Comprehensive report on the importance of defence and security exports to the UK
- Increasing defence and security exports contributes to national security and prosperity
- Government support for exports needs to be strategic and more long-term
- The UK’s robust export licensing regime should be strengthened further
ADS is today publishing an in-depth report into the valuable role defence and security exports play in delivering national security and prosperity.
The leading-edge technology, training and support supplied by the UK’s defence and security industries help our international partners to better protect themselves. Increasing exports also helps to sustain important capabilities essential for our own national security.
Strengthening the UK’s export control regime is a key part of the prosperity agenda. Already the most robust and transparent export licensing regime in the world; the report puts forward measures to enhance its effectiveness.
Increasing exports enables industry to invest in developing new technologies and innovation, providing the UK’s armed forces and security agencies with access to leading-edge technology, training and support.
Positive outcomes of a more coordinated approach to exports identified in the report include:
- Embedding strategic political support; establishing a clear and enduring framework for doing business with the UK
- Boosting practical support through several measures including lowering the cost and improving the coordination of trade missions; raising awareness of export support schemes
- Strengthening the export control regime by increasing scrutiny through open licensing, and enhancing licensing advisory functions.
Paul Everitt, Chief Executive of ADS Groups says: “The report provides Government and industry with a practical framework for increasing defence and security exports.
“A more coordinated approach to supporting exports will contribute to our national security, supporting prosperity and high value jobs. The recommendations outlined in this report support the valuable work being done by the Defence Growth Partnership and Security and Resilience Growth Partnership.
“International budgets are under pressure, competition is fierce and UK industry needs to be able to win its share of global market opportunities. This report sets out how companies of all sizes can gain from opportunities to export, all of which is underpinned by the world’s most robust and transparent licencing regime.”
Government support for defence and security exports provides a crucial level of endorsement. Within the export market, as the end customer is often another government, leveraging existing networks and using market insight more intelligently is crucial. It means industry UK can tailor solutions and so compete more effectively against other international suppliers.
For SMEs, a more joined-up approach to identifying future market opportunities would be useful as often smaller companies lack the resource necessary to commission international research or establish in-market contacts.
Boosting exports will logically result in a corresponding increase in demand for export licences. A number of rigorous checks and balances currently exist to ensure that UK export activity contributes to the government’s mutually reinforcing objectives of safeguarding national security; delivering economic prosperity, and promoting British values abroad.
Preserving confidence in the regime while making changes so that it can accommodate a growth in demand for licences more efficiently is a leading priority. The report sets out several practical ways to bring about this efficiency including:
- Increasing scrutiny though open licensing: Open licences are subject to strict conditions and regular compliance audits. With just 148 standard individual export licences (SIEL) refused of over 13,500 applications in 2013, shifting more SIELs to the open category would allow greater scrutiny of more complex and contentious SIEL applications.
- Enhancing export licensing advisory functions so that companies understand ahead of time the extent to which their goods and services are subject to export control policy. This would also reduce the number of unnecessary applications requiring attention.
- Reducing requests for further information by providing an early guidance service owned and operated by the government. This will mean fewer delays to delivery times, something which can undermine UK competitiveness; create a backlog, and risk reputational damage. Currently, more risk-averse exporters are choosing to forgo pursuing potential opportunities over concerns that a licence will be rejected.
The UK’s armed forces and security services have an outstanding reputation internationally. We are the largest exporter of defence equipment and services in Europe and second globally to the United States. Our industrial base is in a position to bolster national security at a time when the threat landscape is becoming increasingly volatile.
International competition within the defence and security markets is rising and the UK risks losing its valuable lead. This will naturally impact the vital economic contribution made by the defence and security sectors. Going forward, the objective should be to take the UK’s world-leading products and services that meet the needs of export customers and deliver them with a UK seal of approval through a simple and transparent export system.
ADS Group - Security and Prosperity 2015 - Strengthening UK Defence and Security Exports.pdf