Government urged to step-up defence spending

Sep 2 2009 by Andrew Mernin, The Journal

MAJOR players in the region's defence industry last night warned the Government it would be shooting itself in the foot by cutting spending on military supply projects.

The Defence Industries Council (DIC) yesterday said North East businesses which supply the Ministry of Defence could be a driving force in pulling the region out of recession – but only if they are given the Government backing they need.

The DIC published two reports which highlighted the importance of the defence and security sector – which employs 300,000 people nationally and 6,100 in the region – to the recovery of the UK economy.

The trade body said the recession should not be an excuse for “budget-led exercises” that would jeopardise the UK’s security.

The organisation said instead, the defence and security industry should be used as “one of the paths out of recession”.

The warning comes weeks before the party conference season, when it is widely thought all main parties will consider spending cuts in the defence sector in the wake of global financial turmoil.

DIC chairman Mike Turner said the economic downturn had created the ideal climate for the North East’s defence-related industries to flourish.

He said: “As the economic frailties of the British economy become more apparent, there has perhaps never been a better opportunity to harness the full potential of our defence and security industrial base in the North East and use it as one of the paths out of recession.

“This will not only provide skilled jobs in the North East, by promoting economic growth, it will also help to balance our economy and enhance our nation’s defence against the growing threats – on our own streets and throughout the world.”

Meanwhile, defence industry leaders in the North East yesterday put their weight behind the DIC reports and urged the Government to kick-start delayed military programmes to boost the economy.

Robin Fox, of Newcastle-based business development group Northern Defence Industries (NDI), said: “We know full well that if you put money into defence, it flows down into the supply network and creates jobs here in the engineering and manufacturing sectors.

“For every job that is created in the defence sector, a further 1.6 jobs are created in other related industries in the supply chain.

“It’s now time for the Government to take some decisions in getting some of the programmes that have been delayed into being so that we can stimulate the supply network.”