House of Commons Hansard Debates for 9 Jul 1992

Column 599

connected with the presidency. He would have had to cancel that appointment to be here tonight, and I hope that my hon. Friend accepts that that would have been the wrong decision.

As all hon. Members have recognised, Latin America has experienced dramatic political and economic change in recent years. Despite setbacks in one or two countries, as mentioned by the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) among others, and despite the unreformed communist regime in Cuba, democratic government is now the norm in most of the region. Of course, there is a little less euphoria now than there was 12months ago. Earlier, I read the debate of 12 months ago, and I can judge that as well. However, there is a little less euphoria elsewhere in the world--for example, about eastern Europe and the former Soviet Union.

Dr. John Reid (Motherwell, North) : And Britain.

Mr. Lennox-Boyd : The hon. Gentleman makes his comment from a sedentary position.

In Latin America, we are observing free market economic policies, aimed at steady growth. The control of inflation and the encouragement of investment and competition have also been adopted by most of the countries in the region. Regional integration is being pursued, for example, through the establishment last year by Argentina, Brazil, Paraguay and Uruguay of Mercosur--a new southern-cone free trade area. As my hon. Friend the Member for Gravesham mentioned, Mexico is negotiating a north American free trade area with the United States and Canada.

All those developments point to a transformation of the prospects for Latin America, by comparison with the gloomier prognosis of the 1980s. Together they have rightly been dubbed "the quiet revolution" by British press commentators. British business, investors and financial markets are all taking notice. We are already one of the largest foreign investors in the region, and are keen to promote more exports.

The British Government are responding energetically to the changes, to strengthen already good relations with Latin America. We have resident United Kingdom-based diplomatic representatives in every continental Latin American country. We are doubling our bilateral development aid during the next few years, albeit from a modest base, and, of the European Community aid programmes to the region of about 200 million ecu per year, we contribute about 20 per cent. We are strengthening political links. In June, my right hon. Friend the Prime Minister became the first holder of his office in history to visit South America, when he made his successful visits to Colombia for talks with President Gaviria and his Ministers, and to Rio, in Brazil, to represent the United Kingdom at the Earth summit. Of course, my right hon. Friend also had talks with President Collor.

In May, my right hon. Friend the Foreign Secretary visited Mexico, and we look forward to welcoming President Salinas as a guest of the British Government on his visit to London later this month. Last year, the then Secretary of State for Education also visited Mexico, and the then Secretary of State visited Venezuela to launch the Projecto Venezuela to encourage British exports to that valuable market.

Column 600

We have just started our presidency of the European Community, and during that time we shall do what we can to strengthen the EC's already good relations with Latin America. Those relations are based mainly on the EC dialogues with the Rio group and Central American countries. My right hon. Friend the Minister of State represented the United Kingdom at the annual meetings between the EC and the Central American Ministers in Lisbon in February and Rio group Ministers in Santiago in May. During our presidency, we shall build on those contacts so that the EC can best make its contribution to encouraging development and regional integration in Latin America, the consolidation of democracy and the observance of human rights. I should like to make some lengthy remarks on the speech of my hon. Friend the Member for Wycombe, who launched this interesting debate. He mentioned Colombia, with which we enjoy excellent bilateral relations. Inevitably, the successful visit by the Prime Minister in June has enhanced our relationship. The hon. Member for Carrick, Cumnock and Doon Valley also said that that historic visit was a gesture to remedy the less than dynamic interest in South America that our country had shown for many years, especially in view of our historic relations with that part of the world.

In his talks with President Gavira and senior Colombian Ministers, the Prime Minister agreed that we will continue our co-operation in the important matter of drugs, and that both countries would work towards greater bilateral trade and investment. It was agreed that that would include the proposed signing of an investment promotion and protection agreement. My right hon. Friend also invited the Colombian Minister for Foreign Trade to visit the United Kingdom in the autumn.

Hon. Members will know that, in 1991, BP made a great oil discovery at Cusiana, which was the culmination of nearly five years of exploration work. It represents BP's largest find in the world for more than 20 years. A number of United Kingdom companies have expressed interest in the opportunities presented by that significant discovery.

My hon. Friend also mentioned the ancien regime of Latin America in Cuba and Nicaragua, as it once was. Castro's regime is the best example of the terrible impoverishment that results from bad economic policy. That country is impoverished notwithstanding the enormous subsidy that it received from the Soviet Union for many years. Now that that subsidy has come to an end, its poverty has got even worse. There is no willingness to undertake political reforms, despite recent attempts to attract investment. It is increasingly an anachronism in a region where democracy, with all its difficulties about which we have heard, is none the less almost universal. The persecution of dissidents in Cuba is unacceptable.

My hon. Friend condemned the terrorist campaign of the Sendero Luminoso in Peru, as did the hon. Member for Carrick, Cumnock and Doon Valley.

Mr. Foulkes : The Minister has painted a very one-sided picture of Cuba, which has made substantial advances in health and education and has one of the best literacy rates and health services in Latin America. It is also under great pressure from the economic embargo from the United States. I am not saying that everything in Cuba is wonderful, but there must be a balance in the way that one looks at it, and that balance is not coming from the Foreign Office or from the Minister.

Column 601

Mr. Lennox-Boyd : If a country receives billions of dollars-worth of subsidies from the Soviet Union over many years, it must have something to show for it, and Cuba set up schemes for education and health care. However, it destroyed human rights and failed to develop a market economy or any way to sustain prosperity for its people. It is a country with enormous potential, but it has been ruined since the Castro revolution.

All hon. Members who have spoken mentioned Peru. I recognise that the hon. Member for Carrick, Cumnock and Doon Valley unreservedly condemned the dreadful campaign of Sendero Luminoso. We also condemn the indiscriminate violence in that brutal campaign and the dreadful violence of the Movimiento Revolucionario Tupac Amaru terrorists in their efforts to destabilise Peru. The terrorists clearly intend to exploit the situation for their own ends.

My hon. Friend the Member for Gravesham emphasised the enormous importance of the trade opportunities available to Britain in Latin America. He drew attention to the great importance of the Uruguay round and the GATT negotiations. In that, I heartily concur with him. It was right to point out to the hon. Member for Carrick, Cumnock and Doon Valley the tremendous efforts of the Prime Minister last week in Munich to press this point on our European and other G7 colleagues.

Mr. Foulkes : It was a total failure.

Mr. Lennox-Boyd : It may have been a failure, but he made a valiant attempt, and the failure was not his fault.

It is all too easy for forget, and many people do not know, that Latin America accounts for 9 per cent. of the world gross domestic product. Its total GDP is over $1,000 billion, more than the combined GDP of Africa, excluding South Africa, the Indian subcontinent and south-east Asia. Brazil is the eighth largest, and Mexico the 16th largest, economy in the world. The continent is rich in natural resources, with one third of the world's copper and bauxite, 20 per cent. of iron ore, plus vast energy reserves of coal, oil gas and hydro-electric potential. My hon. Friend the Member for Wycombe was right to underline this.

Perhaps I may correct the hon. Member for Carrick, Cumnock and Doon Valley. I think that he said that our trade with Latin America amounted to only 1 per cent. of our--

Mr. Foulkes : No, £1 billion.

Mr. Lennox-Boyd : That is right. It was £1.2 billion in 1991, accounting for 2 per cent. of our exports. It is still a small market for us, and it must be improved, but in several markets the United Kingdom is the second largest foreign investor and has been so for a long time. British companies are expanding and making new investments.

I shall now deal with the constitutional position in Peru. On 8 April, together with our European Community partners, we expressed deep concern at President Fujimori's suspension of the constitution rule and reports of human rights violations. Meanwhile, we have suspended the balance of payments assistance promised to President Fujimori during his visit to the United Kingdom.

We can all agree with the hon. Member for Carrick, Cumnock and Doon Valley that the day of the dictators must be over--that is absolutely right. Naturally,

Column 602

international reactions to events on 5 April were universally critical. Peru's friends in the wider world should work for the earliest possible restoration of Peruvian democracy, as we are doing. It is also important to encourage the efforts of the Organisation of American States in that sphere.

My hon. Friend the Member for Gravesham said that Peru has many problems. The election of the constituent assembly is fundamental to the settlement of Peru's constitutional crisis. It is unfortunate that the elections planned for 18 October have been postponed until 22 November. We believe that there are valid reasons for that. The delay was for practical reasons. It is essential that the elections should be properly organised. However, we will continue to monitor progress, as it is most important that the elections should now proceed without further delay if the Peruvian Government's good faith is not to be challenged.

In developing his thesis about the fragility of democracy in Latin America, the hon. Member for Carrick, Cumnock and Doon Valley referred to Haiti, which was correctly described as French America. With our European Community partners, we support the efforts of the Organisation of American States to work for the return of President Aristide on the basis of the Washington accords.

The hon. Gentleman said that Mr. Mark Bazin was chosen as Prime Minister of the consensus Government, provided for in the tripartite agreement between the illegal regime, the Parliament and the army. He was right to say that the Bazin Cabinet does not represent a true consensus in Haiti. It excludes the pro-Aristide FNCD and the MRN party of Mr. Theodore. It is not clear that Mr. Bazin has the will or the capacity to negotiate a settlement, even were President Aristide to agree to negotiations. We shall press that during our presidency of the European Community.

The hon. Member for Carrick, Cumnock and Doon Valley also mentioned El Salvador. We are extremely pleased at the progress on the peace process in El Salvador. Credit must be given to the leaders of both Government and FMLN for the fact that they have overcome the obstacles in the implementation of the 16 January agreement. The United Nations, particularly ONUSAL, played a critical role in keeping the two sides talking. There is now a good chance of implementation being completed by the 31 October deadline. The hon. Gentleman mentioned aid, and asked me to comment on aid for El Salvador. The European Community has pledged 50 million ecu to the reconstruction plan, of which the United Kingdom contributes 20 per cent. I am glad to report that the first group of projects has been approved, including the establishment of a land bank to help the ex-combatants to purchase land. I am also glad that the reconstruction plan recognises the importance of the non-governmental organisations' efforts, which the British Government have long supported.

The hon. Gentleman also cited Chile as a paradoxical

example--because of its past, sad history--of a country that has emerged as a modern democracy. Our bilateral relations with Chile have grown in warmth and substance since its smooth and peaceful return to democratic rule in 1989. President Aylwin made a successful visit to Britain in April last year as the guest of the Government. Our contacts with his Government are good and frequent at senior and working level. Chile is a valuable trading

Column 603

partner. Its liberal market economy is an example to its neighbours and it provides excellent opportunities for British investment. I am glad that more companies are discovering what the Chilean market has to offer.

My hon. Friends the Members for Wycombe and for Gravesham spoke about their proposal for a Latin America conference next year and paid tribute to Canning house, which next year celebrates its 50th anniversary. I am happy to agree with my hon. Friends that Canning house plays a most valuable role in United Kingdom-Latin American relations. I am glad to confirm to my hon. Friend the Member for Wycombe that the Foreign and Commonwealth Office will continue its financial contribution of £30,000 in 1992-93. My hon. Friends are discussing with the Secretary of State the imaginative proposal for a Latin American conference in this country next year. Those discussions will continue, and my right hon. Friend will carefully consider the proposal.

I am grateful for this opportunity to review Britain's relations with Latin America. The changes in the region represent an irreversible commitment to progress and reform. Undoubtedly, there will be setbacks, but the general trend is set, and the Government will do what they can to reinforce it. The hon. Member for Carrick, Cumnock and Doon Valley said that the conditions were ripe for an improvement in relations. They are, and there will be an improvement. He also said that some of our relationships had run out of steam. That is a little inconsistent with his averment of an improvement in relations, which will certainly come about.

The future will provide many more opportunities to strengthen our relations in economics, culture, science and education. We shall certainly work to that end.

Column 604

European Fighter Aircraft

12.37 am

Dr. John Reid (Motherwell, North) : This is another opportunity to discuss a matter that is vital to our industry, to thousands of our workers, and to the future strategic requirements of the British armed forces. We are discussing the provision of the best possible equipment at the best possible cost to the world's best airmen. Therefore, it is fitting to place on record my condolences and those of the whole House to the family of Flight Lieutenant James Henderson who was tragically killed yesterday evening on a training flight in a Buccaneer jet. When I last checked the news agency tapes, his navigator was still missing. I am sure that I speak for the whole House when I say that our thoughts are with the families of both airmen.

In terms of the armed forces in general, the past two years have not been good for the Government. They managed to lose the confidence of many of their Back Benchers over "Options for Change", especially over regimental changes. They found themselves in conflict with the Select Committee on Defence, dominated by Conservative Back Benchers, over the way that the changes were carried out. As I checked the tapes tonight, I saw that in another place Lord Chalfont has criticised the Government's defence policy as being

"trapped in a time warp and increasingly out of touch with international realities."

The Minister will be pleased to know we support him this evening, or at least his position on the European fighter aircraft. I say his position because, clearly, it is not necessarily that of the Government as a whole if we are to believe the press reports to which I shall refer later. In all humility, I hope that the support that he has received and will continue to receive from my party for the Ministry of Defence's declared position will be of not insignificant, although not earth-shattering, use to him as he continues the labyrinthine discussions with his ministerial colleagues. Tonight's debate provides us with a welcome opportunity to discuss more fully the implications of the decision, taken by the German Government some days ago, not to proceed with the production phase of the European fighter aircraft programme. It is especially important that we have this opportunity as, in the past few weeks, there has been a disturbingly large amount of ill-informed comment on the subject not only in some sections of the press but in some sections of the Government.

I hope that it will be useful if I make it plain for those who have commented in the press on the Opposition's position that it does not stem from a knee-jerk reaction which is somehow required of us because of past defence mistakes. While I have the highest regard for the psycho-analytical powers of some commentators in the press, they would be better served studying the objective analysis of future military needs than delving into the supposed psycho-analytical processes of the collective Labour party and its need to prove itself more macho than the Conservatives. I assure the House that that is not the reason we support the continuation of EFA.

Nor do we believe that the continuation of the EFA is only a matter of jobs or of industry. Again, that is a supposition made by people who are usually more sympathetic to my party but who, for some reason, believe

Column 605

that we could not possibly defend the aircraft because in their analysis--which I believe to be mistaken--of the current military situation, it is no longer required. We do not believe that. There are two essential points that must be grasped before the relative merits of the project are discussed. First, if the Gulf war taught us nothing else, it taught us that the provision of modern, state-of-the- art air power is an essential ingredient in any successful military operation. It may not be a sufficient condition, but it is increasingly becoming a necessary condition. Therefore, allied air supremacy of itself could not have ended the Iraqi occupation of Kuwait, but it ensured the rapid success of the ground operation with the minimum number of casualties in the shortest possible period.

Secondly, if the United Kingdom is to retain an effective air power capability into the next century, we shall need to undertake a replacement programme for many of our existing aircraft. Anyone who examines the issues objectively must come to that conclusion unless one believes that we no longer need an air force. The RAF's Phantoms and Jaguars, in their respective air defence and offensive support roles, are becoming technically obsolete and will in any case be uneconomic or unsafe to operate by the turn of the century. According to the Select Committee on Defence, our other air defence fighter, the Tornado F3, will also have reached the end of its useful service life by about the year 2005.

As our equipment is approaching obsolescence, we see the development and proliferation--the latter perhaps being the most important--of a new generation of Soviet-made, latterly Russian-made, aircraft with superior avionics, and greater combat effectiveness. The MiG29 is the most frequently mentioned of those aircraft and, although it entered service with the Soviet air force in 1983, it remains a highly potent threat. This should be of interest to those who think that the dissolution of the Soviet Union necessarily means the wholesale dissolution of the hardware which it produced. The countries currently in possession of MiG29s include several with a proven track record of authoritarianism at best and external aggression at worst--I refer to Iraq, Iran, North Korea and Syria. Although Iraq, for reasons best known to itself and perhaps to some of our airmen, chose not to deploy MiG29s during the Gulf war, it would be naive to assume that they do not pose a considerable threat, or could not be deployed and employed by Iraq, Iran, North Korea or Syria, among others, in future. With the extremely harsh economic conditions being experienced in the former Soviet republics, we must expect--despite our hopes--that these aircraft will become available to other unsavoury clients along with even more sophisticated designs, such as the Su27 and the MiG33.

Those who have argued that the EFA was designed to meet a threat that no longer exists have missed a vital point. The Soviet Union and the Warsaw pact no longer exist but their hardware has not evaporated into thin air. It is being acquired increasingly by regimes whose intentions remain suspect to say the least. We would be failing in our duty if we did not take account of that in future provision for our airmen and airwomen.

The case for a new aircraft that is capable of carrying out both air defence and offensive support missions is

Column 606

undeniable. It is incumbent on those who argue against the EFA, including those in the Government--there are those in the Treasury who have been muttering behind their collective hands--to say which other options would fulfil the requirement at a lower cost to the public purse or with a better cost-capability. I issue the challenge because it is perhaps easier for me to do so than the Minister, although I know that the Treasury will have noted his long-term commitment to open government. Against that background I have no doubt that the Treasury will be prepared to come out into the open to tell us which option it would prefer if the EFA were not to proceed.

Every authoritative survey has arrived at the same conclusion : each of the available options to the EFA is either less capable or more expensive. Some of the options are both less capable and more expensive. Of the American options, the F15s and F16s are both designs of the 1970s and significantly less capable than the aircraft that the EFA is intended to counter. Similarly, the F18 is regarded as a less capable aircraft. It may even have a higher unit cost than the EFA. The remaining American option, the F22, will not be ready for three or four years after the EFA. It is not designed as a multi-role aircraft and it is expected to cost about 60 per cent. more than the EFA. The F22 is certainly the most capable fighter currently under development--we could have disputes about whether the marginal increase in capability is compatible with the supposed 60 per cent. extra cost--and it is unlikely that the United States Government would allow it to be sold abroad for many years. If they did, it is at least questionable, and perhaps highly suspect, whether they would allow the full array of avionics that accompanies the aircraft to be part of the agreement.

Of the European options, the French Rafale is the most often cited. The French pulled out of the EFA project in 1985 because their requirements for a future fighter differed from ours. The Rafale has therefore been developed primarily as a replacement for the Jaguar in an offensive support role, whereas our priority--mainly but not exclusively--is for an agile air -defence fighter. The Rafale is judged to be a less effective fighter and it is expected to be more expensive than the EFA.

As I watched some of the interviews that took place last week, especially of Conservative Back-Bench Members, I could not help being suspicious that at least some of their opposition to the EFA was because it was a European collaborative project. It seemed that it was becoming deeply embroiled in the Eurosceptic or anti-European section of Tory Back-Bench Members. I hope that I was wrong. I hope that a judgment was being made purely on the basis of future military need, cost and capability. It seemed, however, that some of the comments were inspired by a deep suspicion of anything that smacked of co-operation between European nations.

As I said, of the European options the French Rafale has been most often cited, and I have tried to explain why that would not fit the bill for us. Another favourite solution of the EFA sceptics is that we should buy MiG29s and Su27s from Russia because they are the aircraft that we expect to counter. The flaws in that argument are manifold, but there is one that I put above the rest. It is the duty of the Government and of the House to give our airmen equipment that is better than that of our potential enemies and will offer them more than a 50-50 chance of survival in combat. If, within cost-capability limits, we can produce a fighter that will, by objective standards and

Column 607

judgments, give an 80-20 chance against MiGs, we would be lacking in our duty to our airmen if we produced one with only a 50-50 chance.

Secondly, while theoretically the purchase of Russian aircraft would undoubtedly be cheaper initially, it may turn out to be a false economy in the longer run. It is now widely recognised that the airframe life of a MiG29 is estimated to be as little as one third of the airframe life of an EFA. It is also said that the MiG29 is much more expensive to maintain and purchasing countries have already experienced significant problems obtaining spare parts. There appears to be no doubt that long-term servicing support for MiG29s--or, indeed, any other MiG--would be highly suspect.

Surely the most absurd idea that we have heard over the past two or three weeks is that we should begin to develop from scratch what has become known as a lighter, cheaper aircraft. Given that the whole point of the exercise would be to save money, and given that the £5 billion spent so far on developing EFA would be wasted, the argument cannot stand up under the weight of its own contradictions. Not only would we end up with a less capable aircraft, which would probably cost us more, but it would not be ready for service until many years after the withdrawal of those that it is supposed to replace. Whichever way we look at it, we are driven to the same conclusion--the EFA is the best option available. Surveys show that it is second only to the F22 in fleet and combat effectiveness, and in

cost-effectiveness it has a clear lead over the F22.

Those who have argued for abandonment of the EFA have palpably failed to make a credible case for any alternative programme. As I said earlier, the only sustainable argument that they could make is that we do not really need an air force. If they maintain that we do, the obligation is upon them --commentators, the Treasury, Back Benchers, political analysts and military strategists--to tell us how we could possibly achieve an equally effective fighter at a lesser cost with guaranteed servicing, and which would meet the requirement of the Royal Air Force. They have failed to make any credible case on any of those points for any alternative programme.

Even if we could achieve the savings sometimes imagined--and they are imagined--they would be dwarfed in public expenditure terms by the devastating effect that they would have on the British economy. I have tried to make plain our view that we base that not purely on either jobs or industry, but also on military and defence requirements. It would be wrong to make the case for the EFA purely or even primarily on the basis of its effect on employment. We should not fall into a trap of seeing defence procurement as some sort of grand job creation scheme. I hope that I have made clear the overwhelming strategic case for the continuation of the EFA programme.

However, it would be equally wrong of us wholly to exclude economic considerations from the equation, especially as the case against the EFA is supposed to be financial--at least in the arguments of many of those who oppose it. There is not a British-made alternative to the EFA. Any foreign import, even one that involves some workshare arrangement, would lead to the loss of tens of thousands of mainly skilled jobs. In what possible sense would that lead to budgetary savings for the Treasury or the Government ?

We welcome recent orders won for the airbus by British industry but, notwithstanding that, the loss of the EFA would be a major disaster for our aerospace industry. We

Column 608

are talking not only about the loss of thousands of jobs, but about the loss of an entire industry ; an industry of vital strategic importance to Britain. If the EFA programme is abandoned and we are forced to import the next generation of fighters from abroad, we risk destroying our aerospace industry altogether, civil as well as military, because the two are inextricably interlinked. To put ourselves at the mercy of foreign suppliers for all time and pay for the privilege would serve neither our security nor our economic interests.

There may be a case for adjustment of the original numbers of EFAs ordered, and there may even be a dispute between the Government and the Opposition Front-Bench spokesmen when we come to discuss those numbers--it is widely recognised that there may well be some adjustment to those numbers because the original calculations were made in about 1986 and the world has moved on--and while I would urge the Minister to continue in his efforts to keep the costs of the EFA down, because, obviously, every time we can reduce the cost, the cost capability factor is far more beneficial from everyone's point of view, it remains the Opposition's view that the continuation of the programme is vital for our defence needs and represents the most economical option available.

If any other option met our defence needs and requirements, saved those numbers of jobs and advanced an industry which is not only strategic but at the forefront of technology, the Opposition, like anyone else, would be prepared to accept it. Thus far, that alternative has not been put forward by anyone inside or outside the House, and until we see it we shall continue to support the Ministry of Defence and trust that we shall be able to ensure that the EFA will be produced and eventually supplied to the Royal Air Force. 12.56 am

Mr. John Wilkinson (Ruislip-Northwood) : We all owe a debt of gratitude to the hon. Member for Motherwell, North (Dr. Reid) for introducing this important debate. He has, as is his wont, done much research and produced thoughtful and cogent arguments in favour of pursuing the European fighter aircraft programme to a successful conclusion whereby it is purchased by Her Majesty's Government to enter service with the Royal Air Force, where I am sure that it will fulfil an invaluable and essential function.

It is a comment on our somewhat arcane parliamentary practices that a debate on the single most important military procurement issue of our time should take place in the middle of the night by virtue of an initiative of this kind under the Consolidated Fund Bill. It would have been better if we had been able to have the two-day defence debate before the summer recess. Over the years, I have always argued that the White Paper should be published as near to the spring as possible. In that way we could have a debate before we all disappeared for the recess and if there were a major issue hanging over us, as is the case now with the future of EFA, we could dispose of it in a proper manner and in the right time scale.

I do not wish to be over-critical because, by our presence in the long watches of the night, we have shown that we seek not so much to be in our beds but to be vigilant and evidently concerned for the future defence of our country and our country's defence industrial base.

Column 609

That said, I must wholeheartedly welcome my right hon. and learned Friend the Secretary of State's robust reply to the private notice question on Tuesday, following the visit to the United Kingdom of the Defence Minister of the Federal German Republic, Herr Volker Ru"he. I thought that my right hon. and learned Friend's replies were admirable. They showed an unequivocal personal commitment--as well as an unequivocal commitment on the part of the Ministry--to this important programme. They also showed a clear determination to take on all comers, from the Treasury or from other quarters, who might make his life difficult over the future of the European fighter aircraft, the Panther, or Panthera, as I prefer to call it. The German Government's decision to withdraw from the production of the project once the development phase has been completed poses a challenge to us, but we may well obtain commensurate benefits. I hope that the production process will be rationalised. The proliferation of assembly lines and flight test centres never made much sense ; nor did the strong desire--which was put into effect--to re-invent the management wheel by having a Eurofighter organisation in addition to the Panavia one. Eurofighter could have grown organically from Panavia, as the Airbus consortium was able to produce a whole family of Airbus aeroplanes. The creation of a NATO European Fighter Management Agency, NEFMA, when there was already a NATO Aircraft Management Agency, NAMA, to manage Tornado also struck me as unnecessary.

Those are little quibbles relating to the past, however. We must now show that there is a requirement which really needs to be met. There is a strong temptation to be project-led--to be so keen to replace particular aeroplanes, in this case the Phantom, the Jaguar and the Tornado F3, that we lose strategic perspective and may forget what we are actually seeking to do. We are seeking to procure for the United Kingdom--and, we hope, for our Italian and Spanish friends, and the Germans if they come to their senses--the most flexible instrument to project military power, not only within the NATO theatre but, if need be, outside it, to deter aggression and to secure our commercial and strategic interests and our security.

In recent years, we have seen--from Korea through the Arab-Israeli wars, through the Falklands conflict to the Gulf campaign--that air power is critical to the security of the west and for the preservation of our values and our way of life. Consciously to forgo the most effective instrument available to us for the pursuit of such a strategy would indeed be perverse.

I go so far as to say that if the worst comes to the worst we ought to be prepared as a nation to build EFA alone. I hope that our Ministers will, by means of good diplomacy and by maintaining effective collaboration, make certain that the Italians and the Spanish stay in the programme. If not, however, I believe that the industrial and military stakes are so high that we ought ultimately to be prepared to go it alone. In the last analysis, there is no task more crucial than preserving the peace and defending the integrity of these islands. We discovered that just over 50 years ago, at the time of the battle of Britain, and the lessons learnt then are just as real today.

Column 610

In the 1920s and 1930s, there were those who thought that we could afford to disarm. They were disabused of the idea in a most painful way--it was a close-run thing.

As the gestation time of modern combat aircraft is so long, it behoves us to make the appropriate dispositions now, and not to throw away the advantage that we have gained from all the time, effort and investment already put into the development phase. Nor do I believe that we should allow the Swedes and the French a virtual monopoly in western Europe of the construction capability for high performance military aircraft. We should stay in the business ourselves. There may have to be commensurate savings in the defence budget, because at a time of negative growth it will not be easy for the Treasury to provide additional funds. If so, we ought to look to where the problem lies--to Germany itself. If the German Defence Minister is correct, then the threat to his country in central Europe is greatly diminished by the end of the cold war, the break-up and dissolution of the Warsaw pact, and the disintegration of the Soviet Union into its constituent republics, many of which now have values similar to our own. If that changes the security situation in central Europe so dramatically, especially if the Russians withdraw from eastern Germany and Poland on schedule--and ultimately, one earnestly hopes, from the Baltic states, too- -any savings necessary should be made in the forces we intend to maintain in Germany. Those forces are relatively inflexible and costly in foreign exchange, whereas a combat aircraft is infinitely flexible. It is essential for the defence of these islands and it can be projected rapidly around the globe to wherever it is required. The same cannot be said of tanks by the banks of the Rhine.

I repeat that we owe the hon. Member for Motherwell, North a debt of gratitude, and that we appreciate the firm and rational stance of the Government to date. I shall not repeat the arguments so well expressed by the hon. Member for Motherwell, North, but I will express my personal commitment to the success of the programme. I want to see the Panther flying in Royal Air Force colours and, it is to be hoped, in Italian and Spanish colours--perhaps even in German colours, too. I believe that it will sell in substantial numbers around the globe, because there is no other aeroplane in its class. 1.7 am

Mr. Keith Mans (Wyre) : I am grateful for the opportunity to say a few words in the debate, and I reiterate the congratulations offered by my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) to the hon. Member for Motherwell, North (Dr. Reid) on securing the debate and allowing us to discuss this important topic, even at this late hour. I am grateful that the project has cross-party support. Its chances of going ahead are greater as a result of that support. Over the decades aircraft projects have always had a drama and excitement about them, and not a little political controversy, too. I remember most poignantly from the past the TSR2 project. I joined the Air Force four months before the aircraft was cancelled--I, together with a number of others, had been recruited specifically to fly it. I saw it fly once, then it was cancelled by the incoming Labour Government.

I recently read Lord Jenkins's autobiography, and until then I had not appreciated how close the decision was on

Column 611

whether to cancel TSR2 or Concorde. One reason that the former course was chosen was that the TSR2 was a national project and Concorde a collaborative project. The latter may, by their very nature, be difficult to devise initially, but once the partners have been assembled, the contract makes it difficult for them to pull out. That is how it should be. Aircraft contracts span decades, whereas Governments and individual politicians have much shorter lives. As to the EFA, we are currently tightly tied--as are the three other nations--to its development phase. Its cost is about £7 billion, split between the four partners dependent upon the number of aircraft that they said at the beginning that they wanted to purchase. Thirty three per cent. of that cost will be borne by ourselves, the same percentage by the Germans, 21 per cent. by the Italians and the remainder by the Spanish.

Many billions of pounds have already been spent by the German Government on developing the EFA. They and the new German Defence Minister, Herr Volker Ru"he, make it clear that Germany intends to remain in the programme. Herr Ru"he pointed that out to me on Monday, when he confirmed that the first prototype will take off from a German airfield at the beginning of next year.

Given that the Germans will remain in the programme--which lasts until 1998 --they will spend more than £2 billion developing an aircraft that they accept they will not put into production. It is worth bearing in mind that they do not have to decide until midway through next year--when all four partners will determine whether to go ahead with the EFA's production, dependent on the progress of the development programme and, more specifically, how the aircraft flies.

I believe that most right hon. Members agree that that picture is very different from the one painted by the newspapers over the past two weeks. If one believed the leader writers, even in the better newspapers, one would think that Germany had totally withdrawn from the project. Nothing could be further from the truth. At the very time that those words were being printed, the Bundestag had voted £300 million in this coming year's federal budget for the EFA's further development.

In analysing why Herr Ru"he said that Germany would not produce the aircraft, it is worth considering the original requirement. I will not reiterate the points made by the hon. Member for Motherwell, North but I will add to them. Despite the German Defence Minister's comments, I believe that the requirement itself is more relevant today than in 1985, and not, as the Germans would have us believe, the other way round.

Built into the EFA requirement was not only the need to move out of area but sufficient range to deal with threats--particularly in Africa and the middle east. That was prompted not only by us but by the Italians and Spaniards, who said that their countries were threatened just as much from the south as from the east. If nothing else, that demonstrates the problem of analysing the German's present position. The Germans maintain that, because the threat has changed, there is no longer a need for such a large, long-range aircraft. However, one could argue that, as a result of the changing threat, there is a greater need for such an aircraft.

If the threat is less than before, we must bear in mind that the capacity-- the aircraft opposing NATO which

Column 612

EFA was designed to deter--has not changed. As the hon. Member for Motherwell, North said, the MiG27s, MiG29s, Su27s and MiG33s are increasingly being dispersed around the rim of the Mediterranean. That is a potent potential threat.

If the German Government honestly believe that they can meet that threat, which they will have to in the NATO context, with a smaller, lighter and inferior aircraft, they have got their calculations totally wrong. When the German Defence Minister made that point, he also said that the rest of the German armed forces--apart from the Luftwaffe--would have to become more mobile and more able to move to the peripheries of NATO and, provided that they changed their constitution, even beyond the edge of NATO.

I believe that there is a big conflict between what the German Defence Minister said and the reality of the next five or 10 years. A much more rational reason for the German decision is that it is based on short-term politics and, more specifically, the popularity of the Christian Democratic Union and, in financial terms, the problems that it will have with the budget over the next two or three years in respect of reunification. I believe that the smaller, lighter aircraft is simply a paper exercise to keep the German aerospace industry quiet.

The hon. Member for Motherwell, North made a very good point about the alternatives. Looking at the other options and off-the-shelf purchases--the only option for the Germans if they do not want the EFA--I agree with the hon. Member. If we analyse the alternatives aircraft by aircraft, none of them comes up to the EFA's specifications. The exception is the F22, but that is very expensive. The newspapers failed to point out that the F22 is not actually for sale. It contains much technology that the Americans would not like any nation--and certainly not the Germans and the others--to take on board just yet. The F22 is not an alternative to the EFA. I want now to consider some of the consequences of the German withdrawal from the production phase of the project. The programme is going to be disrupted. A four-nation programme, with all the involved management referred to by my hon. Friend the Member for Ruislip-Northwood, is bound to be disrupted if 33 per cent. of the project is removed. That will cause problems, particularly in respect of the teams that have been brought together for specific purposes, for example, in respect of the fly-by-wire system and the compressor for the engine, both of which are the responsibility of the German contingent.

However, savings can be made by reducing the tooling up of a reduced number of production lines. A larger number of contracts can be awarded based on cost rather than work-share arrangements. There should be considerable savings in respect of the project's cost that fully outweigh the smaller production which will increase costs. The two should balance out : the smaller production line against the cost reductions, because fewer units will be needed.

There is another point : if we decided that one of the member states had to leave the project in order to keep the costs down, we would choose the Germans because their production costs are between 20 and 25 per cent. higher than ours and those of the Italians. We can produce the aircraft as cheaply or nearly as cheaply without the Germans as we can with them. Equally, the reasons for the Germans withdrawing do not

Column 613

relate to the other two countries that remain with us in the project. They do not have the same problems with budgets and reunifications. They also stated in their original specifications that they need an aircraft with a longer range that can operate over the Mediterranean. There is no reason at the moment to suggest that either of the other two countries would, in any foreseeable circumstances, want to withdraw from the project.

What should we do now? We should do very little. We are in the development programme. No decisions have to be made about the production programme until midway through next year. All that we have to do is sit tight. By all means, we should listen to any suggestions from Germany about the new lighter, inferior fighter, but I strongly recommend my hon. Friend the Minister to ask for further and better particulars of that aircraft, just to see what it actually amounts to. Bearing in mind the stringent economic requirements put on it by the German Defence Minister, that it will cost the same as the EFA and, taking into account the remaining development funds available in the programme, we will end up with a brand new Hawk 200 as a result of that exercise. We are still developing the EFA, the Germans are still paying for it, and, half way through next year it will become only too clear that the production of the EFA is the most cost-effective solution for the Royal Air Force and the other two air forces remaining in the project.

Like the hon. Member for Motherwell, North, I have not based my argument on employment or technology reasons. Those matters are important in my area of Lancashire, where jobs and technology are at stake. British Aerospace is the high-tech part of Lancashire. Without it, we would be in a sorry state. The project represents the right aircraft for the three air forces. I end on a personal note. I have mentioned factories around Preston. I have flown every aircraft that those factories have produced and that the Air Force has bought since the war--the Canberra, the Lightning, the Jaguar and the Tornado. I have no doubt that, when British Aerospace gets around to producing a two-seater, I shall be able to have a trip in that as well. 1.22 am

Mr. Julian Brazier (Canterbury) : Like my hon. Friends, I congratulate the hon. Member for Motherwell, North (Dr. Reid) on initiating the debate and on his well-informed and well-researched speech. We have heard three excellent speeches, and I do not want to duplicate the points that have already been made. I should like, first, to dig a little deeper into the German question--what exactly is the German stance on the EFA and what implications does it have? Secondly, I shall refer briefly to the case for the EFA and, thirdly, discuss where we go from here in a slightly wider context. In several speeches on defence procurement, I have tried to stress that the spirit of a defence contract is as important as the letter. For example, even with an ordinary national contract, it is important in respect of intellectual property rights that, if a certain company has developed a good idea, even if the idea is the property of the Ministry of Defence, it is almost always right to let the company that has come up with it go as far as the production phase, because it will do it best. That means

Column 614

that there is an added incentive for excellence in the industry. We saw the best form of spirit coming out of our defence contractors in the Falklands war and the Gulf conflict, with the extra mile and the extra mile beyond the extra mile to which they were willing to go in supporting British armed forces.

The central problem with the EFA project is the fact that the Germans have so manifestly breached the spirit that lies behind the contract, and breached it in a fashion that we should find profoundly worrying in ways that go well beyond the contract.

In order to see the size of the breach, we have to look, as my hon. Friend the Member for Wyre (Mr. Mans) has just done, at the words of Chancellor Kohl and Herr Volker Ru"he and their approach to the project. They have continuously reminded us of the disjunction and the great change in Europe as a result of the collapse of the Soviet Union. They and, indeed, the press have made many references to the terrifically changed climate in Germany. There is overwhelming opposition among the German people and in their Parliament to the project.

However, no serious effort has been made to address the military position. If the EFA is not appropriate, what is appropriate? I have heard nothing from any German source about what possible threat any aircraft that could be purchased for the Luftwaffe, even only the Hawk 200, would be supposed to face. We certainly have not heard any discussion of what aeroplanes such an aircraft could expect to face. We now hear that the Germans are seeking a new format for which there is no intellectual basis whatever.

The problem for Britain is that our most important European ally appears to have closed its eyes completely. The Germans are fulfilling the letter of the contract. They are paying a lot of money to complete the development. But we have to realise that by withdrawing from the production phase because of sheer emotion--to put it bluntly, sheer political pressure-- without making any effort to examine the military rationale for any subsequent course of action, the Germans have changed. That is important.

Germany has been overwhelmingly the most important continental European prop for NATO in the past. It is also the paymaster of the EC. In the past generation, while the French have been in "internal exile" within NATO-- nominally a member but outside the command--Britain and America have looked to Germany as the main continental prop for NATO. The fact that the Germans have treated the most important collaborative venture within European NATO in this fashion has profound consequences for foreign as well as defence policy. We must address those consequences.

My second question goes back to back with the German issue. Why do we need the European fighter aircraft? We have heard cogent expositions already in the speeches of my hon. Friends the Members for Wyre and for Ruislip- Northwood (Mr. Wilkinson) and the hon. Member for Motherwell, North. We must remember how dangerous the world is. Two conflicts are going on side by side in Yugoslavia. In Moldova a bloody little war is going on which is not being reported on television screens. Fighting in Azerbaijan continues sporadically. Nuclear technology is spreading into Algeria, Libya, Syria and Iraq. We do not know how long Boris Yeltsin will last. Mr Gorbachev disappeared in a hurry. We can only admire

Next Section

Home Page