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Defence Industry Consolidation
9. Mr. Gerald Howarth (Aldershot): If he will make a statement on his policy concerning defence industry consolidation in Europe. [70499]
The Secretary of State for Defence (
Mr. George Robertson): The Government are committed to encouraging and facilitating the restructuring of the European defence industry so that it is globally competitive and can help to strengthen European defence. It is not for Government to prescribe the course that that restructuring will take or the structures to emerge. Those are primarily for industry to decide, based on its own commercial judgment.
Mr. Howarth: Given that the enlarged British Aerospace-GEC Marconi will constitute the third largest defence company in the world, and also given that any trans-border mergers between British companies and continental companies will inevitably limit our freedom of movement, I am sure that the House will welcome the Secretary of State's assertion today that that is primarily a matter for the companies themselves. As the Government are clearly standing back from the issue, can the right hon. Gentleman tell the House what the Government's reaction would be were the enlarged British Aerospace to seek to merge with DASA or with Thomson?
Mr. Robertson: First, I shall make clear the legal position. The proposed merger of British Aerospace and Marconi will be subject to regulatory approval, and it is therefore not appropriate for me to comment on that at this stage. The views of the Ministry of Defence on the military aspects of the merger will be given in confidence to the regulatory authorities at the appropriate time.
The hon. Gentleman spoke about subsequent moves that might take place in European defence. As I said, that is a matter for the industry at a European level to decide. The Governments of the seven countries involved in the initiative have made it clear that we will do what we can as Governments to make sure that such rationalisation throughout the industry can take place. The European problem is that our industries lack the scale to be globally competitive. Rationalisation is therefore not a luxury, but a necessity: either we rationalise, or we will have no jobs left in this valuable and important industry.
Dr. Doug Naysmith (Bristol, North-West):
Will recent consolidation have any effect on the Department's future large aircraft project--a subject of great interest to my constituents in Bristol at both British Aerospace and Rolls-Royce?
Mr. Robertson:
The ability of the European industry to undertake such projects effectively and on the basis of value for money depends largely on their remaining competitive and staying ahead of the game. The Government are still committed to the future large aircraft project. We look forward to receiving the details that will inform the decisions that will be taken. The size and nature of the overall industry and our ability to stay alive in the global marketplace will depend on a rationalisation which I believe to be important and, in many respects, urgent.
Mr. Michael Colvin (Romsey):
Thank you, Madam Speaker, for a second chance to ask a question.
The Secretary of State will no doubt welcome the establishment of the organisation for joint armament co-operation--known as OCCAR--involving Britain,
Germany, France and Italy. However, bearing in mind that we must not create a fortress Europe in the defence industries, what will happen if OCCAR, being a programme-based organisation, happens to have in its programme a project in which the Americans have an interest? Will the Americans be able to join OCCAR?
Mr. Robertson:
I have received no indication of the Americans wanting to join OCCAR, whose purpose was co-operation among the European signatories. I was one of those signatories, and I believe that the organisation has great potential for the future. There is no intention to create a fortress Europe in the rationalisation or in the creation of OCCAR. However, we must recognise that a great European defence industry that employs so many people in so many countries, which in many instances is at the leading edge of technology and has made such a huge contribution to all our economies, will not be able to compete with the American giants in its present form. There will be choice in the international marketplace and there will be jobs in an industry that makes such a huge contribution, but things will have to change.
35. Sir Sydney Chapman (Chipping Barnet):
What proportion of the commissioners' assets are currently allocated to property portfolios. [70526]
Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners):
The annual valuations as at 31 December 1998 are still being confirmed. At the end of 1997, the commissioners held 26.5 per cent. of their assets in property.
Asset allocation is reviewed annually by the assets committee and the review for the current year is under preparation.
Sir Sydney Chapman:
Will the Second Church Estates Commissioner tell the House how the figure of 26.5 per cent. compares with, for example, the figure 10 years ago, just before the property industry went into recession? Does the hon. Gentleman agree that the real lesson to be learned is that the commissioners, within their self-imposed ethical restraints, should spread their investments across the spectrum rather than relying too deeply on one or two sectors?
Mr. Bell:
I am grateful for the hon. Gentleman's supplementary question. He might wish to know that at the end of 1997, 13 per cent. of the commissioners' assets were in commercial property, with 7.5 per cent. in agricultural property and minerals and 6 per cent. in residential property. As for the heart of the hon. Gentleman's question, about 10 years ago and into the early 1990s, 60 per cent. of the commissioners' portfolio was in property and about 30 per cent. in the stock exchange. The hon. Gentleman makes a valid point that
Mr. Peter L. Pike (Burnley):
I recognise that valuations are changing all the time in the sectors to which my hon. Friend has referred, but can he give any indication of the guideline percentage that the commissioners believe is right to have invested in property?
Mr. Bell:
We constantly review our investment policy and strategy so as to get the balance right. Given the movement in the world's stock markets, which has generally been upwards--certainly in our own stock market--we are satisfied that the present balance between property rights, investments in stocks and shares and the holding of cash for future investment is proper.
37. Mr. Ben Chapman (Wirral, South):
If he will make a statement on plans to reduce crimes or acts of vandalism against churches. [70528]
Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners):
I am well aware of the nature of the problem of vandalism against churches. On average in a given year one church in three will make an insurance claim relating to a malicious attack on a building. Responsibility for the care of church buildings lies locally with the parochial church council but the Church both at the centre and in the diocese is well placed to give support to parishes in tackling this issue.
Mr. Chapman:
Is my hon. Friend aware that in my constituency, be it in Heswall, Bromborough, Bebington or Eastham, churches are often vandalised? This might take the form of graffiti on the wall, interior desecration or gravestones knocked down, for example. Is my hon. Friend aware also that this serious and deep-felt problem is growing and needs to be contained? Will he consider an extension of the church-watch scheme or encouraging parishes to promote youth projects, or other solutions to that serious issue?
Mr. Bell:
I am grateful to my hon. Friend for drawing attention to what is a sad and serious problem. The Church must balance the fact that we need access to our churches for prayer, contemplation and meditation with the need at the same time to keep churches locked for security purposes. My hon. Friend makes a valid point in drawing attention to certain schemes that are extant, and I draw his attention to a further scheme which is the first Church risk management group, which has been established for the diocese of Leicester. This group will visit parishes and assess and advise on potential risks. It will work closely with the diocesan advisory committee and appropriate outside agencies to improve fire safety, crime reduction levels and risk management in all church property. The scheme has already attracted much interest
Mr. John Bercow (Buckingham):
In the light of the recent Second Reading of the Employment Relations Bill, what discussions has the hon. Gentleman had with the Church Commissioners regarding fair treatment of members of the clergy?
Mr. Bell:
I would hope that the Church will be extremely fair to all its clergy and will take that legislation into account. There are discussions on that issue in the General Synod, as well as among the Church Commissioners, and we take the question of charity at home very seriously.
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