Defence Industrial Strategy

The Defence Industrial Strategy (DIS) is a United Kingdom government policy which was published as a white paper on 15 December 2005. The purpose of the DIS is stated to be to ensure that the UK armed forces are provided with the equipment they require, on time, and at best value for money. This is achieved through the maintenance of sovereign capabilities, i.e. the capabilities of UK companies in key defence areas.

The DIS is structured into three parts. Part A outlines the strategy, part B reviews the UK defence industry, and part C describes the implications of the DIS and how it is to be implemented.

The DIS builds upon the Defence Industrial Policy published in 2002 and the Strategic Defence Review of 1998. UK defence procurement was radically changed by the government of Margaret Thatcher - cost plus contracts and "national champions" were abandoned in favour of competitive tendering. This made the UK defence procurement market the most open in the world and in contrast to the European continent and America. The DIS reverts to the concept of "national champions" to maintain vital capabilities, as identified by the Ministry of Defence "to maintain appropriate sovereignty and thereby protect UK national security." The Defence Industries Council warned in 2004 that the continuation of a totally "open market" approach would see the UK "lose almost completely the strong industrial base that has supplied our armed forces. UK sovereignty could be threatened."

The DIS has been widely seen as confirming BAE Systems as the UK's "national champion". Of the key industrial capabilities which must be maintained several are dominated by BAE, including naval vessels and submarines, armoured fighting vehicles (over 95% of the UK’s AFVs are BAE products), fixed-wing aircraft, general munitions (with the exception of certain "niche capabilities abroad") and Network Enabled Capability (defined as C4ISTAR in the DIS). After the publication of the DIS BAE Systems CEO Mike Turner said "If we didn't have the DIS and our profitability and the terms of trade had stayed as they were... then there had to be a question mark about our future in the U.K."

...
Wikipedia