One could be forgiven for believing a British company with annual sales of £1billion plus, being the country’s largest employer of science and engineering graduates, recruiting 300 every year, and credited with ground-breaking inventions such as microwave radar, thermal imaging, flat panel speakers and liquid crystal displays would be considered an asset to the nation and treasured by our government. But not only was Qinetiq, the former state-owned defence evaluation and research agency, sold off, it was done in such a way for the House of Commons Public Accounts Committee at it’s public hearing on 3rd December 2007 to lambast the sale as “stinking to high heaven”.
The facts are not in dispute.
In 2001 Dr. Lewis Mooney the then defence minister simultaneously announced the creation and sale of Qinetiq saying, it would continue to remain a British company. Two years later the same Lewis Mooney gifted Carlyle, the American private equity asset-strippers, a 33.8% stake in the company. A deal which made Carlyle the preferred bidder and valued Qinetiq at £125million. Three years later and with Lewis Mooney, now Lord Mooney, Qinetiq’s stock exchange flotation valued it at £1.3billion, ten times the government’s best guess, allowing Carlyle to walk away with a £400million profit.
It was these shenanigans which were condemned by the Tory chairman of the Public Accounts Committee, Sir Edward Leigh, as being “against any concept of ethical capitalism”.
Curiously it is the Labour government which having botched the sell-off now defends the outcome even justifying the self-serving smash and grab by the top ten civil service managers, who helped themselves to a £107million slice of the company for a stake of just half a million pounds. An enhancement described by the Financial Times as representing a 19,900% profit!
John Pugh, a Lib Dem member of the Commons committee hit the nail on the head, “It’s difficult to think what the MOD could have done worse apart from putting Qinetiq on Ebay”.
Deja vu
With an impeccable sense of occasion and on the first anniversary of the Qinetiq debacle Mooney’s successor, Bob Ainsworth, returned to the (stock) market to flog the Defence Aviation and Repair Agency (DARA) based at Almondbank, Perth.
DARA at Almondbank is according to the local MSP Rosanna Cunningham a “state of the art world class centre of excellence” and a “cornerstone of the local economy” according to Perth Council leader Jimmy Doig.
DARA at Almonbank employs 350 engineers and skilled technicians and is to be bundled for sale with the helicopter repair facility at Southampton; together they generate £50million of revenues.
This July the minister announced Vector Aerospace of Canada as the preferred bidder, saying according to the BBC, that the “interests of the workforce will be taken into account at all times”.
Yes Minister! What he means is the cattle at the Perth Bull Sales will get more consideration.
The minister would do well to listen to Peter Allenson, the T&GWU national secretary for the public services who condemned the sale decision saying it “was a betrayal of skilled workers by a government in love with privatisation”.
And the Almonbank workers would do well to consider the fate of Rosyth. In 1997 when Babcock bought the naval dockyard it employed 3,000 ten years later that number has shrunk to 1,300. In 1997 Babcock paid £25million for the dockyard and the 150 acres of associated land; land which according to the Dundee Courier (08/02/07) is now part of a proposed £500million leisure and shopping development.
Swords into Ploughshares
According to the Ministry of Defence (Defence Statistics Bulletin No.7) direct and indirect defence related employment had fallen from 410,00 in 1997 to 310,000 in 2004.
Babcock and Vector might not want the skills of the Rosyth and Almondbank workers but the nation does. It would be a national disgrace if the Almondbank workers are thrown onto the scrapheap of unemployment. Their skills can and must be saved. Instead of squandering the nation’s scarce resources on botched privatisations the government should set a new economic and technological agenda that looks to combat the growing energy crisis, improve public transport and reinvigorate the health services which would use the skills of the displaced defence workers.
Thirty years ago the Lucas Aerospace shop stewards proved that it was entirely feasible to re-direct military spending into innovative civil manufacture at companies like DARA. At Lucas they produced a six-volume corporate plan that matched the skills of the workforce to a proposed 150 products which included, for energy -solar and hydrogen fuel cells, for transport -a hybrid road and rail vehicle and for health -a kidney dialysis machine.
To paraphrase the LibDem MP, John Pugh, Put the armaments factories on Ebay if you wish but preserve the skills of the defence workers for the benefit of the British people.
All the country needs is the political will to do it.
