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By Yvonne Headington

13 Sep 11. U.K. Defence Secretary Dr Liam Fox reiterated his intention to publish a list of ‘contracts of concern’, pending the outcome of a Major Projects Review Board meeting next week. Speaking at DSEi on 13th September, the Defence Secretary warned that he would name those contractors who fail to rectify problems of cost escalation and delays so that the stock market would be able to identify programmes at risk. “We do intend to use the market” he said.

Dr Fox also confirmed that export licence charges are being considered but that there would have to be a consultation process before any changes are introduced. It is understood that companies could be charged up to £300 for export licences and that this would impact on small and medium sized enterprises (SMEs) in particular. The proposal appears to undermine stated Government support for SMEs and the drive for an export-led economic recovery.

With exports worth £6,000m, UK industry achieved a 22% share of the global Defence market in 2010 while Security sector exports grew by 8% to £2,000m. Dr Fox singled out the importance of SMEs: “The British success story is not just about global prime contractors” he said, “it is about small businesses who are world leaders in cutting-edge technologies – they are the lifeblood of the industry”.

However, there is certainly a view within the current Administration that charging for export licences would potentially enhance the support provided by the UKTI’s Defence Sales Organisation (DSO). Companies would be encouraged to demand a higher quality of service and speedier licence processing.

The UK Defence sector sustains some 300,000 jobs across the UK, contributing £2,000m each year to the exchequer and some £35,000m to the wider economy. Dr Fox highlighted the additional role that Defence and Security exports play “in promoting our foreign policy objectives – building relationships and trust, sharing information and spreading values – these things cannot be measured in monetary terms on a balance sheet”.

But Dr Fox enigmatically warned that: “These are testing times – not just in security terms but in economic terms too”. While the Government is committed to a 1% real terms increase in the Defence equipment and support budget from 2015, difficult decisions have had to be made concerning “particular programmes that have implications for industry”.

BATTLESAPCE Comment: I wonder if Liam Fox will name a shame MoD Civil Servants who routinely cause huge cost overruns in purchasing the wrong sysyem, such as Scout with ther wrong gcanon, CTA, when there are two items, Warrior in many forms and ATK’s Busmsatre in service with many nations! He should take note that n MoD job lasts longer as long as the IPT is in place. If the items are bought off-the-shelf they have a shorter contrat gestation and thus shorter time for the IPT and thus shorter employment! He has to be very careful that he does not blame BAE Systems for most of this and find them leaving the UK for another Offshore Contractor to pick up from where they left off and jobs, cacapility and technology will be lost

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