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Defence Exports

Volume 474: debated on Tuesday 1 April 2008

The Secretary of State for Business, Enterprise and Regulatory Reform
(Mr. John Hutton)

The Prime Minister’s statement of 25 July 2007, Official Report, column 83WS announced a machinery of Government transfer moving responsibility for defence trade promotion from the Defence Export Services Organisation (DESO) to UK Trade and Investment (UKTI). As outlined in my ministerial statement of 11 December 2007, Official Report, column 16WS, this transfer takes place today, 1 April 2008, with the launch of the new UKTI Defence and Security Organisation (UKTI DSO).

This statement is made in close consultation with my colleagues the Secretary of State for Defence and the Secretary of State for Foreign and Commonwealth Affairs. With this transfer, ministerial responsibility for trade and investment in the defence and security sectors now rests with the Minister of State for Trade and Investment, a joint BERR and FCO Minister. Close links with MOD Ministers will be maintained.

The Government remain fully committed to supporting the defence sector and its continued export success. Defence equipment manufacture is highly important to our economy and the creation of the new UKTI Defence and Security Organisation (UKTI DSO) will allow us to develop our support for the defence sector building on the good work of DESO in the past and taking advantage of UKTI’s experience in helping other sectors.

In line with normal machinery of Government transfers, the relevant resources transfer at current levels from MOD to UKTI (and its parent departments BERR and FCO). Some 240 posts and the associated resources transfer with effect from 1 April, 200 in the UK and 40 overseas. To ensure UKTI DSO has continued defence expertise, around half of the posts will be filled by military and civilian staff on loan from the MOD. The remaining posts will be filled by staff transferring permanently.

A new security directorate is being established within UKTI Defence and Security Organisation, to enhance the support provided to business in the military and civil security sector. This will bring together support previously provided separately by DESO and UKTI into a coherent and co-ordinated national effort to help UK companies in this increasingly important area of the economy to win business from overseas Government and business customers.

This transfer will also enable us to enhance support for defence exports in a way that emphasises our commitment to the highest business standards. UKTI Defence and Security Organisation will seek to assist the defence industry to achieve a more consistent performance across industry as a whole, demonstrably supporting good governance and responding to the compelling business case for transparency and ethical behaviour.

The UKTI Defence and Security Organisation will continue to have strong links to the MOD. Arrangements have been formally set out in a Service Level Agreement (SLA) between UKTI and MOD (published today, 01.04.2008, and a copy of which will be placed in the Libraries of both Houses). The terms of the SLA include the provision support for overseas campaigns, ongoing engagement of Defence Ministers, and the loan from the MOD to UKTI of both military and civilian personnel.

In line with the Prime Minister’s statement and my previous statement, no changes are envisaged to existing and planned agreements between the MOD and other Governments. The MOD export licensing function, previously part of DESO, is being retained within MOD.