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Bae Systems

Volume 405: debated on Monday 12 May 2003

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If he will make a statement on the strategic defence review and its impact on his purchase plans for equipment from BAE Systems. [112220]

The 1998 strategic defence review and the new chapter published last year remain the foundation for the shape, size and capabilities of our armed forces. The defence White Paper to be published in the autumn will provide an updated statement of defence policy and explain our plans for the delivery of enhanced defence capability. This will provide the baseline against which the Department will work with companies such as BAE Systems to procure future battle-winning equipment.

I thank the Minister for that reply. The Royal Ordnance factory in Puriton in my constituency has turned out an enormous amount of ordnance over the past few months to support our troops in the Gulf. BAE Systems has said that it will continue production there, but I wonder for how long. Does the Minister agree not only that that battle-winning equipment, as he calls it, should be manufactured in this country but that one should ensure that it can be procured at a moment's notice for use in any battlefield around the world? Will he therefore commit himself to continuing production?

I will always pay tribute to the work force of Royal Ordnance factories throughout the country. I gently remind the hon. Gentleman that the privatisation of that part of our supply was carried out under a Conservative Government. Indeed, the previous Member for Bridgwater may have been Secretary of State for Defence at the time, but I will check that.

It is clearly important that we have a guarantee on supplies. Of course, all that will be subject to the lessons learned from the current conflict. We will conduct a deep analysis of what happened. It will take some time to come to decisions but I am sure that the view expressed by the hon. Gentleman will be reflected in some of the conclusions reached.

Is my right hon. Friend aware that 470 jobs at BAE Systems in Brough are under threat because of perceived delays in resolving the Hawk contract? Will he do all he can to lobby other Ministers in his Department and other Departments so that the contract can be sorted out sooner rather than later and the 470 jobs no longer be under threat?

The best advice and information I can give my hon. Friend is that BAE Systems's proposal is being evaluated, so it would be inappropriate to speculate on the outcome at this stage. It is incumbent on companies that depend heavily on the Ministry of Defence to be proactive internationally. Alongside what they do for the MOD, they should look for other commercial outlets for their work force. Again, we hope that a decision can be reached quickly on that matter. That may ease the minds of the work force there.

In the light of the retiring Chief of Defence Staff's remarks with reference to the Government's commitment to purchase 232 Eurofighters currently under production in my constituency, does the Minister understand that such remarks have caused much uncertainty and worry in the Wharton work force? The work force are also concerned that the Government have yet to make a clear decision about tranche 2 of that aircraft and the order for 80-odd aircraft, and uncertain about the Government's intentions in developing a ground attack capability for the Eurofighter Typhoon. May I ask him to put on record, if not now in the very near future, a clear statement of what the Government's precise intentions are about that weapons system to deal with the uncertainties that thousands of my constituents are experiencing?

That is a fair and reasonable point. There is no question but that the MOD consults very widely and comprehensively as decisions are taken both in moving forward and perhaps in terms of rationalisation or changes to decisions. That is what we seek to do.

We expect the four partner nations to place the order for the tranche 2 aircraft, of which the United Kingdom's share is 89, later this year. Under the undertaking given in the four-nation memoranda of understanding, the UK has undertaken to acquire 232 aircraft out of a total production of 620. We will, of course, keep the capabilities of the defence programme under constant review, but our commitment to the Typhoon programme remains unchanged.

Does my right hon. Friend agree that, under the strategic defence review, record numbers of orders have been placed with United Kingdom manufacturers? That has given a tremendous boost to economies such as that of the north-east of England. Does he further agree that the strong base that those orders have created gives UK manufacturing a strong and determined base from which to pursue export orders?

I agree entirely. It is a point well made. As it stands, our capability and equipment programme is of record-breaking scope. We just need to consider the shipbuilding programme and the many other important procurement decisions that are coming on-stream. My hon. Friend made a good point in saying that the quality and capacity of British engineering companies enable them to win their share of the contracts, and he is right that that gives them a tremendous platform on which to build for the future not just in seeking and obtaining further MOD and international defence contracts but in gaining a significant share of the commercial market that is out there.

As my right hon. and hon. Friends have made clear, serious question marks hang over a number of critical defence projects involving not just BAE Systems but the many British companies in the supply chain. I was astonished at the answer that the Minister gave the hon. Member for Cleethorpes (Shona Mclsaac). Does he accept that what he said must set alarms bells ringing in the ears of the work force at Brough? It would be inconceivable for the UK Government to order an advanced jet trainer other than the proven, highly successful, world-beating Hawk aircraft. Nobody in this country would be able to understand it if he ordered anything else. He should get on and order the aircraft by the end of June if wants to keep those employees in continued employment.

Will the Minister also confirm that the joint strike fighter programme is slipping, with consequences for our maritime air defence? Without the JSF, the new aircraft carriers that he is ordering will be rather pointless. What efforts is he making to get the Americans to sign up to giving Britain the technology access agreements that are required by BAE Systems?

Further to the remarks of my right hon. Friend the Member for Fylde (Mr. Jack), what about the Typhoon tranche 2 and its air-to-ground capability? The Minister must address that issue very quickly, or we will not have the right equipment for the Royal Air Force.

I suggest that the hon. Gentleman talk to the shadow Chancellor of the Exchequer and find out whether all the commitments that he is making—

You do not have the money, but they are in your programme.

I am trying to explain that we get a shopping list from the Opposition. On our programme, I gave a clear answer in relation to the Hawk. The final bid has been put in by BAE Systems, and it has to be evaluated. I do not know whether the Opposition spokesmen are saying that there should be a different strategy in Departments and that they should just say yes no matter what bid a company makes. That would not be good—quality government.

Let me explain about B,AE Systems. In the last financial year, the MOD made payments of about £250 million and the contracts awarded were worth in the region of £2.7 billion. That shows a significant measure of confidence in that company, and we could, of course, give similar figures for other major UK-based defence contractors. We are investing very substantially in British manufacturing through the defence sector. It would be nice for that to be recognised and applauded by the Opposition.