Over the past 10 weeks as a shadow defence minister I’ve met with people who work in highly skilled jobs in the defence industry, visited factories and science parks, spoken with apprentices and graduates whose careers and futures depend on this industry continuing to develop and grow in this country and troops who depend on equipment to allow them to do the job that they signed up for.
The defence industry, including a very substantial supply chain mostly comprising small and medium enterprises, employs some 300,000 people and was responsible for 43 per cent of the UK’s total export revenues in 2010. The government has invested significantly, over many years, in developing new technology and equipment in the defence industry with the result that many British based firms now hold significant intellectual property in which the UK has a strategic and economic interest.
It is for that reason that the forthcoming defence procurement white paper has the potential to make a real impact on the British economy in the coming years. Following on from a thorough report from Bernard Gray under the last government, this white paper was originally due in the spring but now until we’re within sight of Christmas and the government, well into its second year, still has no policy.
Whenever it comes, there will be a number of key tests to see whether this paper is fit for purpose: not only that it ensures that our service men and women have equipment of the quality that they deserve when they need it but also whether it offers active support to British jobs and manufacturing – from the big firms to the SMEs which make up the supply chain as it failed to do with Bombardier in Derby. Another test will be whether the government can build on Bernard Gray’s work for the last government and that of the Public Accounts Committee in pushing the MoD to deliver better value for money for taxpayers.
For both strategic and economic reasons, the review panel chaired by Admiral Lord West, which submitted a report to Labour’s defence policy review, highlighted the importance of protecting sovereign capabilities. That is to say: maintaining British industries capable of delivering systems and products of national importance as part of a wider economic and industrial strategy.
It is important that the government sets out, clearly, what it believes should be counted as a sovereign capability, where it believes there is an economic and a strategic case for maintaining that capability; where it doesn’t, it must set out the case why not.
Our defence budget has to take account of the increasing array of tasks that we now expect our armed forces to perform – many additional to their role 10 or 20 years ago – stabilisation of fragile states, anti-piracy, international aid and development. With that in mind we will also look to see whether the changes announced to procurement in the Autumn Statement will change the government’s approach to the Gray report’s proposal for a ten year procurement plan for defence which the Tories welcomed in opposition.
In the light of fiscal constraints on the MoD budget, increasing efficiency is vital. The report to Labour’s policy review also came forward with some strong and challenging proposals to safeguard taxpayers’ money by limiting the risk of overspends and project overruns. A key test for the government will be whether they share Labour’s ambitions in this area and, if so, how will their proposals match up?
The cost of failing to support British industry and manufacturing will be borne out in the growth figures and on the unemployment rolls. We’re already starting to see what happens when the government turns its back on industry both at Bombardier in Derby and with BAe in Humberside and the north-west. The government is keen on the phrase ‘export-led recovery’ with an effective defence procurement policy, which supports industry; they have the opportunity to make real that rhetoric.
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Alison Seabeck is shadow minister for defence equipment, support and technology
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