BAE Systems boosts UK economy by £10 billion

BAE Systems reveals the full extent of its contribution to the economy as Britain’s defense industry is besieged by foreign bidders



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BAE Systems revealed the full extent of its contribution to the economy as Britain’s defense industry is under siege from foreign bidders.

The contractor supported 143,000 UK jobs and generated more than £10 billion for UK GDP in 2020, according to research from Oxford Economics.

This is the equivalent of 0.5 percent of the entire UK economy.

Highlight: BAE Systems supported 143,000 UK jobs and generated over £10bn to UK GDP in 2020

Highlight: BAE Systems supported 143,000 UK jobs and generated over £10bn to UK GDP in 2020

The company employs 35,300 people in the UK, and more than 40 percent of its staff work in deprived areas.

Britain’s largest defense group and many of its rivals play a key role in the leveling agenda.

But the broader defense and aerospace industries are being targeted by a large number of foreign buyers – with companies like Cobham, Ultra Electronics and Meggitt falling prey to bidders in multi-billion-pound deals.

Business Secretary Kwasi Kwarteng will face a major test of his approach to takeovers in sensitive industries next week when he receives a report from the Competition and Markets Authority (CMA) on the £2.6 billion attack on Ultra Electronics by private equity giant Advent International.

Kwarteng last year instructed the CMA to investigate the deal.

Politicians and pundits have urged the Business Secretary to block or severely restrict the Ultra connection, as the company makes critical equipment, such as submarine-hunting sonobuoys, which could be critical in the years to come. to ensure the safety of Great Britain on the seas. Tory grandee Lord Heseltine, former Royal Navy chief Admiral Lord West and Defense Committee chairman Tobias Ellwood are among those who have criticized the Ultra deal.

Earlier this month, ministers were given the power to intervene in foreign takeovers. The National Security and Investment (NSI) Act forces the government to investigate deals in 17 sensitive industries.

This includes energy, artificial intelligence, nuclear, aerospace and advanced robotics.

The acquisition of artificial intelligence specialist Blue Prism was swayed by shareholders this week and likely became one of the first deals to be put on the line. Ultra’s investigation began under previous legislation, the Enterprise Act of 2002, so it will not be considered under NSI laws. BAE is one of only two companies – along with Rolls-Royce – that cannot be sold to foreign bidders because the government owns a so-called ‘golden share’. The £18 billion company has 50 locations in the UK and a global workforce of around 90,000. It exported £3.9 billion worth of goods and services in 2020, equivalent to 0.7 percent of all UK exports.

Charles Woodburn, chief executive of BAE Systems, said: “The investment we make in highly skilled jobs, research and development and our extensive supply chain supports thousands of companies and tens of thousands of people and the communities in which they live.”

Defense Procurement Secretary Jeremy Quinn said BAE “helped us level the country by supporting tens of thousands of jobs.”

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