Council sets out "vital nature" of UK defence industry

01 Sep 09

Today, the Defence Industries Council (DIC) has published two major reports setting out the vital nature of the defence industry for the United Kingdom in terms of security, jobs and engineering excellence. Brian Sims reports.

By Brian Sims

One of the reports, produced by Oxford Economics, reviews the crucial economic contribution made by the sector to national life while the second – published by the DIC itself and entitled ‘Securing Britain’s Future and Prosperity’ – examines the support given to the UK’s Armed Forces by the defence industry.

The DIC’s basic aim is not only to highlight the role that the defence and security sector fulfils for the UK, but also to emphasise the need to ensure its ongoing success.

The DIC consists of a number of defence industrialists and representatives of defence Trade Associations who provide advice to central Government on defence issues by way of the National Defence Industries Council, which is jointly chaired by the Secretary of State for Defence and the DIC itself.

Concern over the general public’s attitude

At the present time, the defence sector is concerned that the public no longer associates the country’s ability to defend itself with the capability to produce the equipment for our Armed Forces to fulfil this role. There is a risk that such an attitude overlooks the country’s manufacturing, engineering and service excellence, and how it’s harnessed to equip and support the Armed Forces.

That being the case, the main 20-page report also aims to “reconnect the public with the industry” and “re-engage them in discussing the wider issue of defence”.

Defence costs every UK citizen £11 per week – that’s equivalent to the cost of a quarter of a tank of petrol. However, despite this relatively modest budget - when compared to other Government departments or historical levels of defence spending – what it buys is vital to the country and its interests.

Furthermore, the defence and security sector reaches all corners of the economy and the country as a whole. For example, practically every Parliamentary constituency has some kind of connection with the defence and security industry.

Cutting defence projects on financial grounds

‘Securing Britain’s Future and Prosperity’ asserts that cutting defence projects on financial grounds alone would be counter-productive. Instead, these projects represent “a route out of recession”.

A study by Oxford Economics shows that the defence and security sectors generate more significant benefits to the country (in terms of jobs, returns to the Exchequer, impact on GDP, R&D investment and export potential) than many other sectors. Figures suggest that a £100 million investment in defence leads to a £227 million output.

The DIC also states that defence and security enables the UK’s Government to target economic decisions such that they’ll directly benefit the economy. In turn, this can also lead to an increased return on investment by way of exports.

Speaking about the reports, Mike Turner – current chairman of the Defence Industries Council – explained: “As the frailties of the British economy become more apparent, there has perhaps never been a better opportunity to harness the full potential of our world class defence and security industrial base, and then use it as one of the paths out of recession. In my view, this will not only provide skilled jobs but also promote economic growth, help to balance our economy and enhance our nation’s defence against growing threats whether they be on our own streets or throughout the world.”

Certainly, the current global uncertainty means that the country has to be prepared for all eventualities. “It’s vital that the UK maintains and nurtures a home-grown ability to stand up to all potential threats – be they conventional, nuclear or terrorist,” suggested Turner. “This can only be achieved by a UK-based defence industry that’s responsive to the nation’s needs.”

Benefits to the UK and Armed Forces

Turner stressed: “We are determined to highlight the benefits the industry and its 305,000 employees deliver to the UK and its Armed Forces. Contrary to the prevailing mood in Westminster, we firmly believe that now is the time to consider investing more for our future safety, not less.” One suspects there aren’t many security professionals in the UK who’d disagree with that statement.

“It’s also the time to re-connect the UK defence community with the British public, not just those in uniform but also those from industry who support them at home and on operations overseas,” asserted Turner. “Our aim is to highlight the efforts being made by the hardworking people employed in the defence and security sector and explain how it’s pioneering new, more cost-effective methods for procuring, maintaining and upgrading military equipment for the Armed Forces so that they can protect our country and our global economic interests.”

Here are some interesting facts and figures on the UK defence and security sector, which:

• consists of 9,000 companies of all sizes across the country

• has more small and medium-sized enterprises (SMEs) than France, Germany, Italy, Spain and Norway combined

• boasted a turnover of around £35 billion in 2008

• on average, exports £5 billion of services per year

• supplies 10% of all manufacturing jobs in Britain

• harbours 13 out of The Times’ Top 100 most sought-after graduate employers (2008), more than in IT, legal or retail

• accounts for 5.6% of Government spending (£38 billion), compared to 13% on education (£88 billion), 17.7% on healthcare (£119 billion) and 28% (£189 billion) on social protection

• generates 1.6 new jobs elsewhere in the economy for every new job created in the defence industry

• exports at the rate of four times more per worker than the automotive sector and is 15% more productive than the UK manufacturing average

• delivers better value for money over the life of defence equipment, and ensures that the country retains vital skills with which to support the British Armed Forces in the field

Prioritising the needs of the Armed Forces

In its official press statement issued this morning, the DIC also commented: “The UK operates in coalitions across the globe, but at times also needs to reserve its independence of action. To do so, we need a domestic defence industry that prioritises the needs of the UK Armed Forces and to avoid any supplier country preventing the UK from acting in its interests by withholding equipment.”

The statement continued: “The industry’s ability to supply and support the most advanced and effective equipment capable of standing up to and defeating evolving threats is therefore an essential part of UK military capability.”

Trade Association members of the DIC include Defence Manufacturers’ Association, Intellect, the Society of British Aerospace Companies and the British Naval Equipment Association. Membership is on a rotational basis, currently comprising senior executives from Babcock, BAE Systems, Chemring, Finmeccanica, Kembrey Wiring Systems, QinetiQ, Rolls Royce, Thales and Serco.