Anglo-French tie-up cheers defence firms

DEFENCE contractors yesterday gave a cautious thumbs up to plans for greater military cooperation between Britain and France, which could help soften the blow of swingeing cuts to government spending on big projects.

Prime Minister David Cameron and French President Nicolas Sarkozy yesterday signed two treaties, paving the way for an unprecedented degree of collaboration in a number of defence areas, including aircraft carriers, submarines, nuclear technology and a joint ground force.

BAE Systems, Britain’s largest defence contractor, welcomed the decision to cooperate on unmanned air systems or “drones”, which have become commonly used in the Iraq and Afghanistan conflicts.

A source close to BAE said that France and Britain should pool their resources to invest in a new generation of European unmanned aircraft, instead of buying off the-peg systems from the US.

Pursuing the latter option would lead to a skills shortage in Europe and the UK, the source said, adding: “You need a steady trickle of work to maintain those skills for the future.”

Rolls Royce was more equivocal, believing that it is too early to tell whether the agreement will have any impact on defence spending. “The real answer is the devil is in the detail, the feeling is it’s hard to say either way,” said one source.

Tina Cook, defence analyst at Charles Stanley, said the Anglo-French deal would likely mean fewer project cancellations.