The US is clearly the world ‘s strongest defence market, with the level of US government spend in research and development being particularly significant. – Mike Turner, Chief Executive BAE Systems.
Manufacturing union Amicus says that UK companies are at a disadvantage in bidding for UK defence contracts because European defence competitors are at least partly owned by the state.
To back up its claim, the union highlights the fact that Italian defence company, Finmeccanica’s, attempt to underbid BAE Systems to supply the UK’s Hawk Trainer Jet contract was ‘buoyed’ by the 37% stake the Italian government have in the company.
And so it’s now calling on MPs to sign an Early Day Motion to put pressure on the government to align its defence procurement policy with the Defence Industrial Policy which is designed to protect and support highly paid and highly skilled UK defence jobs.
But will that work? It hasn’t so far. The Defence Industrial Policy was launched in October 2002, after 18 months of discussion between the MOD, DTI and industry. It covered a broad range of topics such as providing equipment at best value for money, treating all defence suppliers in the UK fairly regardless of ownership and sustain an environment that enhances competitiveness of defence industry. That sort of stuff.
Sadly, after some 20 months of the policy being launched, the Defence Manufacturers Association concluded that ‘no identifiable, tangible benefits have been delivered to date’, acknowledging that the Policy was ‘not expected to lead to significant changes in the short term’. The Defence Industries Council noted that ‘it is hard to point to examples of positive application of the Policy.’
So more government policy will most likely do more of the same. Is there another solution? John Wall, Amicus’ National Officer for Defence, thinks that we should be spending more money here in the UK on defence to shore up our industries. According government figures, the MoD has received only a 3% increase since 1997, compared to a 50% increase on health spending and a 60% increase for the Home Office.
And so, “we have literally thousands of UK defence sector jobs, such as those at GKN Westland in the South West, that are hanging in the balance as they wait for the award of a UK contract,” he complains.
But whose fault is that? If there’s no money for bombs here in the UK, then why not go to the US? That’s certainly what those forward thinking companies BAE Systems and Qinetiq are doing. Because they have woken up to the blindingly obvious fact that the Separatists from Scrooby have got a lot more money to shell out on their shells than we do in the UK. And they are aligning their businesses to get in on the action.
The US Department of Defense is a much more important customer for these companies than the UK MOD could ever be. So instead of waiting around for the UK Government to decide whether it wants to spend a few pennies on a couple of silly helicopters, these companies have done the decent capitalist thing and run off to where the streets are paved with multi-million dollar weapons contracts. Setting an admirable example to those companies still ‘struggling’ here in the UK.