Hutton robs forces, pours MoD cash into UK arms biz

Who's the winner with Future Lynx? Not the troops. Not us taxpayers, that's for sure. Not the workers at AgustaWestland either - they aren't getting all that missing cash, they'd mostly jump at the chance of a half-million pound payoff.

Absolutely nobody wins here except shareholders and senior management at AgustaWestland. Nobody wins except the devious arms-industry lobbyists who infest Parliament and Whitehall like a plague of well-fed cockroaches.

At this point, the armsbiz fatcats concerned usually start talking about "sovereignty" - that is, it's better to pay double or triple in money, time and blood so as to have "British made" kit. With Seahawks and Blackhawks, you'd need to go cap in hand to the Yanks for parts all the time. Not good.

What they don't mention is that the Future Lynx uses American engines, dependent on an American support base - so you have to go cap in hand to the Yanks anyway. And, just as an extra benefit, you are also dependent on parts and support from Italy and France as well.

So "sovereignty" is snake oil, and the whole deal is a colossal ripoff. The helicopter factory in Yeovil has done this to us time and time again - in the case of the British-built Apache attack copters bought in the 1990s, every worker whose job was "saved" (so that it could be expensively "saved" again now) could easily have been given a full million pounds to go away, had we simply bought our Apaches from the US assembly line. And we'd still have saved hundreds of millions.

The gloom doesn't stop there. Recently the British Army managed to insist that it didn't want to pay for the modernisation of the moribund UK tank industry. For their new miracle-vehicle plan, FRES*, the soldiers decided to buy mostly American. General Dynamics was made "provisional preferred bidder". The programme would still have been a nightmare, as a well-protected vehicle light enough to be air freighted is pretty much impossible to build (another good reason to go by sea rather than air if possible). At least we wouldn't have been saddling ourselves with another bloodsucking UK factory, though.

But it appears that the British arms biz has managed to scupper the deal, using their "sovereignty" scam to brilliant effect. Essentially, the MoD rule is that even when the British forces are permitted to buy from overseas, UK industry must be allowed as much of the pork as possible - producing subsystems such as sensors, computers etc. British bits give a piece of kit more "operational sovereignty", goes the thinking.

Sounds reasonable, doesn't it?

Unfortunately, in the case of a high-tech integrated system like the proposed FRES Utility Vehicle, the Brit subcontractors can argue that the UK must be given full access to all the designs - all the intellectual property - of the main system, otherwise they can't compete for the subassembly deals.

A previous example was the F-35 jets, in fact, where after massive transatlantic wrangling the UK and its companies managed to gain full access to the latest American stealth technology. Some people at least in the USA were highly suspicious about this, hinting strongly that American tech was effectively being stolen for sale elsewhere.

Nobody is saying so publicly, but it seems clear that the Americans weren't going to let that happen again with General Dynamics' "Piranha" vehicle. The UK wouldn't get any special access, any more than a normal overseas customer gets to a US programme.

The Tories' defence spokesman, commenting on the matter yesterday to Bloomberg News, said: “The government has wasted time and money on a solution which required General Dynamics to concede something that they were never going to give.”

But it wasn't the British Army's need for vehicles which "required" General Dynamics to hand over all their technology to UK industry. It was UK industry's desire to have that technology, and to sell bits and pieces to the MoD even after they'd failed to win the contract. Other nations will buy Piranhas, and other American things like fighters or weapons, and they won't try to gouge kickbacks like this - they'll just buy what their troops need. Only in Britain does defence (and even foreign) policy get glovepuppeted quite so blatantly by the arms industry.

Anyway. The Army has apparently decided to cut its losses on the nigh-on-impossible Utility Vehicle, and will instead now look to award a contract for the smaller, less difficult Scout Vehicle requirement. Arguably the whole concept of armoured scouting has been rendered rather moot these days by such things as drone aircraft, but one may be sure that the Army's influential cavalry regiments won't agree; and their current vehicles are certainly aged and embarrassingly crap. It seems a safe bet that BAE Systems plc - owners of the remaining, decayed British tank factories - will be looking to set up another chain of bloodsucking Yeovil-style workforces on the back of this.

Let's hope the soldiery manage to give them the slip again: but one has to suspect that if they do, the government of the day will simply keep forcing them to reconsider until they agree to be bled white forever more.

All in all, a very good day for the UK's arms industry - and a damned bad one for the UK and its armed forces. ®

*Future Rapid Effects System