ALEX BRUMMER: Don’t let overseas looters undermine Britain’s defences

Rarely does the election of a non-executive director result in higher share prices. The election of former Cabinet Secretary and NATO representative Lord Sedwill to BAE Systems’ Board of Directors is a rare exception.

Russia’s unprovoked and rogue war on Ukraine is proving to be an economic shock as damaging as the Covid pandemic.

It has turned an already dangerous rise in inflation into a cost-of-living crisis that is feeding into the national narrative with the rail workers’ strikes and unrest in the public and public sectors.

Fears in Ukraine: BAE’s latest trading update highlights pledges of increased defense spending by NATO

However, Britain’s robust defense and aerospace industry will benefit from Boris Johnson’s willingness to go the extra mile to provide military support to Ukraine.

BAE’s recent trade update alluded to this, citing NATO’s pledges to increase defense spending.

An uncertain world – from the Baltics to the Middle East and Taiwan – is helping the UK defense sector.

Sedwill will have spent two years out of government in November when he joins BAE. That should avoid too many conflict complaints. That won’t stop critics from habitually objecting to Britain’s defense sector.

They forget how hugely important it is to Britain’s innovation, research and development, manufacturing and export ability.

In this context, Economy Minister Kwasi Kwarteng’s decision to wave through the sale of Ultra Electronics to private equity ghouls Advent is a betrayal. Ultra’s sonobuoy technology helps NATO track Russian submarine traffic.

Kwarteng didn’t have to look further than the defenestration of Cobham in possession of Advent to know what he was dealing with.

A number of commitments have been made to protect Ultra’s national security. The UK retains rights, akin to a gold share, in two safe companies emerging from Ultra. T

Hat can look reassuring. But it doesn’t take into account the ruinous implications of burdening Ultra with debt (when interest rates rise) or the reckless, short-term behavior Advent has shown in the past.

The Ultra sell-off is particularly annoying in the middle of a European conflict. The opportunities for the UK are huge, as illustrated by BAE’s £46 billion order book.

BAE alone employs 89,000 people and is the prime contractor for submarines and plays a large role in the manufacture of advanced combat aircraft, including the Eurofighter Typhoon. Spain has just announced it is adding another 20 Typhoons to its air defenses, dominated by British technology.

At a time when rising borrowing costs are weighing on equity markets, BAE and the defense sector are the exceptions.

BAE shares are up 28 per cent this year and, sensibly, ‘gold’ stocks protect BAE and Rolls-Royce, Britain’s other world-class defense company, from overseas takeovers.

This was not the case for the rest of the sector, which is under siege by overseas raiders.

They should be repelled consistently.

pension rights

As a huge admirer of Jim O’Neill and his work on BRICS (sorry about Russia!) and the North, it was a bit disheartening to see this Tory colleague call a 10 per cent increase in the state pension “ridiculous”. ‘.

As the Institute for Fiscal Studies pointed out, raising the statutory retirement age to 66 pushed a quarter of early retirees into poverty.

After the Tories waived the Manifesto’s commitment to the “triple lock” last year, they had a duty to put things right amid the rising cost of living.

Former Pensions Minister Baroness Altmann notes that while public sector workers may struggle to achieve an inflation-sensitive wage increase in 2022, they should be comforted by the fact that their pension systems will be strengthened by annual CPI adjustments.

How would O’Neill survive on £9,500 a year, which is among the lowest state pensions in the developed world?

Gluttony in the boardroom

The vast majority of FTSE 100 top executives have been in good spirits to keep their wage and bonus demands to a minimum during the pandemic.

The railroad dispute with Network Rail and the railroad companies shows why they should do it again.

It’s not looking good for transport bosses to fill their footsteps while trying to appease peers’ wage demands.

In difficult times, increases in the already far too high salary packages on the boardroom should be coordinated with the rest of the workforce.

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ALEX BRUMMER: Don’t let overseas looters undermine Britain’s defences

Source link ALEX BRUMMER: Don’t let overseas looters undermine Britain’s defences

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