And thank you, for that kind welcome from Paul and his team here in Yeovilton. [Paul Chivers CO Yeovilton]
And thank you to [Kevin and] ADS for organising this event with Wayne’s team in the MOD. [Commodore Wayne Keble, Head of Air Littoral Manoeuvre Capability]
ADS does a great job championing this sector, and playing an active role in both the suppliers forum as well as the SME forum.
I know that ADS, and indeed many others here, have contributed to the Defence Rotary Wing Capability Study which you’ll be hearing more about later on from Wayne and his team.
I’m also most grateful to Agusta Westland, Rockwell Collins and Lockheed Martin for their kind sponsorship of today’s event, today wouldn’t be possible without you.
Ideally I would of course be speaking to you here today in a post PR12 world.
I’m very aware that many of you are waiting for this level of direction to inform your planning and decision making in the months ahead.
It’s regrettable that our discussions today won’t be able to have that level of detail. I can assure you though that we are nearly there.
However, there is plenty to talk about when it comes to this sector. And I’m confident that our white paper ‘National Security Through Technology’ has provided clarity on MOD’s approach to acquisition and support. More about that later.
Helicopter availability in theatre, tribute to industry
A few years ago ‘helicopter availability’ was a pretty loaded term.
Helicopters were very definitely a bad news story for defence, back in 2009 it seemed that barely a day went by without gloomy media headlines denouncing a lack of helicopters in Afghanistan, and claims that this shortage was undermining our operational effectiveness.
Three years on and I’m delighted to say that we’re now looking at a very different picture.
I was in Afghanistan earlier this year visiting Lashkhar Gar and Bastion.
I had the opportunity to travel on a range of helicopters, (including by the way an Osprey, if an Osprey is really a helicopter) to talk to the crews, and visit Joint Helicopter Force there.
I was impressed, and very heartened, by the availability and capability of UK airframes. And this was also borne out by commanders I spoke to on the ground.
The work being done by the chinooks responding to medical emergencies, for example, is just incredibly humbling.
These are the workhorses of the skies being flown by incredibly courageous crews.
The fact that we have enough of these vital assets performing at an optimum level on a daily basis is, I believe, a testimony to the improved and effective partnership working of defence and industry.
Just last week on the terrace of the House of Commons I met members of the Royal Navy and RAF who had been involved in Op Ellamy over and near Libya.
Among them were the deck hands of HMS Ocean who got the Apache helicopters off and safely home, black helicopters on a black deck on a black night on a black sea. Not an easy job with blades whirling, weapons loaded and adrenalin pumping. But what a job those Apaches did.
Their story really brought home to me once again just how critical rotary power is for our operations.
Whether it’s delivering freedom of movement and logistic support, or providing close combat support and an evacuation capability.
The ability of our fleet to operate in these hostile and dangerous environments is, I believe, in very large part due to the hard work and commitment of the companies here in this room today.
But we can still do more, and it is your technological innovation that is helping us to do so.
Many of you will be aware of the very successful cooperation between DSTL, Ferranti, Elbit and Agusta Westland to develop a product to help crews during brown-out landings, which remain one of the biggest risks to helicopter operations.
I know that others are actively pursuing solutions in this area too.
This cooperative investigation has been very successful so far and I very much hope that we will be able to build on this research to provide our pilots with a solution in the near future.
Industry support to UORs
And your responsiveness has been particularly striking on the UOR front.
Agusta Westland’s upgraded Lynx Mk9a has been a real success. We now have a vastly more capable airframe able to cope with the demanding environment of Afghanistan.
12 helicopters delivered to the front line in just 18 months was an enormous achievement, and the now fully converted fleet is continuing to turn in a star performance in theatre with over 4,000 hours flown.
I talked to some of the air crew in person when I was in Bastion. They raved about it. And they can’t wait for Wildcat.
Of course, not all UORs are on this scale, but they are just as important, the kind of emergency practical stuff that’s so essential for keeping our fleet airworthy and effective.
The protective floor covering on Chinook and Merlin used on the Medical Emergency Response Team flights, for example, took just 10 weeks to be fitted.
And that’s 10 weeks, by the way, from initial concept and drawing board stage to deployment in theatre. A terrific achievement, and one that is helping ensure this life saving capability is maintained. A match indeed for Brunel’s mobile theatre for the Crimea.
Rotary Wing Capability study
Rotary power is an absolutely critical component of combat power. That’s why the Defence Rotary Wing Capability study, or Derrick as I believe it’s known colloquially, is so important.
As you know the study was initiated by VCDS in the wake of the Strategic Defence and Security Review.
Essentially the study has been looking at capabilities.
And taking a long hard look at issues such as basing, force structures, command and control, and of course military helicopter flying training from start to finish.
As I said, you’ll be hearing more about the conclusions and recommendations of the study from Wayne and his team today, particularly on areas such as training and simulation.
I know that many of you here today will have been personally involved in the study so I’ve no doubt there will be a lot to discuss.
I am confident that the study will help to provide industry with direction and clarity.
Defence white paper
And I hope that our white paper ‘National Security Through Technology’ also provides insight into how MOD sees the future, and the changes we need to make to ensure we have a balanced and affordable equipment programme.
Essentially, this means we’ll be adopting an open procurement policy.
That means buying off the shelf wherever possible and when appropriate. Where we need technological advantage for security we will maintain it.
It means collaboration with friends and allies wherever possible. The UK-France Defence Co-operation Treaty is a tangible example of that.
This is a partnership which continues to mature and develop, and the consolidation of the complex weapons programme under MBDA is a demonstration that we’re definitely in this for the long term. And it’s a partnership that must bring benefit to both sides.
‘Open procurement’ also means a commitment to opening up more MOD business to SMEs, organisations which bring innovation and agility to our equipment programme, and which are already winning a sizeable proportion of defence contracts. Changing technology makes this commitment ever more important.
These companies are already making an important contribution to this sector, I’m thinking here of companies like ‘Wallop Defence Industries’, involved in providing the flares we use to counter MANPADS.
The white paper has been described as ‘pragmatic’.
Yes, it is. It was meant to be and it has to be. We have to get the right solution for the armed forces at the best possible price for the taxpayer.
So, yes this means it’s sometimes better to do work outside of the UK, elements of the Puma life extension programme are being undertaken in Romania and France rather than on these shores. And actually that was a decision taken by the last government and one I am entirely comfortable with.
And that’s why, for example, we took the decision to build our 14 new Chinooks on Boeing’s Philadelphia production line.
I know there are those of you in the audience that would have liked to have seen these built right here in Somerset. And you made a strong argument.
But when I visited the Boeing factory last year I was left in no doubt that the scale of the operation already in place means that best value for money and lowest risk can only be delivered from there.
These are the realities of defence procurement in 2012. Of course I would love every penny defence has to stay in the UK, but apart from anything else, if we want the world to buy our products and services, which we do, we have to be prepared to use theirs when it is right to do so.
Defence Industrial engagement, and the Defence Industrial Strategy (2005)
But has it not ever been so?
“…it is important to be clear that we will continue to look to the vibrant and competitive global market place to satisfy our future helicopter requirement…”
That sounds rather 2012, white paper in the age of austerity, doesn’t it?
Actually, it’s anything but.
In fact, this text is lifted from page 94 of Lord Drayson’s 2005 Defence Industrial Strategy.
The DIS contained many commendable aspirations. Most of them were, however, unfunded, which meant it was always going to be something of a wish list, and certainly became one as economic realities unfolded.
However, it had a pretty clear and realistic position on helicopters reflected in the reality of Wildcats assembled just down the road in Yeovil, Pumas modified in mainland Europe and Chinooks being built in America. And, as I saw yesterday at RAF Benson, increasingly effective support for the Merlin fleet in the UK.
I understand you want clarity on industrial engagement.
But I hope you’ll agree that actually when it comes to this sector, there has been an enduring policy in place for a number of years.
I see no enduring reason why a competitive British defence industry shouldn’t win business in this sector.
And making you, the defence industry, more competitive is a central theme of the white paper.
This is a government committed without reservation to building an environment conducive to responsible defence exports.
It’s why we are doing so much to support the SME base, where innovation and flexibility offer us a dynamic that the primes cannot.
And it’s why I have for the first time put a floor under the science budget, to ensure that as a nation we remain at the forefront of cutting edge, battle-winning technology.
The white paper is realistic, but it is deliverable. And I firmly believe it should give you more, not less, confidence in the department as we go forward.
Industrial base, the offset issue
And staying on the industrial theme, I want to say a word here about the issue of what was once known as industrial offset, and the challenge this poses for UK SMEs when exporting.
It’s an issue that’s been raised with me on a number of occasions recently, and quite seriously misunderstood.
As some of you here will be aware, the MOD conducted a comprehensive review of our previous industrial participation policy last year.
This was done in the lead up to the publication of the white paper in February, and was undertaken in liaison with industry members from the UK Offset Strategy Group.
The review factored in the changes that have been going on in the global offset market place in recent years.
It also acknowledged the challenges faced by UK exporters who are increasingly being asked to fulfil stringent offset obligations, particularly in new and emerging defence markets.
The outcome of the review has resulted in a new defence and security industrial engagement policy which remains compatible with our obligations under EU law.
Basically, this encourages our overseas based suppliers to continue investing in the UK’s defence and security sectors, and extending opportunities for UK companies to become part of their supply chain.
This also means we will encourage our overseas based suppliers to engage with SMEs in these activities. And the evidence so far is that they are more than willing to do so.
For instance, Boeing are sourcing key components for the 14 new Chinooks from UK SMEs and will be basing through life support work in the UK, which will provide further opportunities through the supply chain.
Looking ahead, our helicopter fleet
The SDSR clearly set out our long term plans for a helicopter fleet based on four core platforms from 2025, the post Herrick era as I’ve heard it referred to.
These platforms are already part of the rotary lexicon: Apache, Merlin, Chinook and Wildcat. I am pleased to say that we have recently secured the release to service for the first Wildcat to start army training, I look forward to seeing this aircraft this afternoon. And we are looking at options to upgrade the Merlin Mk3.
We will still need Puma until the future changes can be made and that is why we committed to complete the life extension plan in SDSR.
And that of course means that there is currently no medium term MOD requirement for a new UK developed airframe.
However, there are opportunities here in the civilian market and BIS are taking a very active role in helping the sector in that diversification process.
Last year BIS announced £32 million of government investment in helicopter production, research and development which will provide an important boost to Agusta Westland, for instance in the introduction of the civil AW169 aircraft.
The reality is that, when it comes to future defence work, the opportunities for many of you here will lie in support and training.
Keeping the Wildcat flying should sustain hundreds of engineering and technical jobs at Agusta Westland and here in Yeovilton over the next few years.
And looking ahead there will be opportunities for industry to contribute to our total force support concept which will include a sizeable number of contractors.
We know there’s more you can be doing when it comes to providing expert support on the ground, in fact this sector is already leading the way, with Vector Aerospace and Boeing UK deploying engineers in theatre doing vital work keeping our Chinooks airborne.
However, the best way to sustain jobs in the long term will be to widen your customer base.
That’s why supporting exports is another principle of the white paper, and why we’ve also appointed Susana Mason to co-ordinate exports on the MOD side.
We’re providing Ministerial support across government for rotary wing opportunities, particularly the AW101 and AW159 Wildcat.
There are worldwide export opportunities for Wildcat, with specific interest from other Lynx operating nations such as Denmark.
I used the word pragmatic earlier on to describe our approach to making sure we have a balanced and affordable equipment programme.
And that’s an approach I would also commend to all of you in this sector as your companies plan and invest for the future.
Because, while defence here in the UK may be a shrinking market, there are plenty of other opportunities out there, in the civilian sector as well as overseas.
Diversification will be the key.
I think I’ve covered quite a lot of ground here this morning, and I hope I’ve addressed some of the issues that I know those of you here from industry have been seeking clarity on.