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DEFENCE INDUSTRIAL STRATEGY

DEFENCE INDUSTRIAL STRATEGY – THE GRADUAL ERROSION OF THE U.K. MANUFACTURING BASE

15 Dec 05. BATTELSPACE has long reported on its concerns that this Government is bent on the gradual erosion of the defence industrial manufacturing base and thus the UK’s ability to expert arms and indeed wage war without European involvement.

Launching the Defence Industrial Strategy (DIS), John Reid said:

“The Defence Industrial Strategy I am publishing today is as important for the defence industry as the strategic defence review was for the Armed Forces.

“It is driven by our military imperative to give our Armed Forces the battle winning kit they need.

“In short today we are telling industry what we think we will need, what will be strategic to the UK, where we will be spending taxpayer’s money and how we will engage with the market.

“This Strategy provides outstanding clarity for industry to plan for a sustainable healthy future. “This will enable industry to deliver best value for money to us as a smart customer and ensure taxpayer’s money is wisely used.

“This strategy means we will maintain the strategic skills we need for the nation and invest in the future of defence in areas like Uninhabited Aerial Vehicles.

“We need the skills to fight the next war not the last one. Skills and capabilities needed by this country change over time – we do not need sword or bow and arrow factories to win wars any longer. The skills we needed in the past were rope making, sail making and signal flags.

“Now we need the high value, technological and systems engineering skills required to enable us to ensure that our current in-service fleets can be maintained, supported and upgraded and that we have in the UK the ability to build and design the sorts of equipment that we require now, and in the future.

John Reid also set out the timing of the DIS:

“The Government is in the middle of a major programme of transformation and is investing heavily in new ships (including Type 45 and the future Carrier), aircraft (Typhoon, Joint Combat Aircraft) and armoured fighting vehicles (FRES). This massive programme of work means now is the best time to look beyond that period to the future. We must plan now in times of plenty for many years away when orders may be fewer.

BATTLESPACE Editor, Julian Nettlefold, asked this question of Defence Secretary John Reid yesterday and he denied, supported by Procurement Minister, Lord Drayson that this was not the case.

“We are doing this at a time of plenty,” Reid told his audience, “So that the industry can have time to adjust to the new strategy over the next ten years.” A cynic would suggest that, given the huge numbers of Labour votes in the defence and shipbuilding industry, to make an immediate change would cause an uproar from the Unions and the loss of millions of Labour votes, particularly in Scotland before the next General Election. So the Government has assured that the regard to industry of a huge chunk of money will ensure that the unions remain on side at the same time as allowing Programmes such as CVF and FRES to slip quietly to the right, ready for any European policies to be implemented. (See: SCOTLAND GETS A CVF LIFELINE)

But, reading between the liens in the submissions, the Government will support existing procurements and streamline a number of pending issues such as CVF and FRES, but after that the U.K. will become a ‘Support-based’ defence industry with BAE Systems Support Division at its core. Where this leaves such firms as Thales who has invested over £2bn in the U.K.’s infrastructure is unclear. It is likely that they will move the technology purchased from the U.K. back to France. What is clear however is that this move signals a move towards European centralised Procurement of systems built in or outside Europe, with the U.K. forming part of that process. Lord Drayson stressed the need for ‘key technology’ and IPR to remain in the U.K. in order that systems in

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