Getting back in the game
The UK’s new conservative government is looking to back defence exports as part of its manufacturing and export strategy – designed to rebalance the UK economy – according to the recently appointed head of UKTI’s Defence and Security Organisation, Stephen Phipson.
Speaking at the Paris Air Show, Phipson noticeably radiated a new level of optimism, although that may have just been the result of turning up to a sunny Le Bourget – something that has been largely missing from recent shows.
The question is what does that really mean? Defence exports under the last coalition government could be said to have been somewhat lacklustre. Behind the scenes officials grumbled that beyond some prestige projects the coalition, and the Liberal Democrats in particular, were disinterested in supporting the defence industry abroad.
But Phipson says there has been a noticeable difference already since the UK electorate returned a Conservative government to power in May.
Freed from having to accommodate its Liberal Democrat partners, who were often queasy about defence sales, the new team at the defence and business ministries are now setting DSO some tough targets.
The government wants to see a doubling of defence exports over the life of the parliament. What that means in terms of the numbers will become clear on 30 June when the national statistics office releases its latest estimates on defence exports.
Big ticket items will therefore be important. Phipson remains optimistic that there could be more Eurofighter Typhoon sales for BAE Systems, although stiff competition from the Gripen and Rafale may put paid to those.
The campaign to get navies interested in the Type 26 frigate is also well under way. But with the rumoured unit price tag creeping up towards £800 million it could be out of the reach of most.
That will leave a lot of the grunt work to smaller, more agile players in the market. These second and third tier companies have a lot of different capabilities to offer. Phipson also reckons that cyber security will play an increasing part in the mix. There are some 3000 cyber security companies in the UK according to DSO and in the last year they signed contracts with foreign nations worth around £1.2 billion.
With a new cyber security strategy already in its second phase and a Strategic Defence and Security Review to complete before the end of the year there is a lot still in play.
For Phipson at least things are on the up as the UK prepares for its own defence industry jamboree in September. Good bye Le Bourget and hello the Excel centre!