Introduction

1. The Royal Aeronautical Society (RAeS) is the Learned Society for the Aerospace and Aviation community. Based in London, it has a worldwide membership of over 19,000, with over 13,000 in the UK. Its Fellows and Members represent all levels of the aeronautical community both active and retired. Through its various Boards and Committees, it can draw upon considerable experience and expertise in aviation matters. In addition, the Society has over 160 Corporate Partners.

2. The Society welcomes the opportunity to comment on the Defence Committee's enquiry into Defence Equipment. The Society has confined its submission to the Defence Industry Strategy and the A400 M.

The Defence Industry Strategy

3. The Defence Industrial Strategy (DIS), as well as its antecedent, the Defence Industrial Policy (DIP), combined with the Defence Technology Strategy (DIS), constituted an unprecedented review and forward look of the UK defence industrial base and its contribution to UK defence acquisition. There were deficiencies of omission and commission; but these were relatively minor when set against the overall quality of the analysis presented, and the coherence it promised for future relations between industry and the Ministry of Defence.

4. Without wishing fully to review the benefits of the DIS, the Society would like to re-iterate its support for the partnership approach developed by the DIS. In particularly, we commend the MoD for the adoption of a guided weapons research partnership that is designed to help maintain a vital capability in the absence of specific requirements. A similar approach has been adopted to support rotary-wing technology. However, in both cases, capabilities cannot forever be sustained by R&D alone, and the predicted cut in small helicopter procurement would inevitable threaten to erode a UK lead in this sector.

5. The Society commends the rapid progress made in Unmanned Airborne Systems (UAS) that was anticipated in the DIS and the DTS. The efforts on the part of both MoD and industry to develop technology demonstrators in this field should enable the UK to sustain a strong domestic capability that will act as a springboard for future national projects and to play an influential role in international programmes.

6. The DIS promised to be a dynamic document subject to discussion, review and regular updating. Even if this would not approach the annual review of American defence industrial affairs as mandated by the US Congress, there were hopes that a second version (DISv2.0) would be published by early in 2008 at the latest. There was a strong expectation that several lacunae present in the DIS would be addressed, particularly in respect of supply chain issues and a more extensive reference to space technology and the promotion of UK space technology.

7. The DIS recognised the importance of sub systems suppliers as the source of much of the innovation in modern weapons, as well as their increasing role as systems integrators in their own right. However, there was concern that the adoption of long-term partnership agreements centring on traditional prime contractors would penalise the equipment sector, reducing their direct access to the end customer and increasing the risks of abuse by vertical integrated prime contractors. While there is yet no evidence of the latter, there was an expectation that DISv2.0 might address the former.

8. Clearly, the changed financial situation and the impact of operational needs on MoD planning have affected original assumptions about the timetable for DISv2.0. Nevertheless, the failure to maintain the momentum and energy associated with work on the DIP and DIS gives the Society considerable cause for concern. Companies, now even more than ever, need some indication of Ministry thinking to set their own budgets and to define priorities. Companies, either UK or foreign, with global footprints may determine that overseas investment should have more attention than here in the UK.

9. The Society is also concerned that the constructive attitudes towards the UK defence industrial base within the MoD, which brought the DIP/DIS/DTS, may weaken. The Ministry does not possess even proportionately the permanent resources available to the Pentagon in the field of defence industry analysis. Fire-fighting current crises, combined with the re-assertion of budget-led procurement strategies may lead to a loss of the long-term coherence that was evident in the DIS.

10. It is worth quoting a recent report from the US Defence Science Board - Creating an Effective National Security Industrial base for the 21^st Century; "Creating a vision is key to successful transformation since it guides policy changes and supports plans and actions to transition from the current industrial base to one necessary to meet future military requirements". Such a vision for the UK was emerging from the DIS process. Better, perhaps, to give a qualified, but updated sense of the future direction of policy than force speculation and pure guesswork on the part of industry.

The A400M

11. In an earlier submission to the Committee, the Society expressed its considerable dismay at the progress with the A400M programme. Our prediction that further slippage was likely was dismissed by industry spokesman as being too pessimistic. It gives the Society no pleasure to see that its misgivings have come to pass. The Society is concerned that a much-needed military capability, as well as potentially a valuable asset in world markets will be subject to further delay.

12. There is little utility in detailing the reasons for the problems with the A400M, save to provide some support for EADS-Airbus' claim that its commercial freedom to manage the programme has been compromised by the politics of collaboration. Airbus was employed to instil the kind of commercial discipline so often lacking in collaborative programmes. In accepting a fixed price contract, it was prepared to assume a large degree of risk. It now seems intolerable that Airbus must now pay the penalty for decisions forced upon it for national industry policy reasons and for the continued interference from several national procurement agencies.

13. More generally, there were hopes that the A400M would constitute a break with some of the past problems associated with European weapons collaboration. This too has proven over-sanguine. If anything, the experience to date with the A400M has re-enforced negative perceptions of European collaboration and there is a danger that firms with other options, particularly in the US, may look for alternative partnerships that could undermine a European defence industrial community that has delivered benefits, particularly technological, for both Europe and the United Kingdom.

Final Words

14. The Society fully appreciates the need to support the armed forces currently deployed in intense operations. Their safety and security must have top priority in defence spending. However, there is a risk that investment in technology upon which Britain's armed services will depend upon in the future will be squeezed between immediate operational requirements and the equipment programme. It is essential that funding for technology acquisition be maintained; without adequate MoD support in this area, the UK defence industrial base will decline, UK companies will lose their edge in world markets, global defence companies will not want to invest in the UK and ultimately the UK armed services will lose access to the high quality domestic assets needed to support equipment in the field and to acquire weapons to meet their specific needs.

10 November 2008