2011/07/20 - UK/France Industry Day

Speech delivered by Minister for Defence Equipment, Support and Technology at the Business, Innovation and Skills Conference Centre, London on Wednesday 20 July 2011.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
Peter Luff

Thank you Richard [Paniguian, Head of UKTI DSO] for those opening remarks.

It’s also a pleasure to welcome Laurent Collet-Billon to London once again - a day when the value of Franco-British scientific co-operation has been highlighted in dramatic form.

New British scientific research at the University of Leeds into French military doctrine has led to a breakthrough in our understanding of one of the classic capability trades: protection versus mobility.

This will inform our future infantry soldier programme’s distribution of weight of body armour, which is key to fighting effectiveness.

The academics have concluded that the outcome of the battle of Agincourt in 1415 could have been different if the French had abandoned their heavy leg armour.

So we learn from events, even 600 years ago.

I think it’s fair to say that we have developed a pretty successful relationship over the last fourteen months; and that our meetings of the High Level Working Group in London and Paris (and once in both places simultaneously by VTC when Eurostar suffered the wrong kind of snow) are becoming increasingly productive.

I would like to say a very public “Merci” to Laurent for all he has done to bring us to this happy situation.

I’m especially pleased to see so many familiar faces here - and some new ones - from industry on both sides of the Channel.

Indeed, I understand that this event was significantly oversubscribed!

An encouraging indication that this new strategic relationship has captured the imagination of industry as well as government.

It’s also a chance for Laurent and me to thank you all for your ceaseless support of the British and French Armed Forces - particularly in Afghanistan and Libya.

And it’s a chance for us to say from the start that this is your day.

We appreciate that industry relies on government to give the strategic context to the UK-France Defence Co-operation Treaty, and to set out the challenges and opportunities.

But for the Treaty to be effective and lasting we are just as reliant on all of you in industry to provide us with the solutions - and even to suggest ones we might have overlooked.

So while I want to reflect briefly on why we signed the Treaty last year, I want to focus most of my remarks exploring the “what”, “when”, and “how” of implementation.

That requires industry’s full participation and I look forward to your questions later on - which, as Richard just said, will be under the Chatham House Rule of strict non-attribution to encourage openness.

I appreciate that many of you, especially on the UK industry side, will want to ask questions about the announcements made in Parliament on Monday - especially on the Three Month Exercise.

The Defence Secretary, Liam Fox, announced that we have taken decisions which have brought the Defence budget broadly back into balance, and secured an increase in equipment funding above inflation from 2015.

This enables us to plan the equipment programme over a 10 year horizon with much greater confidence.

There will be plenty of time in the coming weeks and months to answer your questions on these domestic issues - but I hope we can agree that today is about UK / France collaboration.

So why are we here?

When NATO was formed over 60 years ago, there were worries about nations being able to work together.

Experience has shown that where nations face common threats, or share drivers that compel them to work together - including financial - they can do so.

If we are to deal with the threats we face in our volatile world, having the political will and capability to deploy force when needs must is the key to NATO’s future strength and relevance.

Against that background, the goal of closer Anglo-French Defence co-operation is to make our people safer by making our forces more capable at a price the taxpayer can afford.

To achieve this, the Treaty sets out three main objectives.

First, improved interoperability.

In the last 30 years, Britain has conducted just two unilateral overseas operations - in the Falklands and Sierra Leone.

It makes sense to be more interoperable with our most capable partners who also have the political will to use their force.

Second, maximising capabilities.

Our strong preference is to operate in coalitions - and we will continue to do so - but to work bilaterally to generate the capability required to make significant and sustained contributions to these coalitions.

Of all the defence spending of European members of NATO, Britain and France together account for half, and 65% of the research spending.

By drawing on each other’s relative strengths and investments, and not duplicating capabilities where we don’t need to, this will help us to ensure that our Armed Forces get the best possible equipment and support.

Third, better value for money.

In Britain, we spend around 40% of our Defence budget every year, or around £13 billion, on equipment acquisition, support, and technology.

This is a fundamental activity at the heart of Defence in both Britain and France.

If it fails it is the men and women on the frontline who suffer the consequences and the taxpayer who pays the price.

I know that Laurent will touch on this in more depth shortly.

But let’s be clear.

NATO remains the bedrock of Britain’s security.

This Treaty is about two major European nations willing and able to act together when it is in our common benefit to do so, but retaining the levers to act separately should our national interests require it.

Indeed the Treaty is firmly intended to complement our engagement with NATO and the EU.

Nor should our other partners fear that this is this a zero sum game when it comes to co-operation elsewhere.

We will still nurture our bi-lateral and multi-lateral relations around the world and deepen co-operation wherever it is appropriate.

We will continue to work with other nations, but we simply can’t have such strategic relationships with everyone - that would be self-defeating.

And this in no way diminishes British Government support for British exports in a fiercely competitive global market.

Nor would I expect France to pursue any less vigorously its own multi-layered security or support of its exporters.

Indeed, we’re even competing against each other in India and other fast jet markets - and may the best jet win!

The Treaty is about making things happen at a practical level in a volatile world.

And the political and military leadership which Britain and France have shown over Libya is ample demonstration that co-operation with France is a strategic imperative; as natural as it’s necessary.

That’s why we signed the Treaty last year.

We are now in the implementation phase, and we’ve made a good start.

On equipment and capabilities, we have established a joint governance framework for identifying candidate programmes for co-operation.

We have already been able to identify some quick wins.

For example, we have developed a 10 year strategic plan for the British and French Complex Weapons sector, where our goals are a single European prime contractor, a target of up to 30 per cent efficiency savings, and robust support for exports.

We are also discussing how best to collaborate on Unmanned Air Systems, and I’ll come on to that later.

We look to industry to let us know where the other opportunities for equipment collaboration are.

I’m happy to hear from industry directly, but we still want the High Level Working Group to be a focus for this discussion.

We are changing the way the Group operates and we want more in-depth discussions on specific themes, involving more industrial participants.

Here I emphasise the continuing role of Guy Griffiths - on the UK side - in providing a focus and liaison role for this interaction.

But we must remember it is not all about equipment.

On the operational side, we are working towards full operational capability of a UK-France Combined Joint Expeditionary Force in 2016.

This will give us the ability to field an early entry force that can undertake complex combat and high intensity operations.

We are already training together.

In March this year, the 1st Battalion the Coldstream Guards trained at the French urban facility called CENZUB.

Last month, our armies learned how to work even more closely together at Brigade and Divisional level on Exercise FLANDRES in Mailly-le-Camp.

And when the UN Security Council passed Resolution 1973 on Libya, our own 2 (Mechanical Transport) Squadron was at that time deployed to support Operation SOUTHERN MISTRAL - a flying exercise in Nancy involving British Tornado and French Mirage jets.

2 MT Squadron was immediately diverted to Gioia del Colle in Italy, and went from supporting an exercise to supporting an operation which of course involves both Tornado and Mirage aircraft.

It is dramatic testimony to the importance of interoperability.

When the next crisis comes - and it will - we should see the early benefits of this co-operation.

But as I said at last night’s reception - and alluded to earlier - this is a marathon not a sprint.

The Treaty is only seven months’ old and although we’ve achieved a good deal already there is much more to do, not least on armament programmes; the export market; and our broader approach to industry.

Achieving the envisaged level of strategic co-operation will take time and will require changes to long-established ways of working.

It’s not just about aligning some programmes already on the table.

It’s also about aligning every aspect of future programmes, where it makes sense to do so, from doctrine through to procurement.

There will be early successes and we should be very proud of them.

But the real proof of the effectiveness of what we have begun will only be apparent some years hence.

But what is most important - and the part where we really need your help in industry - is deciding how we should implement parts of the Treaty.

We do have differences we need to address such as our approach to acquisition - for example, our funding and approval processes.

And the Anglo-Saxon fondness for competition too.

So it’s no longer « Vive la difference ».

Wherever we can, we need to deal with these differences - or better still, stop them becoming differences in the first place.

Yet we are not proposing to fuse them needlessly or clumsily.

We will share our equipment plans, identifying gaps and opportunities for greater co-operation.

And we will make sure that doctrinal differences are not impediments to getting the right capability to the front line - we could probably do more in Land vehicles, for example.

We will also need to consider how to align funding profiles, procurement strategy, approvals processes, training, and so on.

None of this is simple or easy - again, we may not truly see the fruits of our labour for many years.

That is the nature of a truly strategic relationship.

And as I think we would all probably acknowledge, ministries of defence can sometimes be rather like super-tankers - difficult and time consuming to set a new course, but once a new direction is set, capable of delivering real benefits for all.

In the UK, the Secretary of State, Liam Fox, recently announced a radical programme of reform that will realign our Defence priorities with the economic realities, re-structure the MoD, and deal with the fundamental causes of delays and poor cost estimation in the equipment programme.

Later this year we will also be publishing our White Paper on equipment, support, and technology.

We anticipate that it will emphasise open competition in the global market, buying off-the-shelf where we can, and only restricting our choice of supplier where we must on national security grounds to protect our freedom of action and operational advantage.

And our Chief of Defence Materiel, Bernard Gray, is developing the ‘Materiel Strategy’ which will reform the delivery of equipment and support to the front line, while addressing performance and running cost issues.

There is plenty in the MoD’s in-tray.

But my main message here today is: we can’t do this alone; we need industry support.

Nor do we expect you to wait to be told what to do - industry on both sides of the Channel should seize the opportunity the Treaty represents.

So let me set out three areas where active input from industry will be especially needed.

First, capabilities and equipment.

Co-operation in acquisition, research, and technology; capability planning; procurement and support is a vital component of a transformed bilateral Defence relationship, and a major part of securing the necessary budgetary savings on both sides.

The immediate task is to harmonise timelines and requirements for our future programmes.

Take the A400M.

We are developing a common support plan which will reduce costs, improve spares availability, and open the way for further co-operation in maintenance, logistics, and training - for both deployed and home-based operations.

Our aim is to have integrated support in place for the arrival of the first French aircraft in 2013.

We have also established a bilateral Joint User Group to facilitate the continued development of A400M training systems, and explore the expansion of our synthetic and live training commitments to facilitate bilateral training exercises.

This is not limited to A400M - far from it.

For example, we are exploring the options for our next generation of military satcoms.

And there is scope for future co-operation on submarine technology, land vehicles, new frigates, Watchkeeper, Chem/Bio, cyber security, and sensors - to name just a few.

But we need industry to assist us in this process.

Second, I mentioned Unmanned Air Systems earlier.

These have become vital tactical and strategic assets for our forces.

We have agreed to work on the next generation of Medium Altitude Long Endurance Unmanned Surveillance systems, based on a joint industrial partnership.

An Assessment Phase will be launched later this year with total funding available of up to 50 million euros, with delivery anticipated between 2015 and 2020.

We are also each assessing requirements and options for the next generation of Combat Air Systems after the Rafale and Typhoon come out of service in the 2030+ timeframe.

Joint funding and interdependence would help sustain industrial capability and deliver major cost savings.

Work is proceeding apace, but industry’s input will be crucial.

Third, more than ever, we need Defence capabilities that are affordable and robust, that can be rapidly deployed, and that are interoperable - with each other and with a range of allies.

Despite the economic context we find ourselves in, we can increase the range and ambition of our joint Defence equipment programmes if we foster closer industrial co-operation.

Our work on Complex Weapons is demonstrating the benefits of mutual dependency - where it makes sense - and we are keen to explore other opportunities with industry.

Early investment in Research and Technology will play a major part.

That’s why we’ve committed to an annual budget of 50 million euros each on collaborative research and development - increasing this where possible.

In this context, I am particularly pleased that joint PhDs will start in October as part of our plans to build a future Anglo-French R&D community.

We’re committed to maximising the opportunities for innovation and SMEs, which is why we’re so proud of our own Centre for Defence Enterprise - again I know that Laurent will say more about R&T.

We’re also building co-operation on exportability and the export opportunities that this will bring.

But we must understand your views.

Don’t trust us to know them; we might well have misunderstood them.

If you disagree, give us the evidence for your point of view.

If you agree with us, reinforce it.

And we need to hear about things that you would like us to do differently, better, or not at all.

As our Prime Minister, David Cameron, has said, “This is a Treaty based on pragmatism, not just sentiment.”

It’s just sheer common sense to work even more closely together.

Government has a major role to play, but there is no point in us reinventing the wheel at taxpayers’ expense.

Where you think there are things you could do to help us achieve the Treaty aims, tell us.

We won’t always agree.

Nor should we expect to.

But we do need an open dialogue and that is what we are hoping for today.

We can’t hope to deliver the aims of this Treaty without the full commitment of British and French industry.

Nor can we expect to do so overnight.

With half of Europe’s Defence spending involved, I am sure you understand the importance of the issues we will be discussing today and over the years to come.

Published 20 July 2011