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Mr. Mike Hancock (Portsmouth, South): I am delighted that the Secretary of State has made the announcement today, and I am sure that everyone in Portsmouth is delighted at the prospect of a return to shipbuilding at its naval base. That will happen only if Fleet Support Ltd. co-operates--and, more importantly, if the Ministry of Defence makes facilities available to Vosper in the naval base and dockyard area. I hope that there will be no impediment in the way of that. I am also grateful for the Secretary of State's comment about module development. I hope that if it is not possible to build the ships in Portsmouth dockyard, the MOD will try to secure Vosper's support at least for the building of some of the modules there.

Mr. Hoon: I am grateful for the hon. Gentleman's constructive approach. I made it clear that ultimately, Vosper Thornycroft must decide on the opportunity. Its facilities in Southampton will certainly be made available for the modular construction process that we anticipate, providing benefits across the country. Instead of the benefits of such a contract being located in a particular

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yard or two, as has historically been the case, there is an opportunity for the whole of the UK's shipbuilding industry to benefit.

Dr. Alan Whitehead (Southampton, Test): May I express my delight at the announcement that the second of class will be built on the south coast by Vosper Thornycroft--a shipyard with a proud record of building first-class vessels for the British Navy over many years? Naturally, my personal inclination would be towards ensuring that it was built at Woolston. Bearing in mind what my right hon. Friend has said about the possibility of the work going to Portsmouth, will he assure me that any decisions will be reached purely on commercial considerations, and that the requirement, were production to be transferred, for Vosper to use a Royal Navy dockyard, will not receive any additional consideration other than that of commercial best practice?

Mr. Hoon: I certainly understand my hon. Friend's concern. I have always emphasised the importance of the commercial considerations that will effect any decision taken by Vosper Thornycroft. Whatever decision it takes on the precise location, I am confident that it will continue to require the very considerable skills of the work force in and around Southampton, which have been built up over many years and will still be required to complete such a contract--as well as future warship orders that the Government will be making in due course.

Dr. Norman A. Godman (Greenock and Inverclyde): As an ex-shipwright--the only one in the House, I think--I am always delighted to hear news of vessels being built in our yards. I only hope that Cammell Laird and other yards will secure orders in the future. I hope that my right hon. Friend will forgive my greed, but I want to see the four ro-ro vessels built on the upper Clyde, by my constituents. I think that I am right in saying that I have more constituents in those yards than any of my hon. Friends. It may not be within my right hon. Friend's gift, but I would be grateful if he would ask BAE to ensure that when workers are recruited to Scotstoun and Govan, they are given decent terms of engagement, not short-term contracts. If the work is there, craftsmen and others should be given security of tenure.

Mr. Hoon: It was only on 6 July that we received the revised bids relating to the ro-ro ferry order. A great deal of detailed work has already gone into an assessment of those bids, and a lot of work was done over the weekend to give us an idea of how they were shaping. More work will still have to be done, but I will certainly try to ensure that the House is given as early a warning as possible of the likely outcome of the bids.

Mr. David Davis (Haltemprice and Howden): There is much to welcome in the Secretary of State's announcement today, but may I ask him how he will deal with one potential problem? Recurrent in naval systems is the problem of matching--interface. That has led to cost and performance problems over many years, and it is clearly a potential issue with the type 45 and the PAAMS. How will the Secretary of State deal with that, given that there are two separate contracts, one under English law and one under French law?

Mr. Hoon: The right hon. Gentleman is right to raise the issue. We have been concerned about it, because of

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previous problems that have arisen with closed IT architecture systems. Specifically, for all the reasons that I hope I have set out to the House already, the IT systems need to be capable of being enhanced and developed, and must also able to respond to brand-new systems that may still be in the process of being thought up, never mind designed. Central to our approach is the idea that the IT systems on board the ships will involve an open architecture, and will be capable of being enhanced and of interfacing with new systems dependent, using a completely different approach. Built into the heart of the radar systems is the ability to interface with new, and, I hope, developing technology.

Mr. Roy Beggs (East Antrim): I welcome the announcement made by the Secretary of State today, on behalf of the Royal Navy and the British shipbuilding industry. I recently welcomed to my constituency HMS Somerset and HMS Quorn, and I hope that I am still around when the first type 45 can be invited to call in to the port of Larne. Can the Secretary of State tell us whether the radical modular construction technique will extend competition so far as to enable Harland and Wolff to compete, and perhaps even provide an opportunity for Short Brothers?

Mr. Hoon: As I made clear in my statement, and in answer to a number of members of the shipbuilding trade union in the House, it is important that the approach is seen as an opportunity not just for a single successful shipyard, or two successful shipyards, but for all those engaged in shipbuilding, and certainly those in Northern Ireland, to participate in a highly competitive process. The challenge is there for British shipbuilding. If there are British shipbuilders that are competitive and capable of offering bids that win the day, there is work available, and we will be delighted to receive the orders from Northern Ireland, just as much as from any other part of the United Kingdom.

Dr. David Clark (South Shields): I very much welcome this afternoon's announcement, which is the first of the largest warship orders for many decades. It is good news for Scotland and the south coast of England. My right hon. Friend placed great emphasis on the need to maintain a strong shipbuilding capability. Does he know that only three years ago, 14,000 people worked in river-related jobs on the River Tyne, but that fewer than 1,000 people now work in such jobs? In view of my right hon. Friend's emphasis on commercialisation, will he explain the way in which a shipbuilding company such as Swan Hunter can participate in the order when it is up against its prime competitors, BAE and Vosper Thornycroft?

Mr. Hoon: The way in which the competition is organised is specifically designed to allow not only for competition between the two companies that I have mentioned, but to ensure that those companies make sure that others have the opportunity of participating, especially in the construction of the modules. Many hon. Members know far more about the history of British shipbuilding than I. However, specific shipyards have depended too often on particular orders for their survival. Indicating that the first three ships are part of a planned class of 12 provides an opportunity for some yards to plan

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for the future. The benefit of such planning for the taxpayer and the Government is that we anticipate that it will reduce the yards' costs, and thus the cost to the British taxpayer. It will also allow the yards to plan ahead, and not be dependent on the single order approach that has done so much damage to British shipbuilding in the past.

Mr. Alasdair Morgan (Galloway and Upper Nithsdale): I welcome the announcement, and pass over the remarks of the hon. Member for Glasgow, Kelvin (Mr. Galloway)--which owed more to the state of mind of the Scottish Labour party than to the order.

The first and third warships will be assembled by BAE Systems. The Secretary of State said that the first warship would be launched at Yarrow. Where will the third vessel be launched? On modular construction, will the Secretary of State outline a typical percentage that may be contracted out from the launching yard under the arrangement?

Mr. Hoon: I am grateful for the hon. Gentleman's welcome. However, my hon. Friend the Member for Glasgow, Kelvin (Mr. Galloway) had a point when he contrasted the policy, which I assume that the hon. Member for Galloway and Upper Nithsdale (Mr. Morgan) supports, of taking Scotland out of the United Kingdom, with applauding an order placed on behalf of the United Kingdom Government. The hon. Gentleman is being a little uncharitable to my hon. Friend, who used his powerful and logical mind to expose the dishonesty that the hon. Gentleman appears to want to avoid mentioning. However, in view of the hon. Gentleman's generosity, I shall not make too much of that.

If the third ship is to be assembled on the Clyde, it follows that it will be launched from there.

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