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Nimrod Project

Volume 492: debated on Wednesday 20 May 2009

May I say what a pleasure it is to take part in this debate under your chairmanship, Mrs. Dean? I should also like to acknowledge the fact that a number of other Members of Parliament, who admittedly are not in the Room but will be soon, want to make a contribution.

The BAE Systems site at Woodford in my constituency has a long and proud history. It first came into use back in the 1920s and has since been in constant use. Companies such as A. V. Roe, Hawker Siddeley and BAE Systems have built and developed many aircraft there, including the world-famous Lancaster bomber, which saw extensive service in world war two. I am pleased to have the opportunity to bring this subject to the attention of the House, not only because it needs to be illuminated among MPs who do not know about the insecure future of the Nimrod project, but because I want to set out to the Minister, whom I am pleased to see in his place, the reasons why the Government should continue to use the BAE Systems Nimrod MRA4 option over the United States Rivet Joint aircraft.

Hon. Members should be aware that I am speaking as a constituency MP who represents not only the BAE Woodford site, but many hundreds of highly trained workers—skilled engineers and technicians who work at the plant and live locally in my constituency or those of my constituency neighbours in the surrounding area. Those BAE employees are relying on three further Nimrod aircraft being commissioned and the site continuing in use as long as possible. As the local MP, I visit the site often, and am well aware of the fantastic job that the whole team of employees does. The expertise of the defence sector workers in this country is world renowned, and it is also on their behalf that I am speaking today.

My contention is simple: to lose valuable contracts to the US markets, as we may well do if the decision goes against Woodford, will not only affect the current workers at the Woodford plant, but will be a death knell for the future of the defence aviation industry in the United Kingdom. Sadly, I do not have time to give all the background and history of the BAE site at Woodford and the Nimrod project, but it would be wrong not to pay my respects and pause to offer my sympathies to the families and friends of the 14 airmen who were tragically killed in the Nimrod incident over Afghanistan in 2006. I understand, however, that the problem that caused the fuel leak that resulted in the accident has long since been corrected and the Nimrods are now on course to have the fewest fuel leaks since the RAF began keeping a tally.

I am very grateful to the hon. Gentleman for being so mindful of the 14 servicemen who died aboard Nimrod XV230, based at RAF Kinloss in my constituency. Does he agree that it is imperative that the Nimrod replacement process continues as speedily as possible, not least because it would assuage any remaining concerns about what is a very aged Nimrod fleet? That is one among many reasons why the replacement programme should continue as speedily as possible.

The hon. Gentleman makes a very important point and I am happy to agree with him on that matter.

As I have said, the history of the Woodford site is very important, but I want to look forwards, rather than backwards. I shall start with the productionisation issue. I understand from BAE that the Minister visited the plant recently and made it clear that the option to convert the three development aircraft to production standard would almost certainly not be taken forward, yet the RAF has stated that it needs a minimum of 12 MRA4 aircraft to fulfil its operational tasks. I therefore invite the Minister to explain to the House how, without those three planes, the operational shortfall will be met and what the replacement measures will cost.

However, the key issue that I want to focus on today is the Helix programme. For those hon. Members who are not aware of it, it is a brand-new electronic surveillance mission system and it requires a further three aircraft. The Government have accepted that the RAF needs those planes and the capacity that they will provide, but the decision that the Minister faces is where the aircraft will come from. We are talking about either the brand-new, state-of-the-art Nimrods from the UK or—this appears to be the only alternative—the 40-year-old US Rivet Joint plane made by Boeing.

In late 2007, BAE submitted an outline proposal that the aircraft should be Nimrods, but the Ministry of Defence decided that the costs were too high and too much risk was involved. Since 2007, the situation has changed dramatically. I am pleased to acknowledge that the Minister agreed that a further bid by BAE Systems could and should be submitted.

Over that time, the MRA4 programme has matured; the development programme is almost complete and through-life costs are now well understood. Most important, perhaps, is that the decision not to productionise the three Nimrod airframes already in existence leaves them ready and available for conversion for the Helix programme. Given those developments, does the Minister agree that no decision should be made before a thorough examination of the BAE bid is made and carefully compared with the American option? I hope that he will at least give us a guarantee that that will happen today.

The MOD will doubtless wish to examine closely the question of cost. Does the Minister agree that there will be cost advantages, as well as advantages such as operational synergy, in operating Helix with a fleet of Nimrods, especially as the RAF already uses them and is familiar with them? I understand that the MRA4 plane has a longer shelf life than the Rivet Joint alternative— 25 years rather than 12. Is that the Minister’s understanding, and will those aspects will be taken into account in the appraisal?

I want to be sure that the cost-benefit analysis of the options takes account of all the effects of the decision, including those that might be unintended. For example, local employment, and therefore the local economy, will be directly affected, with up to 1,000 dedicated employees at Woodford having to face their jobs ending more quickly if Nimrod is not chosen for the Helix project. The UK would also lose the expertise developed in Woodford—expertise that would help possible future productivity—and support and service for the current Nimrod fleet, thus leaving the UK no option but to return to the US again and again for upgrades and maintenance.

In my view, the decision would also damage the UK defence industry’s ability to modify and improve electronic surveillance systems which, in turn, would severely cripple the UK defence industry’s future capabilities. The unintended consequences of a decision to buy American and the advantages of using the Nimrod must be factored into the cost-benefit analysis of the two options. Intelligence considerations are arguably even more important. If the American aircraft were used, all intelligence gathered would come to the United Kingdom via the US military, not directly to GCHQ, as it would if the Nimrod option were chosen.

Will the Minister tell hon. Members how the capabilities of the two aircraft compare? I understand that the new Nimrod is a world-class, state-of-the-art aircraft that offers exceptional capabilities. Does the Minister believe that the same can be said of the 40-year-old Rivet Joint American alternative? In an article that appeared in The Times last year, an RAF insider was reported as saying:

“I am incandescent with rage that we are even considering ditching what is a world-class, ‘gold standard’, war-winning capability in the name of economy and the dubious claimed benefits of greater interoperability with the USAF”.

Again, I would be grateful for any response that the Minister can give me.

On the question of maintaining national security, what level of control would the US have over the Rivet Joint contract? For example, could the contract be cancelled, or not renewed, if the UK used Helix for actions that the US Government did not support? Surely we should not hand over a vital part of the UK’s defence capability to the US in that way. Does not the Minister agree that there is a question of sovereignty and independence?

Finally—I am aware that other Members wish to contribute to the debate—the argument is not about protectionism. It is a question of short-term savings overriding long-term financial sense and stability. It will be more economic in the long term, and for the economy as a whole, to stay with the Nimrod programme. It is also right for the country. In the current economic climate, we would be better investing in UK jobs and developing the UK defence industry instead of subsidising US jobs and the US defence industry.

I congratulate the hon. Member for Cheadle (Mark Hunter) on securing the debate. I emphasise that the matter unites all political parties represented in the north-west. I can tell the Minister that everybody is conscious of his willingness to engage in proper debate on the matter and to make himself open to argument. For example, when he visited Woodford recently, he listened to the concerns expressed not only by BAE Systems, but by its work force.

Although I shall not speak for long, I want to make a few central points and reiterate some of the points made by the hon. Member for Cheadle. We in the north-west of England are concerned that the nation should recognise the importance of the defence industry not only as an employer, but as a repository of the high skills that our nation needs for advanced manufacturing in future. Maintaining that skills base is not an arbitrary factor, but an important consideration; it has not only monetary value but something beyond that.

I realise that the Minister might not want to answer every detailed question raised this afternoon. The growing belief is that comparisons that might originally have been disadvantageous to the Nimrod have been evened up considerably in recent times. That is partly because BAE Systems recognised the need to make significant progress in order to satisfy the concerns of the RAF and the Ministry of Defence. Those were legitimate concerns, given the history of delays in such projects, but things have moved along.

I therefore ask my hon. Friend whether he is satisfied that at least part of the commercial risk has been removed as a result of the offer from BAE Systems to consider a leasing system and the cost equation involved in providing the Nimrod. If not, I would counter with serious doubts about the comparison with the Rivet Joint system. For example, we know that some of the costs involved in operating the Rivet Joint system will be disadvantageous. It will need bigger crews, and it will have certain other disadvantages that will lead to longer ongoing costs than the Nimrod system. Is my hon. Friend satisfied that BAE Systems arguments on the costs equation are going in the right direction?

Cost is an important part of the equation, but the sustainability of Nimrod as a military system is fundamental. There is no point in buying it if it does not do what it should. There is no doubt that the newer Nimrod system is better than Rivet Joint, but with the proviso that I conceded in conversations with the Minister and others. The key question is: can BAE Systems deliver the system when the RAF needs it?

In the end, we need to hear from the Minister whether delivery is still a fundamental problem. We local MPs need to say to the company that it has to close that gap and give the necessary guarantees. If the Minister believes that such things are already built into the equation, can we move forward, recognising that on jobs, costs and in terms of defence capability, Nimrod is the superior system?

It is a pleasure, Mrs. Dean, to serve under your chairmanship. I congratulate the hon. Member for Cheadle (Mark Hunter) on securing this debate. It is on a matter of general public interest, particularly in the north-west of England, and I am struck by the number of Members from all parties who are here this afternoon to take part.

I totally agree with what the hon. Gentleman has said about the history of BAE Woodford. It has a proud history involving the RAF and the use of the very best of British engineering skills over many generations. As he has rightly said, it goes back to the Lancaster bomber in the second world war and the Vulcan just after the war, and it includes the first Nimrod, the MR2 and the current MRA4 programme. I also agree totally with what he said—I am so glad that he mentioned it—about the appalling tragedy of the loss of those 14 men in Afghanistan in 2006. That remains a very live memory. Those men died serving their country in a harsh and difficult environment, and we pay tribute to them. We bitterly regret their loss.

I shall deal in turn with three distinct issues: the current progress of the MRA4 project, the prospects for productionising the additional three aircraft in the MRA4 maritime surveillance role and the possible use of an MRA4 airframe to contain a new version of the Helix system to replace the R1 Nimrod. As all colleagues from all parties in the Chamber who have followed this history over the years know all too well, the MRA4 project has been very much less than a happy one, ever since the original contract was signed by the Conservative Government in 1996. One has almost lost count of the number of renegotiations of the contract since then. The story contains lessons for all of us on the procurement side and for those on the industrial side as well. Those lessons are being learned on both sides.

I am happy to say that the latest indications are reasonably favourable—in some respects, they are very favourable. The latest bad news is that there have been delays to flight trials, but the good news is that we hope that delivery of the first aircraft will be slightly ahead of the latest schedule later this year, which is very good news. The 2011 in-service date will be met, and we look forward to that. The Defence Committee asked me why we did not cancel the MRA4, but I assure hon. Members that, unless something completely unpredictable—indeed, almost inconceivable today—happens, I shall not consider that option at all. We look forward to taking delivery of those aircraft.

The question was asked whether we can do the job with nine rather than 12 aircraft. The answer is, “Yes, we can.” I do not want to go into too much detail, because these are delicate security issues, but the essential national defence task to which those aircraft will be put can certainly be done with nine aircraft. That will leave us with a great deal of capacity to do a wider job in the maritime surveillance role. I am confident that the essential task that we want the MRA4 to accomplish can be carried out. If we had 12 or 15 aircraft, no doubt we could put them to good uses. With current technology, however, there is no need for anything like the 21 aircraft that were originally specified in the totally different circumstances of the early 1990s.

I want to repeat what I said very clearly in Woodford on 27 April, because it is neither responsible nor kind—in fact, it is cruel—to encourage false hope. Although no formal statement has been made or formal decision taken—there are various formal procedures in the MOD to go through first—in all honesty, I cannot conceive of any circumstances in which it would feel right to spend additional taxpayers’ money on further MRA4 aircraft in the maritime surveillance role. I want to put that even more firmly on the record than I did in Woodford. I am afraid that it is a fact that everybody should take on board. I do not want people to spend money unnecessarily. In particular, I am concerned about people planning for their futures and facing up to the realities of the situation earlier rather than later. It is in that spirit that I make that point.

The third distinct issue is the one about which hon. Members on both sides are most concerned: our decision on the replacement for the R1 Nimrod and the question whether we can use these three potential MRA4 aircraft in that role. I shall not disguise from the Chamber the fact that, when I took over this job, many people said to me that that was not a sensible or realistic prospect. However, I am determined to ensure that we do not exclude that prospect unless we have considered its potential very carefully and thoroughly.

I know that BAE Systems put in a bid some years ago for a new replacement for the R1 Helix system, and that it was not one of the companies selected to undertake an initial study. I do not want to go back over the past. Under international and European law, we are allowed to take a national view, from time to time, on defence procurement, and there will be moments when I will feel that it is right to do so. If BAE Systems can come up with a sensible solution, I would certainly prefer a British solution.

I apologise to you, Mrs. Dean, and to the Chamber for being a little late. The Divisions confused me about when this debate would begin. The Minister’s response is very constructive and helpful. However, what consideration has he given to the life cost and operational synergies between Helix and MRA4? Could a great deal of money not be saved? This airframe could be used. I agree that there are complications, but surely considerable savings could be made, particularly in having one aircraft carrying out both functions.

The hon. Gentleman is perfectly right that the through-life cost is the important issue in terms of cost and that cost itself is important. Cost has to be considered along with the other two issues that are most important to me—delivery time and technical risk. There have been far too many cases in the history of defence procurement in which we took on excessive technical risk and found that we were buying capabilities that did not work, or that we had taken far too long to acquire them, because we had had to solve all sorts of technical problems along the line. Historically, the Nimrod MRA4 project is a classic example of that, as too was its predecessor. We must be alive to those things.

The hon. Member for Macclesfield (Sir Nicholas Winterton) is convinced that if I were to consider the matter on a through-life cost basis, I would come up with an equation that points clearly in the direction of the MRA4. My hon. Friend the Member for Manchester, Central (Tony Lloyd) is also very confident that the MRA4 would come out ahead on all those criteria. I do not know. I have not received proposals either for the Rivet Joint or from BAE Systems—if we get one—for the MRA4 in the signals intelligence and R1 replacement role.

On 27 April, I told BAE Systems three things: first, that if it wants to bid, I would enable it do so by briefing it in full on the necessary, up-to-date information about our requirements—that has been provided during conversations over the past few weeks—secondly, that I shall consider the three factors just mentioned; and thirdly, that it might feel handicapped, because clearly its bid would involve adapting an airframe to a role for which it was not originally conceived, the production of a new missions system that has not been in service before and the integration of those two things. Those are the three different technical risks involved.

The Minister is giving a very full response to our questions, and I look forward to the rest of his comments. According to our information, this is an either/or choice—either Rivet Joint or Nimrod—and he has not yet denied that. As we understand it, the American project is a 40-year-old product. Does he share my concerns about the structural integrity of an aircraft that might have spent most of the past 40 years in a desert somewhere in the United States waiting for a buyer? Cost is a major consideration, but safety is also uppermost in all our minds, including his.

I did not include safety in my three criteria, because safety must be taken for granted before we take anything beyond the first stage. The hon. Gentleman knows that I am not an aerodynamist or aeronautical engineer, so I have to rely on the experts to answer these questions. If he asks them directly, as I have done, the experts will tell him that the critical thing is not necessarily the age of the design of the airframe. The original airframe of the Rivet Joint is the same as that of the Boeing 707—he and I might remember going on one of them in our childhoods. The design has proved to be extremely viable over those years. It is the age of the individual airframe, which may not be anything like 40 years old, and the number of flying hours that it has done that are the critical factors.

Let me turn to the US air force, which does not have a reputation for cutting corners on safety. One or two air forces in some parts of the world may not be paragons when it comes to good safety records, but that is not the case with the US air force. The US air force plans to use Rivet Joint, which is the existing system that it is talking to us about, until 2040. According to its schedule, it will start to withdraw the system from 2036 going on to 2043, so take an average of 2040—I think that I am within a year or so of being accurate. In practice, many of the systems will be extended a bit longer than the out-of-service date as foreseen 25 or 30 years beforehand. The US air force is pretty confident about the viability of the airframe. That is the best answer that I can give to the hon. Gentleman. I will not prejudge this whole competition.

When the Minister makes his considerations, will he also take into account the importance of keeping highly skilled engineering jobs in the north-west, because that will attract further investment and give vitality to the region?

The answer is, of course, yes. I was going to touch on that important aspect in my concluding remarks.

In the limited time that is left, I hope that the Minister will make some reference to the intelligence questions that I raised earlier in my speech. I am referring here to the sharing of information.

I am sorry about this, Mrs. Dean, but we are all confused about the way in which this debate has been running this afternoon for the reasons that we all know about. Am I right in thinking that I have another three minutes?

Will it help if I clarify how much time we have left? We started this debate early because the previous debate finished earlier than expected. We may have another vote. [Interruption.] My pager is buzzing away. We can go on until 5.24 pm.

I am grateful for that, Mrs. Dean. In anticipation that we cannot go on for that long because of the expected vote, I will try rapidly to answer that important question. On that matter, unlike on other matters, the hon. Gentleman is misinformed. If we were to purchase or acquire by some contractual mechanism—I leave that matter open for the time being—the capability represented by the Rivet Joint, it would be exclusively British crews who will operate the system. The intelligence will come through to us in the first instance, and it would be for us to share that with our very important allies, including the United States, or it may be just the United States. It will be a matter entirely for us. We retain complete sovereignty over the ownership of that intelligence. There is no danger of our losing that.

The hon. Gentleman raises the theoretical political risk—I call it political risk—that the United States will embargo this country, stymie our defence capabilities, order its nationals no longer to service our aircraft or deliver spares for the aircraft that we are utilising and so on. I cannot estimate in what time scale such US actions or sanctions might be effective, if ever they were applied. I rate very low the chances of such an eventuality emerging in the world of the future, even after our time. I cannot believe that there will be a situation of such enmity between this country and its greatest traditional ally, the United States. Although there is a theoretical risk, it is not one on which I will spend a great deal of time. If such a nightmare scenario were to take place, there would be so many other issues of great national importance that that would not be a concern.

I am looking forward to receiving any offers that anyone wants to send in. If BAE Systems decides that it wants to send us an offer, that is entirely its decision. I have not requested it to send in an offer; I have simply said that I do not want to prevent it from sending in an offer. I will facilitate it putting together an offer, if that is what it wants, and we will consider it very thoroughly and fairly. All the issues that have been reasonably raised this afternoon will be weighed in the balance when we come to make a decision.

Our Prime Minister—I do not want to misquote him—has made it known that he would like, where possible, for purchases to be made of British products, because that will provide jobs for British workers in British factories and bring the maximum benefit. How will such a factor be weighed up? If the company provides assurances over design and reliability and says that there will not be the problems that have been experienced in the past, will that weigh heavily? Given that the trade union movement at Woodford has been constructive and co-operative with management on all occasions over recent years, I do not believe that it should lose out, especially as the Helix MRA4 would answer the requirements of the RAF.

The hon. Gentleman talks about the Prime Minister. I agree with him that the Prime Minister is an excellent Prime Minister. I think that I said the same in more or less the same words as the hon. Gentleman. All things being equal, or not quite entirely equal, I would prefer this contract to go to a British company. I agree with everything that the hon. Gentleman has said about BAE Systems and its work force. I have had several meetings with representatives of the work force and have been impressed with how well informed they are and how pragmatic and effective they are in their dealings with the management. When I went to Woodford on 27 April for what was an exemplary meeting, the management asked the unions to be present at most of our meetings—that has never happened to me before. I thought that that was splendid, because it showed that real teamwork was going on between management and the unions so far as that factory and this project are concerned.

Earlier, the Minister made reference, quite appropriately, to the dangers of building up people’s hopes and expectations. He made it quite clear that the Government are not interested in doing that unless there is real reason to do so. That being the case, will he confirm the timetable for that decision? As the Minister has been to Woodford and paid tribute to its work force and management, will he give us a more specific idea about the timetable? We have been told that a decision is imminent, but it is only fair to those who have livelihoods at stake at Woodford to know what timetable the Minister has in mind, so that they will have a better idea of when precisely their futures will be known.

It is a matter of a very small number of months. We have had conversations with two potential major bidders in this project. I do not want to start setting some arbitrary deadline. I want to receive the two offers, and I want the bidders to feel happy with them. However, what I will not do is delay the project to accommodate the offers. It is very important for us to see progress and people going forward in a matter of weeks. It will be a very small number of months within which we will need to have got on board, in a final version, all the facts. As I have said, there are many considerations in such an operation. I have tried to isolate three, because they are the essential ones on which everyone should focus—they are price, delivery and technical risk. I have not disguised from BAE Systems privately, and I do not disguise from the Members of Parliament who represent the people who are employed in the factory, that on technical risk, it is not necessarily an equal race. We have to compare a proven system with one that will be new in terms of airframe, mission system and the integration between the two. There are some real challenges, but I do not mean to say that it is hopeless or impossible. If I thought that, I would say so and cut off any chance of anybody bidding. We remain totally open-minded, and I look forward to making a decision on that basis.

My hon. Friend the Member for Stockport (Ann Coffey) made a good point about the future of the British aerospace industry and the engineering skills that we have at every phase in the design, development and production of aircraft systems. The Government do not get much credit for good news—nobody pays attention to it—but there was a piece of spectacularly good news the other day, when we confirmed that we are prepared to go with our partners on the European continent to negotiate part of the third tranche of the Typhoon programme. That enormously important programme involves a lot of aircraft and work, so it was considerably good news, not least for the main contractors involved and their work forces and for the subcontractors. The livelihoods of some 16,000 people in this country depend directly on the future of the programme, and it is going forward. I hope that that answers my hon. Friend’s question.

BAE Systems is investing its shareholders money, which we appreciate, and the Government are investing—such joint investment is the way forward, as I have said in many different forums and contexts—in three new unmanned aerial vehicles and unmanned combat vehicles programmes. I will not go into the details or specifications of the projects, because, as the hon. Member for Cheadle will realise, such matters are confidential. I visited Warton, where that programme and the major contribution of BAE Systems to Typhoon tranche 3 are going ahead.

We are entitled to feel reasonably confident about the position of the aerospace industry in the north-west and its component manufacturers in other parts of the country, including the important Selex avionic systems site in Edinburgh. Every time I see the hon. Member for Moray (Angus Robertson) in a defence debate, I tell him that Selex’s long-term future would be menaced, if Scotland becomes independent. He must face up to those issues, which are important for the livelihood of his constituents and many people in Scotland. At the moment, they are nevertheless entitled to feel reasonably confident.

The future of the Woodford plant is a matter for BAE Systems; it is not for the Government to tell it what to do with its assets and plants, or how to structure its business, so we will not do so. However, my understanding is that Woodford will not remain an aircraft production facility much longer than a couple of years beyond the delivery of the nine MRA4s, whether or not we produce a contract to use the three test aircraft in a new role. In other words, instead of a 2012 deadline, we might be pushing a deadline of 2014. Two years is not nothing, but one could always argue that if bad news is coming and there is going to be some restructuring, it is better for people to have an early warning, so that they can change their lives aged 39 rather than aged 41 or 42. We can argue that both ways.

I was deeply impressed, both as an individual and as an engineer, by the chief engineer at Woodford, who has been there for many years, and by his team. The spirit at Woodford is magnificent. As long as we have real business and requirements for state-of-the-art avionics and aerospace in this country, which we will if the Government have anything to do with it, there will be prospects for the skills, dedication and track record, which have been demonstrated by the Woodford work force over the years, to find a continuing role in the industry, if not on that site.

Question put and agreed to.

Sitting adjourned.