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6.35 pm
Mr. John Denham (Southampton, Itchen): I should like to follow the remarks of several hon. Members about the award of the order for type 23 frigates, and especially the interest of Vosper Thornycroft in that delayed--and now urgent--decision. The Minister of State for Defence Procurement knows of my strong constituency interest. The shipyard is on the edge of my constituency and many of my constituents are employed there. I am grateful to him for the time that he gave me and some of my colleagues a few weeks ago to discuss the case for Vosper Thornycroft.
Hon. Members who have visited Vosper Thornycroft in recent years include members of Labour's defence team and those with an interest in training policy, who are interested in its innovative approach to work force training. They will have been enormously impressed by the quality of the company, its management and work force. It is well managed, has a committed work force and is committed to investment, both in capital equipment and in the work force. Although, by the nature of the business, it is not always possible to avoid job losses, the company has had an excellent record of retaining and retraining the work force wherever possible.
It is a matter of deep regret that a cloud of uncertainty hung over the company, my constituency and the rest of Southampton over Christmas and the new year. People had been led to believe that the decision on the order would be made before Christmas. Unfortunately, even today, we have had no date for the decision to be made. The practical consequences of the delay are already serious. The work force was reduced by more than 100 before Christmas. Those were not compulsory redundancies, but the release of contract workers. Nevertheless, contract jobs are still jobs to the people who were doing them and who no longer have the chance to do them. Further delay would make forward planning for the company even more difficult. If no decision was made and no work on the contract allocated to Vosper Thornycroft, employment would fall by a further 500 in the next year alone.
In parliamentary answers recently, the Minister has said that the order will be for up to three frigates. He said earlier that he hopes to take a decision within a few weeks. If he has not yet decided how many he wants, it will be a rushed job for those who have to do the work.I would have hoped that, by this stage, he could have told us how many frigates the Royal Navy requires, as a precursor to deciding who is to build them. I hope that he will give an absolute commitment that there is no question of the decision being delayed beyond the date of the current tendering period in March. It must not be delayed into a period of re-tendering and further indecision. That would be unacceptable to all those who are waiting on that decision. I hope that that commitment and perhaps a clear sign of the decision date and the number of vessels will be forthcoming. Like the hon. Member for Portsmouth, North (Mr. Griffiths), I hope that the number will be three.
Any hon. Member would expect me to have a constituency interest in my local shipyard, but I genuinely believe that in this case my constituency interest and the
interest of the Southampton area coincide precisely with the national interest. The continued success of Vosper Thornycroft is vital for two reasons. First, it is vital to the future procurement policies of the Royal Navy, particularly the Royal Navy's ability to seek competitive tendering for new vessels in the future. Secondly, the awarding of the contract to Vosper Thornycroft is vital to sustain the company's remarkable export success in recent years.
Those two key issues--being able to supply the Royal Navy and being successful in export markets--come together in the awarding of the contract for the type 23 frigate. Vosper Thornycroft's ability to provide competition for Royal Navy orders depends, in practice, on the shipyard continuing to win the export orders which have sustained the company through much of the recent past. In turn--and this is crucial--export success depends on being able to show that the Royal Navy has confidence in the company by placing orders in it. The awarding of the type 23 frigate contract can secure both the future of competition in the awarding of contracts and Vosper Thornycroft's continued success in the export markets. The two issues cannot sensibly be separated. Over the next two years, Vosper Thornycroft will deliver six steel vessels--orders which were won on the back of previous steel shipbuilding for the Royal Navy.
What is the current position? One example that I have been given is that Vosper Thornycroft recently lost a valuable export contract for Brunei to GEC. In the company's view, a critical factor was the absence of a recent Royal Navy endorsement of Vosper Thornycroft as a supplier of steel ships. In that case, the competition was within the United Kingdom and the contract was perhaps not so significant in terms of the national interest, but there are many export markets in which Vosper Thornycroft is the sole UK competitor. If Vosper Thornycroft does not win those orders, they will not go to another British shipyard: they will go to naval shipbuilders in other parts of the world. That should be a serious consideration for the Minister.
The Minister placed weight on the NAPNOC--no acceptable price no contract--procedure, but there is scepticism on both sides of the House about the ability of that procedure to provide competitive prices. If Vosper Thornycroft suffers in the future, not only will the Royal Navy be dependent on that approach to contracting, but the country will lose Vosper Thornycroft's export ability.
In the future, there are longer-term plans for 12 common new generation frigates. It is therefore reasonable to ask the following question. Does the Minister believe that a future Navy Minister would be able to achieve the sort of savings--about one third over the life of the type 23 class of frigate--if at that time there were only one company capable of supplying all those vessels and thus one sole supplier with which the Government of the day had to negotiate? I do not believe that it would be credible to follow the NAPNOC procedure to its ultimate extent and suggest that the Royal Navy would forgo vessels that it needed because it was unable to get the price that it wanted.
Mr. Michael Fabricant (Mid-Staffordshire):
I apologise to the House for not having been here earlier--I warned that I would not be able to be here.Hon. Members have already spoken about their constituency interests. Mid-Staffordshire is nowhere near the sea, but I speak in the national interest.
Before I became a Member of Parliament I was occupied in exporting around the world. I have been able to watch the debate on television and I know that hon. Members on both sides of the House have spoken about the importance of the Royal Navy, not only in terms of the defence of the realm but as a means to promote British exports. Having travelled throughout the world, particularly in the United States, I find it interesting to note the modernity of the Royal Navy. Many of the vessels in the US navy, although larger than ours, date back to the Korean war. It is a credit to the Ministry of Defence and to my hon. Friends on the Government Front Bench that the Royal Navy is not only lean but modern and sleek.
We have also been correct, if not always politically correct, to maintain our nuclear deterrent. It is an unfortunate fact that the genie of how to develop nuclear weapons, once let out of the bottle, cannot easily be put back inside it. Although the Soviet Union no longer exists, we should never forget that the Russian Federation, although an ally, still has nuclear weapons. Sadly, nuclear proliferation has meant that there are a growing number of nations around the world which, even though they do not possess nuclear weapons, certainly have the ability to make them and, perhaps more important, to deliver them.
Deterrence does work: we have seen that in Israel over the Gulf war. The fact that it was known that Israel had nuclear weapons and the ability to deliver them was the sole reason why Scuds, which could have been armed with the means of mass annihilation, were not aimed at the state of Israel. That is a good example of how nuclear deterrence works. [Hon. Members: "Scuds were."] It is typical of the Labour party to argue that it does not believe that nuclear deterrence works; it does work. I would argue that the reason we have not had a nuclear war is--
Mr. Jamie Cann (Ipswich):
I am sure that thehon. Gentleman did not mean to mislead the House, but Scuds were launched at Israel by Iraq in the Gulf war.
Mr. Fabricant:
The hon. Gentleman was not listening to what I was saying. [Interruption.] I apologise to Opposition Members, who are now making fun of my voice--I am on Tyrozets because I have a sore throat.I said that Scuds were aimed at Israel; I said that they were not armed. The hon. Member for Ipswich (Mr. Cann) may like to check the record tomorrow. Scuds were aimed at Israel, but they were not armed because Israel had a nuclear deterrent. It is all very well for Opposition Members to scoff and wave their Campaign for Nuclear Disarmament credentials, but I believe that our Government are right to maintain their nuclear deterrent.
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