On 8th September business and council leaders, based in the South West, were invited to present their views to the UK Parliament's Defence Select Committee.

The Defence Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Ministry of Defence and its associated public bodies.

The inquiry is examining the defence industrial policy of the Ministry of Defence (MoD), exploring procurement policy in relation to UK prosperity and the Department’s impact on the defence supply chain.

Nick Hurst, Artemis CEO, spoke on the barriers often encountered by SMEs when looking to be considered for new contracts issued by the UK MOD and other allied forces.

This is an edited version of the debate:

Nick spoke about the reasons for basing the company in Plymouth: “From our point of view, we initially moved to Plymouth in 1994 to take advantage of the incentives that were being offered to locate to the science park at Langage. Just recently, we signed a new 15-year lease, reinforcing our long-term commitment to maintaining our position in Plymouth for a few reasons. The main ones would be the relative proximity to MoD Abbey Wood and Army HQ; the potential to collaborate with the abundance of defence-based companies in the region; the ability to expand our foothold at relatively low cost to elsewhere in the country; the local support of local MPs and other trade organisations and the LEP; and, very importantly these days, down here in the south-west the work-life balance we can offer our employees is perhaps more attractive than elsewhere in the country. That is becoming an increasingly important factor these days, post covid, when people are looking for a new role or a new job.”

Richard Drax, Member of Parliament for South Dorset asked: “Can I ask (you) to speak about why Plymouth is a place to invest globally? Is there the brand awareness that makes Plymouth attractive in the same way that Detroit is attractive from the car industry’s perspective? Have we reached that point where there is international brand recognition for Plymouth, or is that something that the MoD needs to work on more closely with Plymouth?”

Nick: “It strikes me that R&D investment in projects by the MoD seems to stop at Bristol, and the south-west is quite often ignored and not given the sort of funding that seems to be available to the M4 corridor and other parts of the UK.” “… Plymouth has a lot to offer. There is an abundance of defence companies down here, with some clever people. The MoD itself perhaps needs to partition its strategy a little bit, so that it does not always favour the larger enterprises and considers the smaller enterprises. We can often react quickly to situations and we tend to be more innovative. I think that a certain amount—or more—of the R&D spend could be targeted to the south-west and particularly Plymouth.”

Derek Twigg, MP for Halton: “What are your perceptions or views on the international defence market in terms of whether it is a level playing field and how fair it is?”

Nick Hurst: “In general, no, I do not think it is terribly fair. As a business, we are lucky enough to have some specific qualifications and capabilities that allow us to access the international defence market without too much difficulty, as we operate in a niche. I am aware it is difficult for others. We have often found that traditionally difficult markets such as the US are difficult to break into, but we have been more successful because of our technology and know-how. They are generally more welcoming to us.

That said, as a component-supplying SME, we are often frustrated by the market’s tendency to bias decisions towards the larger enterprises, as I mentioned earlier. As such, we are often stifled in our ability to offer solutions, which we know provide a good technical advantage and offer not only real value for money, but, in many instances, were we to be engaged at an early stage, essential savings.

When the Government are looking at making large platform acquisitions, they do not always insist on strong protocols regarding onshore supply, meaning that UK plc can sometimes lose out on these things. Brett, I don’t know if you have anything to add to that.”

Derek Twigg MP: “How would you suggest that small businesses or Government change, in terms of having many more small businesses involved?”

Nick: “One of the frustrations we have is that trying to sell UK Defence-funded technology overseas to allies is frustratingly difficult. There are many obstacles put in our way that prevent us from talking to allies about some of the technology that we have developed for the UK and that we could sell and would be great for UK plc. We have two examples of that that we have worked on in the last seven years and that we have developed; these are assets in the UK now. We were told at the very beginning that there would be an export—the MoD would sponsor us to take this out and export it to allies, certainly, across the world, and we have found that that has not happened. It has been very frustrating, and you get very little feedback from the MoD when you ask for some help in that regard.”

“I keep banging this drum, but SMEs are the life blood of the UK economy, according to Boris, yet we get very little support, particularly from the MoD but also from Government in general, in terms of being able to exploit some of these opportunities that exist for us worldwide.”

Richard Drax MP: “This question is to you all.  What would you like to see from a new defence industrial strategy?”

Nick: “I would add that the MoD—I feel a little sorry for the MoD in this respect—seems incapable of looking much more than 18 months ahead at any one time. Babcock have just published a 50-year plan for what they want to do in Plymouth. The MoD do not seem able to look much further than, as I say, 18 months. I think part of the reason for that is that every time there is a Cabinet reshuffle, there is a new Secretary of State for Defence who has different priorities from the previous Secretary of State, and then there is pressure from the Treasury and so it is a moving feast. It is like a wobbly jelly. They cannot actually hold it in place for very long before things are changing. I think the way Government runs these large Departments needs to be looked at. It is quite an old-fashioned way of doing it. If you look at countries around the world and the US and elsewhere, they have permanent Secretaries of State, or the equivalent thereof, who remain in post for a decade or more. You find that there is a much more solid strategy and plan, and procurement is more straightforward.”

“… we have developed some technology that we could sell, but are unable to sell. Equally, by the same token, we spent about £60,000 developing some technology for a platform that is being offered at the moment. The decision should have been made on that in 2015 when we did the work, and every year it has been pushed out another year and another year. I am referring to Warrior. I don’t know if you are familiar with that. And here we are in 2020, five years later, £60,000 worse off for our troubles and still no sign of that actually going ahead.”

A full transcript of the debate can be downloaded here:

https://committees.parliament.uk/oralevidence/844/pdf/

Watch the session: Defence industrial policy: procurement and prosperity

https://parliamentlive.tv/Event/Index/c3d5ec18-0de6-4570-8fbb-7c5724607b09

Further information:

Artemis Optical www.artemis-optical.co.uk

Steve Lees, Marketing Manager

0044 7894 745527

About Artemis Optical

Artemis Optical is a designer and manufacturer of high-precision, technically differentiated optical thin-film coatings, supplying blue-chip original equipment manufacturers. With 29 employees and a 22,000 sq ft facility and environmentally controlled production laboratory, Artemis is based in Plymouth in the south-west of England. It is now one of only a few companies globally approved by US authorities to provide laser protection filters and is widely acknowledged as a market leader in HUDs (Head-up Displays).