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A BASIC Success Story: Closure of DESO
In a written ministerial statement on 25 July 2007 the UK
Prime Minister announced changes as to how defence trade promotion
would be handled by the government. This centred on closure
by the end of the year of the Defence Export Services Organisation
(DESO), the 450-strong department within the MoD devoted to
helping the defence sector sell military equipment abroad
by lobbying foreign governments and organising marketing campaigns.
UK Trade and Investment, the Whitehall agency responsible
for promoting British exports across all industries, will
take charge of promoting arms sales alongside its general
responsibilities for civil export promotion. This will undoubtedly
down-grade the attention given to defence sector promotion.
Some key DESO responsibilities, and the Saudi project, will
remain within the MoD.
BASIC has highlighted DESO's role, amongst other government
departments, in the provision of extensive government support
for arms transfers at the expense of the UK taxpayer and Britain's
international reputation and security. Three years ago we
succeeded in getting the government to admit to providing
a subsidy to exporters through the Export Credit Guarantees
Department, and to estimate the level of that subsidy, using
a method pioneered by BASIC. The UK government is now seeking
to influence other governments with export credit agencies
to do the same. Defence trade makes up a significant proportion
of such credits.
BASIC has worked closely with the Treasury to tackle the
subsidies more generally, and highlight the role of DESO in
particular. We were involved in the disclosure in late June
2007 that both the Treasury and MoD were conducting a comprehensive
review of DESO, and we were in communication with officials
at the heart of government involved with these decisions.
BASIC will now seek to ensure that the closure of DESO heralds
a deeper change in government policy and not just a re-organisation
of the same activities from one agency to another.
Publications
- The UK Defence Industrial
Strategy and Alternative Approaches, by Dr Steven
Schofield, BASIC Paper No. 50, March 2006. The Defence Industrial
Strategy is a lost opportunity of historic proportions.
Rather than address a broader global security context the
Ministry of Defence follows an all-too predictable path,
defining security in exclusively military terms. Also available
as a pdf file at: http://www.basicint.org/pubs/Papers/BP50.pdf.
- What Happens When
A White Elephant Meets a Paper Tiger? The Prospective Sale
of Eurofighter Typhoon Aircraft to Saudi Arabia and the
EU Code of Conduct on Arms Exports, BASIC Paper
46, 23 December 2005.
- Escaping the Subsidy
Trap: Why arms exports are bad for Britain, This
report demonstrates that significant subsidies are provided
to UK arms exports, and that there are no economic or employment
gains to be had from such support, BASIC, Saferworld, Oxford
Research Group, 22 September 2004.
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