I’m delighted to join you for the final session of this conference.
Over the last two days you’ve been discussing a security landscape that is becoming increasingly unpredictable and uncertain.
Recent and future elections will lead to change at the political level, while the nature and scale of the threats addressed by those of us working in security policy demands constant flexibility commercially and militarily.
Recently the independent reviewer of terrorism law in the UK (Max Hill QC) said, that, in this country, the danger of attack is as great as at any time since the 1970s.
Yet we don’t just face threats from non-state actors, terrorists and Islamic extremists. We are also standing up to Russian aggression and cyber warfare - the activities of state actors.
At the same time, we’re preparing to implement the decision of the British people to leave the European Union…
But while we are leaving the EU, we are emphatically not leaving Europe. As a country we are stepping out more into the world, stepping up our global role and our commitment to European and international security.
How is the UK Ministry of Defence prioritising and responding to the challenges and opportunities before us?
IMPLICATIONS FOR UK DEFENCE
The short answer is that, despite big changes, our priorities are staying the same.
Our three National security objectives were set out in 2015’s Strategic Defence and Security Review to protect our people, project our influence, and promote our prosperity.
These objectives remain right for today – and we are backing then with growing resources.
We’re one of only five NATO nations meeting the 2 per cent target, and we’ll continue investing in defence equipment, using our growing budget, and £178bn ten-year equipment plan to spend on world-beating capability such as Dreadnought submarines, two new aircraft carriers, frigates and new aircraft including F35s and the P8.
Above all, we’re determined to be what our Prime Minister calls, a “global Britain”
working with our NATO and other allies to front up to aggression from a position of strength, while joining forces with our bi-lateral friends bringing the full range of our capabilities to bear on international problems.
RELEVANCE FOR DEFENCE INDUSTRY
And what of the Defence industry?
Rest assured, we’re more aware of its value than ever, and the contribution that we need and expect from industrial partners.
And nowadays we’re not just looking for industry to devise new game changing technologies, making the most of autonomy, cyber and big data to keep one step ahead of our competitors.
Nor are we simply expecting a focus on value for money…as the demands on our budget rise.
We’re also turning to industry to enhance the UK’s prosperity.
The 2015 Strategic Defence and Security Review was the first time we officially recognised promoting prosperity as a national security task.
Strategic exports are now a core activity for the Ministry of Defence so we are calling on companies to play their part in increasing defence export sales and attracting inward investment into the UK.
It’s a lot to expect but the good news is we’re here to help.
We are not going to retreat into a protectionist shell.
We don’t believe in propping up inefficient industries
As a trading nation, we believe in the power of free trade to push our companies to export further.
So we’re going out of our way to create a can-do, outward looking, pro-growth culture.
In three ways:
First, we’re investing in innovation.
This is an area where Britain traditionally has had strength in depth.
We gave the world radar, the jump jet and the world wide web.
Today we’re leading the way in wing design and intelligent systems.
Tomorrow we will have produced dragonfly drones and sub-orbital engines.
But we can’t rely on natural talent and serendipity to see us though.
So six months ago, we launched our innovation initiative.
It’s all about pushing the boundaries, making defence more open to risk and new ideas.
We’re speeding up the time it takes for suppliers to turn concepts into capabilities.
We’ve set up an Innovation Fund worth around £800m over ten years to pump prime investment into advanced new solutions such as laser directed energy weapons and unmanned rotary wing technologies.
And we’re running a set of competitions to develop leading edge capabilities in everything from rapid and automated integration of new sensors to machine learning algorithms.
Last week we unveiled the next stage in our plan.
Professor Hugh Durrant-Whyte has become our new Chief Scientific Adviser with direct accountability for the defence research programme, which is 1.2% of Defence’s annual budget.
He’ll be working across defence and internationally to stimulate defence innovation, commission research, and use technology to keep our people safe.
At the same time, we’ve been gearing up our new Defence Innovation Advisory Panel with high-profile appointees including astronaut Major Tim Peake, outgoing director of GCHQ, Robert Hannigan and the founder and chairman of McLaren, Ron Dennis.
These inspiring individuals will challenge the Defence status quo…ensuring we become innovative by instinct.
2. INDUSTRIAL STRATEGY
There’s a second way in which we’re creating a pro-growth culture.
We’re tapping into the broader currents of Whitehall’s industrial strategy by strengthening clusters of defence capability around the country whether in Scotland, the South West, the North West and North Wales.
We’re determined to reinforce the way in which the Defence industrial base helps to make this a country that works for everyone.
Sir John Parker’s recent report suggested how we could use regional centres of expertise to improve our shipbuilding capability, embracing digital engineering and proposing the creation of a Virtual Shipbuilding industry model.
In other words, rather than a single shipyard building a ship from scratch, a vessel would be built in blocks by different sites across the UK – from the South West to Birkenhead to Tyneside. As we’ve done with our aircraft carriers ensuring high productivity, competitive cost and a dramatic reduction in build time.
Sir John’s report will inform our shipbuilding strategy due out in the Spring.
Meanwhile, Scottish shipyards have two decades of future work.
But switch domains…from sea to air…and you can already see what stronger clusters will mean for the UK.
Over in North Wales, Government and business joined forces and last year won the F-35 avionics Maintenance, Repair and Overhaul contract award.
Their bid was so compelling it established Britain as a hub for all European F-35s sustaining, in turn, potentially thousands more high value jobs across the supply chain generating hundreds of millions…and potentially several billions of pounds of revenue supporting hundreds of jobs in Wales and extending Britain’s reputation for excellence worldwide.
I’d like to thank all those who helped make it possible.
It was a truly team UK effort.
And 15% of the global programme of c.3,000 F35s are being built in the North West.
But this brings me to my final point.
Creating a pro-growth culture, means strengthening partnerships between Government and industry.
So we’ll be looking to you to collaborate more – sharing the risk and reward of research and development.
We want you to build exportability in as standard from the outset… placing even greater emphasis on the use of modularity and open systems.
And we’ll be looking for you to increase bid opportunities for UK suppliers – large and small.
You help UK defence and prosperity and we’ll help you.
That’s why we’re making sure our refreshed industrial strategy will continue supporting the growth and competitiveness of UK companies and UK skills.
It’s why we’re reaching out to imaginative industries outside defence…to import new ideas and ways of working. This time last week I was in Farringdon…chairing the Small Business Forum at a digital start-up company.
It’s why we’re working day and night alongside our colleagues in the Departments for Exiting the EU and Business, Energy and Industrial Strategy to address issues that affect industry after we leave the EU; whether it’s Defence exemptions from EU regulations on movement of goods or access to skills and experience.
And it’s why we will continue to bang the drum tirelessly for British business at home and abroad…through doubling export support…through our expanded Defence attaché network…and through speeches like this.
So despite the constancy of a changing world, exciting new possibilities are opening up.
And by working together to build winning capabilities we will do more than enhance our security, more than increase our prosperity, more than inspire a new generation of innovators.
Together we will show that the UK truly is a great global nation, open for a business and a force for good in the world.