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Westminster News:


UK and France agree closer defence partnership



The 2018 UK-France summit held at the Royal Military Academy Sandhurst this week saw a range of new defence cooperation agreements between the two nations announced. Most significantly from a business perspective, there was agreement between the UK and France on the importance of the ability of UK industry to continue to be able to engage in European defence research and capability development programmes post Brexit. This is welcome news for those businesses already engaged in such projects and will provide reassurance that continued UK participation can be expected. While UK participation will still rely on the consent of other European participants, France is the singular most influential European ally on defence matters and their voice in support will be critical.


In return, President Macron garnered UK support for developing the European Intervention Initiative (EII), proposed by him in September last year as “common intervention force” which would enable European countries “to better integrate our armed forces at every stage”. Indications that the UK will participate is a significant boost for Mr Macron, who has concluded that, for his initiative to succeed, it requires the participation of Europe’s single biggest spender on defence, Brexit seemingly being no blocker to this. Advocates in both Paris and London will highlight the potential financial benefits of closer military co-operation between two countries facing similarly challenging constraints in terms of delivering their ambitions for defence within existing budgets. Nevertheless, UK has long maintained a policy of ambivalence to European and EU initiatives that look like steps towards the creation of a pan-European military force, and the agreement to ‘support the development’ of the EII, including caveats that this does not duplicate NATO functions, is short of full commitment. The UK will want to ensure that this does not cut across the explicitly bilateral terms of the 2011 Lancaster House Treaty, which proposed a Anglo-French combined joint expeditionary force (which has yet to come to fruition), as well as a programme of bilateral equipment collaboration.


Turkey, UK officials meet over status of Turkish jet program


A British delegation including International Trade Secretary Liam Fox and Rolls-Royce CEO Warren East visited Turkey this week to discuss collaborative opportunities on the TF-X programme, the future Turkish indigenous fighter jet.

The delegation met with Turkish Prime Minister Binali Yildirim, chief procurement officer Ismail Demir, and Temel Kotil, CEO of Turkish Aerospace Industries (TAI), the prime local contractor for the programme. A statement from the Turkish prime minister’s office said that the Turkish and British teams agreed to produce the first prototype of the TF-X in 2023. In January 2017, Britain and Turkey signed a deal worth more than £100 million (U.S. $137 million) to develop TF-X, involving TAI and BAE Systems. And in May last year Rolls-Royce announced it was partnering with Turkish industrial group Kale to develop a potential engine solution. The latest meeting comes as Turkey prepares to select the preferred power unit. In addition to Rolls-Royce, Tusas Engine Industries, TAI’s sister company, have expressed an interest.


Parliamentary Questions:


  • The Secretary of State for Defence, Gavin Williamson, took oral questions in the House of Commons on Monday, which included a debate on support to the UK defence industry, prompted by a question regarding the steps being taken by MOD to increase defence exports and protect UK jobs. Mr Williamson opened by asserting that the Strategic Defence and Security Review created a national security objective to promote our prosperity, supporting a thriving and competitive defence sector. Drawing attention to both the national shipbuilding strategy and refreshed defence industrial policy, he said that industry has welcomed both. Asked to confirm that, by 2020, 20% of the UK’s defence budget is set to be spent in the United States, thus not supporting UK jobs, in design, engineering and manufacturing, Mr Williamson ducked the question claiming only that in return the UK continues to export more defence products to the US. He did not commit to revisiting the inclusion of social, economic and employment policies, in MOD procurement policy that, after the December 2017 industrial policy refresh, is only permitted to be included in value for money judgements, rather than being mandatory. Mr Williamson instead pointed to the fact that MOD has created 20,000 apprenticeship places in the past few years and that everything MOD does in contract negotiations aims to bring as much work content as possible into the UK. Mr Williamson did welcome the role of SMEs in defence and committed to work out how to bring more into the MOD supply chain.


  • Mr Williamson was also asked to dispel rumours that the £3 billion contract for the new Mechanised Infantry Vehicle will be a ‘cosy’ deal with Germany, rather than a fair and open competition for the prime contract. Replying, he said that MOD has been working to get a clear idea of what the Army needs going forward and that Guto Bebb, the new procurement minister, will be looking at the options as to how we take this forward and making sure that the MOD gets the best deal and the best value, as well as the right equipment for the British Army.


  • The MOD also answered a number of written Parliamentary questions on the MIV programme this week regarding the acquisition strategy, whether first delivery will take place in 2021 with an initial operating capability reached by 2023, MOD replied only than announcement on the acquisition strategy is expected shortly and that a precise delivery schedule is yet to be confirmed.


  • Asked what priority his Department accords to maintaining UK sovereign warship design capability and what criteria will be applied when decisions are made between competing bids regarding the UK's prosperity agenda, the Minister replying said that he National Shipbuilding Strategy was clear that for reasons of national security, the UK prioritises the need to retain the ability to design, build and integrate warships. However, evaluation criteria for a tendering exercise will be agreed on a case-by-case basis.


Other News:


GKN rejects £7.4bn hostile takeover bid (BBC)


NATO awards Cobham operational readiness training contract (Cobham)


New stealth fighter jet 'takes-off' (Ministry of Defence)