Buy American

Fallon p-8

This perfectly illustrates a dilemma that is both fiendishly complex and intractable at the same time; support your own defence industry and inevitably it means paying a premium because of smaller production volume, but buy everything from Uncle Sam and you end up being unable to reap the wider industrial and societal benefits of a broad-based sovereign defence industry.

There is research that says the economy benefits by buying from UK defence organisations to the tune of 20% to 40% but the problem is, the MoD only benefits indirectly. From a very narrow perspective, the MoD supporting the UK defence industry means it gets less capability for a given amount of money. Down that road, buying off the US defence industry shelf, although it may have short-term attractions and benefits, does no favours for the wider UK economy. The devil is usually in support contract details, and once you lose industrial independence you become the subject of a monopoly.

And so a balance has to be struck, a defence industrial/scientific strategy developed, and then that strategy supported and followed through.

And that is where it has all gone a bit tits up, the previous well intentioned and well thought through Defence Industrial Strategy (DIS) was great as a strategy, but as Winston Churchill said;

However beautiful the strategy, you should occasionally look at the results

What are the results;

  • Apache E
  • P-8A Poseidon

Multi-billion Pound contracts with no formal competition and very little UK defence industrial involvement, the latter even being exempted from the MoD’s own Single Source regulatory framework as defined by the Defence Reform Act. Perhaps both are unique situations not related to a defence industrial and scientific strategy, we know the background, but someone has linked them.

The Unite have weighed in today with;

Defence secretary Michael Fallon has serious questions to answer about the UK’s secretive procurement policy – the latest controversy being the decision to buy nine maritime patrol aircraft from America.

The deal to purchase the nine Boeing Poseidon P-8A  patrol aircraft, estimated to be worth $3.2bn, without competitive tendering, is expected to be signed at next month’s Farnborough air show (11-17 July).

Unite, the country’s largest union with about 70,000 members across the aerospace, defence, and shipbuilding industries, is raising serious concerns about the lack of ‘offset agreements’ in the proposed Boeing deal, work that could be earmarked for British defence firms to safeguard skilled jobs.

This flies in the face of chancellor George Osborne’s commitment to “unashamedly back … a British success story … like aerospace”.

The current imbroglio comes as a result of the coalition government’s ‘rash and short-sighted’ decision to scrap the Nimrod Maritime Patrol Aircraft, as part of the 2010 Strategic Defence and Security Review (SDSR) at a cost of £4bn to the taxpayer and the loss of 1,400 skilled jobs.

This left the UK as the only major maritime nation without the capability to patrol its own waters with modern reconnaissance aircraft.

The threat to the UK defence industry is further compounded by media reports that Boeing is in line to receive the order for 50 much-needed Apache helicopters, rather than Yeovil-based Agusta Westland, with the potential loss of 600 West Country jobs.

Unite said that Michael Fallon has major questions to answer about the massive tilt in procurement policy, which analysts say, could amount to £2.5bn of the annual Ministry of Defence equipment budget of £8bn being spent with US companies, with minimal UK content, by 2020.

Unite assistant general secretary for manufacturing, Tony Burke said: “At a time of increased international tension and security concerns, defence secretary Michael Fallon needs to come clean with the British public on the secretive nature of the UK’s arms procurement policy.

“As a first step, the government needs to ensure that a substantial amount of P-8A production work is undertaken in the UK, with all the support work to maintain these aircraft in the years ahead. Apparently, the P-8A will not be using UK weapons, which is a disgrace.

“The UK defence and aerospace sector is critical to maintaining thousands of skilled jobs in the UK and the economic prosperity of the communities where the factories are based.

“This proud tradition of manufacturing is critical in any renaissance of overall UK manufacturing in the decade ahead. It can’t just be squandered by the easy option of buying ‘off the shelf’ from America.

“The decision to scrap the new generation Nimrod aircraft as part of the SDSR has been shown to be rash and short-sighted.

“Michael Fallon needs to make a statement to MPs before any contracts are signed and before Parliament rises for the summer recess on 21 July on what is happening specifically with the replacement for Nimrod and also regarding the Apache helicopters’ order

“More generally, the defence secretary has to outline a strategy that will maintain defence manufacturing in the UK, safeguarding British expertise and jobs, as well as the maintenance contracts that go hand-in-hand with such complex pieces of technology.

“Chancellor George Osborne’s ‘march of the makers’ should not begin at Boeing’s headquarters in Seattle, but with well-respected British defence firms with deep roots across the UK.”

There is quite a lot to disagree with in that statement but it raises a broader point, an important point.

Whatever the background issues on Apache and P-8A, it is about time the MoD published a sustainable and unambiguous defence industrial strategy, rather than saying one thing and doing another.

Fallon p-8

Am not making a claim that any one approach is better than the other, and please, let’s not rehash the MRA4 issues because it was never going to come into service, but merely an appeal for clarity so industry and the public know where it is.

Let’s say one thing and actually do it?

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