Scottish Daily Mail

Industrial goliath set to take flight

- Ben Griffiths Ben Griffiths is City News Editor of the Daily Mail

FOR Britain’s aerospace industry and plane-spotters alike the waiting is almost over. In less than three weeks the muchvaunte­d F-35 combat jet will make its debut in UK skies.

The appearance of the Joint Strike Fighter over the Royal Internatio­nal Air Tattoo is set to make the two-day charity air show at RAF Fairford a sell-out event.

More significan­tly, Defence Secr etary Philip Hammond is expected to use Europe’s biggest military air display to announce the first major UK order for the state- of-the-art aircraft, which will be known as Lightning II once in service.

The order is expected to be for the first 14 operationa­l aircraft for the Royal Air Force and Royal Navy – several are already in use for training but based in America.

The F-35 programme i s the world’s biggest defence programme and crucial to Britain’s military aerospace sector.

Weapons-maker BAE Systems alone has a 15pc share of work on each of the 3,000-plus jets that will roll off Lockheed Martin’s production line in Fort Worth, Texas.

BAE, which is also a major player in the Eurofighte­r consortium that manufactur­es the Typhoon, makes the rear section of the jet including tail surfaces.

Much of the high-tech electronic­s is UK-made and the ejection seat which the pilots will sit on is made by Britain’s Martin-Baker.

Lower down the supply chain hundreds of small to mediumsize­d businesses, including 500 in the UK, will continue to benefit from the manufactur­ing process for years to come. Britain had originally intended to buy 138 F35s. But with an average cost of around £100m a piece once support costs are included, some experts suggest the MoD will eventually purchase just 48 aircraft.

Although the F-35s will be based at RAF Marham in Norfolk from 2018 – where the historic 617 ‘Dambusters’ Squadron will be the first to operate them – they have the ability to take- off and land vertically thanks to ingenious Rolls-Royce engines.

That means the aircraft will be able to fly from the deck of the new Queen Elizabeth aircraft carrier, which is also British made.

This massive vessel will be officially named by the Queen on July 4 at the Rosyth dockyard near Edinburgh when Her Majesty breaks a bottle of English champagne against the freshly-painted hull. Together with its sister ship the Queen Elizabeth project is costing £6.2bn. The F-35 is hotly tipped to be on hand to make its public debut in the UK flying overhead as part of that ceremony.

Late and over-budget the F-35 and aircraft carrier may be, partly due to political interferen­ce.

But seen together in around a fortnight the pair will surely herald a new era for British military aviation. As a metaphor for the nation’s powerful aerospace and defence manufactur­ing sector they ultimately represent a success, albeit an expensive one.

Boon for private investors

PRIVATE investors are celebratin­g the economic recovery by piling back into shares, if the latest numbers are to be believed.

Equity holdings among small shareholde­rs have surged to a post- crisis record of £238.8bn – just 3.5pc below the all-time high of £247.3bn reached just before the global financial meltdown of 2007.

One interestin­g fact about the recent private investing boom has been the astonishin­g £58.3bn taken out in dividends in the past seven years, according to analysis by Capita.

Another is that small investors are now the largest investor group in this country.

Their ownership of equities exceeds the combined holdings of pension funds and insurance companies.

Yet the share of UK plc held by individual­s is just 11.3pc. Pension funds account for some 4.7pc and big insurers around 6.2pc.

Unsurprisi­ngly foreign investors hold the lion’s share of 53.2pc of UK quoted shares.

This clearly illustrate­s the power and influence overseas funds such as US giant Blackrock hold over British listed companies, adding weight to the argument that the blue-chip FTSE100 is no longer representa­tive of the wider UK economy, which is more closely tracked by the mid-tier FTSE250 index.

On average, foreign investors and major institutio­ns only hold shares for around two years, whereas private investors sit tight for around five years.

This means retail shareholde­rs are increasing­ly important for quoted c ompanies, a f act acknowledg­ed by the recent flood of initial public offerings that have included chunky offerings to the small investors.

As Justin Cooper at Capita Asset Services points out, it is easy to overlook how important private investors are, but they now dwarf pension funds and insurance companies. They represent a stable, long-term investor base for companies.

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