Outlook: Raytheon missiles

WHEN A hard-nosed American defence contractor offers to fulfill an order for half the contract price, you can be sure there are catches. In the case of Raytheon's bargain-basement bid to arm the Eurofighter with its latest whizz-bang missile, these fall into two categories.

First, if the Ministry of Defence does indeed decide that Raytheon's offer is too good to resist, it will in effect snuff out the competition from British Aerospace-Marconi, ensuring that the US retains a complete monopoly in advanced air-to-air missile technology.

Second, it will give the US Congress the whip-hand over future sales of the Eurofighter to third countries, since American approval will be required for the export of its missile hardware. In the event that the Eurofighter was in a straight dogfight with a US-built F-22 for a big overseas order, that could make for an interesting vote on Capitol Hill.

That said, the firepower in this defence procurement contest looks to be increasingly on the side of the Americans. The choice lies between buying an enhanced version of an existing US missile which will arm the Eurofighter initially anyway, or an all-new Anglo-French missile, which remains untried and untested.

The Eurofighter is itself already a fantastically expensive folly, having consumed pounds 30bn of British, German and Italian taxpayers' money to preserve a few thousand jobs in Wharton and elsewhere. Helping BAe finance the development of its Meteor missile to arm the aircraft, just to demonstrate that Europe retains a technological capacity of its own in this cutting edge area of weaponry, risks throwing good money after bad.

In any event, there is no immutable reason why Britain should insist on having its own proprietary technology in every branch of military procurement, particularly when the defence industry is becoming such a small world. Was it not the chief executive of BAe, John Weston, himself who ruffled European feathers at the Paris Airshow by setting out his vision of the global (ie transatlantic) defence company?

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