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Despite the uncertainties over our future defence strategy and pressure on
defence spending, the United Kingdom's Defence
Industry has proved to be a remarkably resilient and successful element of
our national manufacturing base.
Despite the rationalisation which is still taking
place within the defence sector, it is generally accepted that defence
employment provides a significant element of the broader UK economy via
salaries paid through the supply chain.
Historically, the UK
defence industry has possessed the capability and competence to provide a
wide range of advanced systems and equipment to support our own Armed
Forces. This capability, matched with their competitiveness, has enabled
UK companies to command a sizeable share of those overseas markets for
which export licence approvals are available.
At home, UK industry has
consistently provided some 75 per cent, by value, of the equipment requirements of
The Ministry of Defence. In simple terms, in recent years our industry has
supplied £9 - £10 billion worth of goods and services for our Armed
Forces annually while a further £3 -5 billion worth of business has
accrued to the UK defence industry from sales to approved overseas
customers.
The United Kingdom's
defence companies are justifiably proud of their record in recent years, in
the face of fierce overseas competition. Reductions in the UK's Armed
Forces and the heavy demands on our remaining service personnel, who face
an unpredictable international security environment, make it inevitable
that considerable reliance will be placed upon the support and surge
capacity offered by our comprehensive indigenous defence industrial base.
Without this effective industrial base, the ability of the UK to exert
independence of action or influence over collective security arrangements
would be constrained. It is essential that government policies ensure that
industry retains the necessary capabilities to support our forces in a
changing world.
Up until now, the United
Kingdom's defence industry has been highly successful in supporting the
United Kingdom's Armed Forces with high quality equipment. It has also
made a significant contribution to our balance of payments. As a strategic
resource, it is vitally important that it should attract the appropriate
levels of research and development funding to maintain the necessary
technical excellence and production facilities to meet the needs of the
future.
The defence
industry is not only a major employer, but it is also the generator of high
technology, that is readily adaptable to civilian use in fields, such as
avionics and engine technology. The future of the UK's defence industry
will almost certainly have to be properly planned, if it is to remain an
efficient and essential national support organisation in times of crisis.
A look at MoD payments to contractors during FY 2004-2005 identifies some of
the larger manufacturers.
Major Contractors Listing
Contractors paid over £500 million during 2004-5
BAE Systems PLC
QinetiQ Group PLC
Contractors paid between
£250 million and £500 million during 2004-5Babcock
International Group PLC
British Telecommunications PLC
EADS
Finmeccanica
General Dynamics Corp
Rolls Royce Group PLC
Serco Group PLC
Thales Defence PLC
Contractors paid between
£100 million and £250 million during 2004-5
BP International Ltd
EDS Defence Ltd
Fujitsu Services Holding PLC
Haliburton Corporation
Interserve PLC
Le Grand Annington Ltd
Lockheed Martin Corp
Raytheon Company
VT Group PLC
Contractors paid between
£50 million and £250 million during 2004-5
AMEC PLC
Aqumen Services Ltd
Atkins Facilities Management Ltd
The Boeing Corporation
Cobham PLC
International Business Machines UK Ltd
Lex Defence Management Ltd
Marshall Group PLC
Modus Services PLC
Sodexho Defence
Steria Ltd
Swan Hunter (Tyneside) Ltd
The Weir Group
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