UK plans arms export drive to offset cuts

MILLBROOK, England (Reuters) - Britain will try to boost defence exports to offset possible job losses after a defence sector review that is expected to slash spending, the Ministry of Defence said Wednesday.

All UK defence programs will be included in the review, part of an effort to reform Britain's Cold War defence architecture and cut costs as the country tackles a big budget deficit, the MOD's procurement chief said.

"There will be a very, very, very heavy ministerial commitment to the process," Peter Luff, minister for defence equipment, support and technology in Britain's new Conservative-led coalition government, said of boosting exports.

"There's a sense that in the past we were rather embarrassed about exporting defence products. There's no such embarrassment in this government," he told reporters at a defence hardware show.

Luff gave no target or details on how Britain -- already a leading arms exporter -- would boost defence exports, adding only that aerospace sales were strong and that he wanted more exports from other defence sectors.

His message seemed at odds with comments by the head of the Army, General David Richards, who told Prospect magazine it was not the military's job to prop up ailing industries.

"If they're too expensive versus the competition then I don't think it's our job to spend money simply to keep those industries alive, "he said.

Richards is a leading contender for promotion to overall head of the British armed forces.

DEFENCE REVIEW

The country's future defence planning will be set out after a strategic defence review due in the autumn, Luff said.

Finance minister George Osborne presented a tough budget on Tuesday aimed at tackling a deficit of about 11 percent of national output. He said most departments faced real cuts of 25 percent over four years, but suggested he could go easier on defence, recognising "particular pressures" in this area.

Britain's core defence budget totals about 36.9 billion pounds ($55 billion) for the 2010-2011 financial year.

No defence program in which Britain is involved will be excluded from the review, Luff said.

"The problem is, programs have crept in that shouldn't have been allowed to creep in," he said.

Key tests for future programs include whether the equipment produced is adaptable and exportable, he said.

He said the government would look to work with allies like France and the United States on future acquisition programs.

Multinational projects in which Britain is involved include the Airbus A400M troop transporter aircraft, the Eurofighter combat jet and U.S. giant Lockheed Martin's F-35 joint strike fighter aircraft.

Seven European nations agreed to bail out the delayed A400M project with a 3.5 billion euro injection in March, but ratification of the accord has been held up by budget pressures in several partners including Britain.

(Additional reporting by Adrian Croft; Editing by David Cowell)