SECOND REPORT
The Defence Committee has agreed to the following
Report:—
THE APPOINTMENT OF THE NEW HEAD OF DEFENCE
EXPORT SERVICES
INTRODUCTION
1. The mission of the MoD's Defence Export Services
Organisation (DESO) is to maximise legitimate UK defence exports,
in coordination with industry.[1]
This involves briefing and advising potential equipment customers
overseas about UK defence products; managing government-to-government
export agreements; arranging demonstrations of equipment and training
for foreign forces; supporting equipment exhibitions in the UK
and hosting foreign visitors. DESO also has responsibility within
the MoD for vetting firms' export licence applications, and it
subsumes the Disposal Sales Agency which sells surplus and decommissioned
MoD equipment.
2. On 14 December 1998, Mr Tony Edwards took up his
post as the Head of Defence Export Services (HDES)—the head
of DESO—on secondment from TI Group plc. His predecessor,
Sir Charles Masefield, who had been on secondment from British
Aerospace, took up an appointment with GEC. We decided to examine
the appointment of the new HDES, and DESO's role more generally,
because a number of factors were coming together.
- Mr Edwards' appointment gave us the opportunity
to check that safeguards in the system, put in place with the
appointment of Mr Alan Thomas as HDES in 1989, were still working
satisfactorily. These reforms were concerned in particular with
the openness of the competition process, and the use of measures
to avoid conflicts of interests when personnel are seconded from
industry.
- Although defence exports have always aroused
controversy, since the 1997 general election the government's
more overt emphasis on the 'ethical dimension' of foreign policy
has led to a new focus on controls over the export of 'strategic
goods'. This was a part of our inquiry last year into aspects
of defence procurement and industrial policy,[2]
undertaken jointly with the Trade and Industry Committee. More
recently, the Foreign Affairs Committee[3]
and the Trade and Industry Select Committee[4]
have each dealt with defence export policy. It remains a live
issue, however, not least because a number of select committees,[5]
including ourselves, are currently considering how together they
might deal with the government's proposed annual report on strategic
export controls.
- Since our joint report on aspects of defence
procurement and industrial policy there have been disturbances
in the economies of many Asian countries, with devaluation making
their imports much more expensive. Lower oil prices have also
hit the buying power of many potential and existing customers,
particularly in the Middle East. We wanted to examine how seriously
such developments might affect the successful export performance
that we reported last year.
3. The focus for this current brief inquiry was therefore
to examine the appointment arrangements for the new HDES; the
financial implications of defence exports and DESO's activities;
and the challenges Mr Edwards faces as he begins his term in the
MoD. We took written evidence from the MoD and others, and Mr
Edwards appeared before us, along with DESO colleagues, only a
month into his new job. In his early appearance before us, at
a time when he was busy getting to grips with his new responsibilities,
he showed an impressive grasp of the subject.
1 Ev p 25 Back
2 Seventh
Report, Session 1997-98, Aspects of Defence Procurement and
Industrial Policy, HC 675 Back
3 First
Report from the Foreign Affairs Committee, Session 1998-99, Foreign
Policy and Human Rights, HC 100 Back
4 Second
Report from the Trade and Industry Committee, Session 1998-99,
Strategic Export Controls, HC 65 Back
5 Defence,
Trade and Industry, Foreign Affairs and International Development Back
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