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Mr. Kevan Jones (North Durham): I am very reassured by my hon. Friend's comment that the aircraft carriers

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will be built in the UK and will support UK shipyards. However, is he aware of what has recently occurred on Tyneside? Swan Hunter shipbuilders sub-contracted work on its alternative landing ship logistics to Dutch yards while the yards on Teesside and elsewhere remained empty. Work that could be done in this country is not being done here. Will he therefore assure me that work that is given to a prime contractor will not be sub-contracted to Dutch or other European yards?

Mr. Ingram: We became aware of that development when my colleague in the other place was questioned by, and gave evidence to, the Scottish Affairs Committee. It was news to the Department, but it acted very quickly. It made clear to Swan Hunter our view of the build strategy. On the work that has been put out to tender, I understand that progress has been made to seek to have it done in the UK. However, we must recognise that there may be occasions when there is no capability for elements of a new build ship. It is not just a case of saying we have the skills base and the work should be done here. Sometimes sophisticated judgments have to be made and, when the work goes out to tender, European procurement rules may come into play.

Mr. Jones: I am grateful for that answer, but I raised the matter with the Ministry of Defence in a written question that I tabled last November. The Department assured me that it would keep a close eye on the sub- contracting work at Swan Hunter. Some sub-contractors in the region suspected in November that the problem would arise. If people in the north-east knew about it then, surely the Ministry should have known about it, too.

Mr. Ingram: I do not understand the allegation. Is my hon. Friend saying that we have let down the north-east? If so, the opposite is true. I have given a commitment to UK shipyards which he should welcome. I said that the specifics relating to that section of the hull, which involved specialist steel cutting, were made known when evidence was given to the Select Committee. We acted immediately and the company was left in no doubt about its approach to procurement. Rather than being negative about what we are doing for UK shipbuilding, my hon. Friend should rejoice in the fact that we have given a tremendous commitment to UK shipyards. There is an old saying in Glasgow: it was tears that made the Clyde. It seems to me that the Ministry of Defence saved the Clyde, and that would probably be reflected in shipyard footprints throughout the UK.

Mr. Ian Davidson (Glasgow, Pollok): As a Member who represents a Clydeside constituency, may I say how grateful we all are to the Minister and his colleagues for awarding the Type 45 and aircraft carrier contracts, which will require a tremendous amount of metal work, to our area? However, will he bear it in mind that competition and capacity for the future are also important, not only in terms of metal shaping, but in terms of the systems? The key to having future capacity to bid for major orders such as aircraft carriers will be the retention of a systems capacity. Given that one of the major bidders for the aircraft carrier is not British owned, is the Minister satisfied that if that company is awarded the status of prime contractor, the capacity for systems construction will remain in this country?

Mr. Ingram: If my hon. Friend holds on, I will set out a review of industrial policy as it relates to procurement

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policy. However, he makes an interesting point. He claims that one bidder is not British, but if both bidders are non-UK owned, what would that mean for his argument? Will we be unable to place the order with the other company if it is taken over by a foreign competitor? We have to be clear that our drive and intention is to get such vessels built within UK shipyards where there is capacity to do so. However, we may get better value for money elsewhere in many cases that involve specialist equipment. The important consideration is not necessarily that we get British equipment, but that we get the best equipment.

Jim Knight (South Dorset): My right hon. Friend mentioned the decision on basing the aircraft carriers. I read his statement and letter to me with great care and was disappointed that the Department could not make the brave decision to return the basing of the aircraft carriers to Portland. I was interested to read his comments on a temporary berthing for the carrier. Is the Department thinking exclusively of Southampton for that role, or will it consider other prime locations on the south coast?

Mr. Ingram: My hon. Friend, who always approaches such matters with great care and diligence, is right about his area not benefiting from that particular announcement. The announcement that applied to Southampton related to the unusual circumstances in which both aircraft carriers are in port at the same time. At some point in the future we will have to cater for those circumstances by providing additional berthing facilities. On the basis of an intensive study, I can say that Southampton offers the best facilities with the minimum investment. Depending on what facilities were provided, it could cost hundreds of millions of pounds to invest in a support berthing capability, and it might then never be used, so we have to exercise judgment in determining where to base ancillary support.

My hon. Friend is very active both as a member of the Defence Committee and in representing his area, and I know that he will continue to raise these matters with me, but I hope that he understands the background to this decision.

Before that exchange, I was commenting on specific matters relating to the aircraft carrier and the Astute class of submarine. I pointed out the delays to that programme and to the landing platform dock ship programme. It is worth repeating that the company is in no doubt as to our expectations for its performance on those ships.

Although new warship platforms are important, we must be able to support them as part of our overall capability to deploy world wide. We need to determine the best way of supplying and replenishing the modern Navy, following the retirement of our ageing Royal Fleet Auxiliary support vessels. It is vital that we get those crucial capabilities right.

Looking to the future, I can announce that we are establishing the military afloat reach and sustainability project team—or MARS, in MOD-speak—at the Defence Procurement Agency in Abbey Wood to determine the best way to meet those needs. That could include more new build, new design ships, more flexible than our current single-role support shipping, faster, and able to adapt to a number of different roles. I expect to see the solution being phased in over the latter half of the decade. As a first step, industry will shortly be briefed on that.

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We will welcome innovative proposals, which might include public-private partnership arrangements. I hope for an imaginative and enthusiastic response from British industry. The spending review has given us the scope to launch that important renewal of these key capabilities.

I have already set out where we are on the future aircraft carrier project. The aircraft selected as having the best potential to carry out strike, air defence and reconnaissance missions from the new carriers is the joint strike fighter. The JSF will be a supersonic aircraft, incorporating advanced stealth technology and capable of conducting multi-role operations from carriers and from land. It will be able to locate, monitor and attack targets with precision weapons while protecting itself from air or surface threats.

The project will bring major benefits to UK companies, including BAE and Rolls-Royce, which could gain work valued at £3 billion during the current phase of the programme, and at £24 billion for downstream production and support activities. That could sustain or create some 3,500 jobs in UK companies, rising to 8,500 or more for production and support work.

A detailed evaluation of the short take-off/vertical landing and carrier variant of the JSF is currently under way to establish which would best meet our needs. The House will, of course, be advised accordingly once we have reached a decision on that.

The JSF will replace the capabilities offered by the joint force Harrier. The decision to withdraw the Sea Harrier earlier than previously planned reflects the age of that aircraft—it is 20 years since the Falklands war. The major upgrade required to keep it viable would have been technically very risky and expensive, and the world has moved on. Our focus is now on expeditionary warfare, with carrier-based aircraft principally used for land attack operations. The Sea Harrier makes little contribution to that.

We will instead significantly increase our land attack offensive capability by upgrading the Harrier GR7 to GR9 standard, enabling it to use smart and precision weapons. The recent Defence Committee report on major procurement projects acknowledged the rationale behind that decision, and will no doubt make a further contribution on that.

Mr. Mark Francois (Rayleigh): Will the Minister give way?

Mr. Ingram: I was expecting some response to this point, but may I just finish it?

The Sea Harrier also lacks utility in countering the threat from sea-skimming missiles, whereas modern ship-borne systems have been designed for that purpose. I recognise that its drawdown removes a layer of air defence in the short term—there is no question about that. However, it is important to remember that there are other layers of defence—for example, Type 42 anti-air warfare destroyers armed with Sea Dart anti-aircraft missiles and Type 22 and 23 frigates with their point defence missile systems and close-in weapon systems.

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