Defence Aerospace Industrial Strategy

Harriett Baldwin Excerpts

Thursday 16th November 2017 Commons Chamber

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

The whole defence procurement sector, and especially the defence aerospace industry, has a huge role to play in supporting employment, exports and growth, but our sovereign defence capability, in the national interest, must lie at the heart of the decisions we make and at the centre of the Government’s defence policy. We therefore need a defence aerospace industrial strategy that takes into account the practical needs of our armed forces. Recent and ongoing operations to counter Daesh, as well as humanitarian efforts in the wake of Hurricane Irma, have shown how our modern, powerful and flexible armed forces are vital to our national strategic interest and our place in the world.

It is not sufficient, however, just to ensure we have capability today and in the short term to enable the RAF to defend our skies, fight our enemies, and aid our friends and allies. We must also have the sovereign skills capacity to continue to manufacture platforms and to innovate in Britain far into future. The skills that are needed to continue to develop high-tech, world-leading aerospace platforms are already present across this country, particularly in my constituency, which has Airbus, Boeing, Rolls-Royce and BAE, among many others. We must, however, work hard to maintain and, crucially, to enhance and develop these skills. There is a serious shortage of skilled engineers and scientists, and we must avoid ever being forced to rely entirely on expertise from abroad.

[The Parliamentary Under-Secretary of State for Defence (Harriett Baldwin)]

Does my hon. Friend welcome this week’s announcement at the Dubai airshow that Airbus has struck its single biggest aircraft order ever—for 430 A320neo jets? That is great news for the workforce.

[Jack Lopresti]

I am obviously delighted and thrilled. That excellent news will help to secure jobs in my constituency and elsewhere in the country.

As I have said in previous debates, the defence and aerospace companies I have met and engaged with over many years are clear that without long-term procurement commitments, Britain will start to lose the skills that we have worked so hard to nurture and develop. To illustrate the long-term nature of this issue, it is worth remembering that equipment used in the 2011 Libyan intervention derived from research and development that started in the 1970s. We cannot fall prey to short-term decision making on the basis of the current defence and budgetary landscape yet still expect to find a skilled defence and aerospace workforce in the future when we need it most.

I thank the Under-Secretary of State for Defence, my right hon. Friend the Member for Bournemouth East (Mr Ellwood), for writing to update me on the progress that his Department is making on a replacement for the Typhoon. I am sure that that will be welcomed by companies in the defence and aerospace industries such as Rolls-Royce and BAE Systems throughout the country, but particularly in my constituency. The Minister informed me that the preparatory work for the procurement process had begun. The future combat air system—FCAS—will be vital to support our defence and aerospace skills base. Most importantly of all, it will be vital to the maintaining of our sovereign defence capability, our export opportunities and our place in the world.

Alongside such procurement commitments, it is important that we support and maintain the excellent work of a number of defence aerospace companies to encourage apprenticeships and graduate programmes. Those will help to secure our skills base, as well as providing excellent opportunities for young talent and, of course, enhancing our country’s social mobility. The 5% club, in which companies undertake to ensure that 5% of their UK workforce will be either apprentices or students in structured programmes, is a very welcome scheme. I commend it to all the other manufacturers in my constituency, and indeed to manufacturers throughout the country. I also welcome the efforts of Airbus in particular, as well as others in the sector, to engage directly with universities and university technical colleges, and to invest heavily in highly skilled research and development across the country.

However, our sovereign defence requirements, and the requirements of our skilled industries, extend beyond the FCAS. I urge the Government to consider a wide range of equipment and research opportunities for inclusion in any future defence aerospace industrial strategy. A comprehensive approach is required to ensure that our armed forces remain equipped with the best possible technology, and that our country has the skills base to design, build and continue to develop that technology.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Defence (Harriett Baldwin)]

It gives me great pleasure to respond to this debate. I congratulate the hon. Member for Stoke-on-Trent North (Ruth Smeeth) and my hon. Friend the Member for Witney (Robert Courts) on securing it. We have heard 14 interesting and compelling Back-Bench contributions, and I will start by picking up on some of the general themes that came from them.

Many hon. Members spoke out on behalf of the incredible work of the BAE workforce in their constituencies. There has been an urgent question on this subject in recent days. The decision was made by the company, and it is currently consulting the workforce. As the Department is its largest customer, I have been in discussions with the company, asking that it looks to avoid any compulsory redundancies. As an employer ourselves, we are also in ongoing discussions regarding staff with the right skills who could fit into our organisation.

On the subject of the unfortunately named MUFC—the maritime underwater future capability—there is no hon. Gentleman who speaks up more for his constituents than the hon. Member for Barrow and Furness (John Woodcock). However, I am sure that he would acknowledge that there is a very solid pipeline of work in his constituency for decades to come. That shows the amazing work of those who live and work in his constituency. The maritime underwater future capability project is still ongoing work, and he will have seen some of the wonderfully imaginative recent ideas.

Regarding the Hawk pipeline, I can reassure the House that we continue to work on export opportunities to Kuwait and India. The RAF has 28 of the T2 aircraft, and there is no risk to the Red Arrows. A number of colleagues mentioned the P-8 aircraft. The first of that capability will come into service in 2019, and will be based at RAF Lossiemouth in the north of Scotland, which will be good for the local economy. Some excellent UK companies are in the P-8 supply chain, including Marshall with the fuel tanks, Martin-Baker with the crew seats and General Electric with the weapons pylons.

[Mr Kevan Jones]

rose—

[Harriett Baldwin]

I will not take any interventions because there is so little time.

My hon. Friend the Member for Henley (John Howell) spoke eloquently about the excellent Puma squadrons in his constituency. A number of colleagues asked about Typhoons. So far, just over 500 Typhoons have been built, and they are in service and have been ordered by nine countries around the world. There is still a significant pipeline of Typhoons to be built, and the statement of intent was signed with Qatar. Of course, the Government are working as hard as possible to ensure that those and the 12 Hawk aircraft are on contract by the end of the year.

Contributions from across the House have shown that not a corner of our great country is untouched by the nationwide enterprise that is defence aerospace. Indeed, we have a rising defence budget overall, and the strategic defence and security review in 2015 set out a £178 billion equipment plan for the next decade. In the last year for which we have the recorded numbers, 2015-16, the MOD had a spend of over £2 billion with UK aerospace, and that directly sustained over 7,000 jobs. In fact, I am delighted to be able to announce today that we have awarded Babcock three new contracts, worth £160 million, to provide RAF bases across the country with expert support.

As we heard in today’s debate, aerospace strikes a real chord with the British public, and we have heard some key reasons for that. There is obviously the historical connection and the fact that we have 100 years of the RAF coming up in the next year. We also know that our country would be a very different place were it not for the immense intervention of air power in world war one and particularly during the battle of Britain in world war two.

The current crop of aerospace experts in the UK has a worldwide leadership reputation. We have some of the most technically advanced and capable aerospace companies in the world. Aerospace is an engine of local and national prosperity. Up to 2,500 UK companies are involved in it, and it generates more than £33 billion of turnover, employing more than 120,000 people, including 26,000 just in research, design and engineering. Interestingly, more than 80% of the sector’s production is exported. Of the £64 billion brought into this country through defence-related exports in the last decade, 85% was generated by aerospace, and much of that was from the combat air sector.

Crucially, as the hon. Member for Stoke-on-Trent North mentioned, we are using our kit in places such as Iraq today. A combination of our Tornadoes and Typhoons has helped to bring Daesh to its knees and liberated millions of people from an evil death cult. I am sure hon. Members will want to join me in paying tribute to all the brave men and women who are currently serving in our aircrews on deployment.

We are absolutely right to celebrate the aerospace sector, but we also need to talk about the future. The Typhoon has been selected by nine national air forces, and we are currently pursuing exports to Bahrain, Belgium, Finland, the Kingdom of Saudi Arabia, Malaysia and Qatar. Other Typhoon nations are also pursuing export opportunities to other countries.

On the export pipeline, we are looking ahead not just one or two years. We need to look decades ahead, because we know our Typhoon aircraft will go out of service in 2040. The 2015 SDSR allocated a substantial budget over 10 years to the future combat air system technology initiative, precisely to protect and develop key design and engineering skills in our industrial base. The money includes funding for a national technology programme to maintain the UK’s position as a global leader in this area. Some of the work to mature other high-end technologies is with France, and some is with the US.

The decision on the future of combat air will require us to decide at some stage to replace the capabilities currently delivered by the Eurofighter Typhoon. It will be a complex decision, involving a clear military requirement and requiring detailed consideration of the industrial and financial implications. In terms of the timing, the decision will be made in the very early 2020s or sooner to enable a maingate decision on the procurement in or around 2025.

In conclusion, this is a key sector, and we have had a good debate highlighting a number of the issues in it. Our approach to the defence aerospace industry should be about an overall industry strategy, taking into account the business leaders, the educators, the representatives, the unions and the local economy. We must ensure that, whatever the dangers to come, the great industry we have been discussing today flies even higher, faster and further in the future.