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unreconstructed voice of the Labour party all over again. I look forward to hearing the Opposition Front Bench responding to that. I am only sorry that the new Leader of the Opposition could not be here to give his response. Together with my hon. Friend the Member for Upminster (Sir N. Bonsor), I am delighted, unusually, to welcome the speech of my right hon. and learned Friend the Secretary of State for Defence. I am delighted also that, in his words, no further defence cuts will be contemplated. I cannot speak for my friends in the armed forces, but I believe that they will be reassured by the comments of
Column 87my right hon. Friend the Prime Minister last week and of my right hon. and learned Friend the Secretary of State today.
Stability is desperately needed. The successful defence costs study made by the former Minister of State for Defence Procurement, my right hon. Friend the Member for Thanet, South (Mr. Aitken), largely identified sensible savings. My right hon. Friend deserves credit for his sympathetic handling and for the support and confidence of the armed forces that he gained during that study. It created great apprehension, but was generally accepted as worth while, and it produced a sensible and pragmatic result.
I welcome the new Minister of State, my hon. Friend the Member for Crawley (Mr. Soames). I should be grateful if he clarified one outstanding point from the defence costs study. What exactly will be the size of the Army after implementation and the current restructuring? I have read media reports of a British Army of 116,000, but I thought that it was to number 120,000. If the figure is 116, 000, a further major reduction in manpower has slipped through and the troops reduced have not been reallocated to the front line as promised.
Although I welcome the comments of my right hon. and learned Friend, restructuring of the armed forces is continuing, although nearly complete. New conditions, new units, new regiments and new commanders must be got used to, and we must allow the new structure to settle down to allow new members to believe in the value of a career in the armed forces, and to allow morale and new regimental identities to be established.
For that reason, I want to ask my hon. Friend the Minister two questions about stability. In the current public expenditure round, will any further reduction in allocated defence spending be entailed? As my hon. Friend knows, defence spending has reduced from 5 per cent. of gross domestic product about six years ago to some 3 per cent. in the next financial year. That unique reduction is occurring in a declining security situation--as we have seen in the Gulf, Bosnia, Rwanda, Cambodia, northern Iraq and so on.
My second question concerns the Bett review, which is causing great concern. According to an excellent document published by the Library last Friday, information about that review is hard to come by. Lord Carver, a former Chief of the Defence Staff, recently said of the review:
"The effect on the morale of the services in every rank is potentially even greater and certainly more widespread than that of either Options for Change' or Front Line First'."
The Bett review's terms of reference certainly give me no cause for comfort.
There are rumours of buying in yet further services from the private sector, which is a dangerous route to follow. There is to be further examination of private sector practice, but the armed forces are not a smarter uniformed and more disciplined version of Tesco or of BT, of which Mr. Bett is a former deputy chairman.
If the armed forces were driven solely by considerations of remuneration, nobody would join. It is one of the few professions from which one increases one's pay on becoming a Member of Parliament. My hon. Friend the Minister knows that from personal experience.
Column 88There is talk also of scrapping the boarding school allowance. Last month, I spoke to a friend whose son has attended nine different schools in 11 years because of my friend's moves and his wish not to send his son to boarding school. To say that life in the armed forces is the same as civilian life is ludicrous. The strains of service life will continue, as will the strains that it places on marriages and families. I know of excellent officers and soldiers who left the Army because of the strain on their marriages. The House must recognise the difference and the unique conditions under which members of our armed forces serve the country and the House. Above all, I draw to the attention of my hon. Friend the Minister a point that I have made before. Of all our institutions--the monarchy, Parliament and the police--only the armed forces have retained the respect and affection of the British public. They deserve that respect. Recently, the police themselves issued a report noting that they enjoyed a 69 per cent. approval rating from the public but that the armed forces enjoyed 85 per cent.
Mr. Bett's review may be full of radical, clever and commercial ideas, but it has the potential to destroy the standards, traditions and structures of the armed forces that are the reason for the regard in which the armed forces are held at home and abroad. It is precisely old-fashioned ideas of loyalty and service in disloyal and selfish times, and of discipline in our ill-disciplined society, which are behind the high reputation enjoyed by the armed forces. We tinker with that at our peril. We should put at risk the very institution that the whole House--possibly with the exception of those seated on the back row of the Opposition Benches--wishes to preserve. There is even talk of a one-rank structure. We are told that there is only one management structure in industry. If we do not offer decent careers to intelligent officers such as Sir Michael Rose--about whom my right hon. and learned Friend has spoken--we shall not attract intelligent officers such as him. Sir Michael is illustrative, but not unique. There are many highly intelligent, capable, well-educated and well-qualified people in the armed forces who serve willingly in present conditions for not great remuneration. I doubt whether they will be attracted by performance-related pay, single management structures or any other slick phrase better suited to a commercial organisation. I shall be grateful if my hon. Friend the Minister will comment.
Earlier, my right hon. and learned Friend the Secretary of State spoke about the level of troops in Northern Ireland. If--as we all wish, and God willing--the initiative of my right hon. Friend the Prime Minister succeeds and the present ceasefire leads to permanent peace, troop levels inevitably will be reduced. I urge the Government to reduce the extra troops taken out of the 11th and 12th Infantry battalions early in 1992. I urge my hon. Friend the Minister to return those two battalions as soon as possible, so that current overstretch may be reduced this year, not next year. While the ceasefire lasts,
Column 89I do not believe that we need to keep those troops in Northern Ireland, and we can always reinforce if necessary.
Can my hon. Friend the Minister reassure the House that if Operation Banner ends altogether, the Government will not take the opportunity to reduce the Army still further? We have a tiny Army. I can imagine some bright civil servant--perhaps one sitting in the Box on my left--suggesting that those troops are no longer needed. That would be to miss the point. The situation has been overstretched 25 years. Northern Ireland was talked of in terms of emergency tours, extra to normal duties. I trust that peace will not be used as an opportunity to reduce the infantry or the Army yet further. I refer briefly to the future of RAF medium-support helicopters. My sole concern is to see the best helicopter available flying for British armed forces. A medium-support helicopter is exactly that--one that provides support, usually to the Army. I am keen to support British industry, but when I attended the Farnborough air show last month, the EH101 appeared small and limited by comparison with the Chinook. I have flown many miles in Chinooks, and I know it to be an exceptional aircraft. I understand that the EH101 is designed for naval use and may be converted for use by the RAF. Recently, I saw the updated Chinook in Philadelphia as a guest of Boeing, and it remains an exceptional aircraft. I understand that Boeing has offered a minimum of a 100 per cent. offset for British industry on an order of six helicopters. My pilot friends tell me that they favour the Chinook. All I ask is that I hope that the Government will listen carefully to the users of those aircraft before they make their decision.
Mr. Soames: My hon. Friend raised a point about Mr. Bett. I did not wish to interrupt him when he was in full flow, but I can give him an absolute assurance that the work that Mr. Michael Bett is doing at the moment is nothing like the work that my hon. Friend seems to believe that it would be. My hon. Friend must--I am sure that he will--give us the credit for not allowing any of the awful things that he surmises might happen to happen.
It is a serious and fundamental review, which needs to take place to ensure the continuation of the very circumstances that my hon. Friend and I want and know that we must have, to ensure that we can get the quality of people to continue to enter the services. I assure my hon. Friend that I am fully confident that Mr. Bett will come forward with sensible and clear proposals, which are not a cost-cutting exercise, but a clear framework for the future.
Mr. Robathan: I am grateful to my hon. Friend for that reassurance. I should say that most of the detail that I know about Mr. Bett comes from the Library document, which was issued last Friday, so I am afraid that my ignorance is based purely on research done here.
I cannot resist turning to the Opposition parties' views. It is hardly worth considering the cuckoo ideas of the Liberal Democrats, particularly since none of them is here at the moment, but I can well remember my Liberal opponent in the previous election--the only election in which I fought--saying that she thought that there were far too few soldiers in the Army at the moment and that there needed to be more soldiers, to the bemusement and amusement of her audience.
Column 90I refer now to Her Majesty's Opposition. The hon. Member for Bolsover (Mr. Skinner) is not currently in his place, but I have told him that I would mention this. He earlier spoke on the subject of Kuwait. He made some pretty dramatic comments about the fact that Britain had armed Iraq and that it was all Britain's fault that there was a problem in Iraq in the first place. I do not consider that the UK is guilty of causing all wars, as he appeared to. He certainly blamed the UK, and perhaps Mark Thatcher, for Saddam Hussein's military might. His chippy hatred of the UK's industrial success and military determination is matched only by his gross ignorance. I served in the Gulf and saw the weapons that were used against us. Iraq certainly had some French aircraft. It probably had German chemical weapons. I did not see them, but I suspect that it did have some UK weapons. But the vast bulk of Iraq's weapons were, and remain, of Soviet origin. The tanks were T54s, T62s and T72s. The small arms were AK47s and every other variant. The missiles, as even the most ignorant member of the Campaign for Nuclear Disarmament would know, were Scuds--not manufactured in the UK.
I should like to hear the hon. Member for Bolsover--and I hope that he will later speak on the matter--condemn Russia and the former Soviet Union for selling all those arms to Iraq, because that is what fuelled the war, not any actions by the UK. Indeed, by his comments earlier, I suggest that he damned not only his own country but the industrial work force, whom I so often hear Opposition Members say that they wish to keep in work.
Mr. Dalyell rose --
Mr. Dalyell: Before the hon. Gentleman makes such statements, should he not read Timmerman's "How the West Armed Iraq" and, particularly, about how the French Prime Minister Chirac took Saddam Hussein 70 miles out of his way to show him, boastfully, the latest nuclear development of weapons in Provence? So I do not think that countries other than Russia can escape responsibility.
Mr. Robathan: I am very interested in the hon. Gentleman's comments, but I hope that he noted and did not completely miss the point that the hon. Member for Bolsover condemned the United Kingdom for arming Iraq. I do not think that the hon. Gentleman will find us particularly blameworthy or culpable in the matter.
I welcome the position of the Government and look forward to reassurance on the points that I have made. I believe that the Government's statement today underlines the fact that the Conservative party is in deed and, as we always hoped, in reputation, the party of defence. I personally am very grateful for that. 8.4 pm
Ms Rachel Squire (Dunfermline, West): When I spoke about Rosyth naval base in the debate on the Royal Navy in February this year, I told hon. Members that the base felt that it was in the front line, that it was targeted for closure and that the Treasury guns were poised in its direction. Unfortunately, that prediction has proved true. But before hon. Members switch off and feel that they have heard it all before, I urge them to consider the lessons that I think can be learnt from Rosyth's experience, to consider the deficiencies of the
Column 91Government's defence policy and their implications for the security of the country as a whole. I wish to highlight the way in which Rosyth naval base has been dealt with and the fact that that has created not strength, but weakness; not stability, but instability; and not security, but insecurity.
The first example of weakness is that concerning strategy, because there is a growing feeling among service personnel and the civilian work force that strategic and operational issues are secondary to Treasury demands. Where cuts fall can all too often be decided by personal bias and political interest.
I see that the hon. Member for South Dorset (Mr. Bruce) is in his place. Certainly, when I visited Portland naval base, I got the clear impression that it felt that it was a victim of that approach. Having had the opportunity to go out on a Thursday war exercise at Portland, I seriously question why the Government decided to move operational sea training from what appeared to be such an excellent location. I know of other places that feel similarly aggrieved--for example, the stores at Exeter, the gunnery range at Kirkcudbright and, of course, Rosyth naval base.
I quote now from the minutes of the Defence Select Committee of 19 May 1994, in which the Secretary of State for Defence commented on "Front Line First" and told the Committee:
"I am very conscious of the fact that of course the whole purpose of support is to provide the necessary support for the front line and you cannot simply ignore one and pursue the other."
Yet it seems that strategic and operational advantages of operating minehunters, mine-sweepers and operational offshore patrol vessels from an eastern naval base are being ignored and that they have both direct and indirect implications, as has already been mentioned, for oil, gas, fishery protection and the unpredictability of the world climate that we now live in.
I also highlight the fact that the base has been considered an ideal location for mine-sweeping training and that it is used for the joint maritime courses that have already been mentioned. Indeed, there was one in June, when the then commodore of minor war vessels at Rosyth said, in a local newspaper:
"Today's Royal Navy has to be ready to respond anytime, anywhere, more often than not at the drop of a hat.
"We still live in a world where turmoils can erupt quickly . . .
"We should never necessarily regard ourselves as being any safer this year than we were last year, emphasising the need for courses such as this to be taking place on a regular basis."
He is now serving as the command officer of HMS Cornwall, off the coast of Kuwait. His words were indeed prophetic.
It is believed that the cuts that are proposed for Rosyth and elsewhere could weaken this country's extended readiness. It seems that there is a lack of substantial analysis of the strategic reasons for those cuts. Again, I quote from the sixth report of the Defence Select Committee, which says:
"The sort of blind cut imposed by the Treasury axe on expenditure in 1996/97 and beyond does not inspire confidence in the Forces and elsewhere in the process of public expenditure control."
My second example of weakness in the Government's defence policy relates to the whole costings and consultation exercise. There has been a lack of sound
Column 92financial information, investigation and analysis in the defence costs study. I echo some of the points made by other hon. Members, and welcome the news from the Secretary of State that the consultation period will be flexible and that more information will be available; but--here again, I am picking up points made previously--the fact that information was not available, and proper consultation could not take place, during the summer recess is unacceptable.
Let me again use Rosyth as an example. The consultation document concluded, apparently out of the blue,
"major savings are only achievable through complete closure of centres of operation".
But there was no reasoning or evidence to support such a statement; there was no acknowledgment of the substantial savings--40 per cent.--made by the naval base over the past two years, and no mention of the strong possibility that extra funds would be needed to implement the Government's recommendations and to deal with the fear already expressed by the naval base commanders for both Clyde and Portsmouth that they would not be ready for the transfer of resources and facilities to them by 1996.
I feel that I should also mention the proposals for Pitreavie--which, as hon. Members will know, is currently the maritime headquarters for Scotland, Northern Ireland and the north of England and, indeed, the rescue co-ordination centre for the same areas. Only last year, Pitreavie was told that it would become a centre of rescue co-ordination for the whole United Kingdom; only in the last couple of years, £4 million has been spent on improving facilities there. We are now told, however, that it will effectively be closed, and that we in west Fife will be left with yet another unsightly hole in the ground--this time a reinforced concrete bunker, dealing with which could cost up to £2 million.
Nowhere does the defence costs study go into the real costs of transferring resources and dealing with redundancy, unemployment and the loss to the economy. That leads me to my third point about the weakness of policy, which concerns the treatment of people. A naval base, a gunnery range or a stores depot is not just some bit of land or stretch of water; it is an integral part of the local community. Yet it seems that the Government are ignoring a vital part of our country's defence--the people. They ignore the people's expertise, experience, commitment and loyalty. Increasingly, both service and civilian personnel are feeling undervalued, and their morale is low. That is certainly true of Rosyth, where people feel that five years of assurances and promises were simply broken by the Government. The Government maintain that they have no responsibility to assist communities or individuals harmed by their decisions to close bases and reduce expenditure. I contest that. Hon. Members have already pointed out that other Governments see the matter differently: indeed, the prime example of a market-led economy--the United States--takes a very different view in its treatment of communities affected by defence reductions and closures.
As the hon. and learned Member for Fife, North-East (Mr. Campbell) has said, we in Fife have seen an independent report by the Fraser of Allander institute suggesting that the closure of the naval base would lead to a loss of £71.8 million to the local economy and a total job loss of 7,010 over a five-year period ending in 1996. Yet the Government's response --particularly that of the
Column 93Secretary of State for Scotland--has been to play down the economic impact that closure of the base would have on the local economy. The right hon. Gentleman has been equally unwilling to acknowledge the impact that the closure of the Kirkcudbright gunnery range, in his own constituency, would have: it is the largest employer in the area. Let me tell the Minister that the burden of the peace dividend should not be borne so heavily by those who have given most to the country's defence over the years.
A fourth weak point is the Government's treatment of the defence industry. In paragraph 96 of its fifth report, the Select Committee states:
"The United Kingdom industrial base is a strategic asset and must be safeguarded accordingly. We believe that it would be unwise to rely entirely on even our closest allies to provide surge capacity as they have their own priorities and their industry may wish to supply their own national forces first."
Against that, however, we have the tragic loss of a valuable national asset like Swan Hunter; we face the full privatisation of the dockyards, and we hear detailed debate about the replacement of the Hercules.
I assure the hon. Member for Upminster (Sir N. Bonsor) that I have read the Select Committee report on the replacement of the Hercules, and have taken a considerable interest in the arguments--admittedly, because I was given a particular personal interest by my valuable placement with British Aerospace as part of the Industry and Parliament Trust scheme. I have endeavoured to consider all the arguments for and against the replacement of the Hercules. It has been said that it is not possible to wait even for the results of the feasibility study on the future large aircraft. If the position is that desperate, it demonstrates the Government's failure to place orders for replacement military aircraft in sufficient time, and the weakness of their support for a key part of our defence base.
Mr. Mans: Given her remarks about her party's support for defence industries in the past, perhaps the hon. Lady would like to explain why we are in our present position in regard to the replacement of the Hercules. A former Labour Government virtually destroyed the aviation industry overnight when they came to power in 1964 by cancelling all three of the major aviation projects that were in progress at the time.
Ms Squire: I was not a Member of Parliament then, but I have certainly taken an interest in the lessons that can be learnt throughout the House about the timing and nature of key decisions on the defence industry and the need for equipment.
I hope that I have illustrated what I consider to be some of the weaknesses in the Government's current defence policy, and my concern about their continued refusal to carry out a strategic defence review rather than a succession of defence cuts. There has been widespread comment on that. Like the hon. Member for Upminster, I have read the House of Commons Library's review of previous defence reviews and their shortcomings. There is a widespread view, not just across the House, but in military and academic circles, that a full review of our defence objectives for the 21st century is needed.
I recommend to hon. Members a very good book that I read over the summer recess containing a series of articles by Lord Carver, among others. It considered what the options for Britain's defence policy in the 21st century should be. It is not only Opposition Members who are
Column 94saying that now is the right time for a full review. I would not pretend that that would be an easy task or that it would not raise difficult and complex issues such as Britain's future role in world affairs and the future development of NATO, a common security and foreign policy and "Partnership for Peace". The Government must accept, however, that there is a real need for such a strategic review and that it is all too easy to try to eliminate the unnecessary and instead start eliminating the essential. I hope, therefore, that hon. Members who are serious about a strong defence will argue for a delay in the implementation of the decisions or recommendations of the defence costs study until such a review has been conducted and until the Government have accepted a greater responsibility for managing change, as that affects both communities and industries.
Mr. Robert Hicks (Cornwall, South-East): I understand the reasons for many of the views of the hon. Member for Dunfermline, West (Ms Squire) on her region and on Rosyth in particular. Hon. Members will find that many of them will be reflected in my remarks.
With the end of the cold war and the collapse of the Berlin wall, 40 years of relative stability, particularly in Europe, have been replaced, ironically, by uncertainty and unpredictability. Undoubtedly, the removal of east-west tensions has been beneficial for the international community. There are, however, adverse consequences. Many of those have been referred to this afternoon. For a variety of reasons, they have manifested themselves in the break-up of the former Soviet Union and Yugoslavia and the resultant upsets and decisions, all of which have led to uncertainty and destabilisation.
I believe, therefore, that it was right that the Government, as a global power, should address themselves to the new circumstances. No one ever thought that that would be an easy task. Balancing our potential national and international commitments with our capabilities and the financial resources available has never been straightforward, as any hon. Member who has had any experience of Government will know. However, given the combination of greater uncertainty about our potential responsibilities and the financial restraints, it is probably more difficult to secure those objectives today than before.
It has meant in practice that both our armed forces and the essential back- up facilities and requirements have been subjected to considerable change. Here, I, too, pay tribute to all those men, women and their families who have been involved or affected in some way by the major changes in recent years. It has not been an easy period for any of them.
I wish to concentrate my remarks on the impact of the changes--both already implemented and proposed--on the Royal Navy and the Plymouth travel-to-work area. As hon. Members will know, Plymouth is a major garrison city. It has an Army presence, the Royal Marines, a royal naval base and the associated Devonport dockyard. The south-west is the most dependent of all United Kingdom regions on defence and defence-related economic activities. Since the mid-1980s, the region has lost thousands of jobs as a result of defence and defence-related cuts. The level of job loss is equivalent to about one third of the number of people currently unemployed in Devon and Cornwall.
Column 95Equally frightening is the fact that those stark job losses have meant a loss of spending power in our regional economy. The accumulated loss of income to our economy in the far south- west since the 1980s through defence changes is estimated to be in excess of £500 million. If that in itself is not enough for our fragile south -west economy to take, we now have the unwelcome prospect of a further loss of 800 jobs in royal naval stores and supplies--mainly at Devonport, but also in Exeter and Wrangaton--the proposed relocation of the Royal Marines from Plymouth, and continuing anxieties created by uncertainty over the work load level at Devonport dockyard in the next five years before the Trident refit programme takes effect. It worries me that uncertainty still exists, despite the review and the various papers that have already been produced. Only this morning, I was informed that the Royal Navy's south- west communications nerve centre in Plymouth was likely to close within the next three or four years. That would have an adverse affect on the naval base and would mean a further loss of 100 service and civilian jobs.
I do not claim to be a defence expert. All I can do is evaluate the adverse effects that all those changes have had and will have on the Plymouth travel-to-work area, of which my constituency forms part. Hon. Members will agree that all this change has been both extensive and detrimental to our sub-regional economy. The local population can be forgiven for taking the view that the changes that have been implemented by the Ministry of Defence, and which are probably Treasury driven, will inevitably be introduced in an isolated fashion, without regard to the net economic cost to the sub-region or their overall economic and social impact.
We all know that one of the problems facing this country is that our structure of government is very much vertically orientated. Every year, Departments apply to the Treasury for their budget for the following year. It is all done in a vertical manner and in isolation. It is only when various effects are manifest at the local level--or horizontally--that we recognise the full impact of any changes. The Ministry of Defence's changes worry me. Plymouth is a major garrison town and will be affected significantly, but the full social and economic implications of the changes will not be recognised or taken into consideration until their adverse impact is felt, when it is, in effect, too late for any of us on the ground to rectify it. It is even more galling to Devon and Cornwall to know that our cost-of-living index is some 8 per cent. above the United Kingdom average and that our gross domestic product is just 83 per cent. of that for the United Kingdom as a whole but that the Government's response to our structural economic difficulties, as manifested by the changes in our defence expenditure and requirements, is such that the budgeted expenditure of key Government agencies for Devon and Cornwall is just £51 million in the current financial year, whereas Scotland and Wales, which have similar structural economic difficulties, are allocated £530 million and £187 million respectively.
I conclude by emphasising to the Ministry of Defence team that the economy of the south-west is undoubtedly becoming increasingly fragile because of the rundown of
Column 96defence and defence-related activities. It will be difficult for my region to absorb the proposed reductions that I have highlighted unless the Government make available appropriate financial support to offset the adverse effects. Unless I receive assurances from Ministers either that the further reductions in defence expenditure and facilities in the region are to be halted or that appropriate financial measures are to be introduced to offset the proposed reductions, my support for the Government tomorrow evening cannot be taken for granted. I do not say that lightly, but, having represented my constituency for the past 24 years, I am not prepared to tolerate this further blow to our regional economy as a direct consequence of decisions taken by my Government.
Mr. Nicholas Brown (Newcastle upon Tyne, East): The hon. Member for Cornwall, South-East (Mr. Hicks) made a powerful and brave speech on behalf of his constituents. He has drawn the House's attention to the difficulties caused for communities that rely on defence-related employment when that employment is taken away. I shall take up that theme on behalf of my constituents, the people of Tyneside who rely--or relied--on Swan Hunter as the main pillar of our community's employment base.
When Swan Hunter was privatised by the Government in the mid-1980s, it was as a warship building yard. It was asked not to undertake merchant work and although it did do so--three small merchant orders, I believe--it was effectively wholly reliant on warship building. As only Governments purchase warships, it was overwhelmingly reliant on the Ministry of Defence as its main customer.
Swan Hunter went into receivership in May 1993. It has staggered by for more than a year in the receivership of Price Waterhouse, completing three type 23 frigates for the Royal Navy. That work was completed to price and on time and was of excellent quality, despite the appalling circumstances.
I remind the House of the significance of Swan Hunter to the community that I represent. Prior to the yard going into receivership, its direct wages bill was more than £1 million a week and that money went into the local economy. More than 3,000 people could look to Swan Hunter for direct employment and a similar number could expect to be employed regularly working for sub-contractors--I dare say that a further two thirds of a million pounds a week poured into Tyneside's shipbuilding and ship repairing community through the weekly wage bills of those sub-contractors. In other words, Swan Hunter was an enormously important pillar of various local economies, especially those of east Newcastle, Wallsend, Jarrow and South Shields. All that has gone.
Theoretically, it would be possible to save the yard even at this very late hour, but that is unlikely to happen. At the end of the month, the very last type 23 frigate will leave for its sea trials and will not return to Tyneside. The remaining work force who are ensuring that the last ship is a credit to our community and to more than 100 years of shipbuilding tradition on Tyneside know that their contracts of employment will come to an end. Only security men will be left on the site, although a large part of it has already been sold to much smaller ship repair companies.
Column 97What has happened to Swan Hunter is a disaster for the community that I represent. It is a disaster not only for the people who work there but for those who relied on Swan Hunter's wages coming into the local economy. Swan Hunter's very existence maintained the economy of the community that I represent. To take it all away--and to do so this quickly--is not just a misfortune but a disaster.
There are things that the Government could do. The first and most obvious thing that they could have done was to enable us to carry out the helicopter carrier order rather than to place it elsewhere in Barrow and Govan. The argument has moved on and there is no going back, but there were other things that the Government could have done. They could have allowed the yard to reduce the number of employees but to survive; they could have placed the Sir Bedivere contract--a much smaller order--with Swan Hunter. The placing of that order with Swan Hunter would have triggered a bid for the yard by CMN, a foreign company. It believed that it could obtain work from overseas. In other words, it would not have taken work from other domestic shipyards, but would have still brought work to the Tyne. That would have provided a private-sector solution to Swan Hunter's problem, but the Government chose not to facilitate such a solution. When the Sir Bedivere was not placed at Swan Hunter, I thought in my heart that the battle for Swans was over.
CMN, however, came back with a further prospect of saving the yard. I was surprised that it did so, but all credit to it for trying and also all credit to the receivers, Price Waterhouse, for doing everything that could be done to try to sell the yard as a going concern. I am not critical of CMN and I am not critical of the receivers.
I am, however, critical of the British Government. I think that the Government could have saved Swan Hunter if they had wanted to do so. They could have saved it by placing the Sir Bedivere in the yard. Even after that, they could have saved it by meeting CMN's request to undertake the frigate contract. The negotiations broke down because of a disagreement over price. The sum involved is about one third of a million pounds--that is the size of the money that was being haggled over on a contract of about £54 million. In the circumstances, I thought that the Government could have done something for the people of Tyneside. It would be the cheapest possible way in which to underpin the remaining employment at the yard, which involved about 1,000 people earlier this summer. Of course, the figure will go down to nothing by Christmas.
The Government were unwilling to do something and one is left to conclude that the Government wanted the yard to be closed. Certainly, the rest of the British warship building industry wanted to see Swan Hunter closed, partly because it regarded it as competition and partly because it believed that there was overcapacity in the industry and that this was an opportunity to get rid of some of that capacity permanently. This is a very hard way to do it.
The misery that will be inflicted on the community that I represent and on the communities of neighbouring constituencies will take an enormous effort to pull round. We are talking about male unemployment levels in communities such as Walker and Wallsend of more than 40 per cent. once the redundancy rounds are finally driven home. There is no alternative work. What about the rest of the employment base to which skilled, semi-skilled and
Column 98unskilled manual labour might have looked on Tyneside? NEI Parsons, a large engineering works just down the road, is the second largest private sector employer. It has just made a third of its manual work force redundant. The announcement came only three or four weeks ago. A further 600 people were made redundant in a community who had looked to the shipbuilding industry for employment.
The offshore oil industry is, as we all understand, cyclical and it is in a trough rather than at a peak at the moment, so employment levels at AMEC are very low. People who might have hoped to be taken on in neighbouring shipyards and who were even prepared to travel to Sunderland to work in the Sunderland shipyards cannot do so because the Government and their urban development corporation have already ensured that every single shipyard on the River Wear is closed. Perhaps one could look to the other great traditional employer in the north-east of England, the mining industry. Employment in the mines of Durham and Northumberland is there no more. This is an enormous, cumulative amount of unemployment for our community to have to absorb all at once, or at least in a very short time. We cannot do it. We are now in a desperate strait. Things are so bad that there is no private sector solution that would help us through the problem. The only short-term solutions are public sector solutions or at least public sector- led solutions, so we have to ask the Government for help. We know that we shall not get it. The enterprise zone that was promised in May 1993 is still under discussion. It has not appeared and its failure to appear is not only preventing new inward investment, but balking inward investment that might come to Tyneside anyway, because anyone who is thinking of locating on Tyneside will wait to see where the economically privileged area is before coming. I was pleased to hear the announcement today about the new jobs for Cleveland and I was pleased for the people of Teesside. But that will not alleviate poverty and unemployment on Tyneside. The people of Teesside have their own difficulties and good luck to them with today's announcement. However, it will not help us and no one should pretend that it will. We need Government assistance. We need public sector investment, perhaps a local public project, as a matter of urgency and we need a competent economic development body for our area which can actually spend what little money there is wisely. We do not need the uselessness of the urban development corporation on Tyneside. Throughout the whole Swan Hunter saga, it has at every episode made the wrong decision at the wrong time. It backed the wrong bids and refused to support the right ones. It failed to make the representations to Government that it should have made and it has made separate representations to Government that, frankly, no one else supports.
I say to the Minister on behalf of the community whom I represent that the people of Tyneside think that his Department has treated us scabrously. We feel that we have been let down and betrayed. People were willing to work their hearts out at the time of the Falklands war. Shipyard workers even went to sea as civilians with the task force as it sailed south to do their bit for what they took to be their country's cause. They were not made redundant, of course, until they came back. We have had more than 100 years' tradition of supplying the Royal
Column 99Navy with first-class vessels. The people of Tyneside have not let their country down, but now their country is letting them down. At the Conservative party conference, Conservative speakers said that the Conservative party was the party of the Union and the party of the whole country. I tell Ministers that that is not how it is seen on Tyneside. On Tyneside, people believe that the Conservative party is the party of special interests and special privileges and, increasingly, the party of the south of England, and of the suburban home counties of the south of England at that. If the Minister wants to disprove some of that, he can make an effective statement tomorrow night doing something useful for the people of Tyneside.
Mr. Ian Bruce (South Dorset): I have a great deal of sympathy for the heart-felt speech, with its plea, by the hon. Member for Newcastle upon Tyne, East (Mr. Brown). It is heartrending, of course, to think of all the communities who are affected by the big changes. Just the other day, my own newspaper had the headline:
"South Dorset to lose 4,500 jobs."
That is the number of jobs that the University of Portsmouth estimates will be lost through defence closures in my community over the next nine years. That seems like a reasonable number of people until one considers the total labour force in the area, which is only about 20,000. The figure of 4,500 people out of 20,000 puts into context the real concern that communities clearly have.
If we get too despondent and avoid realising that positive things are happening, we may start to take the wrong decisions. I may give a few points to the Government before, probably, kicking them somewhere painful a little later in my speech. In South Dorset, there has certainly been a strategy for change. Since January, our unemployment has come down month by month. That is a result of the Government's decision to give Konver money, to give intermediate assisted-area status and to give rural development status. Indeed, the Government bid in Europe for money for roads and other things. Unfortunately, the Commissioner in Brussels, whose name escapes me at the moment--I think that he used to be a Labour Member of Parliament-- decided to turn us down and to turn the Government down. We have the strategy there.
We hear so much from the Labour party about a defence conversion agency. I notice a colleague who was on the Employment Select Committee with me when we looked, on an all-party basis, at how communities should deal with the conversion from high-technology industries, such as defence, and how they should re-create the jobs. What was clear, and was common ground, was that the Government had a role in that, but that the role was in providing finance, as I have just described, to a local defence conversion agency. We have that in South Dorset. It is called the South Dorset economic partnership. As soon as I knew those problems were coming up, I had a meeting with the chairman of the local training and enterprise council. He immediately went into action and talked to all the local authorities and got the full backing of all the political parties to set up that partnership. So we have a group of people out there, demonstrating that
Column 100South Dorset is the place to come to establish new jobs and to build. Certainly in the south-west, I know that every area that has such problems has set up some sort of defence conversion agency. If the Labour party does not think that those agencies are doing the job right, please tell us. However, Labour councillors are, in the main, very much pushing the agencies forward, supporting them 100 per cent. and certainly not criticising them and the way in which they work. It would be helpful if the Front-Bench spokesmen of the Labour party told people what they mean by a defence conversion agency, because I believe that it is exactly the sort of body that we have set up.
I thought that I would have to berate the Minister for my not having received the consultation paper and, indeed, for not being given any time for consultation of the proposed closure of the air station. In fact, as I rushed into the House today, I found precisely that paper in my pigeonhole. Unfortunately, one of the pages was missing. I felt a little like the Front -Bench spokesman for the Labour party, the hon. Member for South Shields (Dr. Clark) must have felt when he was making his speech. We all know that he left the page behind on which there were any policies on what the Labour party would do for the defence of this nation. In fact, I now have the full copy and I have done something with the figures which I was given on a single sheet of A4 paper. The Minister will see that I have blown them up to four times the size so one can just about read the figures. But I have to tell the Minister that, unfortunately, the detail in the report is not sufficient for us in South Dorset to make any positive contribution to that particular consultation exercise. I shall be talking to him in the very near future about greater detail so that we can see what is happening.
I know that the Minister will be told by all his staff that any time he makes a cut in anybody's back yard, the hon. Member concerned will come down on him and say that he cannot cut here, he cannot cut there; it is all Treasury driven. I am a rather strange guy. I believe, being an old works study guy, that one makes savings only when one goes to the guy at the top of the organisation and says "Look, here is a financial target. I will cut your figure, because the country cannot afford it. You now have to come back with the best deal possible for the taxpayer and get the best bang for our buck". We are really disappointed in South Dorset, despite our trying to save the MOD money, about the way in which the MOD constantly comes forwards with schemes that are in the next four or five years to cost a vast amount of money, to be paid for by the very same taxpayer whom we are trying to assist. The latest proposals for the air station mean a capital expenditure of something like £38 million. Of course, that is nothing to the £600 million that is currently being spent on building a new sea systems control and procurement executive headquarters north of Bristol; nor is it when compared to the £100 or £200 million that the Defence Research Agency is getting for remodelling itself. Indeed, it is nothing to the £40 million currently being spent in Plymouth to re- create facilities. I am grateful to the hon. Member for Dunfermline, West (Ms Squire) who mentioned how excellent the flag officer sea training facilities were at Portland. I congratulate her doubly, because my constituents have constantly tried to bat on behalf of her constituents and it is the first time that I have heard somebody in the Labour party come forward and make such a positive statement.
Column 101I have invited the Front-Bench spokesmen on many occasions to do that, only to hear that they would reinstate the facilities or stop the closure. I am afraid that they are very good at rhetoric, but not good at putting their hands in their pockets for the defence budget. I shall briefly touch on the case that has been put forward for the air station. The 4,500 jobs that are likely to be lost from our economy have just been mentioned. That figure is really a loss of roughly 3,000 direct jobs and a 1,500 knock-on effect. My hon. Friend the Minister could, in a stroke, halve the problems of South Dorset by looking carefully at what is being suggested. I find difficulty in following the logic of the argument because I have known for a very long time that the air station would probably close in 2007, unless we could find another aircraft to base there. The document outlining the case is strange because it talks of keeping the Lynx helicopter going for another 25 years. I am not quite sure when the Lynx helicopter was first built, but from design stage, we are talking of a design and use life of around 50 years on the basis of the document. My understanding is that with its useful life and with the replacement of the Merlin helicopter coming forward and being designed on to our ships that the Lynx would be knocked out by 2007. Therefore, it is strange to see costings of 10 years and 25 years for that helicopter.
When I blew up the figures, another interesting factor was to find that the annual cost of maintenance of the air station would be £4.5 million. I do not know where that figure has come from. It has been spirited out of the air as far as I can see. Certainly it was never mentioned when we previously considered the detailed figures involved in moving all the facilities on the air station when we closed the naval base.
In the staff costs, figures have appeared like magic. It costs £33 million to staff and run all the helicopters. The idea is not to reduce the number of helicopters, but, by magic, to move them from Portland, which is a purpose-built, single-type air station and shove them into Yeovilton. The staffing costs would then go down, it is said, from £33 million to £20 million. That is magic, it is wonderful. If we can do it, why not do it at Portland? It does not seem to be sensible. I certainly know that if we put everybody inside one fence, we may well save on a lot of guarding costs. But let us hope that in the not-too- distant future, guarding of bases can be reduced a great deal because of the peace which seems to be breaking out in Northern Ireland. Certainly, in the next five years, we should take that into account.