(2) what steps the Government are taking to maintain UK capability within the air sector.
The Defence Industrial Strategy identified that once Typhoon and the Joint Combat Aircraft have been introduced into service, there is no requirement for a new-design manned aircraft beyond our extant plans although future procurements of uninhabited and/or manned platforms are envisaged. The consequent long term decline in new programme work is expected to lead to a significant rationalisation of the UK defence aerospace business. That is why MOD is negotiating with BAE Systems on the terms of the business rationalisation and transformation agreement required to facilitate the effective sustainment of the industrial skills, capability and technologies—wherever they may be in the supply chain—that will be important to our ability to operate, support and upgrade our fast jet combat aircraft through life. We aim to work with the company during 2006 to agree the way ahead—and to implement it from 2007.
The MOD is also planning to invest in UAV Technology Demonstrator Programmes (TDP) to better understand technologies that are likely to play an important role in this future military capability. The investment should also help sustain aerospace engineering and design capabilities in the UK, providing further assurance of our ability to operate and support our future fixed wing aircraft. We expect to be in a position to announce the commencement of the TDP later this year.