Defence scientists reacted with anger yesterday to a Government announcement that most of Britain's secret Defence Evaluation Research Agency (Dera) will be privatised.
Nine thousand scientists work on Dera's military and commercial projects, which vary from stealth technology to germ warfare antidotes to research. The sale of Dera, is seen as a "golden goose" which could raise £1bn for the Treasury.
But David Luxton, of the white-collar union IPMS which represents many of Dera's technical staff, said the latest proposal was "a compromise that will satisfy no one". He added: "This will undermine all Dera has achieved and its reputation for impartiality. The Government needs to go back to the drawing board, use its imagination and find a solution that keeps all of Dera in the public sector." Union officials believe privatisation could cost up to 3,000 jobs.
One Dera scientist said. "The sell-off is ludicrous. This is not the way to conduct research for highly sensitive military projects. Secret military information will end up floating around the private sector. It could lead to more situations like the Iraqi supergun affair."
Sir John Chisholm, chief executive of Dera, said privatisation would allow it to expand into global markets. "We will now be able to raise private capital that will enable us to attract and reward really skilled staff."
Dera, with headquarters in Farnborough and 25 other sites, employs 12,000 people and has a turnover of £1bn. Under the plan, three-quarters of the agency would be floated as ta private sector company in 2001. The Government would initially retain a stake.
Sensitive projects, with 3,000 staff, will remain under MoD control in the retained Dera, including Porton Down chemical weapons arm, although its biotechnology expertise could have lucrative civilian applications. The rest will be sold.
Baroness Symonds, the Defence Minister, said: "This approach would create two vibrant sustainable organisations. The new company would have the freedom to flourish, to grow its business and to diversify the wealth of knowledge it has built up. The retained organisation will be a small but world-class organisation offering rewarding careers within MoD and the wider Civil Service."
Dera was identified for part-privatisation last year but ran into criticism. The cross-party Commons Defence Select Committee described the plan as "fatally flawed" and said that a partial sell-off could jeopardise Britain's close working relationship with the US, with the Pentagon reluctant to allow access to its secret research.
Shadow defence secretary Iain Duncan Smith said: "The Government is scratching for money. They really care nothing about the effectiveness of our armed forces."
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