(13 years, 7 months ago)
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Mark Menzies (Fylde) (Con)
Thank you, Mr Deputy Speaker, for granting me the time and the opportunity to hold my first Adjournment debate. It may be my first Adjournment debate, but the topic is one on which I have spoken many times, both in the House and locally in the constituency. It is no less a subject than the future of UK military aircraft production.
The debate could not be more timely. Only last week, unfortunately, BAE Systems, which has its military headquarters in Warton in my constituency, announced potentially 1,000 job losses. I know that BAE Systems and the trade unions are working hard to minimise that eventual figure, but it serves as timely notice to us that the issue is not one of numbers or technology. It concerns people’s lives, jobs and the UK maintaining a sovereign capability in an area in which we are currently world leaders.
I refer to comments made by the Prime Minister and the Chancellor of the Exchequer shortly after the election, when they said that one of the most important things that we had to do as a nation was to rebalance the economy, and rebalancing the economy was about being less reliant on services and moving on to manufacturing. It was about jobs being in the north rather than in the south. It was about jobs with high export potential that earned serious money for this country. I can think of no other sector that ticks all those boxes more than the UK military aircraft division.
I know that you, Mr Evans, and your fellow Deputy Speaker, the hon. Member for Chorley (Mr Hoyle), are precluded from taking part in the debate by the office that you hold, but both of you have a long-standing record as doughty defenders of the UK military aircraft sector.
In the north-west the industry is the engine room of the entire regional economy. From Warton, Samlesbury and the other plants that we have, tens of thousands of component suppliers and many, many small shops and taxi firms gain a living from the work that is done there.
In this debate I shall focus on a few key areas—the future of the Typhoon programme, the exports that we can derive from that, and the unmanned aircraft programme, which, I am proud to say, is being developed at Warton. There are some Members in the House who say that we should not be concerned about having a UK military aircraft capability, that sovereign capability was for yesteryear, and that we should be buying off the shelf. What they seem to forget is that the UK is the shelf. We are world leaders in most of this technology. When it comes to unmanned aircraft, the work is not done in the United States. The Americans are not the world leaders, they are not at the cutting edge and they do not have the talented people. The work is done here in the United Kingdom—in the north-west, in Lancashire, in Warton and in Samlesbury. That is where the talent lies, and those are the people whom I am here to represent this evening.
I therefore call on the Minister, when he makes his remarks, to reflect on the importance of the future of the unmanned aircraft industry to this country, because it is not just an industry that we lead, but one of huge potential growth both in the realm of military technology and for civilian use. We live in an unstable world, and as part of the security and strategic defence review we have considered all sorts of threats. They include an increased risk of piracy, the need to defend key oil installations and tackling human trafficking. Unmanned aircraft in their various forms are a fantastic way of including flexibility in one’s military capability in order to address a number of those risks. Aircraft such as HERTI are flexible enough to allow civilian operators to take on some of those roles, leading to less reliance on Governments.
Typhoon, or the Eurofighter as some people may know it, is primarily built at Warton, but work has also been done at Samlesbury, and there has been talk recently about the importance of tranche 3B and why it is crucial for the RAF to place orders. I appreciate that when it comes to the lack of money in the defence budget, we are in unprecedented times, and I know that the Minister has to take some incredibly difficult decisions. Members will not like some of those decisions, but I believe that tranche 3B is very important and Typhoon is a first-class aircraft, so I make an appeal to him once again. When he looks at it, he should do everything that he can to ensure that there is the potential in the RAF for 3B.
However, we have to look beyond 3B, because the real prize is in Typhoon’s export potential, because that is where the jobs, the foreign currency and the futures of people in my constituency will lie. Many Members will be familiar with the export orders that have been placed with Saudi Arabia and BAE Systems’ work in that country and throughout the middle east, but I call upon the Government to continue that excellent work and gradually drive forward the work of BAE Systems and its work force in securing those export orders. I refer the Minister to the Prime Minister’s recent visit to India, where we secured a substantial order for Hawk jets, because I do not believe that BAE Systems, great though it is, could have achieved that without significant Government help at the highest level.
Graham Jones (Hyndburn) (Lab)
I thank the hon. Gentleman for securing this debate. Does he agree that UK defence contracts with BAE Systems also importantly enhance our export capability, and that any reduction in UK defence contract spending will affect our capacity to export?
Mark Menzies
The hon. Gentleman makes an interesting point. We cannot be totally reliant on exports, because, if the RAF buys and uses something, that is a more powerful pitch than any sales brochure, so we have to ensure that the UK armed forces continue to place significant orders for UK military aircraft. I agree that exports are not the only solution, but, in a tough economic climate, we need to invest a considerable amount of energy in securing such exports.
I say to the Minister, please let us not be shy about getting behind BAE Systems when securing exports. The French are not shy, the Americans wheel out Barack Obama and the Russians wheel out Vladimir Putin. So, let us leave no stone unturned and use every weapon in our armoury to ensure that the United Kingdom is out there putting forward what I passionately believe to be a world-class product built by a world-class work force, securing defence orders for this country and vast amounts of foreign currency potential. I call upon the Minister to support me in that.
We have 6,500 people working at Warton and about 5,000 at Samlesbury, but it is not just about numbers—it is about the quality of those jobs. Two hundred apprentices are currently going through BAE Systems military aircraft division.
Andrew Griffiths (Burton) (Con)
Does my hon. Friend agree that there is a huge impact in terms of knowledge and skills that are transferable throughout manufacturing as a result of the aerospace industry, that many of the techniques and technological advances that are developed feed through into manufacturing in the UK generally, and that having a thriving, successful aerospace industry will have a huge impact on British manufacturing?
Mark Menzies
My hon. Friend makes a very valid point. He is on the record as speaking up for jobs and skills in this country.
A layman could be accused of thinking of the jobs at Warton as being about metal-bashing and nuts and bolts, but far from it. We are talking about people who are at the cutting edge of design and computer technology—the sorts of things that I, as a mere Member of Parliament, struggle to get my head around. They are absolute world leaders in their field, and they are our people—Lancashire people, on the whole. They have spent their whole lives honing their skills at Warton—they were not invented: they were grown. We need to recognise the contribution that those skills make to the economy, as well as their transferable nature and the fact that many component manufacturers can look to the military aircraft division and take some of the lessons from that sector to use in their own sectors.
Gordon Birtwistle (Burnley) (LD)
Does my hon. Friend accept that not only the people at Warton and Samlesbury are involved in this, but the people at Rolls-Royce who develop and build the engines and avionics? In making his comments on the Eurofighter, would he like to include the F-35, which is being developed, alongside in the USA, at Samlesbury and at Warton? It would be helpful if my hon. Friend the Minister, or even the Prime Minister, could get some clarity from the American Administration on how they intend to progress development of the engine for the F-35. That would create thousands of jobs, because that aeroplane is needed in vast quantities by the USA. Those are the very products that are being built in the UK, at Rolls-Royce and in Samlesbury, for the new F-35 fighter.
Mark Menzies
I wholeheartedly endorse what my hon. Friend has said about the F-35. Indeed, we are very lucky this evening to be joined by members of the trade union movement from Samlesbury who are in the Public Gallery. Before I came into the Chamber, I was reminded of the importance of the F-35. Were I to forget to mention it, I would have very much failed in my duty to represent their wishes.
Graham Jones
One of the worries is that if the Eurofighter is withdrawn to a significant extent from Samlesbury, we run the risk of part of the development of the F-35 being withdrawn to the United States. There is always a risk, especially with high unemployment in the US, that the Americans will be looking to US manufacturing to take on what are essentially US jobs. The Eurofighter keeps that anchor in the UK and in Lancashire.
Mark Menzies
The hon. Gentleman raises an interesting concern. However, I am sure, from my conversations with BAE Systems, that the nature of the contract is robust enough, and the commitments from this Government are clear enough, that there will be a good future at Samlesbury. The Minister is bound by a difficulty in being able to give details about the F-35, but any that he can provide will be incredibly welcome.
I want to be generous in giving others time, because I know that colleagues wish to make some points. My final point is that the future of the UK military aircraft division, which is based at Warton but also has a significant element at Samlesbury, is not just about the regional economy of the north-west, or about jobs, vital though those matters are. It is about the UK being serious about ever again being able to play a role through a strategic, sovereign capability to manufacture our own aircraft, own our own technology, develop our own high-tech skills base and continue to be a world leader in what we do. It is also fundamental to achieving the objective of rebalancing the economy that the Prime Minister and the Chancellor of the Exchequer have set out. If we fail to take that into account and to get behind the UK military aircraft sector, not only will the north-west lose out but the entire UK economy will be much the poorer. I ask the Minister to get behind exports, do what he can for the future of the F-35 and the Typhoon, and let us really make a difference.
Mark Hendrick (Preston) (Lab/Co-op)
I congratulate my neighbour, the hon. Member for Fylde (Mark Menzies), on securing the debate. I reiterate his point that I am sure your fellow Deputy Speakers would have loved to speak in the debate, Madam Deputy Speaker. Indeed, I am sure that you would have been keen to take part as well, given the constituency interest.
Aerospace is an industry that touches every part of the UK economy, including the south-west, but nowhere more than the north-west. We in the north-west are extremely concerned about the job losses that will almost definitely occur there in the coming months, particularly at Samlesbury and Warton. We know that 149 jobs are likely to go at the former and 298 at the latter. Having spoken to both management and the unions, we are aware of the reduction in work on Airbus components at Samlesbury. I am sure that that matter also affects your constituents at Filton, Madam Deputy Speaker. We know about the valuable work on the Tornado, the Harrier and the Hawk that has taken place at Warton in the past. I will be honest in saying that the announcements about reductions in the Tornado and Harrier fleets were made before the general election, but we are also concerned about future plans. I shall touch on that later.
The work force have been given about 90 days to be consulted by the management on jobs. Hundreds of jobs were lost in the industry last year, including at the Warton and Samlesbury plants. We hoped that there would then be a tailing-off of job losses, and I am angry that they are continuing and are likely to continue further as a result of the Government’s strategic defence review.
We must attempt to minimise job losses where possible. I do not want anybody from either plant to be made compulsorily redundant. However, I understand that they just about scraped through last year with voluntary redundancies, so it will be much more difficult this year. Many workers there who are friends of mine, and their families, are concerned about their economic future and their careers, having spent decades at the two plants that are going under.
It is particularly heartbreaking that many skilled manufacturing jobs have gone abroad over the past five decades, especially with the growth of the European Community, now the European Union, and globalisation. The north-west is proud that we still have a much higher percentage of the population engaged in manufacturing than elsewhere, and in the Preston and central Lancashire area the percentage is the highest in the country. That is under threat now.
We have been making aircraft in the Preston area for more than 100 years, and aircraft that fought in both world wars were built in and around my constituency. They used to be built to fight against countries such as Germany. We now build aircraft in co-operation with Germany. Europe has been at peace for decades and we want that to continue. Indeed, we want peace on a global scale, but while there is no guarantee of that, defence equipment will always be needed, and it must be manufactured. This country is particularly good at that and has an extremely high technological base.
I trained as an electronics engineer and computer scientist. I worked in those jobs in my professional life in both the public and the private sectors before entering politics. As the hon. Member for Fylde said, engineering is not about metal-bashing. Of course, many skills, including metal-bashing, have survived for generations, but many of the skills that are coming on stream are highly technical and advanced, particularly in computer-aided design, and we are the envy of the world in many areas of manufacturing. We lead the world in stealth technology—I have seen the world-beating stealth technology manufactured at Warton—and are ahead of the Americans, the Israelis and the French. The hon. Gentleman also mentioned the unmanned vehicles that we are developing.
We have already lost many manufacturing industries to countries such as Germany, Japan and China, particularly in the consumer electronics field, but one area in which we excel is the manufacture of defence equipment. We need that to continue, which is why we should do everything in our power to protect jobs and the high-tech industries such as those in the north-west.
Andrew Griffiths
The hon. Gentleman mentioned the loss of manufacturing jobs overseas. Does he agree that in 13 years under the previous Government, there was an unprecedented collapse in manufacturing in this country, when it declined three times faster than under Margaret Thatcher?
Mark Hendrick
I accept that there has been a loss of jobs in manufacturing, but that trend has continued since the 1960s under Governments of both persuasions. I say that as an engineer rather than as a politician. As technology advances, computers can do many jobs that humans used to do, and a section of an aircraft that used to be made of 100 parts can now be made of two or three. I would not try to be party political on manufacturing. Nobody did more to defend jobs than the previous Labour Government. Every contract that could be given to British Aerospace, which is now called BAE Systems, was given to it, and order books were full. We were looking forward to decades of further production at the company, so we will not take any lessons from the Conservatives.
John Woodcock (Barrow and Furness) (Lab/Co-op)
My hon. Friend’s point about general manufacturing is important, but does he agree that defence industry manufacturing has been completely different from much of the rest of the picture? Defence manufacturing has been a strength in the past 10 years, especially given the number of jobs that have been created. The danger is that we could lose capacity over the next decade and the capability to lead the world in a range of areas, including, of course, shipbuilding.
Mark Hendrick
My hon. Friend makes a very important point. We are not here to talk about aircraft carriers, but they are important to the future of both Warton and Samlesbury. Manufacturing the two aircraft carriers in places such as Barrow would support many industries in the north and north-west, but they are under consideration in the strategic defence review. Bluntly, if the carriers do not go ahead, the need for the aircraft to go on them will be called into question, as will our share of the F-35 joint strike fighter programme. We are currently guaranteed 12 to 15% of those contracts with Lockheed Martin. The Government are sailing close to the wind when it comes to maintaining our share of that work unless a commitment is made to the aircraft carriers.
We are playing for high stakes, because at threat is the future of Britain as a defence manufacturing nation. We have lost a lot of consumer manufacturing to the likes of Germany, Japan and China, and it is essential that we maintain our expertise and technological base in defence manufacturing. Otherwise, not only will the jobs and livelihoods of people in the north-west economy suffer, but the nation will suffer, because we will not punch the same weight or have the same GDP. We will be a much poorer nation as a result. Aerospace is the jewel in the north-west’s economic crown.
On the strategic defence review, the Typhoon programme is extremely important. Exports are important, as is take-up by the four partner nations in that programme. Before the general election, I was disappointed to see the Liberal Democrats make it plain that they would not continue tranche 3B of the Eurofighter Typhoon, against the wishes of many in the north-west. It is a disgrace that so many Liberal Democrats can take a view that threatens so many jobs in the north-west, especially when so many were silent on the issue during the election, especially my opponent in Preston. The Labour Government signed up to tranche 3A, so we showed our commitment, and I call on the Government to show their commitment not only to Typhoon, but to the aircraft carriers, the design and preparation for which are well under way.
The skills of a generation of the work force at Warton and Samlesbury will be put at risk. Last year, 200 jobs went at Samlesbury, leaving only 4,200 jobs. The hon. Member for Fylde mentioned the figure of 5,000, but 4,200 is the actual figure—a loss of more than 25%. The situation is similar at Warton. I do not want to see anyone lose their job, but it is surprising that executive jobs have not been greatly affected. Only one executive job will be lost over both sites, which seems unbalanced.
The announcement that 1,000 jobs will be lost across the country in BAE Systems is a tragedy, but I shudder to think what the strategic defence review will reveal after November when it is completed. That announcement may be just the tip of the iceberg of job losses, and the Government will rue the day if they make significant cuts and these major programmes disappear, as those decisions will be reflected at the ballot box at the next general election.
Paul Maynard (Blackpool North and Cleveleys) (Con)
I congratulate my hon. Friend the Member for Fylde (Mark Menzies) on securing this debate. Unlike the hon. Member for Preston (Mark Hendrick), I do not intend to tempt the Minister to prejudge the outcome of the strategic defence review, nor will I engage in self-indulgent scaremongering about possible outcomes. There are more than enough armchair generals, bath-tub admirals and heaven knows who else opining in the letters columns of the national press about what form the future force configuration should take, and we do not need to debate that tonight.
Mark Hendrick
I do not want to hog the debate, as I have already spoken at length but the hon. Gentleman will recognise that before the general election we made it plain that we would cut the deficit by 50% over four years. With a party now in government saying it will attempt to cut the deficit totally in five years, hon. Members can draw their own conclusions.
Paul Maynard
I thank the hon. Gentleman for that intervention, but people’s jobs depend on decisions being made now, and I do not intend to engage in self-indulgent scaremongering. He may wish to do so on behalf of his constituents, to whom he is responsible, but I do not intend to adopt a similar position.
Paul Maynard
No, because I have a number of things I want to say.
We are here to discuss the UK military aviation industry, not the outcomes of the strategic defence review. There are two important aspects to consider. First, there are the potential changes to UK Government orders that we do not know about, and which we will not find out about tonight, however much Opposition Members may wish otherwise. I do not expect that, and I am sure that many other Conservative Members do not expect it either. However, we can discuss the important steps taken by the Government to promote exports. I was interested to hear the hon. Member for Preston (Mark Hendrick) discuss the need to improve exports. The hon. Member for Hyndburn (Graham Jones) said it was no substitute for investment by the UK Government. We had 13 years of a Labour Government who failed to take seriously the promotion of UK exports. I heard it time and time again, even from active trade unionists, that BAE Systems—
Andrew Percy (Brigg and Goole) (Con)
Does my hon. Friend think that the absence of the Opposition Front-Bench team is a further sign of the importance they place on this matter?
Madam Deputy Speaker (Dawn Primarolo)
Order. This is an Adjournment debate, so the hon. Gentleman’s point is not relevant. I hope that Members will return to the aviation industry.
Paul Maynard
Export industry is crucial, and improved Government support for it—
Paul Maynard
No, I am sorry. I am not prepared to give way.
As my hon. Friend the Member for Fylde said, a recent trip to India resulted in a much improved Hawk order. However, I would like to make one observation to the Minister that I hope he will bear in mind. There is no finer advertisement for the British military aviation industry than the Red Arrows. I hope that he will bear that in mind when he is considering the wider issues of the strategic defence review.
Tonight’s debate should not be about BAE Systems only. I realise it is a major player in the UK military aviation industry, but it is not the sole player. In the north-west, we have the North West Aerospace Alliance, which has made an enormous effort to develop a world-class supply chain that includes not just BAE Systems—
Graham Jones
Put simply, if the RAF or the British Government will not buy Typhoons, why should any other country? It is a really poor advert. Does the hon. Gentleman accept that the strength of our exports will come from our confidence in our own products and UK manufacturing base? He seems to be arguing the opposite, which I do not fully understand. That is an important point that he needs to focus on—
Madam Deputy Speaker
Order. This is an Adjournment debate, which is going a little longer tonight because of the time. The debate is in the name of the hon. Member for Fylde (Mark Menzies). [Interruption.] Will the hon. Member for Blackpool North and Cleveleys (Paul Maynard) please resume his seat while I am on my feet? Thank you. Interventions are to be brief. It is a Back-Bench debate and should refer to the title and subject of the debate. If Members want to speak, they should stand and hope they get in.
Paul Maynard
I appreciate your guidance, Madam Deputy Speaker.
I want to talk about the importance of sovereign capability in terms of our military aviation industry. Many people might regard the notion of sovereign capability as something nostalgic. At the moment, we are celebrating the 70th anniversary of the battle of Britain, and many people are saying how fortunate we were in those days to be able to generate our own aircraft, make them within our own shores and defend our shores against our enemies, and that we should continue that in the future. I would be cautious, however, about basing any arguments for sovereign capability on nostalgia, tempting as that might be, but sovereign capability matters. It is an important concept that the Government have to buy into, because we do not know what is around the corner or what the future holds. We do not know whether we can rely on those on whom we have relied in the past. The world is full of unknowns, and sovereign capability is our sole protection from them.
I therefore ask the Government to consider carefully the ways in which they can support sovereign capability, and to look beyond defining it simply in terms of whether shipyard X or aircraft factory Y remains open. With regard to military aviation, I ask the Minister to consider how the Government can use some of the things that they are already doing to protect sovereign capability, in particular through the important changes being made with the introduction of local enterprise partnerships. It is important that the Ministry of Defence speak to other Departments to consider how the newly emerging LEPs can best be allocated to strategic areas, which can then underpin particular subsections of the defence industry. A good example would be the application by Blackpool, Fylde and Wyre to have a local enterprise partnership focusing on the aeronautical supply chain, which I discussed earlier. That is one way in which Government innovation can help to support sovereign capability without having to invest just to keep things open.
David Morris (Morecambe and Lunesdale) (Con)
One thing that must also be considered when talking about the area of north-west England for which my hon. Friend is a Member—quite a few Members are from there—is that places such as Samlesbury and Warton form an area of excellence that is the silicon valley, as it were, of the defence aviation industry. We have only to look back at what happened in the 1960s when the Wilson Government cut the TSR2. We had a world-beating product, but it was shredded because of what was happening at the time in the political framework. My hon. Friend is correct about the allocation of funding. We have to preserve not just the jobs, but the scientific—
Madam Deputy Speaker
Order. I said just a moment ago that interventions needed to be brief. That is a general rule of the House. The hon. Gentleman should not use the opportunity of an intervention to make a speech. I am sure that his hon. Friend has got the gist of his point now.
Paul Maynard
I agree with it fully, so I thank my hon. Friend for his comments.
The other Department that I would like the Minister to talk to is the Department for Education. It is a common complaint across Government as a whole that science education is somehow in decline. When I was fortunate enough to tour BAE Systems in Warton, I saw many highly skilled people who had engaged in scientific educational training. They had their physics and their chemistry: they knew what they were doing when it came to science. That is one important reason for ensuring that we emphasise why more students should get science-based qualifications that lead to careers in important defence-based industries—in particular military aviation—and underpin the protection of our sovereign capability.
I hope that the Minister will take both those ideas away and do something with them. Sovereign capability matters. It needs to be more than just a phrase that gets deployed in debates such as this, and we need to do more than depend on nostalgia to underpin it. I hope that he will consider that. We have something that we can be enormously proud of in the UK military aviation industry but, like anything, it must be constantly burnished and kept up to scratch. I hope that the Minister will tell us how he intends to do that when he responds to this debate.
John Woodcock (Barrow and Furness) (Lab/Co-op)
I had not originally intended to speak in this debate. I will try to make my contribution brief, but it is important to make a contribution, in part to correct some of the misconceptions spread by the previous speech and, to an extent, by previous interventions.
First, I agree with the hon. Member for Blackpool North and Cleveleys (Paul Maynard) on sovereign capability. It is important that we maintain that in the years ahead. The aviation industry in the north-west offers prime examples of the ways in which we have been able to lead the world, and it is vital that we continue to do so. I hope that the Minister will bear this in mind as we approach at breakneck speed the conclusions of the strategic defence and security review.
Hon. Members on both sides of the House should support the Government’s drive to improve the standing of our exports. We can sustain many jobs by increasing our exports, not only in the aviation industry in the north-west but right across the defence industry. We can also improve the UK’s standing in the world, and our military and diplomatic influences, by doing so. Let us not pretend, however, that the situation is dire at the moment, or that the previous Labour Government ran us into the ground. I am sure that the Minister is aware—although I am not sure whether the hon. Member for Blackpool North and Cleveleys is—that this country punches roughly three times above its natural weight in its exports industry. We should be proud of that, and the kind of partisan remarks that the hon. Member for Blackpool North and Cleveleys has just made do the defence industry and those who work in it a disservice.
I want the Typhoon to play an important part in the areas that I have just mentioned, and in sustaining the economy. It will do so, however, only if we take a mature attitude to exports and, as my hon. Friend the Member for Preston (Mark Hendrick) said, if we buy this kit ourselves. The first question that any foreign Government will ask when we rock up at their door and try to sell them this kit or anything else is, “Are you using it yourself?” If we are not, why on earth should they buy it? I very much hope that the laudable rhetoric that is coming from the Government at the moment will be sustained by a proper strategy that will enable us to acquire this kit and help us to export it overseas.
I want to mention scaremongering in regard to jobs. There is an important role for Members of Parliament in standing up for employment in their constituencies and their regions, and I think that many hon. Members on the other side of the House get that. I hope that the hon. Member for Blackpool North and Cleveleys understands it as well. It is not dishonourable to speak up for the potential industrial consequences of the decisions that are about to be made. I am a member of the cross-party Defence Committee, which has just concluded that some of those decisions could put at risk our long-term security, as well as our defence industry and the industrial base that it sustains.
Graham Jones
I note that, yesterday, the Minister said that the UK was the second most successful exporter of defence products in 2009, with orders worth more than £7 billion. Would my hon. Friend like to comment on that?
John Woodcock
My hon. Friend provides evidence for what I was saying earlier. We are a successful country, but we want to become even more successful. We shall need to do that in an environment that is going to be very tough in the years ahead. Other counties are retrenching their budgets just as we are, but it is important that we take a mature attitude to this.
Returning to my point about jobs and about the industrial base that the defence industry sustains, I wonder whether the Minister and the hon. Member for Blackpool North and Cleveleys are aware of the evidence that the chief executive of BAE Systems and other senior members of the defence industry gave to the Defence Committee last week. They pointed out that we are on the verge of decisions that we risk getting wrong. Alarm was expressed within the industry among the speakers who gave evidence to the Defence Committee last week. If we get this wrong, they said, we could lose our capability in the north-west—in aviation, shipbuilding and right across the piece—in a way that will have devastating consequences for employment. If in five or 10 years’ time, we decide that we need this capability, we will find that the employment base needed to sustain it has gone—never to return. If the hon. Member for Blackpool North and Cleveleys believes that those people were scaremongering when they said that, I hope he will stand up and make his view clear. I certainly do not think that they were, as this is a serious issue that will have to be dealt with.
In conclusion, it is so important to sustain capacity at Samlesbury and Warton—for the reasons I have just set out, but additionally because if the north-west takes the right decisions and the Government support it, and developing a defence and industrial policy following the strategic defence review will be critical—that could strengthen and augment its position as playing a leading part in the country and the world in producing world-class industrial products to serve our armed forces here and to export across the globe. The decisions made now and in the coming weeks and months will be critical.
Andrew Stephenson (Pendle) (Con)
I congratulate my hon. Friend the Member for Fylde (Mark Menzies) on securing this important debate. I agree with everything he said; I know he has worked tirelessly on this issue for many months. I am also pleased that the hon. Member for Barrow and Furness (John Woodcock) struck a slightly more positive note. I do not think that all is doom and gloom; we should celebrate the success stories as well, so I am grateful that some Members have reflected that.
I shall start by focusing on some of the positives in the north-west of England. The aerospace sector there has long been recognised as one of Europe’s leading industrial clusters and as a model for development within the aerospace and other industries. In my Pendle constituency, a number of significant firms are dependent on the aviation industry and on military contracts in particular.
As recently as Defence questions on Monday this week, I raised the importance of military aviation. I was reassured by what the Minister had to say. I pointed out to him that on the previous Saturday I had visited Euravia, a company that repairs and overhauls aircraft engines located in Kelbrook in my constituency. I was there to attend the event at which the company was presented with the Queen’s award for enterprise in the international trade category. Despite the recession, that firm had seen a growth in orders and was significantly increasing its overseas trade, starting to explore new and exciting opportunities. I believe that such businesses are leading the way in showing how other firms in the aerospace sector should behave—developing the skills of their workers, attaining an international reputation for high standards and good customer service, and always looking for new contracts abroad in case contracts in the UK dry up.
In underlining the importance of the aviation industry to my constituency, I point out that Rolls-Royce is the largest employer, with more than 1,000 workers in Barnoldswick producing engine fan blades. I was particularly delighted to have been able to take my right hon. Friend the Chancellor of the Exchequer to visit Rolls-Royce prior to the election; I know that he is acutely aware of the importance of the aviation industry in Lancashire. I find it encouraging that in recent months Rolls-Royce has announced a string of deals, including one worth £1.1 billion at the Farnborough airshow. In July, the company unveiled detailed plans for a new £30 million aerodrome at its site in my constituency. This extension of the current site is where it will build fan blades for the F-35 joint strike fighter, which colleagues mentioned earlier in the debate. The extension will create about 100 new jobs in my constituency, although that will depend on approval from the President of the United States, Barack Obama, for the Rolls-Royce F-35 engine.
I know that the Government have already been working closely with Rolls-Royce to help it to secure more business. I was particularly pleased to see bosses from Rolls-Royce and BAE Systems accompanying the Prime Minister on his recent visit to India. I really do see aviation exports as key, and I am therefore delighted that unlike Ministers in the last Government, Ministers in the present Government are proactively helping our businesses to win contracts abroad.
Graham Jones
I question that last point. All the previous tranches, up to 3A, went through under a Labour Government, but tranche 3B, on which many Members are now focusing, is in doubt under the coalition Government. How can the hon. Gentleman justify his comment, given that all the previous contracts were honoured by the Labour Government, whereas the new Government are considering reviewing and perhaps cutting a future contract, 3B?
Andrew Stephenson
I am happy to justify my comment by asking how the hon. Gentleman justifies the Labour Government’s huge overspends, and the massive deficit that they built up when their expenditure was out of control. Clearly they should have got spending under control, and should have conducted a strategic defence review instead of delaying the pain until now.
The importance of big aerospace contractors such as Rolls-Royce and BAE Systems to Pendle, Lancashire and the United Kingdom economy should not be underestimated. As my hon. Friend the Member for Fylde pointed out, there is a significant number of subcontractors and support companies. The average job in aerospace contributes £75,000 gross value added to the economy, and the figure rises to £115,000 at BAE Systems, compared to only about £15,000 gross value added per job in other sectors in Lancashire. I have noticed when I have spoken to business men in my constituency how many of them started off as apprentices at either BAE Systems or Rolls-Royce.
Many Opposition Members have expressed concern about the potential impact of the strategic defence and security review on the military aviation industry. We have already had a debate today about who has been fuelling scare stories in the press. I believe that hon. Members have a responsibility not to fuel scare stories: I do not think that they do anything for workers’ morale. I suggest, however, that the biggest risk to our military aviation is not the strategic defence and security review, but the muddled and incoherent programme left by the last Government.
Before Opposition Members lecture the coalition Government on the financial implications of reviewing certain defence contracts, they should remember that with a defence budget of some £35 billion a year, they left behind an overspend in the equipment programme that will amount to £38 billion by 2020. That is what we must deal with now, and that is why we are carrying out a full review of all the current contracts.
I used my maiden speech to explain the need for us to build a high-skilled economy, and I specifically mentioned the importance of the aviation industry. So far I have been very encouraged by the measures that Ministers have taken to support military aviation, but I urge them to do even more to support that vital sector.
Andrew Percy (Brigg and Goole) (Con)
I congratulate my hon. Friend the Member for Fylde (Mark Menzies) on securing what has turned out to be a longer debate than we might have expected. It has given many more Members a chance to make speeches, some more political than others.
I want to break the Lancashire stranglehold on the debate—or rather the north-western stranglehold. I used to teach geography too, so I apologise to the hon. Member for Barrow and Furness (John Woodcock). My constituency has been very much affected by the proposal for job losses at the BAE Systems site at Brough. My right hon. Friend the Member for Haltemprice and Howden (Mr Davis) and the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) have been engaged in cross-party work in relation to that proposal, and over the past few years they have also worked closely together to help to secure contracts for the continuation of the site.
The BAE Systems site at Brough has a huge impact on our area. In recent years we have struggled in respect of manufacturing jobs, as has the rest of the country, and the continuation of the Brough site is greatly valued by local people. It gives young people in the area some aspiration that they might have a future job in manufacturing. I know all about that. I grew up in the area, attending a comprehensive school in Hull, and one of the most secure prospects we had was the possibility of going into apprenticeships at either BAE Systems at Brough or BP at Saltend.
I cannot over-emphasise the value of BAE Systems and the Brough site to our local economy and education facilities. It is heavily involved in local schools in my constituency and across the East Riding, and probably beyond that. Its educational roadshow is run from Brough and it has thus far received about 5,000 young people from the ages of nine to 13, bringing them on to the site to see what the possibilities for them there might be, and perhaps sparking an interest in manufacturing and in pursuing that interest in their own educational futures. BAE Systems is also heavily involved with the local secondary schools and every year provides a number of apprenticeships to local schools. All that is a success story for our region, so I do not want anybody to leave this debate with any impression other than that the existence of the Brough site in our local area is entirely positive.
The links go far and wide. The current mayor of Goole is an employee at Brough BAE Systems, as is the husband of my secretary in the constituency. Perhaps I should therefore declare an interest, although many more people than just those two are employed there—and, in fact, the mayor of Goole is a Labour party member so I am working cross-party in that respect.
There have been a number of challenges to the Brough factory in recent years. It is heavily reliant on Hawk contracts, for instance, and a couple of years ago there were a number of job losses. My right hon. Friend the Member for Haltemprice and Howden and the right hon. Member for Kingston upon Hull West and Hessle worked incredibly closely to try to alleviate the pain of that. Following the problems back in 2008 and earlier we got an assurance from BAE Systems that the over-reliance on the Hawk contracts at Brough would cease and that it would seek to broaden the work undertaken there. However, I can only repeat what the right hon. Member for Kingston upon Hull West and Hessle has said in response to the latest threats to Brough:
“So with the first test of this so-called transitional plan, which only ended in December, it has failed and I think this is a breach of faith.”
There are certainly those in the Brough work force who would share the sentiment that despite the assurances BAE Systems gave some years ago, the continued reliance on Hawk has led us to the position we are now in. I urge the Minister to give us assurances this evening in whatever way he can that the Government will put as much pressure as possible on BAE Systems to ensure that the work undertaken at Brough is broadened in furtherance of the agreement of some two years ago.
It is also important to pay tribute to the unions at the Brough site. Every time there have been threats to jobs at Brough, they have engaged in a positive way with management, local elected representatives and the local councils, who are also incredibly supportive of the site. As we move forward in addressing difficult decisions more generally, the nature of their engagement might serve as a lesson to others about what can be achieved when we have a proper positive partnership between unions, staff and management. I hope others will take a lead from the engagement at Brough as they face their own issues in coming months and years.
I also seek some assurances from the Minister this evening on the future of the Hawk contracts. We have not been able to get to the bottom of that. We are told that there are three countries, two of which have been named—one as country X, for whatever reason—where there are potential Hawk contracts ready to be signed. What is different about the current position at Brough, where about 210 jobs are under threat, is that this seems to have come as a bolt out of the blue. When there has been a threat to jobs in the past, the management at BAE Systems have engaged positively with local Members of Parliament, the local councils and the work force to see what pressure can be applied, wherever, to try to alleviate the problems. This time, the threat seems to have come out of the blue, so we are unclear as to what exactly the contracts are, at what point the Hawk contracts are at and whether indeed there are any contracts. The securing of one of these contracts would put the site on a secure footing for a couple of years. If the Minister is unable to respond this evening to those points, I urge him to take them up with BAE Systems and respond to the work force and MPs as soon as possible.
It is also important to welcome the new Government’s movement on the so-called “commercial foreign policy”, because this is something we need. I heard with interest the comments about the success of the UK’s aerospace industry over the past few years. It did not happen overnight or in the past 13 years; it happened because of decisions taken decades ago, many of them in the 1980s and often in the teeth of opposition, because of the nature of the work involved, from the Labour party—depending on who gets its leadership, we might see that again in the future. Those tough and important decisions taken in the national interest decades ago have led to the successful industry we have in this country today.
John Woodcock
The hon. Gentleman makes persuasive points, but does he not think that they underline the importance of the decisions that we are going to take next month in ensuring that the next two decades can continue to provide export growth?
Andrew Percy
I do think that, but Labour Members have absolutely no credibility on this issue. They could and should have undertaken the strategic defence review a number of years ago, and they have left us in the current financial position. They must accept that the decisions being taken today are not down to this Government, but down to our inheritance from the previous one.
Andrew Percy
No, I am not going to give way to the hon. Gentleman, because I fear that we will end up getting into too much of a political debate. Perhaps I have contributed to that, and I apologise, so I shall now focus much more on the positives of how we can make progress.
There is the potential for us to work on a cross-party basis and for MPs representing different parts of the country to work together to protect their local work forces. The Government have got the right idea about going out there and selling for Britain. I take the point that the hon. Member for Barrow and Furness made about the fact that we must prove our commitment to our products, and I am sure that the Minister will have heard what he said. Tough decisions lie ahead, but as long as this dialogue takes place early, the announcements do not come out of the blue and we are given the full information about where we are at, particularly on the Hawk contracts and the Brough site, we can perhaps alleviate many of the current threats to jobs.
I conclude by, again, emphasising that the Brough site has a highly skilled and dedicated work force, who are an important part of not only the local economy, but the national economy. We have to get real about this commitment to improving manufacturing in this country, and there we have an excellent example that can be drawn upon for use in other areas of Government policy. I urge the Government to do all that they can to work with BAE Systems, to protect jobs not only in Brough and my patch, but across the whole industry. It is a huge success story for our country, and I look forward to the Minister’s response.
Gordon Birtwistle (Burnley) (LD)
I congratulate the hon. Member for Fylde (Mark Menzies) on managing to get this important issue on the agenda this evening. I have worked in the aerospace industry for more than 40 years, and I can remember working on the old Phantom engine at Lucas Aerospace many, many years ago. Amazingly, some of those engines are still being used in jet fighters in underdeveloped countries.
It is important to remember that this country can no longer afford to develop new military aerospace equipment, because it is far too expensive for a single country to do that. The European countries of Germany and Spain—the ones involved in the Eurofighter contracts—have appreciated that. One thing that concerns me a little is that although the Eurofighter is being built at the moment, we should be developing the next stage of military aircraft now. A new aircraft does not just happen tomorrow—it takes years and years to develop. I hope that the European Union, in collaboration with all the aerospace companies, is starting to consider the next combat plane that will have to be developed after Eurofighter finishes.
Eurofighter is being built at Samlesbury, near Preston, but the biggest contract for Preston would be one that has already been mentioned: the F-35. Our requirements for the F-35 are negligible compared with what the USA wants. I understand that it is considering somewhere in the region of 3,000 of these aeroplanes. Quite a large number of them will be built in Lancashire at Samlesbury and Warton. I hope that the Minister can press the USA to take final decisions on engine design and engine contracts, because I know that Rolls-Royce at Barnoldswick is urgently awaiting the contract.
Graham Jones
The hon. Gentleman makes some excellent points and I agree with him. I am concerned about our capacity at Warton if we are solely reliant on the F-35 and the Eurofighter is cancelled or reduced. The F-35 is assembled not in the UK but in the USA, so we will not need the runway at Warton and we will lose our capacity. There are ongoing issues when we rely totally on the F-35. We should not be doing that; we should be trying to keep our European bases, which is the point that he is making.
Gordon Birtwistle
All military aircraft go out of fashion. By the time the Eurofighter was developed, the countries that would potentially be our enemies were already developing systems to combat it. We have to accept that, as it has gone on for ever. I remember the TSR2—not many people in this Chamber will remember that—which got almost to the point of taking off when the then Labour Government cancelled it. This has nothing to do with politics, really—it has to do with collaboration between countries across the world in developing the fighters.
One thing that I want quickly to mention is the link between military aircraft and commercial aircraft. Modern aeroplanes, such as the Airbus, are built around the technology that has been developed over many years in military aircraft. The fly-by-wire in the Airbus was initially developed in the early stages of the English Electric Lightning aircraft and was developed further for commercial aircraft. Military aircraft sales in this country are very high—I accept that—but they pale into insignificance when they are linked to the sales of commercial airliners.
Rolls-Royce is one of the manufacturers, and much is built in Burnley—the thrust reversers are built at Aircelle. The contracts for the Trent engine and the Airbus wings all involve products that have been developed from old military technology.
Mark Hendrick
I totally agree with the hon. Gentleman. As a young engineer, I trained at the Royal Signals and Radar Establishment. Liquid crystal was one of the products that was developed there for military use. As we know, that has formed the basis of television sets sold in millions around the world. That is a technology that we developed and that we are not exploiting as a nation because the sets are made in other countries in the far east. The loss of any industry in the north-west would mean that we would lose the spin-off industry, as well as the direct industries that he talks about.
Gordon Birtwistle
Yes, that is another industry that developed from military aircraft. My link is from military to commercial and concerns the potential for sales of commercial equipment—that is, the new Trent XWB Rolls-Royce engine that we hope will power the new family of single-aisle aircraft after the Boeing 737s and A320s have finished their lives. All that technology starts in the military field because commercial companies cannot afford to develop the technology. They live off what they get from the Government to develop technologies to power military aircraft, and that spins off into commercial aircraft. When the Government order military aircraft, they might—indeed, I am sure they do—contribute to the development of commercial airliners and engines in this country. Thousands of people work in that industry and we are world leaders in it. We probably produce the best aircraft wings ever built and Boeing is certainly a big customer of many manufacturers in this country, particularly Rolls-Royce, whose Trent engine powers the new Dreamliner, the 777, most of the Boeing 737s and the majority of the Airbus aeroplanes. Hon. Members will know that the new A380 is powered by the new Trent 900 engine.
It is important to keep military aircraft going, but it is also important to keep a focus on the cost of doing so and the cost of developing those aircraft. I understand that Eurofighters cost about £20 million apiece. It is important to link all that together and consider the development of commercial equipment that spins off from military equipment. As I have said, military equipment comes and goes—in my life, I have seen some aircraft cancelled and some that are developed go on to be very successful—but it is important to focus on what we can get from the development of military equipment into commercial equipment, as that is where all the money is made by companies that work in that industry.
Graham Jones (Hyndburn) (Lab)
The hon. Member for Burnley (Gordon Birtwistle) made a good point about cross-subsidy. We can look at BAE Systems and start from there. It spends £101,000 for every £1 million—10% of its revenue—on research and development, and it is the third-highest of 850 UK firms when it comes to R and D. He made the tremendous point that any reduction in our military or industrial base will affect commercial opportunities and other businesses in the north-west and the UK.
This is not a two-sided argument, as some Government Members have characterised it. It is not about deficit reduction or increased national debt, and I am very concerned that the Treasury is leading on this issue rather than the Ministry of Defence. The arguments between the Chancellor and the MOD do not serve the country or the aviation industry well, and statements such as that by the Secretary of State for Defence that we will buy “off the shelf” are very unhelpful.
The hon. Member for Blackpool North and Cleveleys (Paul Maynard) talked about scaremongering. When workers hear those kinds of comments and see job losses, they are naturally concerned. As my hon. Friend the Member for Barrow and Furness (John Woodcock) said, they have every right to approach their Member of Parliament and expect them to stand up on their behalf and for their jobs and families. They also have sense in that they understand that the sector is part of the UK’s industrial base, especially in Lancashire and the north-west.
I think we are all aware of the UK’s industrial base. I want to read out three points from the plethora that have been raised with me. First, the UK is the world leader in the manufacture of aircraft wings and engines, as the hon. Member for Burnley pointed out, and has a 35% market share in the sale of engines, which is worth more than £5.1 billion a year. Secondly, defence exports are generally worth £5 billion a year to the UK economy and support 65,000 jobs. Thirdly, according to the Government’s 2009 value added scoreboard, the aerospace and defence sector added £12 billion in value to the economy. The average value added per employee in the industry was very high, as the hon. Member for Pendle (Andrew Stephenson) pointed out, at £116,000, whereas for general manufacturing the figure is £15,500 per employee in Lancashire. The £116,000 figure also compares well with those for other industries. The sector is one of Britain’s success stories, as has been pointed out.
This is not about scaremongering. The hon. Gentleman is right that it is important that these issues are raised in this place and discussed thoroughly. The citizens who elect us are the important people, not us. We are simply advocates on their behalf. They are the ones who will face redundancy and repossession when they are unable to pay the mortgage. Britain will suffer from the economic impact—and there will be an economic impact. This is not a case of pushing one domino over and perhaps two or three others falling. In the case of the defence industry, if one domino is pushed over, it is likely that the whole lot will go down, and Britain’s industrial capacity in one of our best exporting sectors will then be torn away.
The north-west has a great export and manufacturing story. However, as the hon. Member for Burnley said, that has come on the back of military spending and Government contracts. The old private sector and state industries are long gone, and the heartbeat of the north-west economy is kept ticking by, if not the public service, defence and nuclear.
The Chancellor’s priorities for the coalition Government are a return to manufacturing, and a focus on the private sector and on manufacturing companies that are able to export to get Britain out of the so-called deficit. The north-west’s defence industry ticks all those boxes. We should look at the domino principle of how everything collapses if the industrial and skills bases are taken away. If things are turned off today, they will not come back on in five years’ time. Given that the industry ticks all the boxes that the coalition has put forward, I do not understand why it would cancel any of the defence contracts.
Gordon Birtwistle
Does the hon. Gentleman agree that the age profile of a lot of the work force in the British aerospace industry, particularly in Lancashire, and the engineering industry is getting very high and that when those members of staff move, the companies should seriously consider replacing them with a major influx of new apprentices? We heard earlier that BAE Systems takes on a derisory number of apprentices compared with the number of people whom it employs.
Graham Jones
The hon. Gentleman makes the good point that a lot of skilled people in the sector developed their skills in the 1960s and 1970s. We paid the price for the great manufacturing recession of the 1980s with the loss of capacity and skills. Those in my generation are missing from the skilled group, and such unskilled people should have become skilled so that they could work in places such as Warton and Samlesbury. The history lesson from the 1980s shows that when manufacturing is hit, it does not come back, and we should take that lesson on board when we consider defence spending.
The hon. Gentleman is right to talk about apprenticeships. BAE Systems has some 200 apprentices. It spends £1 million at the university of Central Lancashire and is heavily involved in trying to bring young people through so that they get skills. On job prospects, I have heard someone—it might have been my right hon. Friend the Member for Doncaster North (Edward Miliband)—talking about Govan shipyard or Asda, and one could almost say for us that it is a supermarket or BAE. That is not quite true, but it is a lot of people’s perception of job prospects. A job at British Aerospace, as it was formerly known, was something to behold because someone employed there was working for a first-class company that was one of the best in the region.
The Minister has heard a lot of evidence during the debate—all of it true—to show that we cannot afford to cancel defence contracts now.
Ben Gummer (Ipswich) (Con)
The hon. Gentleman is addressing the House in a positive manner and we are with him on maintaining jobs, skills and our excellent defence export industry. However, is he edging towards suggesting what his party would be able to cut to maintain the defence expenditure that he is proposing? Government Members would be fascinated to hear what might be sacrificed so that his skills base and industry may be supported.
Graham Jones
Thank you very much for raising that. You make a very good point that there has been no dialogue—
Mr Speaker
Order. May I gently say to the hon. Gentleman that I have not made any point at all? It is important that the second person is not used. We must get into the habit of holding debates through the Chair. I know that the hon. Gentleman will wish to continue that now—we look forward to it.
Graham Jones
I apologise, Mr. Speaker. It is a result of being a new MP.
There has been little dialogue between the Government and unions. We need more discussion of the future prospects. I appeal to the coalition to engage in more dialogue and to think about the decision that it will make.
David Rutley (Macclesfield) (Con)
Thank you, Mr Speaker, for giving me the chance to say a few words. I had not intended to speak, but this is a stimulating and important debate. I congratulate my hon. Friend the Member for Fylde (Mark Menzies) on securing the time for a debate on such an important subject. We have heard some great remarks.
Although I had not planned to speak, the subject is important to me as the Member of Parliament for Macclesfield because in the neighbouring constituency, Cheadle, there is a big BAE site, BAE Woodford, which is a former aerodrome, as my hon. Friend the Member for Pendle (Andrew Stephenson) no doubt knows, having been raised in Poynton. Many of the work force live in Macclesfield. Woodford is famous for the Lancaster bomber, the Vulcan, and now Nimrod. It is also famous for many well known air shows, where Concorde turned up.
BAE Woodford is symbolic of the importance of the industry to the UK. In recent decades it has seen a huge amount of investment in the new Nimrod MRA4, which is a magnificent aircraft. I have had the chance to tour the aircraft on site and it is an amazing structure. Sadly, the long-term survival of that aircraft is not guaranteed, despite the best efforts of my predecessor, Sir Nicholas Winterton, of the hon. Member for Cheadle (Mark Hunter), and of the work force and management of BAE. It is well known that the site will close in 2012.
Today we have been meeting the Minister and are extremely grateful to him for the time that he has given. We made representations about the importance of securing the remaining nine Nimrod MRA4s that we are keen to see produced, which will be vital to protect this country’s Trident capability. We will see how that emerges from the strategic defence review. We are very hopeful.
It is important not just for BAE Woodford and the people who work there, but in the context of the debate, that we have a strong and vibrant aviation industry and military capability. We need that not only to find jobs for people when the 600 jobs at Woodford go in 2012—of course I am concerned about that—but in order to maintain our sovereign capability, which has been well described in the debate. We must have that at the forefront of our minds.
The other point that has been made on both sides of the House is that we need to maintain the skills and the experience that underpin this vital industry. Those are important to the economy not just of the north-west or the other side of the Pennines, but to the whole country. The industry is strategically important. I hope that on the strength of the debate, the strength of feeling and the judgments that have been made by the Minister and his colleagues, we will see the industry thrive and succeed. It will be vital in future. I hope the Minister will take note of these points, and I look forward to hearing his response later.
Mr David Hanson (Delyn) (Lab)
Thank you, Mr Speaker, for calling me to speak in the debate. It is always a pleasure to be able to contribute to a debate when I had not expected to do so, and today is one of those rare opportunities. I am grateful to the hon. Member for Fylde (Mark Menzies) for initiating the debate and I apologise to him for missing the commencement of it. The previous business finished earlier than we expected.
I shall use the opportunity to make a case that I have made before to the House with regard to the A400M future large aircraft, with which the Minister will be familiar. It is a major development project for future military aircraft that involves manufacturing capability in my constituency in north Wales, with the Broughton Airbus site, and also creates employment in Bristol and the Avon area.
The Minister will know that some 6,500 people are employed at the Broughton site. Many—to continue the tenor of the debate—live and work in the north-west, and many live and work in my constituency in north Wales. Indeed, some 2,000 of the people who work at that plant are based in my constituency, and they are very concerned to ensure that the A400M aircraft is developed, purchased and built, and that the relevant skills are grown, to ensure that we meet the needs not only of the military, but of the skills base in the private sector.
The Minister will know that my right hon. Friend the Member for Coventry North East (Mr Ainsworth), when Defence Secretary, signed a contract for the purchase of 22 A400M aircraft—before the general election but in the window between January and the general election date. The current Government have now deemed that period to be one for the review of contracts. The Minister is currently reviewing the contracts for the purchases that my right hon. Friend intended to make at that time, and I wish to see the Minister do so positively, for the reason that the hon. Member for Burnley (Gordon Birtwistle) gave.
The use and development of military technology is strongly linked to the development of civil aircraft. Members will know that the Airbus factory at Broughton produces world-class wings for civil aircraft, but it does so based on the technology, skills and investment in people that its military capacity is developing and, with the A400M, I hope will continue to develop. There is a great synergy between the two, and, when I recently met the trade unions, which work very positively with the management at that factory, to look at the work on civil and military projects, they recognised that although the Airbus factory in north Wales, servicing north Wales and the north-west, does not make a major contribution to the A400M, the skills, expertise and wings that are developed for civil aircraft very much depend on its successful construction.
The A400M is a flexible aircraft, providing the opportunity for the strong development of the required technologies in modern aircraft. It offers the requirements that the military need for civil, military and humanitarian usage, and it is an excellent technology that has long been in development. I was very pleased when that contract was signed, so I am disappointed that it is under review, but I hope that the Minister will review it positively. Given what I have heard from Members today, this debate is not just about our military capability, but about maintaining a world-class manufacturing base with skills development and long-term jobs in the British aerospace industry, both in the military sector and, as with my constituency, in the civil sector.
Those skills are interchangeable, but if we duck that challenge, purchase products off the shelf from foreign countries and do not develop our skill base, we will be exporting those jobs to competitors—to foreign countries—who will ultimately cost us more in the long term, not just in terms of our technology and our ability to export products and skills to other countries, but in relation to our future defence capacity.
I am very grateful to the hon. Member for Fylde for initiating this debate and to you, Mr Speaker, for allowing me to contribute, however briefly, given the time that we have had. This has been a very valuable debate, and there are real issues at stake, so I hope that the Minister, in his difficult deliberations, will take on board my constructive comments about the A400M and, ultimately, confirm the contracts that my right hon. Friend the Member for Coventry North East signed in good faith in order to keep that skills base in north Wales and in the United Kingdom.
The Parliamentary Under-Secretary of State for Defence (Peter Luff)
It is customary to congratulate the hon. Gentleman or hon. Lady who has secured such a debate at the end of the day, and I congratulate my hon. Friend the Member for Fylde (Mark Menzies) with particular pleasure today. It is his first Adjournment debate, mine too as a Minister, but it has been of the most exceptional value and great quality, so his congratulations are all the more deserved. There has been a phenomenal level of participation in what is normally a half-hour debate. My brief is littered with handwritten comments, which I hope I can decipher as I go through my remarks. If for any inadvertent reason I unintentionally overlook any hon. Gentleman in my response, I shall of course write to them subsequently. I also congratulate my hon. Friend on what was a very informative and entertaining maiden speech in the House during the debate on the strategic defence and security review on 21 June. He is clearly carrying on with exceptional skill the excellent work of his predecessor, Michael Jack, who also spoke very strongly for the aerospace industry in the north-west.
Peter Luff
This debate is timely, as my hon. Friend said, not only for the reasons he gave us—the very sad redundancies, which I want to discuss later—but because of its significance to the strategic defence and security review process. That process seriously constrains how far I can go in replying to many of the points made by hon. Members, and I apologise for that, but the debate is an important contribution to the process, and I welcome it for that reason.
The debate is also timely for a second reason, as we heard. Today is battle of Britain day: 15 September 1940, 70 years ago, was a critical turning point in the war, when RAF fighter command claimed a decisive victory over the Luftwaffe. It is fitting, when debating the aviation industry today, to pause and pay tribute to the bravery of our RAF service personnel, past and present, and to all those who work so hard to design and build the aircraft in which they fly. From the battle of Britain to Afghanistan, the skills of all those who work in the industry and their commitment to supporting our servicemen and women has proved to be second to none.
The contribution made by the UK’s military aviation industry in supporting our armed forces cannot be underestimated, and it certainly has not been in the Chamber this evening. All three of your Deputy Speaker colleagues, Mr Speaker, have interests in the aerospace and military aviation sector. I know that the hon. Member for Chorley (Mr Hoyle) and my hon. Friend the Member for Ribble Valley (Mr Evans) are particularly sad not to be able to contribute to this debate—they, too, have been outspoken advocates for their constituencies in the past—and the right hon. Member for Bristol South (Dawn Primarolo) has a strong local aviation industry and a vital interest in the A400M project.
I am relieved that Members from areas other than the north-west turned up. This is not just a north-west issue, although it is very important to that region, and the right hon. Member for Delyn (Mr Hanson) demonstrated that fact. We also have interests in Yorkshire and around the country, including the south-east, the south-west, the west midlands, and the east midlands. Wherever one goes there are aviation and military aviation interests, so I am glad that the debate has been so broadly drawn.
Our servicemen and women who are currently deployed on operations, particularly in Afghanistan, deserve the best equipment that we can provide, and there is no doubt that the UK military aviation industry has risen to that challenge in the past and, as hon. Gentlemen have said, continues to do so. I listened carefully to my hon. Friend’s excellent speech and I share his heartfelt and sincere view that it is crucial for the security of the UK and our allies that we have a strong and dynamic military aviation industry both now and in the future.
BAE Systems’ Warton facility, which lies within my hon. Friend’s constituency, demonstrates this ethos, supporting as it does the important multinational Typhoon and joint strike fighter programmes. I will be concentrating on fast jets and unmanned aerial vehicles—UAVs—but military aviation of course encompasses much more, including helicopters, tankers, strategic lift and, as the right hon. Member for Delyn reminded us in his fine speech on the A400M, intelligence, surveillance, target acquisition and reconnaissance, or ISTAR.
Turning briefly to ISTAR, my hon. Friend the Member for Macclesfield (David Rutley) told the House that he had met me, together with my hon. Friend the Member for Cheadle (Mark Hunter) and the right hon. Member for Oldham West and Royton (Mr Meacher), to discuss the Nimrod MRA4. I pay tribute to my hon. Friends and to the right hon. Gentleman for the way in which they put their case and, in particular, to the trade union representatives from Woodford who came with them and made such a powerful case. I apologise publicly for the fact that the meeting was so disrupted by Divisions in the House, but I think they successfully conveyed their key messages, and I congratulate them on that. I promise that I will take careful account of what was said.
The coalition Government recognise, of course, that the UK military aviation industry is a vital strategic asset. The challenge is to maintain a vibrant and innovative industry capable of meeting the needs of the MOD at a time of financial challenge, and to be competitive in the world marketplace while at the same time minimising any MOD investment in artificial sustainment activities—we want this activity to be real. We simply cannot do this without listening to what industry has to say; and industry has had some very powerful advocates in the Chamber this evening.
That is why, in addition to the engagement with industry that has occurred during the SDSR—despite, Mr Speaker, reports to the contrary—I recently announced the publication of a Green Paper at the end of this year to explain the MOD’s defence industry and technology policy, to follow the conclusions of the SDSR in the autumn. It will include a full discussion of many issues, including sovereign capabilities and skills—I hope that will please my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard)—and, I hope, the role of apprentices, which was mentioned by my hon. Friends the Members for Pendle (Andrew Stephenson) and for Brigg and Goole (Andrew Percy). On a recent visit to Rolls-Royce I was struck by the number of senior managers who had started their working life with the company as apprentices, which shows how important that route of entry into the industry is.
As a result of that Green Paper process, we will publish a White Paper in the spring, which will formally set out our approach to industry and technology through to the next SDSR, which I hope will come after a much shorter gap than this one. That will provide the clarity that the industry needs to understand what our priorities are and how we plan to engage with it to bring those priorities to fruition.
Two of the highest priorities in the Green Paper and White Paper will be reinvigorated Government support for exports and helping small and medium-sized enterprises to expand and prosper. Many of them serve and supply the military aviation industry, as hon. Members have said. We will support the drive for exports with an active and innovative programme of defence diplomacy, and Ministers will play an important and personal role in that.
My hon. Friends the Members for Fylde and for Blackpool North and Cleveleys mentioned the role of my right hon. Friend the Prime Minister in securing a recent Hawk contract in India, which shows how important high-level ministerial engagement is. When I wore a previous hat, as Chairman of what was once called the Select Committee on Trade and Industry, we repeatedly made the call for such engagement, and I am delighted to see it bearing fruit so quickly under the coalition Government. The entire ministerial team was at the Farnborough air show this year to demonstrate our support for military exports in general and the military aviation sector in particular. I undertake that that level of support from Ministers will continue.
I turn to the BAE Systems site in Samlesbury. The MOD continues to recognise BAE’s integral role in the UK aerospace industry, and it is essential that we continue to work together for our mutual benefit as we establish and confirm the UK’s strategic objectives in the wake of the SDSR. In that respect, I very much welcome the company’s own review that is currently under way to ensure that its Military Air Solutions business has the right balance of skills, capabilities and resources to meet the new challenges that lie ahead. That cannot be achieved without some effect on the structure of the company, and I note with sadness the company’s announcement on 9 September that it sees a need for more than 700 job losses at a number of its aviation business sites following decisions by the last Government in 2009. Those losses come on top of earlier such announcements.
My hon. Friend the Member for Fylde will be aware, however, that BAE Systems is making a multi-million-pound investment in the north-west at its Samlesbury facility, which will be state-of-the-art. The company aims to develop the site into a major centre for unmanned air system development. Samlesbury has a strong tradition of design, engineering and manufacturing excellence in the aerospace industry, for which I pay tribute to it. It is home to some of the most advanced aerospace manufacturing and assembly technologies in the world.
On the subject of advanced technologies, unmanned air systems, which my hon. Friend mentioned, are already making a critical contribution to our operations in Afghanistan. Hermes 450, Desert Hawk and Reaper are saving the lives of our forces, our allies and the Afghan people themselves. I look forward to the introduction of Thales’s Watchkeeper system, which is currently the MOD’s largest unmanned air vehicle procurement programme. It will provide operational commanders with a day and night, all-weather capability to detect and track targets without the need to deploy troops into potentially sensitive and dangerous areas. My hon. Friend mentioned HERTI, which, if I remember correctly, is a privately funded capability at BAE Systems.
Looking further forward, we are investing in programmes to help us better understand possible future roles for unmanned air systems. Mantis, for example, is a programme funded jointly by the MOD and BAE Systems, which is leading an industrial consortium. The programme is a concept demonstrator with state-of-the-art sensors that will demonstrate a UK-developed deep and persistent intelligence, surveillance, target acquisition and reconnaissance capability of the type currently provided by Reaper.
Mark Hendrick
The Minister is speaking very strongly about the importance of the UAV programme, which is taking place principally at Warton, and I totally agree with him. He mentioned the restructuring at Samlesbury, which we all know has amounted to hundreds of jobs being lost last year and hundreds more this year. What does he have to say to people there who are going to lose their jobs, some of whom have given a lifetime of commitment to Samlesbury? That is likely happen to even more of them as a result of the defence review, in addition to the losses announced recently.
Peter Luff
I hope the hon. Gentleman heard me express deep regret for those redundancies, which result from decisions taken in the past. Exactly how BAES chooses to distribute its skills and work force in future is a matter for BAES, and it is not for me to comment. However, I express deep regret to those individuals, many of whom are outstanding engineers and technicians who started as apprentices and who have given a lifetime of work to some excellent products. I shall turn to the importance of maintaining a skills-base in the north-west, in particular for unmanned aerial systems, in a moment.
Another unmanned aerial system, Taranis, is the MOD’s prototype unmanned combat aircraft of the future. Built by BAES, Taranis reflects the best of our nation’s advanced design and technology skills. It will allow the MOD to gain a better understanding of the most cost-effective and capable future combat air capability force mix between manned and unmanned platforms. A pinnacle of UK engineering and aeronautical design, Taranis is a leading programme on the global stage and a significant step forward in this country’s fast jet capability. It is truly a trailblazing project.
To return to a point I made earlier, projects such as Mantis and Taranis will enable the UK to retain vital aeronautical engineering and design skills, not least in the north-west at Warton and Samlesbury. However, we acknowledge the risk to sustainment of critical engineering skills and, in particular, a critical mass of design skills within the UK aerospace sector. We are currently funding some work with BAES and key UK suppliers to sustain capabilities pending SDSR outcomes, which I am afraid I cannot prejudge.
My hon. Friend the Member for Fylde of course has a specific in interest in Warton, and its work is vital to the Department. The Typhoon programme contracts are worth approximately £20 billon for, from memory, about 160 aircraft, up to and including tranche 3A. I was asked to say that I would not cancel tranche 3B, but I cannot cancel it, because no order has been placed. However, all future Typhoon contracts are SDSR dependent. Of course, a significant proportion of the Typhoon work goes to BAES.
The MOD has also awarded a contract worth approximately £145 million for unmanned air systems air projects based at Warton. As a number of hon. Members pointed out, the site makes a critical contribution to the multi-billion dollar JSF F-35 programme, about which many hon. Members spoke enthusiastically. I agree with my hon. Friends the Members for Burnley (Gordon Birtwistle) and for Pendle that a two-engine option is vastly preferable in terms of security, design and driving down cost. I hope our American friends will be persuaded to pursue the two-engine option, which offers great strategic and financial advantages to countries participating in the programme.
The UK’s military aerospace industry is well placed to continue performing significant work in maintaining Typhoon’s capability edge and to address the considerable export interest that is being shown. Indeed, with two existing export customers—Austria and Saudi Arabia—official campaigns being pursued in India, Japan, Turkey and other countries, and with further opportunities in the middle east, including in Oman and Qatar, Typhoon promises to provide excellent employment prospects. That underlines that healthy defence exports are the best way in which to sustain a viable defence and aerospace sector in the UK.
The hon. Member for Hyndburn (Graham Jones) suggested that we were in some sense withdrawing from a commitment to Typhoon, but nothing could be further from the truth. Such suggestions are very damaging to our defence exports. This country has a fine aircraft in Typhoon, which is already in active service and serving the country very well indeed. However, the Typhoon situation will require the industry to continue modernising its approach to address the capability and through-life support requirements of those customers, as it does in the UK, rather than simply focusing on aircraft production and supply. Through-life support costs are hugely important, and we look forward to showing the way ahead through the Green Paper that I mentioned. Certainly, we will work with industry to ensure that, in future, our requirements for new equipment are designed from their inception with exportability in mind. That is very important in, for example, the unmanned air systems environment.
My hon. Friend the Member for Fylde asked for reassurances on the JSF. Again, it must be SDSR dependent, as in everything else, but the UK’s contribution to the JSF development will not change—it is fixed by the memorandum of understanding that we signed jointly with the US in 2001. There are significant work share benefits for the UK aerospace sector and it is important to recognise that those benefits come because of the excellence of that sector, which has won those contracts in competition in world markets. That is a great tribute to British engineering and the sector itself.
The UK’s plans to purchase further joint strike fighters are incremental—we already have some bought for test purposes—and they have always been based on the programme reaching technical maturity levels and being affordable within the overall resources for defence. We will regard future purchasing plans accordingly, as part of the normal planning process and the outcome of the SDSR. The UK continues to play an important role in the JSF programme through the provision of expertise and resources, including RAF pilots who are now flying the short take-off and vertical landing—or STOVL—flight test aircraft.
The SDSR underpins all this work and, together with the new national security strategy, will provide a coherent and consultative approach to security and defence across government. Our National Security Council has agreed that the overarching strategic posture should be to address the most immediate threats to our national security while maintaining the ability to identify and deal with emerging ones before they become bigger threats to Britain. This flexible, adaptable posture will maintain the ability to safeguard international peace and security, to deter and contain those who threaten Britain and her interests and, where necessary, to intervene on multiple fronts. It will also, crucially, keep our options open for a future in which we can expect our highest priorities to change over time.
It is very clear that the current defence programme is unaffordable and tough choices will need to be made. It cannot be said too often that the programme for the next 10 years is £38 billion over-committed, a sum that we simply cannot fund. That is additional to any requirement to cut budgets beyond that. That over-commitment of the existing budget is the legacy of the last Government.
Graham Jones
Will the Minister accept that the reason for the £38 billion overspend is the Government’s choice to cut the deficit further and faster? Otherwise the money would be there.
Peter Luff
Labour Members just do not get it. It is not a matter of choice. The last Government made a choice to be—I shall choose my words with great care—a little disingenuous with the figures and to make commitments that they knew they could not meet. We have to deal with the £38 billion over-commitment before we address any budget deficit reductions, and that is the problem we face in the Ministry of Defence.
Mr Speaker
Order. May I just say to the hon. Member for Bournemouth East (Mr Ellwood) that as he has only just toddled into the Chamber he should not be chuntering from a sedentary position in evident disapproval of the views of others?
Mark Hendrick
The Minister ignores the fact that we had a major global economic crisis and the Government had to bail out the banks after the irresponsible behaviour of generations of financiers. The reason we are in the terrible state we are in now, which the coalition Government seem to forget, is the behaviour of the bankers, not of the previous Government.
Peter Luff
It is the nature of Adjournment debates not to be too partisan, so I shall just spell it out in very simple language. The problem facing the MOD—the £38 billion—is nothing to do with international crises or bankers. It is because the last Government made commitments that they had no money to pay for. It is nothing to do with deficit reduction or the crisis. I could not be clearer about that. The £38 billion is a problem that we have inherited that we would have had to deal with irrespective of any need to address the extraordinarily large structural deficit that we also have in the UK. The £38 billion is a starting point before we address the consequences of the crisis.
John Woodcock
I hope that the Minister will accept my apologies for coming in slightly late for his speech. Members on both sides of the House accept that there is an over-commitment in the budget. Will he accept the findings of the Defence Committee’s report today that there is a grave danger that if the correction is done in the wrong manner—and it is being done very quickly—we will lose the capacity to maintain or restore capability in vital areas in future years?
Peter Luff
The Select Committee’s statement was constructive and thoughtful. I have not read every word of it yet, but it is a very helpful document. In some areas, it has not quite understood the process, but never mind—it is a good response, and today’s debate shows that Members on both sides of the House, including me, understand how important it is to maintain these capabilities and to ensure that we can take part in the next generation, particularly of unmanned aerial systems, which are the future of fast jet production. I will not labour the £38 billion point any more, but it does set the framework of what the Government have to contend with.
For Britain’s defence, and despite all the financial constraints we linger under—both inherited ones and the structural problems caused by irresponsibility in fiscal policy generally—that means taking strategic decisions for the long term. These are the realities we face as we approach the critical decision-making phase of the SDSR. I reiterate that no decisions have been taken on any of the issues debated in the House this evening. The right hon. Member for Delyn (Mr Hanson) referred to the A400M. Everything is in the pot, including the Nimrod MRA4. Everything is there together, and nothing has been singled out or decided. We have to do that to ensure we address both the fiscal challenges and the defence issues facing our country.
Mr Hanson
The contracts for the A400M were signed by my right hon. Friend the Member for Coventry North East (Mr Ainsworth) before the election, but that has been put in abeyance by the coalition Government. So a decision has been made on something that would, it had been decided, go ahead.
Peter Luff
I would like to be more explicit, but I cannot be. We are, and I quote:
“Pleased that agreement in principle on the future of the A400M programme has been reached between Partner Nations and Airbus Military (AMSL); this is an important stage in agreeing an amended contract.”—
the contract now needs to be amended—
“Work on the amended contract continues, and we expect it to be concluded later this year. However, as these discussions are ongoing and at a critical state, it would be inappropriate to provide any further details at this stage.”
I hope that the right hon. Gentleman will accept, therefore, that the issue is not just about the SDSR; negotiations are also going on at present.
I said that no decisions had been taken. However, my right hon. Friend the Defence Secretary made one such commitment at Defence questions earlier this week: he is keeping the RAF. I hope that provides some reassurance to hon. Members.
The potential prize is great: modernised, well-supported armed forces ready to defend and promote British national interests and successful manufacturing industry to support that. The UK military aviation industry is a strategic asset, and this Government will ensure that it remains so. We are committed to increasing the exportability of our equipment and delivering the industrial and technology support our armed forces need. The MOD’s defence industry and technology policy Green Paper will be a significant step towards achieving those aims. I welcome the opportunity to engage with our industrial partners in the coming months to ensure that, despite the serious financial challenge we face, these aims will become a reality.
Question put and agreed to