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Column 58feasibility study is completed? May I ask him also what conclusions he drew when he visited my constituency, where the wings for the airbus are made, and when he had discussions with management and leaders on the shop floor? I had the distinct impression that he thought that excellent work was done at Broughton, but he might like to share some of his thoughts with the House.
Dr. Clark: I thank my hon. Friend for giving up his time to accompany me when we visited British Aerospace at Broughton, which is in his constituency. What was impressive about BAe at Broughton, and indeed at Filton, was the way in which it had met the challenges on the shop floor and involved the work force in a constructive way--in a way in which modern management should operate--and the way in which it played its part in the airbus programme, which has been so successful. It is one of the great success stories of Europe in this decade. We have now obtained 30 per cent. of the market for that type of product. Bearing in mind the fact that, when just over a decade ago, it had no contribution at all, that is a marvellous contribution.
We do not want the Government to throw away that opportunity, because there is a carry over between the military and the civilian field. The skills, technique and processes which allow British Aerospace to build the wings of the airbus is the same technology that would be required for the FLA. We hope for the same success for the British workers and British companies. But I come back to the point that we believe that the Government should not rush into any decision. They should wait for the feasibility study to see whether the FLA is a viable concern and, if it is, we should back British industry and not just take the easy option and buy in American. But when I talk about commitment to this country, perhaps I can move from the air to the sea, because the merchant fleet is one area that is neglected by the Government. Without sufficient numbers of ships, Britain will be unable to ensure that our forces can be moved cheaply, securely or quickly. The Government have crassly ignored the importance of a viable merchant fleet and allowed our shipbuilders to wither away as though they were irrelevant to our trade or society. They are wrong. In 1980, the Government inherited 13,000 British merchant ships. They have now reduced the number of ships available to the Ministry of Defence to a mere 139. Whereas in 1982, at the time of the Falklands, there were 49,000 merchant seamen, there are now 19,000. That is why we have had to resort to hiring expensive Danish or German ships. That is why there was fraud in the MOD. The Government have ignored the merchant navy. It is not only in terms of procurement, however, that the Government have let the country down; they have done the same in the international field of disarmament. As the Secretary of State reminded us, over the past few years there has been a welcome end to both the cold war and the threat of nuclear war. Historic treaties to reduce nuclear weapons seemed to be the order of the day as the United States and Russia sought to outbid each other in a downward spiral of cuts. It is likely that, within just nine years, both Russia and the United States will have sliced their nuclear arsenals to a quarter of what they once were. That is admirable, but there is one anomaly: when Russia and the United States feel secure enough to cut their warhead numbers, why do we seek to increase
Column 59ours? Why are we seeking to double the number of warheads on our nuclear submarines to 384? Why is that necessary?
The next Labour Government will deploy Trident, but we will not deploy it with more nuclear warheads than the Polaris boats have now. At a time when nuclear disarmament is the order of the day, it seems crazy to us for any Government to increase the number of nuclear warheads.
That leads me to another philosophical difference between us and the Government. It concerns the comprehensive test ban treaty. The United States, Russia and France are all pursuing testing moratoria, but what of Britain's position? When the United States first introduced legislation initiating a testing moratorium and seeking a comprehensive test ban treaty by 1996--a worthy objective--the British Government described it as "unfortunate", "misguided" and "unwise." They tried desperately to persuade the United States to resume testing, in order to allow Britain to conduct more tests in Nevada. Fortunately, the policy failed: the United States has extended its moratorium, and the United Kingdom cannot test. We will watch the Government's negotiation position in Geneva closely, to ensure that they do not seek in any way to undermine or unnecessarily delay any progress towards a comprehensive test ban treaty.
Mr. Mans: Will the hon. Gentleman give way?
Dr. Clark: Time is moving on, and I want to make progress. Labour shares the Government's goal of achieving an indefinite and unconditional extension of the non-proliferation treaty at the special conference next spring. We believe that that will provide the soundest basis on which to secure further disarmament measures, and to prevent further proliferation. Of course we all accept that the non-proliferation treaty is not perfect, but--as such--we should encourage other states to join it.
If we are to succeed in preventing proliferation, as well as securing all those controls we need to persuade countries that it is not in their best interests to seek to acquire nuclear weapons; we must also demonstrate to the non-nuclear weapon state signatories to the non-proliferation treaty how we, as nuclear weapon states, intend to negotiate nuclear disarmament. Unless the Government reverse their complacent attitude and end their double standards, we shall jeopardise international efforts to reach a consensus on this crucial issue.
Let me now move from the strategic to the more operative end, and say a word about anti-personnel mines. They have been recognised as a major global problem by all the development agencies in the world. There is a dire need for multilateral action in this respect, and again I must say that British leadership is sorely lacking. There are tens of thousands-- millions--of such land mines in many very poor countries, causing an estimated 800 civilian deaths per month. But not only civilians suffer; occasionally, our own soldiers suffer as well. Two of our soldiers in Bosnia have tragically died because of land mines.
Some countries, given that evidence, have sought to change their export policies. The United States has extended a one-year moratorium on the export of all such
Column 60mines; France has confirmed a ban on the sale of anti-personnel mines, as have Germany and other European countries. This Government, however, have again conspicuously failed to live up to international expectations.
The Government's excuse is the fact that some mines are equipped with self- destruct mechanisms. That is good, but I am afraid that those mines are not foolproof. Only the manufacturers believe their own claims that they are 99 per cent. effective. Military personnel estimate that the failure rate is 10 times that, while some charities that work in the third world disarming the mines believe that the true failure rate is between 15 and 20 per cent.
That means, for instance, that of the 9 million mines in Afghanistan, if all were self-neutralising and the failure rate was just 10 per cent., 900,000 would exist in that country alone for an indefinite period. That is completely unacceptable. The weapons are used in such countries in a deliberate attempt to terrorise the population, and consequently they should not be exported. A Labour Government will ban the export of all anti -personnel mines: that needs to be done in the name of humanity.
Mr. Robathan: Will the hon. Gentleman give way?
Dr. Clark: I know that the hon. Gentleman is very knowledgeable, but I am anxious to make progress.
I was pleased that the Government signed the chemical weapons convention, but I was rather sad to note that they were hesitant about ratifying it. Why have they not done so? When I raised the matter with the Secretary of State for Defence, his response was far from satisfactory: he claimed that
"we hope to be among the first 65 states to ratify the Convention."
The Government should not merely "hope"; they must be among the first 65 states, because only after 65 countries have ratified the convention will it come into force. We plead with the Government to introduce legislation allowing them to ratify it. The Opposition will give such legislation a fair wind.
The Secretary of State mentioned the NATO summit and "Partnership for Peace". We went along with much of his thinking. We have a clear understanding of the fears and aspirations of the countries involved--both Russia and the former Warsaw pact satellite countries; we are aware of Russia's worry that NATO could isolate it, and perhaps surround parts of it. It is clear, however, that "Partnership for Peace" has been a success so far. As the Secretary of State said, 23 countries have signed it; it has given something to all parties, and that must be built on.
"Partnership for Peace" can be seen either as a measure to buy time, or as a first step. We believe that the latter is correct, and we look forward to the day when some of our former Warsaw pact enemies are full members of NATO. It is right that they should be: after all, they are part of Europe-- it is hard to imagine Poland, the Czech republic or Hungary not being part of Europe--and they are democratic. There is no reason why they should not be NATO members.
The space given to us by "Partnership for Peace" must be filled with proposals to make Russia feel more and not less secure. Ultimately, however, we cannot allow Russia to dictate our security. I urge the Government to take a lead, and not sit passively on the sidelines; this is a complicated issue, but it needs to be pursued.
Column 61The Opposition fully believe in the importance of NATO, and the need to ensure its continuity and survival in a changing world. It has new tasks and responsibilities, but the role that it set out in 1949--to ensure that the security of Britain and the free world was protected--is just as necessary now, even in these different conditions. What worries us is that the Government are not giving the necessary lead. We are ideally placed to act as a defence bridge between north America and Europe, but that necessitates effort and energy, both of which the Government sorely lack.
Defence is one area in which Britain is still respected in the world and so it should be. We should be taking the lead in Europe to ensure that the new architecture of defence in Europe is effective, thought out and well planned. Obviously, we must increase Europe's contribution to the alliance, but at the same time we must ensure that we do not lose the strength of the United States.
Another role of our troops has been in United Nations peacekeeping missions, which the Labour party heartily endorses. Our commitment to the UN is enshrined in the rather topical clause IV of the Labour party constitution, which I hope will not be re-written in this respect. We believe that more should be done to give the UN the leadership and the support that it deserves. There is a need for reform and, in the 50th year of the UN, I urge the Government, as a permanent member of the Security Council, to take the lead in pursuing some active reforms.
In the RAF debate at the start of last year, I called for the establishment of a situation room operating 24 hours a day, seven days a week so that defence work could be co-ordinated. I am glad to see that such an operation room has now been established, but that is only a start. The UN also needs to develop an early warning capability to analyse and interpret intelligence.
We need to increase our training for UN operations and, of course, we should be arguing for the working effectiveness of the military committee at the UN and for the establishment of the post of chief military adviser to the UN Secretary-General. If we are going to fill the vacuum left by the super-powers, and if that vacuum is to be filled not by terror, but by the UN, as we all hope it will, there must be major reforms of the UN. I hope that the Government will be in the van in arguing for that.
At the end of the day, however, this defence debate is about our security. When one asks, "What about the future of Britain's security?" it is clear that the Conservatives are not sure. Until they conduct a defence review-- and they will come round to the view that that should happen--there is no answer. The only answer is the Treasury.
In a recent speech, the Defence Secretary made it clear that the Government do not want to face up to a defence review. The Chancellor of the Exchequer made it clear last year that he, and not the Ministry of Defence, decides Britain's defence commitments. That is no way to conduct defence policy. I advise the Secretary of State that, as long as he lacks a proper defence strategy, he will be in the hands of the Treasury. As long as he is in that position, he will find that the Treasury, like any blackmailer, will come back for more and more and more.
The position is more worrying if one considers the Government's own figures. After 1997, which just happens to be the last year for a general election, the Government will run into a shortfall of money available.
Column 62According to the most recent estimates, there will be a shortfall of just under £2 billion in 1997, rising to an estimated £4 billion in 1999. A shortfall equal to more than one penny of income tax will still exist. How do the Government intend to square the circle? We have argued--and we have never pretended that this is an easy option--that the only true way to protect our security is to have a full defence review. Only by that means can we assess the threats to our security and reshape our defences accordingly. That is not an easy option, but it is the only proper way to provide for our defences in the years ahead.
Mr. Tom King (Bridgwater): My right hon. and learned Friend the Secretary of State for Defence said at the start of his speech that there has been a period of change since the publication of the defence estimates. The first change that I should like to welcome is the new team that sits beside him on the Front Bench--new members of my right hon. and learned Friend's Cabinet grooming squad, who are faced with major challenges.
The first challenge is the awfulness of the Labour party's defence policy. My right hon. Friend the Member for Northavon (Sir J. Cope) and I were just discussing the position of the hon. Member for South Shields (Dr. Clark), who my right hon. Friend rightly said has an impossible job. I sympathise with that and with the fact that the Labour party wisely decided--although it was a pretty sublime discourtesy to the House--not to table an amendment to the motion. I understand that it is likely to be tabled tomorrow. The hon. Member for South Shields cited precedent--the Labour party did not table an amendment last year either. That was equally appalling. For two years running, hon. Members will have had to speak in these debates without the privilege of a Labour amendment before them.
Dr. John Reid (Motherwell, North): Will the right hon. Gentleman give way?
Mr. King: If the hon. Gentleman will allow me, I wish to try to keep to Madam Speaker's strictures.
The argument of the hon. Member for South Shields is no more convincing now than it was last year. Hugo Young got it right in the quotation that my right hon. and learned Friend read out. The hon. Member for South Shields wisely declined to challenge or respond to the invitation, from my right hon. and learned Friend the Secretary of State, to set out more clearly what Labour defence policy might be.
Dr. Reid: Will the right hon. Gentleman give way?
Mr. King: If the hon. Gentleman will forgive me, I want to make progress.
The Defence White Paper and the subsequent "Front Line First" statement carry forward the work on which we have been engaged since the total change of circumstance brought about by the end of the cold war. We have had the "Options for Change" programme, the "Britain's Defence for the 90s" White Paper and successive White Papers. I congratulate my right hon. and learned Friend on the progress that has been made. He will know of my feelings on the matter over the years. The proposals that we put forward at the start of the process were continually
Column 63criticised and carped at from the wings. I pay tribute to the senior officers and senior officials who worked on the original programmes, which have stood the test of time remarkably well. No informed comment seriously suggests any major change to the schemes that we laid out or to the outline for our defence in "Options for Change", which was confirmed in the "Britain's Defence for the 90s" White Paper. The logical consequence of that policy is carried through into "Front Line First". Having determined what our capability is, we should ensure that our overheads are not excessive in relation to front line commitments and that we have the capabilities and resources that we need.
In his speech to the Conservative party conference, my right hon. Friend the Prime Minister said that "Front Line First" would bring an end to the upheaval. That was a little premature. It may bring an end to the argument about financing levels, but we are in a period of continuing change. Many of the changes still have to take place and, sadly--as the hon. Member for South Shields fairly said--some jobs will be lost and some bases and installations will close. That, however, is the inevitable consequence of restructuring, which is essential if we are to ensure that we have effective, cost-effective defences. At the time of the "Front Line First" announcements, I asked my right hon. and learned Friend to give an assurance that, having made further changes, we would have a period of stability in which those who work in our armed forces, in our civilian establishments and in the MoD could clearly see the basis on which we embarked on our policy and the destination. I am pleased with the statement that he made in that respect. However, I say to those people that stability will not mean fossilisation. It will not mean that there will be an opportunity to sit back complacently and say, "Now we can settle back with the present and agreed establishments." It will mean a continuing search for efficiency.
The hon. Member for South Shields asked how situations that could lead to waste could arise. Someone has compared the problem with painting the Forth bridge. When dealing with an organisation that consisted of 500,000 people and had a budget of £24,000 million, we face the problem of continually ensuring that there is no waste, inefficiency and, as there sometimes sadly can be, fraud--the hon. Gentleman mentioned that--in certain aspects of the defence establishment. A continuing search for efficiency is the duty of everyone in responsible positions in the MoD.
Although I applaud the decision to introduce stability into the defence budget, some very difficult decisions have to be made. The lumpiness in the pattern of calls that will be made on the procurement budget will pose major challenges. We know that the largest call will be that made by the European fighter aircraft. My right hon. and learned Friend and I have had to fight very hard--not least with our German allies--to keep the project going. I am very worried by some of the stories that I have heard about cost overruns and the lack of progress being made with that scheme. I hope that everyone involved in it realises that many people fought very hard for the jobs created by the project and for the capability that it will bring. Management has a heavy responsibility to ensure that the project can proceed and be sustainable within the defence budget.
Column 64My right hon. and learned Friend referred to the added components of "Front Line First", such as investing in the future equipment programme. The hon. Member for South Shields referred to the number of stores that we need. He was quite right about the old Challenger 1 tanks and the problem of finding enough that could even roll out of the maintenance depots and reach the Gulf. I ordered the new Challenger 2 tanks and the Government have now placed a further, larger order for Challenger 2 tanks so as to ensure that our tanks work the first time and are not wholly dependent on maintenance depots.
I have already referred to the fact that our forces must be properly manned and properly trained, something that has caused a problem in periods of strain and stretch on the defence budget. We must maintain our capabilities. It is no good boasting of the number of our front-line troops if they are not of sufficient quality or do not have the training that they need.
I welcome what was said about the joint rapid deployment force. It, too, will be an important ingredient in dealing with the challenges facing us at the moment. I also welcome the comments on the approach to the Territorial Army in terms of our capability to reconstitute our forces.
The White Paper states:
"After 40 years of stability . . . uncertainty and
unpredictability are . . . the norm."
My right hon. and learned Friend wrote that before what was perhaps the welcome but most unpredictable event since the House last sat-- the ceasefire in Northern Ireland. I am pleased that he gave the probable gross figure--300,000--for the number of personnel who have served in Northern Ireland--I had been wondering what it was. The ceasefire is greatly welcomed by everyone in Northern Ireland, including the civilian population, which has had to endure so much. It is, in itself, a tremendous tribute to those in the police and the armed forces who have served in Northern Ireland.
I shall not try to emulate my right hon. and learned Friend's admirable and eloquent tribute to the achievements of the service men and policemen involved. He gave details of what they endure--a 16-hour day on a six-month roulement tour, sleeping with their boots on, often in appalling conditions. The rules under which they had to operate mean that their achievement and commitment were remarkable indeed.
I endorse fully my right hon. and learned Friend's comment that, although there is a ceasefire, terrorist groups nevertheless retain all their military hardware and military capability. That means that there is a risk of a resurgence of violence, so there can be no question of our lowering our guard. However, in the short term, the ceasefire will help to reduce the pressure facing our service men and policemen.
The scale of our commitment and the burden placed on our armed forces and the Ministry of Defence mean that the possible changes could be substantial. It will be necessary to consider the consequences. We are now entering a period with an opportunity for less overstretch, but the risk is that our armed forces will face understretch.
Column 65We have largely withdrawn from Germany and we are withdrawing from Hong Kong, and the question of opportunities for training arises.
Mr. Edward Garnier (Harborough): Operational experience.
Mr. King: My hon. Friend the Member for Harborough (Mr. Garnier) correctly says that the best training in the world is operational experience. I saw our Royal Marines who came out of west Belfast and went to northern Iraq to clear the Iraqi snipers at the beginning of Operation Provide Comfort. On the basis of their experience in Northern Ireland, they had capabilities that the American soldiers and marines who went to Iraq at the same time simply did not have. Our commitment to Northern Ireland has been a strain and a stretch, but there is no question but that it has enhanced the capabilities and operational experience of private soldiers and young non-commissioned officers. It has been of considerable military benefit. We accept the importance of maintaining standards, and the challenge offered by the ceasefire is significant in terms of defence planning.
Mr. Eric Martlew (Carlisle): Given his experience of Northern Ireland, what is the right hon. Gentleman's solution to the problem of understretch?
Mr. King: My point was that operational experience is the best training. There is no doubt that the frequency of the roulement tour, the experience of carrying weapons and live ammunition and the pressure and challenges faced by service personnel are difficult to simulate in peacetime training.
I referred earlier to properly manned and properly trained forces. The challenge facing us now is how best to replicate the training experience gained in situations such as that in Northern Ireland. I think that the hon. Gentleman will agree that we are likely to become involved in more peacekeeping. The situations arising from that will be much more akin to the street scenes of Northern Ireland than to the circumstances of the Gulf war, which I experienced. Many people would now regard those circumstances as less likely to occur than smaller "brush fires" of one type or another, or civilian insurgencies and disaffection with which we may have to help, or the problem of areas such as Bosnia, which involve us in the provision of humanitarian relief in semi-military situations.
We must maintain standards for another reason. Some people may have thought that my right hon. and learned Friend the Secretary of State was boasting when he described our armed forces as arguably the best in the world. Let us consider our defence capability not just in terms of its quality of equipment or training but of our position as a country in terms of our international posture and relations. The nations that can help in international situations are the United States, Russia, France and ourselves. One of those countries has to be the lead player. Other countries will join the team. In the Gulf war, in the end, 30 countries sent forces to play their part. However, other countries cannot operate in the United Nations unless they have leadership from one of the countries that I have named in any significant and challenging situation.
It is not just a matter of our national pride. There are those who are concerned about the situation in the world and who see that Britain needs to play a role. In that
Column 66international role and in the ability to play our part internationally, it is important that we maintain our capability and our standards.
We have highly capable and well-led forces. Tribute was paid to General Sir Michael Rose. I saw General Sir Peter de la Billie re in the Gulf war and General Rupert Smith, and now we have General Sir Michael Rose. The world is starting to see, in these rather more publicised situations, something of the calibre of leadership that we can offer and which exists in our armed forces. When the spotlight shines on such people, we see how well so many of them are able to perform and what a credit they are to our training and to the quality that we can bring to such situations.
I say to my right hon. and learned Friend the Secretary of State that, faced with the challenges and the pressures, the plans that we have laid and that he is carrying forward, that he has reinforced with his statement on "Front Line First" and that he has carried through in the defence estimates show that we are providing for our country and that we are providing in a wider sense, for the international community and for the United Nations, a defence capability of which we can be extremely proud and which does our country great service.
Mr. Doug Hoyle (Warrington, North): I shall speak for a short time in view of the number of people who wish to contribute and I shall concentrate on a single subject--the future large aircraft. My plea is the same as that made by my hon. Friend the Member for South Shields (Dr. Clark) in an excellent speech from the Front Bench.
The future of the British aerospace industry, especially into the next century, depends to a large degree on whether the FLA is ordered. When I talk about aerospace, I am talking about the last great manufacturing industry in this country. It provides 2 per cent. of British gross domestic product, 5 per cent. of manufactured goods and almost 10 per cent. of our exports.
The replacement for the Hercules must be an aircraft that can meet the needs of our armed forces. They are new needs following the end of the cold war. They must be able to provide a rapid response and to get our troops and equipment to where they are most needed as quickly as possible. The future large aircraft falls into that category. It is in itself a leap into the technology of the next century. As my hon. Friend the Member for South Shields said, it is important to remember that it is a new aircraft that incorporates the expertise and knowledge of the Airbus team, who have been exceedingly successful.
The FLA is unlike the C130J, which, whatever one says about it, is an old aircraft. It was designed and its air frame was built in the 1950s. Whatever is added to it, the air frame remains the same. I referred to the new needs of the armed forces. The FLA will give tremendous advantages in relation to the payload. It offers 100 per cent. greater cargo in volume, a 70 per cent. higher than average payload per sortie and a 25 per cent. higher maximum payload and it has a 20 per cent. higher cruising speed. All those points are important. I am pleased that my good friend the hon. Member for Crawley (Mr. Soames), who has moved to a new Ministry, is taking note of what we are saying in relation to this. I am sure that later we shall hear either from him or from the Minister of State for Defence Procurement in relation to the FLA.
Column 67Let us concentrate a little on the load that the FLA could carry. It could carry missile systems, artillery, logistic vehicles and, most importantly, armoured fighting vehicles, especially the Warrior and the Saxon. We all remember that in Bosnia, the Warrior could not be taken in by Hercules and it had to come by boat. The FLA would give that almost immediate response for which we are looking. As I said earlier, jobs in aerospace are absolutely essential. When considering the alternative aircraft, we should look at the jobs that each would provide in this country. If we opted for the C130J--to take what has been said by Lockheed in the expensive advertisements in the press--the company claims that the project would engender 3,000 to 3, 500 jobs. However, I suggest that, of those, only about 1,750 are direct jobs in aerospace. They are all very useful, but most are with the suppliers.
Mr. Andrew Hargreaves (Birmingham, Hall Green): As the 1,750 to which the hon. Gentleman refers is probably exactly the number of jobs that would be created by that project in my constituency and within Lucas Industries, I should be grateful if he would take what Lockheed has said in its publicity quite seriously. There are, obviously, positive arguments on both sides of the debate. It would not be fair for the hon. Gentleman--I am sure that he will not do this--to rubbish the claims of the rival to support his own theory.
Mr. Hoyle: I agree with the hon. Gentleman. Of course, I am not here to rubbish anyone. I am here to put forward the claims for the FLA. I am analysing the two options. I accept the claim of 3,000 to 3,500 jobs. but I do not think that the hon. Gentleman will object when I say that about 1,750 of those are directly aerospace jobs. The rest--I have made the point --are extremely important because they involve suppliers to the industry.
Although Lucas Industries is in the C130J programme, it may get a double bonus if the FLA goes ahead-- [Interruption.] I shall wait until the hon. Member for Birmingham, Hall Green (Mr. Hargreaves) has finished talking to his colleagues. I am replying to the point that he raised with me. Lucas Industries may, of course, get a double bonus. I have no doubt that if the FLA goes ahead, Lucas will participate in it as well. I do not think that the hon. Gentleman's constituency would suffer.
Again, I am being fair to Lockheed. Lockheed has said that the orders that it would place for about 120 sets would not be dependent on whether the British ordered the C130J or went for another aircraft. I think that the jobs of the constituents of the hon. Member for Hall Green are pretty well assured. I am not here to knock others. I am trying to conduct an analysis.
Up to 6,000 or 7,000 jobs directly in the aerospace industry may be created as a result of the FLA. They would be at the leading edge of technology. The jobs relate to the aircraft wings, which are very important. I see that my hon. Friend the Member for Alyn and Deeside (Mr. Jones) has had to depart. The jobs are very important to the Broughton plant in his constituency. The development and production of the engine will be important to Rolls-Royce and it is estimated that it could provide 1,000 jobs in Bristol. It is a core engine which will be shared between Rolls- Royce and Germany.
Column 68The right hon. Member for Bridgwater (Mr. King) talked about the position of our troops in Ireland. The FLA is important to Shorts in Northern Ireland. The company is very much in the forefront of aerospace technology and it would benefit greatly from a decision in favour of the FLA, as would 60 other companies.
Again, I hope that I am being fair to the Lockheed bid. The bid is firm for about 120 sets, as I understand it. Whether that would be extended to 400 sets or, indeed, to the 700 that Lockheed hope to sell, I am not too sure. If it sold 120 sets, it would provide about £360 million. But if the MOD then decided to order 30 C130J aircraft, once we had got in that £360 million, it would cost us £1 billion to pay for those aircraft. So, there would be a deficit of something like £640 million. If, as I say, the MOD ordered 50 aircraft, the deficit would be even greater. It would then cost us £1.7 billion and there would be a deficit of £1.34 billion. Therefore, those jobs would be provided at a cost.
If we had the 20 per cent. share promised to us in relation to the wings or the aero engine in the future large aircraft and if 300 aircraft were built, neglecting any exports, the deal would be worth about £5.5 billion to this country, which would be a positive contribution. If we were successful in exports as well and sold up to 700 FLAs overall, it would be worth £10 billion to the United Kingdom. So we are talking about very large sums.
There is another aspect to consider, to which my hon. Friend the Member for South Shields referred--our participation in the Airbus. I should not like to see us jeopardise that participation by not going ahead with the FLA. If we go ahead with the FLA, we will be partners in Europe with countries such as France, Germany, Italy and Spain. The alternative would mean that we would be absolutely dependent on the American sources, which would give the Americans a monopoly in the world market. The only alternative to American domination in that area is to go ahead with the European consortium.
I hope that, in reply, the Minister does not say that while we want to go ahead with the first tranche, the FLA will not be an available option to us. If we followed that line, it could mean that we would not be the major source in the consortium as would be expected. That would mean double sourcing of everything, whether it be spares, pilots, or training, which would put Lockheed in the driving seat for the second tranche.
Mr. Bill Walker: Will the hon. Gentleman give way?
Mr. Hoyle: I do not want to give way, but I shall if the hon. Gentleman is very brief. I am conscious of time.
Mr. Walker: Will the hon. Gentleman address the point which the hon. Member for South Shields did not address? Would he expect the Ministry of Defence to pay the development costs of the FLA and, if so, what does he think is the likely figure?
Mr. Hoyle: As the hon. Gentleman knows, the cost to this country would be shared by the whole consortium. There would be no greater cost than the cost related to the Airbus, which has been an outstanding success. I think that the hon. Gentleman will agree that I was talking about the total deficit which would occur with the American bid. Whatever we paid in the first instance for the FLA,
Column 69in the long term, if exports took off, we would be the beneficiaries to the tune of £10 billion. That is very important.
Mr. Mans: Will the hon. Gentleman give way?
Mr. Hoyle: No, I shall not give way to any other hon. Member because I know that many of my hon. Friends want to speak.
Mr. Hoyle: All right, if it is very quick.
Mr. Mans: In answer to the comment of my hon. Friend the Member for Tayside, North (Mr. Walker) about development costs, does the hon. Gentleman agree that one proposal that has been put forward by the FLA consortium is that, provided that the Royal Air Force comes up with a specific order at a specific time to a specific design criteria, it may be that, in a similar way to the way in which the Airbus 340 was developed, the costs of developing the FLA could be paid for outside the Ministry of Defence?
Mr. Hoyle: I could not agree more with what the hon. Gentleman has said. That would be extremely helpful. Of course, if it could be arranged in that way, it would be another plus factor for the FLA. What we are drawing on all the time--the hon. Member for Wyre (Mr. Mans) was right to say it--is the expertise that has been developed while working on the Airbus. Costs would be cut because of the experience of the Airbus and we would draw on the knowledge that we gained from that civilian project. Not to go ahead, as I said to the hon. Member for Tayside, North, would not, I am sure, be amusing to all those in aerospace whose jobs may be lost. I am sure that that is not the intention of the hon. Member for Tayside, North and that that was not what was amusing him. Also, if we do not go ahead in the FLA project, our future role in Airbus will be put in jeopardy because the Germans are very keen to secure the wing design and they would be quite happy, having got the wing design of the FLA if we did not go ahead, to step into our shoes in future Airbus projects.
I say to the Minister that I hope that we will at least delay any decision until early 1995 when the feasibility study will have been completed. That is extremely important because a failure to delay the decision would be a body blow to the aerospace industry.
Sir John Cope (Northavon): This is the first time that I have had the opportunity to address the House from the Back Benches in just over 15 years, and I am delighted to do so. One gets a better view from up here-- perhaps a more all-round view. I am delighted to address the House because I am a strong supporter of our team at the Ministry of Defence. "Front Line First" was not only elegant, as the Select Committee on Defence said, but reflected the clear thinking of the Secretary of State.
I follow the hon. Member for Warrington, North (Mr. Hoyle) in supporting the future large aircraft and in reflecting on that project. The Labour party spokesman, the hon. Member for South Shields (Dr. Clark), who replied for the Opposition with a typically weak speech, if I may say so, said that the Government should not rush into a decision. Indeed, as far as I could see, he spent his
Column 70whole speech telling the Government not to make any decision for ages and ages. He certainly advises the Labour party in that way. But it is important to my constituency, as to others, what decision is made about the future transport aircraft for the Royal Air Force. We have a very large aerospace complex at Bristol, which is partly in my constituency and, centred on British Aerospace and Rolls-Royce, is the most complete aerospace complex in the country.
There are, of course, three sets of factors that affect the decision of which my right hon. and hon. Friends in the Ministry of Defence have to take account--the military, financial, and industrial factors. There are also three Departments of State involved which reflect those three factors: the MOD, the Treasury and the Department of Trade and Industry. All three should be involved in the decision. The factors have been canvassed at some length, but I shall comment on each of them briefly.
The RAF has started to argue relatively recently that its present C130s are worn out and that they must be replaced before the future large aircraft becomes available. Of course, the C130s were originally intended to last into the next century. It is now clear that they will not, at least not without refurbishment. However, it is also clear that they would last with refurbishment. If that is not clear, it has been made clear from the attitude of Lockheed. Lockheed has said, in its keenness to sell us some new C-130s, that it will take the old ones back, it will refurbish them-- that is apparently its intention--and sell them on to other forces. That means that Lockheed does not believe that those aircraft have come to the end of their useful lives.
The RAF also apparently sees no reason to change the basic specification of the C130, in particular the size of the load carried. That is determined by the air frame, which was designed many years ago in the 1950s. Everyone who went to Farnborough knows that there is a vast difference between the load capability of the C130 and that of the FLA--that was obvious from the full- scale model of the FLA on show there. The Warrior and other similar vehicles, as well as guns and so on, would not fit into the C130, but would fit into the FLA.
Emergencies, such as that which arose in the Gulf last week, as well as events in Bosnia and Somalia, reveal that, in future, it will be important to have the ability to put forces on the ground with their proper equipment quickly. It is a grave disadvantage to have to send equipment by sea.
I happened to do my national service during the Suez emergency. I was in the artillery and my regiment was posted to Suez by air and our guns were sent by sea. Some of the vehicles got there, but we never did. In fact, for lack of air transport we had to leave some of our vehicles in Egypt when those personnel who did get that far came back. That is a wonderful example of why not to separate forces from their equipment. I am therefore extremely conscious of the difficulties caused by trying to put forces on the ground without their proper equipment.
It is difficult to assess the financial considerations behind any decision to go ahead with either the C130 or the FLA, partly because many negotiations and studies are yet to be undertaken, notably the feasibility study mentioned by the hon. Member for Warrington, North. Lockheed emphasises that the initial capital cost of the C130 is lower than that of the FLA, whereas British Aerospace argues that the lifetime costs of the FLA would be lower than those of the C130. Those lifetime costs are