Hugo Rousseau

Hugo Rousseau joined CMS Strategic in 2017 in the role of Account Executive. He is a public affairs professional with a Masters in Political Science & Public Affairs and experience working as a Policy Officer in the French Prime Minister’s EU Affairs Service.  Prior to joining CMS Strategic Hugo also interned at PR agencies such as Edelman and Ketchum in London and has worked in the public sector in Paris and Brussels.

 

Claire Scotter

Claire Scotter joined CMS Strategic as Account Director in 2016.

Her communications experience, gained over 20 years, encompasses a wide range of technology and engineering based organisations, where she has managed internal change communications, high profile issues and proactive external communications programmes to place complex technologies, products, systems and services in the media and with opinion formers.

Claire has worked in communications at QinetiQ, Shell, G4S, Transport for London, Heathrow T5 (construction phase) and Lucas Automotive (now TRW).

Claire graduated in Law and is a Member of the Chartered Institute of Public Relations.

UK Defence Export Orders Stay Ahead of Ten Year Average

Collated from a UKTI DSO survey of UK defence companies together with ‘rest of the world’ competitor data and released in compliance with a formal code of practice as ‘Official Statistics’ this morning UK defence exports for 2015 are shown to have been worth £7.7 billion, down by £800 million on the equivalent figure for 2014. Security based exports were up by £600 million to £4bn from the equivalent £3.4bn in 2014.

Nevertheless, over a five year period UK defence exports continue to be above trend and in viewing these figures it is important to recognise that year to year fluctuations are not unusual. Sikes in 2007 and in 2013 were to an extent offset by poor years recorded in 2008 and in the context of an increasingly competitive global market, the UK’s defence export total of £7.7 billion last year is a reasonable achievement, particularly given the limited number of large platform orders.

The UK remains the third largest exporter of defence equipment behind the US and France and over the past year, as witnessed in the 2015 Security and Defence Review [SDSR 2015] the Government have shown a new determination to assist UK defence exports through recognition of the importance and value that they bring to the economy. Defence exports will play an increasingly larger role within the Governments’ prosperity agenda and the encouragement and support that innovation based industry/military partnerships such as the Defence Growth Partnership working together with UKTI Defence and Security Organisation and the MOD good will come from this.

In comparing and contrasting the UK defence figures today it is worth noting that UK defence export figures represent new orders, whilst those covering the rest of the world usually represents contracts signed. The UK has been assessed to be the third highest placed global defence exporter in 2015 and to have successfully retained its ten-year average position as the second largest global exporter of defence equipment.

Of orders included the largest was a multi-million pound deal signed with the Royal Saudi Air Force for a further 22 Hawk ‘Advanced Jet Trainers’ in December 2015. At 85%, the air domain continues to represent the largest level of UK defence related exports and the outlook here in my view remains very strong.

While the UK’s share of the global defence export market in 2015 was at 12%, down from 16% in 2014, UKTI DSO estimate that on a rolling 10 year average the UK’s average market share is 19%. If so this would be consistent with the long term trend.  By region, defence export destinations continue to be dominated by the Middle East (68%) and North America (18%).  UK defence exports to Europe and the Asia-Pacific were slightly down on 2014, the figures included a large win in Norway and wins in the Asia-Pacific region included Thales to supply missiles to the Malaysian and Thai armed forces and the Devon based company Supacat providing 82 Extenda vehicles to Australia.

The Middle East and Asia-Pacific continue to be seen as important growth markets in 2016; together with activity in Latin America and Africa also likely to be active. Defence export markets are always challenging and the UK defence sector companies face constant challenges from key defence competitors such as the USA, France, Russia and Germany. Other emerging defence export competitors include the Republic of Korea, Turkey, Canada and Brazil.

Security export in 2015 showed significant growth over those of 2014 (£3.4 billion which represents an increase of 18% sales increase. This was the largest year on year increase since 2010 and enabled the UK to close the gap on the 5th highest exporter of security equipment – Germany with £4.04 billion of sales in 2015. The UK’s share of the global security export market was 5.3%, an improvement on the 2014 figure of 4.5%.UKTI DSO have also said that there has been an increase in global demand for physical security products, this being largely due to the rise of so-called IS/Daesh and need of various countries to enhance Counter-Terrorism activities.

Key UK security competitors are China, USA, India, Japan and Germany. The enclosed chart if it comes out on your copy may be useful in respect of UK defence exports.

CHW (London – 26th July 2016)

Howard Wheeldon FRAeS

hwheeldon@wheeldonstrategic.com

Tel: 07710-779785

UK Defence (257) – Ringing The Ministerial Changes

With Secretary of State for Defence, Michael Fallon having thankfully been left in the position he has held for exactly two years, it was with little surprise although a considerable amount of personal disappointment that I learned on Saturday that Minister of State for Defence Procurement (MinDP) Philip Dunne has been moved from Defence to Health.  

No more high level visits to Gulf States to assist our industry selling defence equipment to countries with which Britain has long and well established relationship ties and no more having to cope with industry and military alike looking to government to do more. On behalf of all the many friends that you have deservedly made across all aspects of defence, let me say a very big thank you to Philip Dunne for the excellent work that you have done, for our military, for our industry, for our people and for exports. Let me also say that we wish you all the very best in the more ‘sedate’ if no less politically charged world of the NHS where you are now to be Minister of State in the Department of Health.

Ordinarily one lives with the idea that a minister will only be in any one position for two or maybe three years at most and in that regard, having s been at the MOD for a total of four years, three of which as an Under-Secretary of State for Defence and one year as Minister of State Defence Procurement, we have done very well. .

Very well-liked and respected those of us that have had the pleasure of knowing and working with him appreciate that while he quickly proved an ability to fight the Government corner he was a very good listener. Moreover from the outset Philip Dunne, MP for Ludlow, understood the concerns that were often raised and he went out of his way to almost always leave a matter better than he found it if he could. Not many ministers manage to do that. He will be sorely missed by military and industry colleagues. 

As I write this, unless I have missed it, Mr. Dunne’s replacement at the MOD has yet to be announced. Whoever it is it is unlikely that they will have had any specific knowledge of defence apart from perhaps in their own constituency. Whatever, the person concerned will have a lot to learn in a very short time as there is much going on in defence right now. Indeed, I was rather looking forward to Mr. Dunne winding up the Trident replacement debate in the House of Commons this afternoon. It is also worth mentioning here that amongst junior ministers Penny Mordaunt, the MP for Portsmouth North, has also been moved from Defence to that of Work and Pensions.

As the political face of defence, at least as far as industry is concerned, the relationship, bonds and ties established with the military, industry, defence exports and potential customers for UK defence products highlights the huge importance of ensuring the right person s placed in this particular government slot. Whilst the Secretary of State Defence plays the more senior role the ability to meet with and negotiate deals with foreign governments and administrations, the ability to cope with diverse cultures make the role that Philip Dunne has left behind very different from the rest. Mr. Dunne has worked tirelessly in respect of export support particularly in the Gulf Region and the many excellent relationships he has personally established with potential foreign customers has been invaluable. I would go so far as saying that no Defence Minister has worked so hard in support of defence exports than Philip Dunne has and I do not give such praise without deep knowledge. He has also ensured that following procurement decisions made in SDSR 2015 there would be no unnecessary delays. 

Philip Dunne had arrived in defence following a Cameron reshuffle that witnessed departures of Peter Luff and Gerald Howarth. He was a relatively new and unknown quantity and at the time, I remember observing whether, being close to Prime Minister David Cameron and given the sense of mistrust between the former and then Secretary of State for Defence, Philip Hammond, whether there were perhaps other reasons behind the appointment.

Philip Dunne had played no part in the dangerous and seriously damaging SDSR 2010 or within the ‘National Security Through Strategy’ strategy paper that followed in February 2012. He was though left to pick up the pieces from that mess and suffice to say that having reached a low point around the time of Mr. Dunne’s defence portfolio appointment, this probably marked an interesting turning point for UK defence. 

With SDSR 2010 and the unfortunate follow on strategy attempt played lip service to issues of sovereignty, skills, training and defence exports, it was Philip Dunne who began a process of listening to the calls of industry and military. Whilst it was too late to reverse permanent damage, particular that done to the Royal Navy through the premature and unnecessary withdrawal of the excellent Type 22 ships and that of HMS Ark Royal, and the damage done to air power through the withdrawal of Harrier GR9’s and cuts to the Tornado GR4 force publication of the more better planned and coordinated SDSR 2015 strategy document last year in which the Government set out a different agenda showed that the Government had listened. The military will get some of the much needed new capability it needs from 2019 and importantly, the strategy showed a very different attitude from government in respect of engagement and exports. Enter innovation and the prosperity agenda and recognition I hope that the Government has finally got the message on the importance of defence to the national economy in terms of jobs, engineering and other skills and the importance of supporting exports. Let us hope that HMG means what it says. 

As some of my longer term readers well know, I have been engaged supporting defence exports for the best part of thirty years both when I was working in the ‘City’ and as an independent since 2012. In doing so I have been to several counties to provide support to UK government export teams and I have had the pleasure of meeting many ministers too. Imagine my horror when in 2007 having already slashed much of its previous strength Gordon Brown or should I better say, Shriti Vadera, pushed the once fine Defence Export Services Organisation (DESO) from MOD responsibility to that of UKTI in the hope that it would wither on the vine. Our French and US competitors could not believe the crassness of such a decision and which would make life much easier for them. Now, following efforts made by Philip Dunne and others it does seem that although it is too late to turn the clock back the combination of the MOD Defence Export Support Group, UKTI DSO and the Defence Growth Partnership progress is again being made. Newly in post, I am very much looking forward to observing how Huw Walters and Peter Watkins play their part in fast jet and complex weapons export sales for which they have responsibility.      

Every cloud has a silver lining though and the change of Prime Minister and the major reshuffle of government that followed has led to some others disappearing as well. One of these is Oliver Letwin, long time confident of David Cameron in the Cabinet Office and a man who many of us regard has been the enemy of defence!      

CHW (London – 18th July 2016)

Howard Wheeldon FRAeS

hwheeldon@wheeldonstrategic.com

18th July 2016