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Mr. Clifton-Brown: My hon. Friend has spent more hours talking to RAF personnel than most people in the past few months, and his comments are entirely true, but does he agree that it is not only pilots, but senior NCOs--the people who are posted round the world and have far longer detachments than pilots, who support pilots day in, day out and who have had no promotion for the past three years--who, when they come to a break clause, are likely to leave the RAF as soon as they can? Much more serious, if they are approaching the end of their term of service, they will retire with a lesser pension because they have not been promoted.

Mr. Key: My hon. Friend is right. Some of the points that I have been making have been relayed to me by airmen as well as flying officers. I am sure that my hon. Friend will acknowledge that what he describes was happening under the Conservative Government, but we told Ministers that, if the SDR slipped, and if there was more uncertainty, the consequence would be a serious failure of morale. I fear that that is happening. Every week we delay on the SDR gives weight to what my hon. Friend has just said.

Mr. Bayley: I am most grateful to the hon. Gentleman for giving way a second time.

I did the attachment with the RAF three years ago, and much the same sentiments were expressed to me by pilots and NCOs. Morale was low. We should hope that the strategic defence review will address those issues, which undermined morale in the armed forces three years ago, two years ago and in the past year and, sadly, were not addressed before.

Mr. Key: The hon. Gentleman is wrong to say that those issues were not addressed before; the Bett report dealt with them. Those difficult problems have persisted for years, but I of course hope that they will be resolved.

Many people who do not have other options are accepting premature voluntary redundancy. They are leaving the RAF early and are losing gratuities and pension simply because they have had enough, which is bad news. People have talked to me about a huge shortage

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in middle management crews in about 12 to 18 months. The RAF now accepts that, and I am sure that Ministers are addressing the issue.

The Minister mentioned RAF Valley. I have been presented with a different picture and have heard that tactical flying instructors there are talking of huge problems. Some of the Hawk aircraft are on their last legs, we have heard stories of poor students coming into the system and it is said that about 90 per cent. of the instructors are studying for commercial licences. It is said that the training system is falling apart, although that is probably an exaggeration, and not enough new pilots are being produced. There is talk of a serious deficiency in front-line pilots in 12 months--there will possibly be 20 per cent. undermanning--and another person spoke of a shortage of 80 fast-jet pilots at the end of the year.

Before the Minister invites me to give way, I should say that I know that there was a problem under the Conservative Government, but it is getting worse. I draw it to Ministers' attention so that they can address it with vigour.

Dr. Reid: I was not going to say exactly that. I ask the hon. Gentleman, first, not to exaggerate the problems at RAF Valley.

Secondly, every nail that the hon. Gentleman hammers into the coffin of RAF Valley is hammered into the privatisation project with which the Conservative Government insisted on going ahead despite warnings from me and others that the problems that he claims are now occurring--I am not substantiating them--would happen. If he is correct, they are not a continuation, but the beginning of a problem arising out of the privatisation.

Mr. Key: I shall not pretend that all is rosy if it is not, but it is my duty to point problems out, which I do. I am not shy of pointing out where things have gone wrong, and I hope that the Minister will make a positive response to those difficulties. I am not seeking to drive nails into coffins, but I reiterate that my remarks reflect the genuine fears that have been expressed directly to me by pilots. We should discuss that matter seriously.

RAF Harrier force personnel are also said to be concerned about their continuing role on board ships because they spend an increasing time away from home. The problem of poaching by airlines, which the Minister rightly identified, will be added to if overstretch worsens.

Pilots are delighted about the Eurofighter. Although it will come into service in 2003, which is several years away, there are concerns that it will not be much more than a shell without much of its operational equipment working fully. I do not know the answer, but pilots are putting their concerns to me, and I hope that Ministers will take them seriously. It has also been suggested that there have been further delays to the in-service date or squadron deployment of the Eurofighter.

I have made those points with no pleasure. They are summed up by a pilot who is leaving the RAF early and losing a considerable sum of money in pension and gratuity rights. He said:

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    There are lots of reasons why he should stay in the RAF, as the Minister and I would agree, but I urge the Minister to consider carefully the poaching of RAF pilots by airlines. We cannot ignore it.

I must mention another issue, which the hon. and learned Member for North-East Fife (Mr. Campbell) also wants to discuss, before I move on to happier territory: the crash of Chinook helicopter ZD 576 on the Mull of Kintyre, which remains unfinished business. My remarks are not party political--the Minister awaits my submission on the matter, which is on the way--but for the sake of the families of the pilots and of the others who died, and for the sake of those serving currently who continue to be troubled by the verdict of gross negligence against the pilots, I put it on the record that a small cross-party group of Members of Parliament continues to pursue what we believe to be justice for the pilots.

The Minister has promised us words of wisdom about procurement. In a previous defence debate, my hon. Friend the Member for Ryedale (Mr. Greenway) raised the issue of Slingsby Aviation and the Bulldog replacement scheme. The initial proposal to replace the Bulldog came from Slingsby three or four years ago when the Ministry of Defence had purchased its first Firefly aircraft for joint flight training, based then at Topcliffe in North Yorkshire. Slingsby was also competing to supply more than 100 Firefly aircraft to the United States air force. It won the contract in the face of fierce competition. It also won the Queen's award for export. Air forces in 12 other countries have the Firefly aircraft in service.

The Ministry of Defence, through Hunting Aviation as main contractor, acquired a further 25 aircraft a couple of years ago for the Joint Elementary Flying Training Squadron. We understand that the aircraft are well regarded and that the contract is being fulfilled without difficulty.

Mr. John Greenway (Ryedale): I am grateful to my hon. Friend for mentioning the matter. In terms of testimony to the Firefly, not only did the United States air force procure 100 of the aircraft, but as recently as two and a half weeks ago the head of America's flight training education command, General Newton, came to Kirkbymoorside and expressed his total confidence in the Firefly. He and many air forces throughout the world would find it extremely strange if this country did not use it to replace the Bulldog.

Mr. Key: My hon. Friend's unremitting enthusiasm for Slingsby Aviation and the Firefly has been aired many times in the House. His constituents can be proud of his efforts and we shall no doubt return to the matter. I am not surprised that there has been such praise for the aircraft from the Americans.

Under current defence procurement arrangements, the Ministry of Defence has invited contractors to tender for the supply of an aircraft to replace the Bulldog on a number of hours flying time basis. Two contractors, Shorts and FRA Serco, have submitted bids. The FRA Serco preference is thought to be the Firefly, while Shorts prefers the Grob, which is a German aircraft.

The tendering process has gone on for well over two years. We are concerned that any cost advantage associated with the Shorts-Grob proposal results in part

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from a hidden subsidy, but we do not know whether that is the case. We know that the RAF has stipulated that, if the Firefly is chosen, it wants the more powerful Firefly 260, which is bigger and has more expensive running costs. That is no surprise, but it is a surprise that we hear that elements in the RAF are saying to Ministers, "Oh, but this aircraft has higher running costs, so we had better have another one." They asked for the aircraft and then said that they do not want the smaller versions. That is extraordinary, and Ministers must take a strong line because much is at stake.

The order is critical to maintaining an aircraft-building capability at Slingsby in Kirkbymoorside. Potential orders from Saudi Arabia, Jordan and Canada are on hold while they wait to hear whether the RAF endorses the Firefly, which we know it already has because it has been flying it for some time. It is inconceivable that, in military equipment of this type, the Government could prefer a German alternative to a British product that has been so overwhelmingly endorsed by our major NATO allies.

It is said that some of the top brass in the RAF do not like the Firefly and are making a lot of criticisms and excuses to undermine ministerial confidence, saying that its design is 30 years old, that the cockpit is too small, that visibility on landing is poor or whatever. That is fine. All I can say is that the Firefly meets the anthropometric specification that was laid down by the RAF in the first place, and if it did not like it earlier, it should have said so then, not now. I therefore urge Ministers to come to a rapid decision.

I should be grateful if the Minister could shed a little light on the proposed management of the forthcoming tranche II of the Hercules rolling replacement programme. Conservative Members are clear that an enhancement of lift, both airlift and sealift, is necessary to provide the mobility that is required for the joint rapid deployment force. There can be little argument that such an enhancement is needed, and sooner rather than later. Britain must be capable of deploying forces in support of United Nations-sponsored operations and humanitarian missions.

I am somewhat perplexed by the knots into which the Government seem to have tied themselves on the issue. Are we, for example, to participate with the French and Germans on the Antonov-70 aircraft, or are we to procure the Boeing McDonnell Douglas C-17s? Will the Government find the money--the £600 million--that is required as a deposit for development of the future large aircraft under the single phase commercial approach? If so, which defence programmes will the Government cancel to find it? I dare say that the Minister will say, "Wait for the defence review," but this is a sector where damage is being done to the British procurement industry.

Given all the uncertainties, how will the Government ensure that adequate levels of airlift, strategic and tactical, and sealift will be introduced into the inventory within a reasonable time frame? Will the Minister reassure the House that the pressing need for additional airlift will not become mired in European industrial rationalisation? That has been an eye opener.

On 9 December, the MOD and the Department of Trade and Industry issued a joint press notice, as the Minister will recall. It started by saying:

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    They were given until the end of March. On 27 March, a joint press notice from the DTI and the MOD said:

    "The government has received the response from the Airbus partners. The President of the Board of Trade, Margaret Beckett and Defence Secretary George Robertson, who presented the 9 December statement on behalf of the UK, welcomed the joint report and the wide measure of agreement that has been reached between the partners."

On 20 April, we again read in an MOD press release:

    "The Ministers welcomed the response from aerospace and defence electronics companies to the call last December by the leaders of France, Germany and the United Kingdom to draw up restructuring plans. They encouraged industry to focus on the goals and means of restructuring, and to keep up momentum."

But, oh dear, on 1 April Mr. Kevin Smith of British Aerospace told the House of Commons Defence Committee, when asked why aerospace and defence companies were dragging their heels in industrial consolidation and submitting a response that was "short on detail", that it was

    "to protect the competitiveness of not only aerospace, but all UK industry."

He said that the prime concern of a European consolidated company must be clear shareholder-driven values and he was "not sure" that the French Government were committed to such a goal. He said that we

    "can't be definite on Airbus reconstruction"

because of concerns about the French Government's ideas on their ownership role.

Then, on 15 April, we read in Jane's Defence Weekly that Mr. John Weston, chief executive officer of British Aerospace, had said:

The article continued:

    "Weston's stance came a week after the French government had insisted on state-ownership and the Spanish government demanded private ownership.

    Weston said that BAe is completely opposed to the French notion of creeping consolidation, which will, he believes, destroy plans for Euroco."

I hope that Ministers will be extremely realistic about that. I understand the great difficulties therein, but it is a matter of grave concern to our procurement companies that this seems to be going wrong, so let us cut the buoyant press releases and do some sorting out in Europe--an area where the Government are supposed to be so well received.

I warmly welcome the Minister's announcement, made very quietly this afternoon, about the future arrangements for the in-house deep repair of aircraft. That was sensible and we certainly support it, but I am a little concerned about the implications for jobs, particularly at Almondbank, a remarkable establishment that I visited with members of the Defence Committee a couple of years ago. Will the announcement mean that that facility will remain at Almondbank, or does it imply a relocation?

We were a little disappointed, to say the least, by the Government's paper on the Defence Diversification Agency. There were no surprises about swords into ploughshares and there was little that was new. There was

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well-deserved recognition of the success of the Defence Evaluation and Research Agency and its partners, but all the difficult bits of the DDA were kicked into touch and left to the strategic defence review, so we are looking forward to what Ministers have to say about the tricky bits of the DDA and about DERA's future.

I recall a very early meeting at the start of all the business of contractorisation when the then Minister briefed me about contractorisation at Boscombe Down, which was where it all started. It has had it for a long time. It has been named and renamed--probably re-branded in current parlance--but DERA's future is crucial.

Industry is concerned that although excellent progress has been made on procurement and restructuring, there has been less movement on research and technology in general and on DERA's future in particular. It is concerned about the overall trend in defence research and technology, including dual-use activity and the way in which DERA operates.

The first point that industry is concerned about is that DERA must be responsible for maintaining an impartial source of expert advice to the MOD. That role is fundamental in implementing smart procurement, because the new procedures emerging from the MOD procurement executive and industry consultations depend on the MOD's being able to make informed judgments on technical issues.

In addition to supporting the MOD's intelligent customer capabilities, DERA's status as a Government organisation is crucial in maintaining access to material from other Governments, particularly the United States. Any dilution of that status through privatisation or other means would pose a direct threat to that function.

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