Examination of Witnesses (Questions 280
- 299)
WEDNESDAY 24 MAY 2000
SIR ROBERT
WALMSLEY AND
VICE-ADMIRAL
SIR JEREMY
BLACKHAM
280. I think you have already indicated the
answer to the next question but I would like to pursue it just
a shade further. Let us suppose on the black downbeat scenario,
as it were, that there is a very significant delay after we had
selected the JSF: we selected it and after we had committed ourselves
to design the carriers appropriately, would it then be the case
that if there were a very significant delay of JSF that the carriers
would have to be delayed themselves, or would it be in any way
practicable to switch to another contender to be an alternative
aircraft for the carrier? I suspect the answer is that by this
stage it would be too late to switch judging from what you have
just said about the way the carriers would have to be designed
and tailored to meet the aircraft that we selected.
(Vice Admiral Sir Jeremy Blackham) I think it would
depend on which version you had chosen. If you had chosen a conventional
take-off aircraft then it is not impossible to suppose that one
might switch. If you had chosen a vertical take-off version there
are not many competitors. It is worth remarking that we are making
the choice of aircraft manufacturer later this year and we do
not have to decide at that point the form of launch, whether it
is a vertical one or a conventional one. We do not have to fix
the final design of the carrier until we do that, so we have actually
got a bit of time to see the aircraft fly, to monitor the progress
of the programme.
281. My final question on this is the one I
indicated earlier that I would be asking. Would you please tell
us a little bit about some of the other aircraft that are in contention
for this contract?
(Vice Admiral Sir Jeremy Blackham) The F18 is well
known about and Rafale is the French version which will have some
carrier experience before we need to use it. There is thought
about a marinised version of Eurofighter which we do not currently
have in the programme. That involves changes to the structure
of the aircraft. There has been some thought given as to whether
an advanced Harrier might be designed. None of these aircraft
yet exist in carrier form because we have not selected it.
(Sir Robert Walmsley) The number of aircraft that
the Royal Navy would require for carrier operations is relatively
small and the loading on to the price of production of those aircraft,
any significant development costs, really makes it a very unattractive
proposition in terms of value for money.
282. What numbers of aircraft are we talking
about?
(Sir Robert Walmsley) Perhaps 60.
(Vice Admiral Sir Jeremy Blackham) It would probably
be slightly more than that because one of the decisions that the
SDR made was to replace the Harrier FA2, the naval Harrier, and
the Harrier GR7, the RAF model, with the same aircraft, so I would
expect the numbers[3]
to be a little greater than that. The actual operational fleet
combined might not be more than about 60.
Chairman
283. If the MoD selects Thomson-CSF will there
be any advantage in going the whole hog and purchasing Rafale
to fly off it? Is there any synergy between the French bid and
the type of aircraft flying off it?
(Vice Admiral Sir Jeremy Blackham) I would not have
thought so, not unless it is the right aeroplane. We are talking
about the design of the ship and that is an independent thing.
It could be closely related to the aircraft but I would not have
thought in a commercial sense—
284. You gave a very serious answer to what
was meant to be a very provocative question.
(Vice Admiral Sir Jeremy Blackham) One I hope I will
not have to answer.
Chairman: The next question I very reluctantly
hand to my colleague, Mike Gapes, but I might come in. One from
Mr Hancock first.
Mr Hancock
285. I am very interested in what you said,
I thought your serious comment was to a serious question from
the Chairman.
(Vice Admiral Sir Jeremy Blackham) I always assume
the Chairman asks serious questions.
Chairman: I hope it was not a serious
question.
Mr Hancock
286. I thought it was. He does pose the question
that you yourself have posed about designing the ship around the
aircraft. Are we still on target, or is it the wish of the MoD
to go for carriers in excess of 40,000 tonnes which would be capable
of taking 30 aircraft or maybe more?
(Vice Admiral Sir Jeremy Blackham) I know there is
a great fascination with the tonnage of a ship which personally
I do not share. The key issue is what is the aircraft going to
be and what numbers are we going to deploy. The public position,
and I have no reason whatsoever to dissent from it, is that we
might want to deploy up to 50 aircraft but we would have to fix
the number a bit more clearly than that. Once we have decided
on the aircraft we will have to build a carrier to accommodate
it. Should it be a conventional take-off and landing aircraft
we will need arresting gear and catapults and that will cause
the ship to be larger and certainly more expensive than if we
do not need it. Depending on the size of the aircraft we will
have to consider the size of the flight deck and the size of the
hangar arrangements. Different sized aircraft require different
amounts of space, you have got to build in a gap between them
or they all bang into each other. It does not make sense to determine
exactly what the size of the carrier will be until we know what
the aircraft is.
287. That goes right back to Julian Lewis' point
about the type of aircraft delays in getting a decision on the
conventional take-off fighter as opposed to the vertical take-off
fighter. What is your timescale now?
(Vice Admiral Sir Jeremy Blackham) For?
288. For making a decision on these carriers?
(Vice Admiral Sir Jeremy Blackham) The carrier will
have to be ordered in about 2005. We are expecting to down select
the type of aircraft, the make of aircraft, later this year and
we will have to consider the actual version system after that.
That will still be well before the decision to design and order
the carrier.
(Sir Robert Walmsley) I think I would like to just
make a point there. It is absolutely true, of course, that these
extra equipments have to be accommodated and designed if we choose
a conventional take-off and landing aircraft. A carrier is not
a complicated ship, it is basically a big box with a big hangar
inside it and a flat deck and a sufficient degree of command and
control arrangements to enable the ship to communicate, as it
has to. It is not going to have lots of other weapons. It is not
full of systems like a destroyer that is stuffed full of the most
complicated electronics, etc.. When you go on board a carrier
it is basically empty, it is just a box. What is complicated is
the aeroplane. I do not want to allow us to create an impression
in your minds that the construction of the ship is an immense
technological achievement. I have got Mr Baghaei sitting behind
me who is the leader of the Integrated Project Team, who I asked
to come to hear the Committee's enthusiasm for this programme
today. He used to be a production director at Kvaerner on the
Clyde. He knows about building ships. He is not going to allow
himself to get bogged down in some minutiae as to whether or not
it is difficult to accommodate. We will do the ship.
Chairman
289. We went to Newport News and we have been
on board the STENNIS. I had to forcibly stop Mr Gapes bringing
his STENNIS hat. The ones we have been on are not strictly boxes.
(Sir Robert Walmsley) That is very interesting, Chairman.
I absolutely agree because I went on the sister ship HARRY S TRUMAN
in Newport Shipyard and the reason that ship is so complicated
is because it has nuclear propulsion. We are not going to do that.
Mr Gapes
290. Sir Robert, you recently announced that
your Deputy, Mr John Howe, was going to leave his present post
at the Defence Procurement Agency to take up a secondment with
Thomson for two years.
(Sir Robert Walmsley) Yes.
291. And continue to be paid by the MoD during
that time. I would like to ask you a few questions about this.
Clearly Thomson are involved in two projects we have been talking
about this morning. What do you hope to gain by the secondment
of Mr Howe?[4]
(Sir Robert Walmsley) More effective
competition from a potentially very significant UK based prime
contractor. Everybody in the room will know that we saw last year
the completion of the merger of the UK's two biggest defence companies.
I have spoken often enough about my huge enthusiasm for competition
as a method of stimulating innovation. I believe it is very important
indeed to the armed services and to the Government and certainly
to my organisation that we continue to derive as much benefit
from competition as possible. Thomson have not so far been a prime
contractor in the United Kingdom in a very big way. Their acquisition
of Racal puts them in a position where it seems to me they are
potentially able to begin to look a bit like Marconi used to look
like, a hugely competent defence electronics company, with manufacturing
and engineering facilities in this country, who is also able to
take on prime contracting for ships like the carrier, just like
Marconi took on the prime contracts for Astute-class submarines.
Of course if you are going to do that successfully a number of
pre-conditions have to be in place. The company has to understand
how MoD works as a prime contractor. That is the first thing that
Mr Howe will be able to explain very clearly to Thomson. I know
they welcome it and it underpins in many ways this competition
for the carrier that we have been talking about. The second point
is security. When you have an owner who is basically centred in
a foreign country and yet you wish to operate subsidiaries in
this country, totally isolated in the security sense from the
ownership of the company, the confidence with which other allies
and the Ministry of Defence look to that company to operate security
procedures is fundamentally important. These are not matters I
would like to go into in open session but they are detailed and
they are hugely important to the flourishing of the Thomson operations
in this country. Mr Howe will take a very close interest in those
aspects to ensure that we do not have any stumbles there.
292. Is it right then that you are promoting,
in fact, the consolidation of the British defence industry by
doing this in a way? Your memo refers to the continuing consolidation
of the defence industry. It seems you are almost wanting to build
up an alternative power base to British Aerospace, is that what
you are doing?
(Sir Robert Walmsley) I do not like the phrase "power
base". I want to build up an alternative competent prospective
prime contractor. If we do not do that we will lose competition
and all the benefits that we get from that in defence electronics.
We are doing quite well in other areas. We have got Lockheed Martin
but they have no substantial manufacturing base in this country,
they are a good prime contractor but it is almost an administrative
operation. We have to be very, very careful before we sink too
far down this route. I would say that GKN Westland is potentially
a competent prime contractor but, of course, they divested themselves
of their armoured fighting vehicle business which, in a sense,
has narrowed their focus again. We are struggling a bit to look
for a good competent prime contractor. As soon as Thomson pressed
the button on Racal I think I saw an opportunity there which we
did not want to let slip through our fingers.
293. You deliberately put Mr Howe into that
company because you see that as a way to build them up and make
them more effective?
(Sir Robert Walmsley) To make them more effective,
absolutely.
294. Which means they are more likely then to
get contracts in the future which would otherwise have gone to
British Aerospace?
(Sir Robert Walmsley) It means if British Aerospace
win a contract in competition with Thomson they will have had
to put forward some very good ideas.
Chairman
295. Are there any reciprocal arrangements?
Are very senior French Defence Ministry personnel being seconded
to us to help us win contracts against the French?
(Sir Robert Walmsley) Let me be quite clear, Chairman,
this is all focused on Thomson's competence in this country. It
has nothing to do with that competence in France. I am not aware
of any senior British Defence officials being seconded to France
in Thomson-CSF.
296. Vice versa? Senior Ministry of Defence
officials in France seconded to British companies to help British
companies compete successfully with the French companies?
(Sir Robert Walmsley) More is the pity, Chairman,
there are no British companies operating in a very big way in
France in this field. This is a completely separate matter. As
I think you know, the French Government are always putting people
backwards and forwards to industry and if there was a British
industry in France I am sure we would share a bit of that.
Mr Gapes
297. Is it your view that we should be encouraging
French companies to take a bigger and bigger share in the British
defence contracts?
(Sir Robert Walmsley) No, no it is not. My view is
that we cannot get ourselves into a situation where we are placing
defence contracts willy nilly with the only people in this country
who are capable of executing them. It is much better if you have
a choice.
Chairman
298. British Aerospace has quite a lot of competition
making it one of the more efficient British companies. I am not
trying to force this point but I am just trying to get my head
around the whole concept of we encourage a French company to acquire
Racal, we then allow them into a bid for a carrier programme in
this country and then we complete the generosity of the British
Government by handing them over a very senior civil servant who
has given evidence to us on many, many occasions. He is an exceedingly
senior and exceedingly competent person. We are now loaning him
to them and we are actually paying for him. This is the bit that
I find quite difficult, we are paying his salary whilst he goes
over to France and tells the French how to screw the British in
a competition with a British company. Now I am a great believer
in competition but is this concept not taken to absurd levels
when it is not even reciprocated by the French?
(Sir Robert Walmsley) It would be absurd, Chairman,
if it was anything like the scenario you describe. The first thing
is the British Government did not encourage Thomson to take over
Racal. We dealt with that situation when the two companies came
to an agreement. It was a very important opportunity for us to
think "How do we manage that?" Racal is a very good
British activity. Thomson are huge investors in domiciled British
defence industrial activities. They are the people who put money
into Short's missile systems in Ireland. Money did not come from
anywhere else. I hesitate to think what would have happened to
the future of that company if Thomson had not been prepared to
shoulder that burden. It is very interesting to see what Thomson
have done in terms of Pilkington Optomics. They have been wholly
responsible. Very interesting to see what they have done in terms
of the Thomson Marconi sonar. That is what has enlarged that company's
market. We are not relying on Thomson products coming from France,
we are relying on products from a number of good defence companies
operating in this country who happen to be owned by Thomson. It
does not mean the bits are made in France. It does not mean the
strings are being pulled from France. The chairman of Thomson-CSF
UK Limited was a former Minister in the previous Government, as
you know, in the Cabinet. We have got very, very senior people
now, UK nationals, in the Thomson organisation in this country
and I do not see it as a company which is, so to speak, having
its strings pulled tight from Paris. It is a really important
part of the scenario of the British defence electronics industry.[5]
299. Right. Well, we have agreed on almost everything
else you have said, Sir Robert, but I am afraid we dissent quite
startlingly on that. One further question in deference to our
late colleague, Michael Colvin. I do not think he ever allowed
any of us to ask a question on OCCAR. Can you bring us up to date
with the OCCAR Convention? Is everything now in place? What is
the current status of Belgium's and the Netherlands' applications
for membership of OCCAR? Another phrase I associate exclusively
with Michael, do you see WEAG and the WEAO—he was the only
one who knew what it meant—surviving the transfer of the
WEU's main functions to the EU? What is the state of play with
OCCAR, Belgium and the Netherlands and WEAG and WEAO surviving
the transfer of the WEU's main functions?
(Sir Robert Walmsley) OCCAR, as you know, we signed
the Convention at Farnborough in 1998. Four countries—the
United Kingdom, France, Italy and Germany. Since then the four
countries have been going through the process of ratification
which is necessary in order to obtain immunities, like not requiring
OCCAR people having to open their cases when they cross borders
and things like that. The position is that France has completed
ratification and has not surprisingly deposited the instrument
of her ratification in the appropriate building in Paris, because
France is the depository nation for the OCCAR Convention. The
United Kingdom completed that process last month, and we have
deposited our instrument. Germany completed the parliamentary
processes last year but, for reasons which nobody has been able
to explain to me, has not so far deposited the instrument in Paris,
which I just find inexplicable. It is the date of the last instrument
being deposited in Paris which makes the ratification effective.
Italy has not yet completed either her parliamentary process or
obviously the deposition of the instrument. It is quite difficult
to predict how it is going to turn out in Italy this summer. We
are still hopeful that they will complete it before their summer
break. Other perhaps more cautious people think September might
be a more likely date. If it is September, of course, then OCCAR
will be up and running as an independent international body in
September of this year. I would be disappointed if it is that
late because I would like to see OCCAR have a very formal launch
ceremony inviting Defence Ministers and industry from across Europe
to what will be a very significant development in the co-operative
armaments process. We will need a few months to plan that. I hope
to do that in November but if we do not get it all signed away
until in September it will be a bit too much pressure on the timetable.
Netherlands and Belgium, their applications are on the table.
The Netherlands one is much more mature than Belgium but both
countries accept all the founding principles of OCCAR. One of
the key prerequisites though is that they participate in a programme
and neither of them yet has found a programme which would be,
so to speak, their entry ticket on those grounds. I hope this
year that the Netherlands will sign up to join the Multi-Role
Armoured Vehicle, GTK in German, programme which we have under
way with Germany. That would be their entry ticket then and they
would enter OCCAR almost instantaneously. My understanding is
the Dutch Parliament has approved it.
3 Note by witness: the numbers referred to
are those for the RN and the RAF. Back
4
Also see written answer from MoD p 48. Back
5
Note by witness: the cost of seconded civil servants'
salaries are generally recovered from the receiving organisation;
Mr Howe's civil service salary will accordingly be recovered from
Thomson CSF (UK) Ltd. Back
| 
