Doing more together: the essential role of international defence relationships in the Strategic Defence Review
Phil Siveter, CEO
| Thales UK
In a challenging environment, the government must use our international partnerships to deliver the equipment our armed forces need, at pace and good value for money, while bringing investment and jobs into the UK and supporting our relationships with key allies.
In the context of increasing geopolitical instability and stretched defence budgets, the UK must look to its international partners to enhance our capabilities, defence industrial relationships and operational learning.
There is a huge amount of value that defence relationships with key partners bring back to the UK – in diplomatic, economic, and employment terms as well as greater development of battle-winning technology and interoperability with our allies.
For those reasons, it is my view that greater industrial collaboration with our international partners should be a foundational pillar of the upcoming Strategic Defence Review (SDR).
This can include pursuing new formal bilateral arrangements, as we have seen with the new Trinity House agreement with Germany; strengthening existing partnerships like Lancaster House; and with government-to-government arrangements for specific opportunities.
It was very welcome to see the new government reframe the role of “Minister for Defence Procurement” with an explicit addition of “Industry” to the title. Government working hand in glove with industry, with clear expectations about what capabilities the UK wants to develop at home, will allow industry to better understand future pathways and intentions; that long-term visibility allows us to make confident investment decisions in the UK.
Similarly, it is also helpful to understand what the UK is content to develop in conjunction with, or buy as part of a diplomatic partnership. The ability to develop and deploy operational capability does not necessitate a ‘UK-only’ supply chain. The UK should employ concepts like 'operational sovereignty’ to exploit the global reach of defence organisations, localising only what it needs.
We must ensure that these types of deals offer favourable terms for all involved, and support workers across the relationship, for example looking at how there might be a balance of activities, based on expertise.
For example, the Army’s Land Mobility Programme presents the chance to help combat the trade imbalance with Australia and further support the development of close trade and defence equipment ties with this important ally, replicating similar successes that we have seen with the Type 26 deal.
Thales’ Bushmaster vehicle is a battle-proven option to meet the UK’s medium weight requirement at the pace needed. There is the potential for an arrangement between the governments of the UK and Australia to deliver the capability while strengthening the defence industrial relationship between the two nations, with the vehicle build being in Australia with systems integration and support in the UK.
International partnerships can also improve Britain’s industrial base by building in export from the start. Historically, Thales has exported £300-400m annually from the UK. This is set to grow organically, increasing benefit to the UK, though international partnerships are a clear avenue to grow further.
There is no better example of where exports have been critical than at Thales in Belfast, where the STARStreak and Lightweight Multi-role Missile (LMM) are produced. We are set to double, and double again, our production rates to meet increased order book and are looking for additional new space in Belfast to meet demand. It was because of hot production lines delivering for export customers that Thales was able to ramp up our efforts at pace to deliver the key Air Defence capabilities to support Ukraine when they needed them.
This strong export order book has also resulted in spiral upgrades to the UK’s capabilities. The British armed forces are the beneficiaries of new launchers and sighting systems due to technological advances made for export contracts – so they are receiving best-in-class technologies at no cost to the UK taxpayer.
Extending this idea further, the UK could become a buying agent of certain capabilities like munitions for NATO, conferring economies of scale by bulking procurements and improving interoperability.
The SDR represents a great opportunity to reimagine how we do defence procurement in the UK, and making better use of our international partnerships must be a significant part of that.
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