Defence Acquisition

The Government welcomes the Committee's inquiry and agrees with a number of its recommendations, but rejects the conclusion that the UK lacks a defence industrial strategy and does not agree that tax revenues should be considered in investment appraisals.

• On industrial strategy, the Government "rejects the Committee's conclusion that the UK lacks a defence industrial strategy", saying the February 2012 White Paper replaced the 2005 Defence Industrial Strategy. It also does not agree that the White Paper puts the UK at a disadvantage.
• On tax revenues, the Government says "does not agree", citing the complexity of a large open economy and possible legal challenge. It says it does not consider exchequer tax revenues in its investment appraisal process.
• On the Joint Strike Fighter, the Government "notes" the concern and states that the 2010 decision "was right, based on the information available at the time", but was re-examined when the facts changed.
• On the future of Defence Equipment & Support, the Matériel Strategy is in an assessment phase expected to last about a year, comparing a GOCO and a public sector comparator. A final decision is "expected in summer 2014".