UK's Hammond Announces Missile Deal

Sep. 10, 2013 - by ANDREW CHUTER  - Defense News

At DSEi, Defense Minister Also Resists EU 'Interference'

LONDON — Britain’s Defence Secretary Philip Hammond opened this year’s DSEi defense and security exhibition in London with a £250 million (US $391 million) deal for missile maker MBDA and a broadside for European Union plans to reform the defense sector.

Hammond announced the production deal for the Sea Ceptor missile, which will provide air defense for the Royal Navy’s Type 23 and later Type 26 frigate fleet.

The contract follows a £483 million development deal, signed in December 2011, to get the missile into service in 2016.

The Sea Ceptor, the naval variant of the Common Anti-air Modular Missile, is the first of several contracts or selection announcements due this week at DSEi.

BAE Systems is likely to roll out several suppliers selected for the Royal Navy’s upcoming Type 26 frigate program. Rolls-Royce, with the MT30 gas turbine, is likely to top the list of suppliers announced on Wednesday.

An order for a fourth F-35B joint strike fighter to join three jets already delivered to the British for operational evaluation is possible by the end of the week.

While the missile industry here will have welcomed the defense secretary’s speech, the same can’t be said of the European Union.

Hammond said Britain will resist EU attempts to interfere in the defense market as outlined in a policy paper published by the commission in July.

The British are invariably opposed to further regulations and oversight by Brussels and are expected to hold a referendum in the next few years on whether to stay in the European Union.

Hammond told this DSEi audience of industry executives and military personnel that on this issue, his German counterpart has also been expressing reservations about the ideas scheduled to be considered at a EU defense ministers summit in December.

The British defense secretary said that some of the proposals, such as improving competition in the internal defense market and support for small- and medium-sized enterprises, were welcome

Other proposals were not. “Interference in defense exports and government-to-government defense sales represent a significant extension of the commission’s role and is not necessarily in the best interests of the UK defense industry and will be resisted,” Hammond said. “We will carefully eye potential interference from Brussels,” he said

“We don’t believe, and we are not alone — my German counterpart speaks with vigor in this area as well — that increased competitiveness in the defense industry means actually more competition, not less. We cannot embrace a solution that feels like somebody in Brussels is directing some kind of latter-day command policy,” Hammond said.

“For Europe to stand a chance in the global defense industry of the future we have to have products that are exportable. It’s no longer going to be enough for three or four European countries to get together. Typically that will not create enough demand. We want to to see an approach supportive of the industry which doesn’t try and deliver that support by imposing a solution which is actually anti-competitive. The UK would be very resistant to that,” he said.

The Brussels policy paper recommends a series of reforms aimed at what the EU reckons is required to create a more competitive and efficient defense and security in the face of falling defense budgets across the region.

Howard Wheeldon, of Wheeldon Strategic Advisory, said Hammond’s attack on Brussels was “absolutely justified and the words he used were the [ones] industry would support. However, actions speak louder than words.”