The MoD door opens a little wider for industry

THE MONDAY INTERVIEW James Arbuthnot : The arms procurement minister tells Russell Hotten how he hopes to convince Britain's defence companies he is on their side

After years of Thatcherite emphasis on competition and open markets, Britain's defence companies sense a subtle shift in the policies of the Ministry of Defence. The conventions of MoD-speak mean that officials cannot actually call it a change. But cut through the weasel-words, and it is clear the Government is emphasising anew the importance of supporting the UK industrial base and fomenting closer collaboration with European defence companies.

Of course James Arbuthnot, eight months into his job as defence procurement minister, denies that such considerations have ever been far from the thoughts of MoD officials. But executives at the coalface of the defence industry have often wondered whether the MoD really understood the needs of British companies.

"What we do not want to do is give an impression that we want to create a protected British defence industry," Mr Arbuthnot says. "But procurement policy has to take a more systematic account of the industrial issues."

Mr Arbuthnot, an archetypal Tory whose background includes Eton, Cambridge and the law, has worked as an assistant whip, and private secretary to both Peter Lilley and Archie Hamilton, but the MoD is the biggest opportunity yet to advance his political ambitions.

He'll have plenty of work, not least in convincing the defence industry that the Government has the sector's best interests at heart. Recent orders, especially last year's award of a helicopter contract to America's McDonnell Douglas, caused some concern for people worried about jobs and Britain's technological base.

The Whitehall rumour mill has been rife with talk that the MoD was pushed into adopting a more coherent industrial procurement policy by the DTI. Mr Arbuthnot says a sub-committee of the National Defence Industries Council, made up of businessmen and MoD officials, will now have a greater input in procurement decisions.

He acknowledges that the role of the DTI will become more important but denies suggestions of a departmental power struggle behind the scenes. "The DTI is concerned with helping industry, whereas the MoD is British industry's single biggest customer. There is an obvious tension between these two interests. But we are working closely together."

That is why the MoD looks certain to oppose any attempts by British Aerospace and GEC to bring their operations together and create a national defence champion. Negotiations about closer ties appear to have been shelved for the moment. But the issue is strongly tipped to be back on the agenda once George Simpson gets his feet under the table at GEC.

Mr Arbuthnot will not voice any outright opposition to a merger, but the hints are strong enough. "It is no secret that to have a national champion would cause us some difficulty because our long-term interest is having value for money, and having good competition.

"What we are interested in is cross-border mergers between companies in different countries, so that there can be a genuine rationalisation of defence industries."

Mr Arbuthnot acknowledges that in a world of smaller defence budgets, maintaining competition is not always possible. But he rejects suggestions that the MoD's own warship procurement policies have encouraged the reduction in the UK's shipbuilding capacity.

Last month's order for Type 23 frigates is evidence that competition in UK shipbuilding is working, he says. Even so, analysts believe there was only ever going to be one winner for the order, GEC's Yarrow shipyard, because rival Vosper Thornycroft no longer has the facilities.

"The award of the order was the result of a competition, and Yarrow won by putting in a significantly lower price," Mr Arbuthnot says. "The fact that one of them won does not mean the end of competition."

Even so, he is clear that MoD orders alone will not keep UK shipbuilding afloat. Vosper, Yarrow and VSEL will have to continue to diversify if they are to survive, he says.

With the defence industry in such a state of flux, the procurement ministry is a department where an ambitious MP can make his name - or break it.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Brendan O'Carroll as Agnes Brown in the 2014 Mrs Brown's Boys Christmas special
Could Mrs Brown's Boys take the lead for second year running?
News
news
News
peopleIt seems you can't silence Katie Hopkins, even on Christmas Day...
Arts and Entertainment
tvChristmas special reviewed
PROMOTED VIDEO
Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)
tvOur review of the Doctor Who Christmas Special
Life and Style
fashion
Arts and Entertainment
Japanese artist Megumi Igarashi showing a small mascot shaped like a vagina
art
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
i100
Arts and Entertainment
Left to right: Stanley Tucci, Sophie Grabol and Christopher Eccleston in ‘Fortitude’
tvSo Sky Atlantic arrived in Iceland to film their new and supposedly snow-bound series 'Fortitude'...
Arts and Entertainment
Jenna Coleman as Clara Oswald in the Doctor Who Christmas special
tvForget the rumours that Clara Oswald would be quitting the Tardis
Arts and Entertainment
tv
News
The Queen delivers her Christmas message
newsTwitter reacts to Her Majesty's Christmas Message
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all