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Old 26th Jul 2007, 13:33
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DefenseNews: Brown Confirms Demise of U.K.’s Defence Export Services Organisation

British Prime Minister Gordon Brown has signaled he will shut down the Defence Export Services Organisation (DESO) in its current form. Brown told members of Parliament in a written statement July 25 that defense exports in the future are to be integrated with the government’s general trade support activities.

The government will move “responsibility for defense trade promotion from DESO to UK Trade and Investment,” the statement said. “This will provide much greater institutional alignment across government.” UK Trade and Investment is a government body responsible for aiding exports of all kinds from Britain, and providing assistance for incoming investment here.

British defense exports are second only to those of the United States. DESO figures released recently show exports in 2006 reached $10 billion, part of a total of $41 billion in overseas sales achieved since 1998.

Exactly how the government move will affect the defense export sales effort here is unclear at the moment. One government insider said it appears the size, shape and nature of the government effort will likely change.

Brown’s statement said account would be taken of the “specific features of defense exports, including the continuing role of the Ministry of Defence.”
Institutional arrangements will come into effect as quickly as possible after an implementation plan to replace DESO is completed by the end of 2007, said the statement.

But BAE Systems, the country’s largest defense and aerospace firm, expressed concern about the move. A BAE spokesman said the company “is surprised and disappointed about this decision, which has been taken without any consultation with the industry stakeholders. The U.K.’s defense industry has been hugely successful in the export market over a period of many years, not least because of the close support of DESO operating within MoD, and the associated links with the U.K.’s greatly respected Armed Forces.

“It is not at all clear how this will work under the proposed new configuration,” the spokesman said. “BAE Systems looks forward to being consulted by government on this fundamental alteration affecting the government’s support to one of the U.K.’s few very successful manufacturing, engineering export sectors.”

The move also drew an immediate response from Derek Marshall, the director of aerospace, defense and homeland security at the Society of British Aerospace Companies, a leading trade body here.

“SBAC is disappointed by the decision to reallocate the responsibilities of the Defence Export Services Organisation — ending more than 40 years of coordination and promotion of defense exports,” he said. “We will need to take some time to understand and assess the implications of the new arrangements. It is disappointing that the government did not consult or discuss this approach with industry before making this decision.”
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