It was with no apparent irony that Defence Secretary Denis Healy told Parliament in January 1966 While the Government attach[es] the highest importance to making progress in the field of arms control and disarmament, we must also take what practical steps we can to ensure that this country does not fail to secure its rightful share of this valuable commercial market. The comment was part of a speech in which Healy accepted in full the findings of the Stokes report, whose recommendations centred on the establishment of a small but very high-powered central arms sales organisation. This was also the beginning of a process that saw such an organisation established inside the Ministry of Defence.
Arms sales unit
Based on similar developments in the US under Defense Secretary Robert McNamara, the units aim was to provide sales support to UK arms companies, many of which were publicly owned at the time, to enable them to sell their products more effectively in the global market. The chairman of a military electronics firm, Racal, was seconded to head up the Defence Sales Organisation, as the unit became known, starting an unbroken tradition of arms company executives occupying the post. In 1985 the DSO became the Defence Export Services Organisation (DESO) but in all other respects remained the same. Todays Head of Defence Export Services is Alan Garwood, previously Chief Operating Officer at missile manufacturer MBDA.
The arms industry considers DESO important enough to club together to supplement Garwoods senior civil servant wage with an undisclosed amount to bring him up to the earnings of an industry executive. Yet despite the complete privatisation of the arms industry since DESO was set up, Garwoods supplement is all that the arms industry pays towards what is essentially their very own taxpayer-funded marketing department. Whats more, no other industry is subsidised to such an extent. Relative to its share of total UK exports (which is less than 2 per cent), DESO receives thirteen times the budget of the government organisation which promotes civil exports, UK Trade and Investment.
Government connections
It isnt simply the fact that 500 civil servants work to promote their arms exports that makes DESO so valuable to the industry. In theory, an arms industry trade association like the Defence Manufacturers Association could raise and spend DESOs annual budget of £16 million on marketing itself. What they wouldnt get is the unique, and uniquely undemocratic, access to the heart of government that DESO provides.
Because DESO is a government body, its resources are not limited to the offices that it maintains in 18 countries worldwide. It is able to draw on the support of the military attachés that are located in around 82 UK embassies. By some estimates, military attachés and their support staff spend an average of a third of their time on arms sales, using diplomatic contacts which otherwise would not be available. In addition, DESOs London staff and its head have direct access not just to Defence Ministers but according to former Head of Defence Export Services Charles Masefield, directly to the Prime Minister.
Recent events have highlighted just what benefits arms companies garner from these links. In October this year, the Guardian reported that Tony Blair had visited DESO priority market Saudi Arabia to push £40bn worth of Eurofighter Typhoons on behalf of BAE Systems. With senior ministers helping DESO in their mission, it is little wonder that the organisation can boast on its website that successive Customer Satisfaction Surveys of the UK defence industry revealed that over 75 per cent of …[arms exports] would not have been achieved without the assistance of DESO .
Key markets
DESOs strategic marketing plans also assist the arms companies. Whilst the UK remains prepared to sell arms to just about anyone, DESO does identify priority markets each year where it thinks the best opportunities for UK arms sales lie. The most recent available Strategic Market Analysis is for 2004 and lists 28 countries as key markets, ranging from rich countries such as Japan and Italy, to poorer ones such as Kazakhstan and India. DESOs overseas offices are opened and closed periodically as the emphasis shifts from one market to another. The organisation also attends strategically important international arms fairs. It spent £1m on its presence at 13 of these arms fairs in 2004 (see www.armsfairs.com for more information).
Two of the key markets, though, stand out from the rest, making up a premier league. Even before the possible Eurofighter deal came onto the horizon, repressive absolutist monarchy Saudi Arabia received so much of DESOs attention that the work of up to 200 of DESOs staff focuses on this country alone. The importance of Saudi Arabia dates back to the 1986 Al Yamamah deal, which was negotiated personally by Margaret Thatcher, and was followed in 1988 by an even bigger deal that established an arms-supplying relationship with Saudi Arabia for the forseeable future. It was, and remains, a de facto message of approval to a regime that Amnesty International says has a dire human rights situation.
The other country in DESOs premier league is the worlds foremost imperialist power, the USA. With its global military commitments, the US represents the biggest arms market in the world, a market into which DESO is clearly keen to get UK companies. BAE Systems, which now has several US subsidiaries, is in a good position to supply the Pentagon from inside US territory, but others export from the UK. In fact, in 2004, the US represented the biggest export market for UK-manufactured arms, with licences issued for goods on the military list worth £340 million, plus open (unvalued) licences constituting much more.
Corporate welfare
In the forty years since Healy established the DSO, both the UK and the arms trade have changed a lot. In the 60s and 70s, the DSO operated in a sector that was largely owned by the state and geared towards producing equipment for the UK armed forces. It sold second-hand military equipment that was no longer needed by the UK, and surplus production from equipment manufactured primarily for the UK. Whilst Stokes was keen to see the industry plan ahead to make its products more attractive to these secondary customers, this was still a far cry from the privately-owned, internationalised arms industry of today.
In line with these changes, DESO now seems to support the sale of equipment with only the most tenuous links to the UK, such as Swedish Gripen fighters with UK-made components. Furthermore, in April 2005 the Disposal Sales Agency, which sells the second-hand equipment, was moved out of DESO, leaving the organisation even more squarely focused on what its mission has evolved to be: the most barefaced form of corporate welfare.
Of course, there was no more ethical justification for running a government department with the sole aim of global arms proliferation in the 1960s than there is today. In four decades, DESO has helped facilitate sales of weapons that were used by human-rights abusing states from General Pinochets Chile to Suhartos Indonesia. It has also presided over arms sales to both sides of a conflict, such as during the Iran-Iraq war of 198088.
Yet as developments in the arms industry have made the justifications for DESOs continued existence increasingly redundant, the influence of arms companies over government policy ensures that the organisation itself continues to occupy a prestigious place in the Ministry of Defence. That influence is maintained by a revolving door between government and industry, through the multiple advisory bodies that arms executives sit on, by corporate lobbying, and crucially through the existence of DESO itself. The Defence Export Services Organisation stands at the centre of a pernicious nexus of corporate influence on government, for which we have to pay. Any strategy for ending the misery caused by UK arms exports must include closing it down.
Heads of DESO in the last 20 years-
Colin Chandler 198589
Seconded from British Aerospace; went back to Siemens Plessey, the TI Group, Racal, Vickers.
Alan Thomas 198994
Seconded from Raytheon.
Charles Masefield 19941998
Seconded from Avro and Airbus (part-owned by BAE Systems); went back to GEC and BAE Systems.
Tony Edwards 19982002
Seconded from TI Group
Alan Garwood 2002present
Seconded from MBDA (partowned by BAE Systems).
It was with no apparent irony that Defence Secretary Denis Healy told Parliament in January 1966 While the Government attach[es] the highest importance to making progress in the field of arms control and disarmament, we must also take what practical steps we can to ensure that this country does not fail to secure its rightful share of this valuable commercial market. The comment was part of a speech in which Healy accepted in full the findings of the Stokes report, whose recommendations centred on the establishment of a small but very high-powered central arms sales organisation. This was also the beginning of a process that saw such an organisation established inside the Ministry of Defence.
Arms sales unit
Based on similar developments in the US under Defense Secretary Robert McNamara, the units aim was to provide sales support to UK arms companies, many of which were publicly owned at the time, to enable them to sell their products more effectively in the global market. The chairman of a military electronics firm, Racal, was seconded to head up the Defence Sales Organisation, as the unit became known, starting an unbroken tradition of arms company executives occupying the post. In 1985 the DSO became the Defence Export Services Organisation (DESO) but in all other respects remained the same. Todays Head of Defence Export Services is Alan Garwood, previously Chief Operating Officer at missile manufacturer MBDA.
The arms industry considers DESO important enough to club together to supplement Garwoods senior civil servant wage with an undisclosed amount to bring him up to the earnings of an industry executive. Yet despite the complete privatisation of the arms industry since DESO was set up, Garwoods supplement is all that the arms industry pays towards what is essentially their very own taxpayer-funded marketing department. Whats more, no other industry is subsidised to such an extent. Relative to its share of total UK exports (which is less than 2 per cent), DESO receives thirteen times the budget of the government organisation which promotes civil exports, UK Trade and Investment.
Government connections
It isnt simply the fact that 500 civil servants work to promote their arms exports that makes DESO so valuable to the industry. In theory, an arms industry trade association like the Defence Manufacturers Association could raise and spend DESOs annual budget of £16 million on marketing itself. What they wouldnt get is the unique, and uniquely undemocratic, access to the heart of government that DESO provides.
Because DESO is a government body, its resources are not limited to the offices that it maintains in 18 countries worldwide. It is able to draw on the support of the military attachés that are located in around 82 UK embassies. By some estimates, military attachés and their support staff spend an average of a third of their time on arms sales, using diplomatic contacts which otherwise would not be available. In addition, DESOs London staff and its head have direct access not just to Defence Ministers but according to former Head of Defence Export Services Charles Masefield, directly to the Prime Minister.
Recent events have highlighted just what benefits arms companies garner from these links. In October this year, the Guardian reported that Tony Blair had visited DESO priority market Saudi Arabia to push £40bn worth of Eurofighter Typhoons on behalf of BAE Systems. With senior ministers helping DESO in their mission, it is little wonder that the organisation can boast on its website that successive Customer Satisfaction Surveys of the UK defence industry revealed that over 75 per cent of …[arms exports] would not have been achieved without the assistance of DESO .
Key markets
DESOs strategic marketing plans also assist the arms companies. Whilst the UK remains prepared to sell arms to just about anyone, DESO does identify priority markets each year where it thinks the best opportunities for UK arms sales lie. The most recent available Strategic Market Analysis is for 2004 and lists 28 countries as key markets, ranging from rich countries such as Japan and Italy, to poorer ones such as Kazakhstan and India. DESOs overseas offices are opened and closed periodically as the emphasis shifts from one market to another. The organisation also attends strategically important international arms fairs. It spent £1m on its presence at 13 of these arms fairs in 2004 (see www.armsfairs.com for more information).
Two of the key markets, though, stand out from the rest, making up a premier league. Even before the possible Eurofighter deal came onto the horizon, repressive absolutist monarchy Saudi Arabia received so much of DESOs attention that the work of up to 200 of DESOs staff focuses on this country alone. The importance of Saudi Arabia dates back to the 1986 Al Yamamah deal, which was negotiated personally by Margaret Thatcher, and was followed in 1988 by an even bigger deal that established an arms-supplying relationship with Saudi Arabia for the forseeable future. It was, and remains, a de facto message of approval to a regime that Amnesty International says has a dire human rights situation.
The other country in DESOs premier league is the worlds foremost imperialist power, the USA. With its global military commitments, the US represents the biggest arms market in the world, a market into which DESO is clearly keen to get UK companies. BAE Systems, which now has several US subsidiaries, is in a good position to supply the Pentagon from inside US territory, but others export from the UK. In fact, in 2004, the US represented the biggest export market for UK-manufactured arms, with licences issued for goods on the military list worth £340 million, plus open (unvalued) licences constituting much more.
Corporate welfare
In the forty years since Healy established the DSO, both the UK and the arms trade have changed a lot. In the 60s and 70s, the DSO operated in a sector that was largely owned by the state and geared towards producing equipment for the UK armed forces. It sold second-hand military equipment that was no longer needed by the UK, and surplus production from equipment manufactured primarily for the UK. Whilst Stokes was keen to see the industry plan ahead to make its products more attractive to these secondary customers, this was still a far cry from the privately-owned, internationalised arms industry of today.
In line with these changes, DESO now seems to support the sale of equipment with only the most tenuous links to the UK, such as Swedish Gripen fighters with UK-made components. Furthermore, in April 2005 the Disposal Sales Agency, which sells the second-hand equipment, was moved out of DESO, leaving the organisation even more squarely focused on what its mission has evolved to be: the most barefaced form of corporate welfare.
Of course, there was no more ethical justification for running a government department with the sole aim of global arms proliferation in the 1960s than there is today. In four decades, DESO has helped facilitate sales of weapons that were used by human-rights abusing states from General Pinochets Chile to Suhartos Indonesia. It has also presided over arms sales to both sides of a conflict, such as during the Iran-Iraq war of 198088.
Yet as developments in the arms industry have made the justifications for DESOs continued existence increasingly redundant, the influence of arms companies over government policy ensures that the organisation itself continues to occupy a prestigious place in the Ministry of Defence. That influence is maintained by a revolving door between government and industry, through the multiple advisory bodies that arms executives sit on, by corporate lobbying, and crucially through the existence of DESO itself. The Defence Export Services Organisation stands at the centre of a pernicious nexus of corporate influence on government, for which we have to pay. Any strategy for ending the misery caused by UK arms exports must include closing it down.
Heads of DESO in the last 20 years-
Colin Chandler 198589
Seconded from British Aerospace; went back to Siemens Plessey, the TI Group, Racal, Vickers.
Alan Thomas 198994
Seconded from Raytheon.
Charles Masefield 19941998
Seconded from Avro and Airbus (part-owned by BAE Systems); went back to GEC and BAE Systems.
Tony Edwards 19982002
Seconded from TI Group
Alan Garwood 2002present
Seconded from MBDA (partowned by BAE Systems).