plan, Defence Equipment and Support (DE&S) reform, relations with the defence industry and defence exports as a catalyst for a potentially huge change in attitude.

First and foremost Mr. Dunne’s appointment into the more senior role should be seen as an opportunity to repair the damage done by what has I am afraid been tantamount to a British Government void in other large parts of Asia and the Gulf Region over the past ten years.

We must better use our strengths, accept the huge value that sovereign capability presents and brings to the UK economy in terms of engineering, skills and to the balance of trade, build on our already strong military to military relationships, embrace government to government deals with those that we consider allies and friends and finally, accept the need to better mix military capacity with the ability to project power.

That will I hope mean that the British Governments now works very much harder to engage and establish relationships with Governments abroad that would like to do business with us. It is for instance worth noting at this point that the French Defence Minister, Jean-Yves Le Drian, visited India and Qatar countless numbers of times over the past year. So too has the French President, Francois Hollande.

I am not at all sure how many times Secretary of State for Defence, Michael Fallon has visited India and Qatar recently or indeed, how many times Prime Minister David Cameron has visited either country but I’ll guess that the combined total would be less than the fingers on one hand.

So why are the British so reluctant to engage and why is it that we, unlike the French, do not appear to be getting message about the vital need and importance of Government supporting our own defence industry in the way that the French support there’s?

For the best part of a decade in terms of international defence sales there has, outside of our existing partnerships and arrangements, been an increasing level of reluctance by Whitehall to be involved in direct Government to Government deals. That is not to say that some Ministers have not worked extremely hard supporting industry of course and also sovereign capability and I commend the very excellent work done by Mr. Dunne already in his previous defence role over the past three years. I also commend the very valuable contribution made by Lord Astor of Hever in his position as immediate past Under Secretary of State and also, the Governments defence spokesman in the House of Lords.

But clearly it has not been enough. Our defence industry has no lack of ambition, drive and determination to succeed but what is too often missing is the Government putting what is best in our national interest first. These are issues that impact on a great many facets of all our daily lives of course and quite apart from defence and defence exports but it is the latter that occupies my reasoning today.

We remain unsure of where it is and what it is we wish to be in the world and yet our government is very quick to remind that it wants Britain to play an extensive role on the world stage. Sadly, sometimes in terms of how it is not always prepared to support sovereign capability, we fall well short of putting national interest first let alone achieving what may or may not be our strategic ambitions. Too often we allow policy to dictate strategy as opposed to the other way round. Most of all though it seems to me we lack strategic narrative and it is this above all else that I would like to see the new Government address.

If the new Conservative administration does take up the defence export challenge and if we are able soon to translate a new form of ‘strategic narrative’ that ends up producing a much greater level of real support from our Government to engage internationally in support of defence equipment sales, sovereign capability and also, in support of other industries too, then I feel certain that Britain will be perceived as being reliable and that we end up on the right road to real and sustainable long term success.

I have often used the term ‘with a little bit of hard work and effort what a wonderful place this could be’ and I mean just that. To get to that point we must reverse the reluctance of Government to put more input into supporting defence exports in just the same way that the French Government places so much importance supporting their own industry. We must do the same and move away from the ridiculous political correctness and fear of being challenged internally and that too often in the past has appeared to be the policy of Whitehall.

The bottom line in terms of support for the defence industry is that it requires the Secretary of State for Defence, the Foreign Secretary and most importantly, the Prime Minister to make very regular visits not only to countries that we have secured interests and long established relationships but to other friendly nations as well.

I repeat, we must move away from the dangerous and unnecessary stance of political correctness that has grown up in recent years to one that more actively and openly engages government working in support of sovereign capability and defence exports meaning that those that govern must spend far more time visiting countries that could in future be customers for our fantastic range of defence equipment and products. Not once, not twice but as many times as takes to complete the mission.

We must also make far better use of what we already have in the form of the Royal Air Force and Royal Navy to continue actively supporting defence sales and we must also listen to our potential customer and recognise better what it is that they want and then say, yes we can deliver as opposed to the old habit of telling them only what we think we can provide. That means if the purchasing governments want us to, for instance, train their people to fly jets they might buy from us the answer must always be yes and if that requires more investment and a higher degree of risk then so be it.

Of course we must never stray away from agreements that we have signed up to and ensure that Britain continues to adopt the most rigid policy process in the world that ensures we only ever sell defence product to responsible governments.

Given knowledge that both India and Qatar had both considered Typhoon capability to be extremely impressive it is right that we should now attempt to analyse in a positive frame of mind why it is that Rafale won and Typhoon failed. Was it about capability perhaps and that the four nation partnership had delayed for far too long agreeing to invest in Captor E-Scan radar and upgraded missile delivery systems? Possibly it had some bearing but on the other hand, unlikely as it was well known by the nations involved that agreements by the four nation governments to do all required work that will lead to Typhoon capability being the best available had already been signed.

If not capability was it perhaps price? Possible of course but given the dire state of the French economy common sense suggests that it would make very little sense to sell the Rafale jets to either country at a huge loss. I would contest that the reason that France has been so successful in selling Rafale to Egypt, India and Qatar is that when it comes to competing abroad the French Government provides every inch of support that it can to its industry.

When it comes to selling large pieces of defence equipment to countries abroad there is only ever one customer – the government of the nation concerned. Not only do governments looking to buy equipment prefer to deal directly with the government of the nation who are manufacturing the equipment or own the IP but they almost always like to deal with their ministerial equals.

Back in 2010 it was David Cameron who visited India and sealed the final agreement with the Indian Government on an order for BAE Systems Hawk aircraft. In common with the wish of the political leaders of the buying country to deal almost exclusively with their opposite number here in Britain it is also likely that large defence deals will be require to be done on the basis of government to government deals and the defence company concerned being the prime contractor within this. That, for instance, has been the very satisfactory position that has existed for the past 50 years in the various defence agreement that Britain has signed with the Kingdom of Saudi Arabia. And it is just what the French Government have agreed in the recent deals to sell Rafale jets to Egypt, India and Qatar.

Government to Government agreements will not only decide whether the capability being acquired may need to be built in-country but also ‘offset’ requirements. They will often include agreements made by the nation selling equipment to investment in-country as well or to supply and provide support to the buying nation of other requirements such as infrastructure and energy equipment. France is believed to have agreed to undertake to provide various other means of infrastructure and energy support in India although, if so, no details have yet been announced. There is nothing at all wrong with this and the point here is that while the French Government continues to do all that it can to support its defence industry win export orders the British Government needs to get its act together and think about the bigger picture of strategic influence.

In an example of what I mean I note that when speaking three days after India had confirmed on April 10th an order for 36 Rafale fighter jets its Defence Minister, Manohar Parrikar said that future procurement of the jet will also be through the Government to Government route.

The announcement of the purchase by India was followed a month later by news that in another Government to Government deal the French had been awarded a contract to supply 24 Rafale fighter jets to the Gulf State of Qatar. The move by Qatar completed an excellent couple of months for the French Government which earlier had agreed a deal to sell 24 Rafale aircraft to Egypt.

All credit to French President Francois Hollande and Defence Minister Jean-Yves Le Drian. Though. Both made countless numbers of visits to the various countries in question and they did so with a freedom to operate and negotiate on a government to government basis that is the envy of competitors.

Unlike the British it seems that the French have no hang-ups in who they are dealing with provided that they are not breaching international agreements. Political correctness is not something that worries the French Government – to them it is what is in the best interests of France and French national interest that matters. High time we took a leaf out of the French book and put what’s best for Britain first. High time that we had a new strategic narrative on defence exports.

CHW (London 18th May 2015)

Howard Wheeldon FRAeS

hwheeldon@wheeldonstrategic.com

Tel: 07710 779785               

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