Juliusz Sabak: What is the scope of the Polish-British military and industrial cooperation agreement, that is due to be signed by the end of 2017?
Hariett Baldwin, Parliamentary Under Secretary of State and Minister for Defence Procurement: Our defence relationship with Poland is incredibly important in the UK. We have obviously two of the most significant budgets in terms of defence in NATO. Of course the UK made a decision to leave the European Union but obviously we remain deeply committed to the defence and security of Europe and also very importantly we have a range of different defence and security relationships.
Over the summer our government published all ongoing commitment unconditional to the security of our continent. We think there's a lot we can work together with Poland and we are very grateful to Poland for the hospitality they showed to 150 of our armed forces who are based here in Poland.
Clearly, we have a lot of common equipment programs and so I've had some very useful meetings today to discuss how we can broaden, deepen that equipment collaboration. Of course other countries have very strong economic relationships in the defence industry in the particular, there are some very strong collaborations ongoing and I'm hoping that those will continue to broaden and deepen as well.
So it will be related with the cooperation in the scope of NATO presence in the East European countries and on the eastern flank of NATO but also of the industrial cooperation.
Yes, because often what happens is that we are procuring similar equipment and have similar requirements to other countries and so in particular today on the agendas there've been a number of programs where the UK is involved. For example, we've already invested 1 billion pounds in the Watchkeeper programme and I know that this is the one the Polish MOD is considering as they look at that particular capability. For the UK MOD we think that it would be a wonderful opportunity not only in terms of capability of our armed forces but also a really strong industrial collaboration with Poland and then potentially an opportunity to export that capability into third countries as well.
Brytyjscy żołnierze na ćwiczeniach w Polsce, fot. MoD UK
Brytyjscy żołnierze na ćwiczeniach w Polsce, fot. MoD UK
We've invested a great deal of our taxpayers' money in developing that capability and we really value it for our armed forces. The UK government strongly supports that particular effort similarly where we have helicopters with particular capabilities. To give you an example we have a range of helicopters that have an antisubmarine capability for example as well as search and rescue capability. And there again it is always great to work with the country where they have similar requirements and indeed we have common specification. In my understanding is that in the case of Poland's particular requirements.
At the moment the Leonardo offer in the helicopters is the only one that is meeting the specification in terms of size of the helicopter requirement and that again would be the opportunity for inward investment into Poland but it would also mean that the UK was using very similar equipment so there would be some benefits for both sides on that.
So it will be some kind of cooperation on the industrial level and also on the military level in support in training?
Poland understandably wants a sovereign capability, inward investment into Poland and job creation and we appreciate that and often it's the case. So to go one the third example the ground base air defence. MBDA is working closely with Polish industry. There is again the opportunity for some strong inward investment and the ability to have sovereign technological capability as well. The UK government has been working closely with the Polish MOD on that.
In fact, it will be related with the main programs for the Polish armed forces in the near future?
Yes, because our both countries are increasing the defence spending budgets and there will be some commonality in the equipment that we have. It's going to improve the prosperity of Poland and the UK if we can work together on the industrial side and improve the capabilities of both the armed forces if we can work together on the military side.
Yes, but it can be complicated. Do you think that there is enough work in those programs for industries of Poland and the UK?
From the time we've been discussing with the different parties on those particular programmes. But don't forget there's always the third countries export markets. We're not the only two countries in the world that are thinking about the capabilities and how best to address the capability gaps, how best to improve capabilities, how to invest the increasing defence budgets because we've turned corner in terms of NATO defence spending. Since the 2014 Wales Summit and of course the Summit here in Warsaw in 2016 there has been progress in terms of not only the percentages that people are spending but also as the economy grows the uptick value of defence spending.
We always hear from the representatives of the UK government that all those programmes, all those offers to Poland are supported by the UK government. What does it mean in fact?
It will very obviously depend on the situation. We have a Defence and Security Organisation which is a part of our department of the international trade that have a tremendous reach and understanding through our defence attaché network around the world and so many different MCs working very closely with our armed forces in those countries which are allies to identify the potential requirements going forward and giving them backing either through those contacts but also sometimes from export finances as well.
We've increased the amount of money that we allocate in the export finance so often we can work with another country to offer something that has a significant amount of the UK content. It doesn't have to be exclusively the UK content.
Then of course there's the other element which is the cooperation perhaps in terms of equipment training or indeed on combined exercises so we can work with each other's equipment to ensure that we understand and have interoperable skills again through our strong military collaboration that is another element that we value and other countries value in terms of working with us.
Projekt lekkiej fregaty Type 31e, ilustracja: http://www.stellersystems.co.uk/
Projekt lekkiej fregaty Type 31e, ilustracja: http://www.stellersystems.co.uk/
We've also just published our national shipbuilding strategy for the general purpose frigate which is called the TYPE 31E for export. We are inviting everyone to get involved and see how best they can meet the requirements that we've spelled out in that programme. For example, the "E" stands for export, for what we've tried to do there is to recognize that it's not just the Royal Navy that has the requirement for the frigates for the next two decades it's also around the world there will be a demand for frigates and let's see if there's an opportunity to work together to design something that will be very competitive in those export markets. That will enable the growth in that area of work.
So it means that you support export but also support the end-users in Poland - the army and the other forces on the level from parts to the training.
Potentially yes because we spend a lot on defence, Poland spends a lot on defence but I always think we both get better value from money if we can work together in common programmes. The money will go further if it is spent on the similar capabilities rather than everybody going their own way and starting from scratching every single country.
I understand that you are not only talking with Poland. So I assume that you are also thinking about the Baltic states which are rather small but have very big needs. Can you say anything about the wider cooperation in the Central and Eastern Europe?
Of course. We do value bilateral and multilateral cooperation with lots of other EU countries and of course with the US, Canada and our allies Australia, New Zealand and of course important allies in the Middle East. There's a range of strong defence relationships. Where I can give you a very good example we are investing in maritime patrol aircraft called the P8. We are building nine of these aircrafts. We've signed a trilateral agreement with Norway and with the United States who are also operating the same aircraft so that we can work together in terms of replenishment, all going basing, all going patrolling, all going training and so on. Again that makes it just that much more efficient for us all three countries to work together so that’s a good example.
Another great example is our Typhoon aircraft which is very much a backbone of our air force capability where we are working with Germany, Italy and Spain and obviously we have a range of different countries which have bought into that aircraft. It's one that is constantly being upgraded and improved by our work together with other countries. It means we can invest more in those upgrades and improvements.
I know that the Eurofighter is starting again fighting in Poland for a contract because we will be buying more combat aircrafts.
It's a fantastic aircraft. It's very reliable and it's been proven in operations and the reliability has been exceptional. And of course because it's such a tried and tested piece of equipment it's very good in terms of knowing the ongoing cost of support is. And with the other main country nations were able to work in improving and upgrading the weapons, the other capabilities in the aircraft. And we were delighted recently that further countries are committed to joining the family of the Eurofighter Typhoon nations with Qatar signing the statement of intention to buy 24.
But when you're talking about Typhoon and the cooperation, first thing that comes to my mind is of course Brexit. Currently, Brexit is being negotiated, on the other hand Great Britain remains a very important NATO ally. During the ANAKONDA exercise in Poland we have seen British and German engineers employing together a pontoon bridge, a symbol of military cooperation. To what extent could Brexit affect the military or industrial cooperation between the Great Britain and the other European countries? Do you think that joint major projects will be continued?
Well, I think that they are completely separate issues. The EU is obviously a legal construct with a parliament and our country has chosen to leave this legal construct, the move towards more federal Europe, single currency - we've said no we don’t want to go this path. But what we want to do is retain our deep and special friendship with other European countries. We will be still in NATO, there are many countries that are in NATO and not in the EU. There are also EU countries that are not NATO members. It's that they distinct things in our view.
We do have a lot of multilateral equipment programmes, not only with the US whereas we are the team partner in F35 and we're making 15% of each of those 3000 aircraft in the UK. But also of course the French were originally a partner in Typhoon, then they pulled out and developed their own approach.
Clearly, we work with them on A400M programme for example. We are buying 22 A400M, we've taken delivery of 16 and actually we've seen them deployed in the Caribbean with the heavy lift capability which I think has really proven itself in the difficult situations. So I think that is a programme which has some bad publicity because of the gear box issue as you know at first. But those have now been rectified and that's got back on track.
We work closely with French and obviously the Spanish and the Germans on that so I would see this equipment collaboration has been very distinct form membership of the legal construct that is the EU. As you know the negotiations are ongoing.
We are talking about the ongoing systems but what is the future because the EU is thinking about integrating defence industry, defence programs inside the EU. Don't you think that in the end it may cause some problems because Great Britain will be outside the system of internal European Union defence industry?
I certainly think there will always be change in the world of defence industrial cooperation. I know Poland works a lot with the US companies and the US have nothing to do with the EU. So I see them as very distinct issues and in terms of leaving the EU. Will it mean that countries in the EU will want to develop equipment without the skills of the BA systems, Rolls Royce, Leonardo, Thales UK? We do have a lot of major industrial capability within the UK that I know is valued very highly not only by ourselves as the customers but also by other countries. I would think it would be a lost for all involved if it would be decided that just because we decided to leave the legal construct of the EU we can no longer be involved in the defence and security programmes.
In Poland we have discussion is it Polish or foreign offer made by PZL-Świdnik owned by Leonardo or Sikorsky owned PZL Mielec. How do you perceive the UK manufacturers like Leonardo Helicopters factory in Yeovil or Thales UK, which is part of mainly French Thales corporation?
I think we really value the capabilities that we have at Yeovil. I know it's Centre of Excellence for Leonardo in terms of helicopter manufacture. I know that the company is involved in discussion in terms of Poland's procurement of helicopters and clearly the more helicopters that Poland wants to buy from Leonardo the more there will be built in Poland. If Poland buys a lot of helicopters form Leonardo, they will obviously predominantly involve the Polish manufacture.
Nevertheless, there will be an element that comes from Yeovil and therefore the UK government is very supportive of that discussion because we see it as valuable into UK jobs and UK prosperity. I know we work very closely with the Italian government to work on this common approach because we believe that it's in both countries' interest. So I hope that answers your question.
From your point of view it's more important to be part of the international market than thinking about what is local or not?
These are all important factors. Number one will be making sure that you’ve got the right capability for the armed forces. At the end of the day it has to be the best capability. I understand that in the specific case of helicopter requirement that a helicopter that can carry 12 people is a larger helicopter and this is a part of that requirement. I believe Leonard offer meets that requirement.
Second important aspect for us is the value for the money for the taxpayers. So we need to make sure getting a really good promise. Third requirement is to take into consideration the impact on the UK prosperity. It has meant that we don't exclusively buy only UK equipment. In fact, our procurement is international by design but we work with our suppliers in terms of the inward investments into the UK. Because it is a good place to do business and because we have a very strong workforce we have a lot of inward investment. We've been successful for example in the case of F35 of building 15% of 3000 aircraft which is a much bigger number than building 100% of 138 aircraft that the UK requires.
Not only that but we also won the bid to do all of the F35 maintenance, repair, overhaul and upgrade in the avionics in north Wales so we will be the global hub for that. So although I would get as a politician people say: "Why did you buy an American airplane?", I would say: "You know at the end of the day the economic impact in the UK by being a part of the larger international programme is more positive than if we have just build a UK capability”. But I appreciate this will always be a subject for politicians to debate and for the press to cover with energy and vigour.
Also the case I would make to the Polish government is that if we are able to work together on the Leonardo offer for helicopters which involves significant amount of ability to transfer the technology into Poland, if it's a big order then that would allow us to work together to look at some of the world markets for helicopters which is significant. That is something that I would be emphasising in my discussions with the Polish government.
The same idea is for the watch keeper in which Poland will be supporting in some ways and we'll have some share in any Watchkeeper exported.
So these are two great examples and I would add the ground base defence to that of where we can increase the security of our two countries as well as the prosperity of our two countries.
Thank you for the conversation.