Select Committee on Defence Seventh Report

8  Sovereign capability and international issues


95. The DIS states that:

In his Statement to the House on 15 December 2005, the Secretary of State said that the DIS:

    communicates for the first time to industry…. those skills, technologies and industrial capabilities that are assessed as being required onshore in the UK in order to sustain the armed forces' ability to operate with an appropriate level of sovereignty. [171]

96. Lord Drayson told us that in producing the DIS, the MoD had analysed the defence market by sectors to identify the defence capabilities which were regarded as so strategically important to the UK's defence interests that "not having those capabilities on shore may lead to others having an impact on the operational freedom".[172] As much future work will focus on maintaining and upgrading platforms, the MoD will need access to technical information and Intellectual Property Rights so it can maintain and upgrade platforms and ensure operational sovereignty. Lord Drayson acknowledged the importance of this.[173]

Technology transfer

97. A recurring concern of this Committee and its predecessors has been to ensure that the UK gets all the information and technology transfer it requires to give it sovereign capability: that is, the ability to operate and upgrade its equipment without recourse to overseas supply. Most recently, we raised concerns about the Joint Strike Fighter (JSF) programme, concluding that:

98. The Chief Executive of BAE Systems also stressed the importance of obtaining technology in the UK on the JSF so that the company could play a role in supporting and upgrading JSF when it came into service.[175] Lord Drayson told us that the "battle over technology transfer" was "progressing reasonably well, but the test will be where we have got to at the end of this year, and the test will be the Joint Strike Fighter".[176] We have recently held meetings with the Senate Committee on Armed Services and the Deputy US Ambassador and intend to pursue this matter with vigour during our visit to the US in May.

99. We consider it vital that the UK can maintain and upgrade equipment independently. We expect the MoD to obtain all the information and technology transfer it requires to do this. We will continue to monitor the progress on technology transfer in relation to the Joint Strike Fighter.


100. The DIS states that in the general munitions sector:

101. The DIS also refers to the importance of security of supply:

    we need to ensure that we can support equipment, or produce expendables (e.g. munitions), in times of conflict (predicated on an assumption that we understand the dependencies within the supply chain, where in some cases we need to do further work with industry). High levels of onshore technology and capacity may often offer greater comfort in security of supply and the ability to undertake modifications in response to short-term operational demand.[178]

102. On 14 December 2005, a petition was laid before the House from residents of Bridgwater and others requesting that the House of Commons call upon BAE Systems and the Ministry of Defence to save the former Royal Ordnance Factory (ROF) at Puriton, in Somerset, and sent to us for our scrutiny.[179] We sought comments on the petition from the MoD and from BAE Systems, which now owns the ROFs. The MoD's observations briefly state its confidence in the company's continued security of supply.[180] BAE Systems' response regrets the closure of Puriton from the end of 2007, with the loss of some 130 jobs, but states that it was "no longer economically viable at a price that MoD would be prepared to pay for materials that can be sourced elsewhere". It acknowledges that the UK will in future be dependent on supply from abroad, but states that:

    the necessary materials can be sourced from a number of secure alternative suppliers in allied countries, fully meeting the requirements of appropriate sovereignty that were described in the MoD's Defence Industrial Strategy.

The materials will be processed in the UK, at Glascoed.[181]

103. The trade union Prospect submitted evidence to us in this inquiry expressing concern about the proposed closure of the Puriton ROF and its sister factory in Chorley. Prospect's memorandum outlines concerns about the ability of the MoD to obtain security of supply, in particular for small arms and ammunition and high explosive.[182]

104. We sought further information from BAE Systems about its outsourcing policy. Their response explains that the decision on whether to qualify one or more sources of supply to ensure competition and improved security of supply would be taken on a case by case basis. Land Systems Munitions will manufacture strategic stockpiles to bridge the gap between in-house manufacture and availability of the new source of supply. For each of the products now made at Chorley and Bridgwater, BAE Systems' response sets out the potential overseas suppliers. For high explosive materials, for example, it states that a Request for Quotation has been placed with Holston Army Ammunition Plant, in the USA, and with Eurenco, a European Joint Venture between France and Scandinavia.[183]

105. We sought assurance from the Chief Executive of BAE Systems that the two ROF sites would not be closed until such time as a secure alternative supply of those munitions had been sourced to the satisfaction of the MoD. Mr Turner told us "that is part of the process that we are going through now. Absolutely".[184]

106. The Minister stressed that he had been looking at this issue closely because it was important that the UK "retains the ability, in terms of advance munitions like that, to be able to source what it needs when it needs it".[185] We pressed Lord Drayson on the security of supply, given that the closures would require BAE Systems to procure certain munitions from overseas. We sought assurance that the MoD was going to be sure that there was absolute certainty of security of supply before the two sites were closed.[186] The Minister told us that he was "absolutely sure" that the sites would not be closed until issues about security of supply had been resolved. He said that he wanted:

    to be absolutely sure, in terms of security of supply of the elements coming in and…. absolutely sure about the robustness of the manufacturing process that we are moving to.[187]

107. We welcome the assurances given by the MoD that the Royal Ordnance Factory sites at Bridgwater and Chorley would not be closed until it was "absolutely sure" a secure alternative supply of the munitions existed. We consider that, in an area as vital as general munitions, the UK should never be in a position where it cannot guarantee security of supply.

International issues

108. Chapter A3 of the DIS outlines the main characteristics of the defence market at global and national UK levels. It considers the consolidation which has taken place in the US and Europe.[188] However, some of the evidence we received suggested that the international implications of the DIS—and particularly the European dimension—had not been sufficiently covered:

  • The SBAC saw the need for more discussion of the international implications of the DIS and considered that there was "very little in the document on how international collaboration will be handled under the DIS". It also sought clarification on how the Government saw the European Defence Agency (EDA) developing its policies and practice "on the European defence market, the supply chain and European defence R&T".[189]
  • Professor Hartley considered that "various parts of the DIS refer to the EU defence markets, EDA and OCCAR [Organisation Conjoint de Coopération en matière d'ARmement[190]]. However, there was no vision of whether and how such an EU defence market might contribute to the future of the UK DIB".[191]
  • Professor Taylor considered that "reconciling the DIS with the aspirations of the European Defence Agency and the European Code of Conduct on a European defence market is not straightforward".[192]

109. We followed up these concerns, in particular, about the European Defence Agency. Mr Paul Everitt, Director of Communications, SBAC, considered that the EDA had a clear role in opening up the European defence market and also thought, that in terms of R&T, the EDA could have a role to build a better understanding across Europe of which countries are looking at which technologies and what they are trying to develop.[193] Mr John Howe, Vice Chairman of Thales UK, also considered that the EDA had a very useful potential role in energising international programmes to address gaps in defence capability, and if it succeeded in this objective, it would be "a big plus". He thought that the international context was an important one and he hoped that further dialogue would be developed with the MoD.[194]

110. The Minister considered that the EDA needed to show that it could add value and that in some ways it had begun to show that, but he thought that the Agency should start small and demonstrate success before it grew larger.[195] Feedback from the UK's international partners had been very positive about the DIS. Lord Drayson told us that "they have found it useful to have clarity, whether it is in the direction of the United States or the direction of Europe". He considered that the DIS set out clearly to the UK's international partners the way in which the UK wanted to business.[196]

111. We consider that international co-operation is vital and that the European Defence Agency is likely to have an important role in the future in many areas covered in the DIS.

170   Cm 6697, para A1.21 Back

171   HC Deb, 15 December 2005, col 1463 Back

172   Q 291 Back

173   Ibid Back

174   HC (2005-06) 554, para 107 Back

175   Q 242 Back

176   Q 299 Back

177   Cm 6697, para xxxiv Back

178   Ibid, para A9.6 Back

179   HC Deb, 14 December 2005, col 1407; Supplement to the Votes and Proceedings, 16 December 2005 Back

180   Supplement to the Votes and Proceedings, 27 January 2006 Back

181   Ev 120-121 Back

182   Ev 97 Back

183   Ev 122 Back

184   Q 265 Back

185   Q 292 Back

186   Q 293 Back

187   Q 294 Back

188   Cm 6697, pages 25-33 Back

189   Ev 83-84 Back

190   OCCAR was established by Administrative Arrangement on 12 November 1996 by the Defence Ministers of France, Germany, Italy and the UK. Its aim is to provide more effective and efficient arrangements for the management of certain existing and future collaborative armament programmes. Back

191   Ev 104 Back

192   Ev 91 Back

193   Q 148 Back

194   Ibid Back

195   Q 312 Back

196   Q 313 Back

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