Latest UK report reveals fall in export deals
The UK government on 26 October published statistics that paint a broad picture of defence equipment exports in 2020 and the last decade, highlighting how the UK positions itself in the global landscape alongside its EU and non-EU competitors.
A report from UK Defence and Security Exports (DSE), based on data released by manufacturers and government agencies — highlighted almost £8 billion ($10.9 billion) worth of export contracts in 2020 — a 28.1% year-on-year decrease compared with the £11 billion recorded for 2019.
The economic impact of COVID-19 may have been one reason: the report mentioned that total exports to the lucrative Middle East market fell from 57% in 2019 to 19% in 2020, citing the economic impact of the pandemic on regional defence budgets and the price of oil.
However, DSE calculated that the UK was still the second-largest defence exporter in the world (behind the US) over the past ten years.
As for its share of the global defence exports market in 2020 alone, DSE found that the UK secured 6% in 2020, behind only the US and Russia.
(Source: UK DSE)
In terms of export market share in comparison with major competitors (US, Russia, France, Germany and Italy) in a ten-year timeframe (2011-20), DSE statistics suggested that the UK has matched or outpaced France or Russia for most of that period apart from 2013 and 2018.
The latest DSE data is particularly interesting compared to figures released by the Stockholm International Peace Research Institute (SIPRI) in March 2021 — perhaps reflecting different methodologies and the fact that SIPRI (unlike DSE) included China in its calculations.
In its 'Trend in international arms transfers, 2020' report, SIPRI put the UK as the sixth-largest arms exporter between 2016 and 2020, accounting for 3.3% of global arms exports.
The SIPRI data also described a substantial 27% plunge for UK defence exports in 2016-2020 compared with 2011-2015.
Between 2011 and 2019, the UK signed several major export deals.
The biggest ones include deals worth between £6 billion and £6.8 billion apiece with Kuwait, Saudi Arabia and Qatar in 2016, 2017, and 2018 for Eurofighter Typhoon aircraft.
Concept image of Eurofighter Typhoon with Kuwaiti insignia. (Photo: Leonardo)
Furthermore, the value of the US F-35 programme must be factored in as UK companies play a significant role in manufacturing parts of the aircraft.
In 2020, Lockheed Martin commissioned KPMG to conduct research which found that UK industrial participation in the F-35 programme delivers an estimated £40.6 billion in gross value added (GVA) to the UK economy between 2007 and 2038.
He said: 'Our role as an organisation has always been to make sure that we've got the smoothest possible relationship with our international partners'.
He added: 'Against that backdrop, looking as to how we're going to play our part with our colleagues across government across the services across the various ministries, in implementing both the Integrated Review and the Defence and Security Industrial Strategy '.
An optimistic Goldsack stated that the UK is 'not afraid of the competition' because it is 'very confident in the quality of the technology it offers'.
Challenges still remain, not only with the market after COVID-19 but also with Europe after Brexit. Commenting on the issue of export licences post-Brexit, Goldsack said that licensing ‘will always be a live issue’ but ‘our licensing system is the tightest in the world… And we shouldn't be afraid of that. That means that what we do is properly scrutinised’.
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