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There is an opportunity to use these to meet the requirement for vertical-launch Sea Wolf on type 23 frigates, but they require some conversion work.Marconi Radar and Control Systems are already involved in supporting the radars used in several Sea Wolf point defence missile systems. Complex negotiations have now been taking place with Marconi for some time. I can assure my hon. Friend that we are pursuing these vigorously, and hope to be in a position to place the contract by October.
The second programme my hon. Friend asked about is the tactical radar replacement programme for the Royal Air Force. The competition for this requirement, for which GEC-Marconi is one of four contenders, is now in progress. Although the order is a comparatively small one by Ministry of Defence standards, we recognise the importance which both the United Kingdom firms bidding for the work attach to winning it.
I know that my hon. Friend will understand that, until the evaluation of the tenders has been completed, it would be inappropriate for me to discuss in detail the merits of any bid across the Floor of the House, but I can assure him that the eloquent points he made will be taken into account in the final decision, which we hope to be able to announce by the end of next month. I hope that these indications of contract announcement dates will be helpful to my hon. Friend and to all who work at GEC-Marconi. My hon. Friend referred to a study published by the European Commission which showed Essex as an area of the Community with the second highest dependency on employment in the defence industries. This study was based on work carried out by the centre for defence economics at the university of York. There is no doubt that a substantial proportion of industrial concerns in the county are defence-related, but I have to say that we are not entirely convinced that the comparisons in that study between regions in different member states have been done on a like-for-like basis.
This is not just an academic point, as the study's assessments of overall defence dependency have been used by the commission as the basis for allocating funds under the KONVER programme, to which my hon. Friend referred tonight, and also in his speech in the industrial base debate in May. The KONVER programme is a matter for which the Department of Trade and Industry is primarily responsible. As my hon. Friend knows, the Government have some strong reservations about such schemes, because they represent a partial approach to industrial adjustment. We have also taken issue with the basis of allocation of funds between member states. But, having entered these caveats and reservations, the Government intend to take advantage of the scheme in order to help constituencies such as my hon. Friend's. I take on board his point that the criteria need to be changed, and will bring that argument to the attention of my right hon. Friend the Minister of State, Department of Trade and Industry. I was glad to hear my hon. Friend speak of the success of GEC-Marconi in diversification matters, and in particular its sales to the BBC and to other institutions and
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companies in the exet again that it is not for the Government to direct companies to diversify. Our interest is in seeing a profitable and competitive defence industry. It is for companies to decide how best they can be profitable and competitive--and if that means diversifying, so be it. I am glad to hear that GEC-Marconi has done so well without any intervention or orders from Government. I know that my hon. Friend shares my lack of enthusiasm for a defence conversion agency--a distaste which I feel on grounds of both principle and practice. I will not here rehearse the familiar arguments why this is really another socialist interventionist scheme dressed up in new clothing. I think that we all agree that the Government should give what useful advice and help they can, without in any way being an interventionist Government with taxpayers' money.The Department of Trade and Industry's recent publication "Changing Tack" provides step-by-step advice for defence companies wishing to diversify, backed by the expertise of professional management consultants Touche Ross. In that way, we assist and encourage management flair, rather than stifling it with regulations, bureaucracy or ill-targeted subsidies paid for by the taxpayer. I was grateful to my hon. Friend for pointing out that British defence contracts support British jobs and expertise in some 90 per cent. of cases in which we award contracts. We believe in fair and open competition, but the fact that more than 90 per cent. of our contracts go to British firms shows where our heart lies. We do not wish to neglect the importance of Britain's home-grown defence industries.
Let me say a little about our relations with industry generally. It is important that my Department and the defence industry work together closely. We do not believe that relations are in any way unhappy at present ; indeed, I was pleased to note that the defence manufacturers gave a cautious welcome to the announcements in the recent White Paper.
I acknowledge that, two or three years ago, there was a feeling--born of the uncertainty of the time--that, during the period of deliberation on "Options for Change", the Department was not as open with industry as it might have been ; but I think that my right hon. and hon. Friends who have held ministerial office experienced difficulties at that time. They had to formulate defence-policy parameters and set the priorities--duties which, possibly, are for Government alone.
Once decisions were made, however, we made strenuous efforts to provide industry with all the information necessary to enable it to make sound commercial judgments. Our aim was, and is, to enable companies to remain competitive and successful in both domestic and overseas defence markets. The GEC group as a whole, and GEC-Marconi in particular, have certainly done that.
We are trying to provide the defence industries with as much knowledge of our requirements as possible. There has always been a significant flow of information from the Ministry of Defence to companies right across the spectrum from top-level committees such as the National Defence Industries Council and the Chief of Defence
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Procurement's regular meetings with the trade associations, down to the informal contacts between individual companies and MOD officials. The work that hon. Members such as my hon. Friend can do in strengthening that bridge of information and understanding is considerable.We are doing all that we can to provide defence companies with more and more information. We shall soon publish a comprehensive list of endorsed staff targets and staff requirements, which we shall update annually. Those documents are the driving force for procurement action on all projects in which we expect to spend at least £5 million on development or £10 million on production. We hope that the publication of that comprehensive list will be helpful to all actual and potential defence contractors, including GEC-Marconi. The process of managing the defence budget is dynamic. Inevitably, we must make painful adjustments to certain programmes from time to time, because of the changing international strategic situation, to which my hon. Friend referred. We shall continue to fine-tune the
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programmes, but I think that industry understands the difficulties created by the changes in the world security environment. Although there are bound to be tensions and problems, I think that on the whole there is an amicable and constructive dialogue between my Department and industry.I feel that, in general terms, we should welcome the more stable international situation that now exists. Of course there are still some trouble spots in the world, such as the former Yugoslavia ; nevertheless, we have been able to shift some of our national resources away from defence. I recognise that that is only a modest comfort to those who work in the defence industry, and I sympathise greatly with the plight of the workers in Chelmsford described so eloquently by my hon. Friend. Sadly, it is a fact of life that there will be fewer MOD orders in the future than in the past ; that is why companies such as GEC-Marconi are having to adapt accordingly. Question put and agreed to.
Adjourned accordingly at fourteen minutes past Twelve midnight.
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