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Mr. Deputy Speaker: Order. I have now to announce the result of the Division deferred from a previous day.

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On the Question on Section 5 of the European Communities (Amendment) Act 1993, the Ayes were 275, the Noes 179, so the Question was agreed to.

[The Division Lists are published at the end of today's debates.]

Defence Procurement

7.39 pm

Rachel Squire (Dunfermline, West): I shall touch on several issues. First, as my right hon. Friend the Member for Walsall, South (Mr. George) anticipated, I want to talk about defence procurement as it affects my constituency—namely, Rosyth dockyard—and secondly, I want to deal with some of the wider issues affecting defence procurement, British defence manufacturing and the interoperability of our forces with our United States and European allies, especially post-11 September.

I begin by saying how much I disagreed with the comments of the hon. Member for Yeovil (Mr. Laws) as regards the budget and the comprehensive spending review, and how much I welcomed the announcements on defence spending made earlier this week by my right hon. Friend the Chancellor of the Exchequer. The debate has been given additional importance by the announcement of the largest increase in defence spending for 20 years, representing 1.2 per cent. growth per year in real terms for the next three years. I trust the Government to deliver, and I trust that in three years' time the hon. Member for Yeovil may be willing to acknowledge that his figures were not correct.

Mr. Laws: I am grateful for the hon. Lady's patience, given that she has only just started her speech. Surely she is aware that the figures that I quoted are from the Government's own document. Which of those figures does she disagree with?

Rachel Squire: I was aware that they were in the Government's own document but, as became clear during the Minister's speech, in this House the interpretation of any quoted figures is often very much subject to—shall we say?—political bias.

I trust that the extra defence spending that was announced on Monday will be delivered. The Government have already shown their commitment to, and acknowledged the importance of, additional defence expenditure post-11 September. The events of the past few months make it even more vital that we provide our armed forces with the equipment and technology that they need for effective operations anywhere in the world. I pay tribute to the British armed forces, who have excelled themselves, especially in the past 12 months. Whether they are engaged in war fighting or peacekeeping, there are none better. We owe it to them to provide the equipment, support and logistics that they need, when they need them. We also owe it to their families to give the troops guns that fire and communications systems that work. When we talk about procurement, we must recognise that the core ingredient of any decision is people, whether they are members of the armed forces, employees in our defence manufacturing base, or those providing the vital support services that are needed to keep our planes flying and our ships afloat.

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That brings me to Rosyth dockyard. I want the Minister and hon. Members to recognise the major changes and challenges that Rosyth dockyard has dealt with in the past 10 years. Its core and secure area of work—submarine refitting—was removed by the disastrous, costly, and politically motivated decision of the previous Conservative Government. Rosyth naval base was closed, the entire dockyard was removed from the Ministry of Defence and sold to a private company, and the dockyard work force had to deal with thousands of redundancies and major changes to pay, conditions and working practices. I pay tribute to the dockyard work force not only for surviving the equivalent of a hurricane, but for achieving so much and looking to their future rather than the past.

A very effective partnership has been developed between Babcock Rosyth and the work force, and in recent years the dockyard has won additional work against fierce competition. It has reduced its costs and has delivered on cost and on time, and there has been high praise from the Navy, the Government and many parts of the MOD for Rosyth's skills and expertise, particularly as demonstrated by its recent refit of Ark Royal. It has delivered, to use the words of my right hon. Friend the Minister, real value for the defence pound. Given the recent unfortunate incident involving HMS Nottingham and the damage that she incurred, I would put in a bid for Rosyth dockyard being well equipped to help to mend that ship and to deliver her to full operational value. I should add that Babcock Rosyth has contacts in Australia and Babcock owns a dockyard in New Zealand.

As regards future procurement decisions, the reality for Rosyth is that, despite its present work load, in two years' time that allocated programme of work will have been reduced to virtually nothing. My right hon. Friend the Minister said today that industry must seek new work and not always rely on the Government to deliver it. I would make three points in response to that. First, Rosyth dockyard is providing the best, and at a good price. Secondly, it has vigorously sought other work and ventures elsewhere, with some success, but it is not sufficient to maintain a work force of 2,000. Thirdly, it is not competing with other dockyards on a level playing field, because the other two dockyards concerned have between them a guarantee of 10 to 20 years' work on submarines and the Type 45. Moreover, they have naval bases attached to them, with the admirals no doubt occasionally expressing their point of view.

I am worried by the trend in the thinking of the Defence Procurement Agency and the Ministry of Defence whereby all refit and maintenance work is to be located at the base port, because that would severely disadvantage the Rosyth dockyard work force. Given what Rosyth has delivered in cost savings and efficiency, combined with high standards of workmanship, I hope for a commitment from the Minister that it will have the same opportunities as the other two dockyards in obtaining naval work and competing on a level playing field. As the workers of Rosyth have told me, they have delivered on the demands made of them by Babcock and the MOD, and they would now like their efforts to be recognised and rewarded with some kind of secure future.

That brings me to one of the major procurement issues—the future aircraft carrier. Whichever company it is decided will be the prime contractor—Thales or BAE

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Systems—I urge it, the MOD and the Government seriously to consider bringing the assembly work to Rosyth. They would not regret it.

Rosyth has unrivalled experience in refitting and supporting the current aircraft carrier fleet and other types of warship. It has a deep water channel with unrivalled access to the sea. The Forth is not congested with a large volume of commercial shipping and leisure craft. Rosyth is adjacent to Royal Naval Armaments Depot Crombie, the only suitable deep-water berth in the UK for rearming a ship. It continues to have HMS Caledonia to support naval personnel and their families.

Rosyth has the largest non-tidal basin for ship repair in the UK—an ideal environment for assembly, outfitting and maintenance activities. By widening an existing dry dock and other modifications through a single investment, it could provide a facility suitable for assembly, outfitting, commissioning and maintenance as well as sufficient labour to undertake the work, drawing on a highly skilled work force from throughout Scotland and the north of England.

Before I conclude my comments on Rosyth dockyard and the possibility of a major share of the aircraft carrier work of the future, I want to emphasise that the dockyard work force acknowledges that work has been provided, and that without a change of Government in 1997, the yard would probably have closed by now. It welcomed the commitment that the Labour Government demonstrated to the biggest warship-building programme in more than 30 years.

I believe that the dockyard work force is also well aware that the defence procurement proposals of those who promote independence for Scotland, who are again notably absent, would mean, at best, a single, small warship. That is hardly sufficient to keep Rosyth, Faslane or the Clyde shipyards in operation.

Procurement is about delivering on cost and on time the equipment that our armed forces need to do the job that we ask of them to maximum effect. I want to make three points about that.

First, it is important to give all ranks, not only the most senior, the opportunity to comment on the design and type of equipment that they need to do the job. I understand from the Defence Procurement Agency and the integrated project teams that that is being done now. I hope that the opportunity to comment and influence will be increased.

Secondly, it is vital to have a quick fix process for pieces of equipment that clearly do not work. We have heard a great deal about the SA80s, so I shall not go over ground that has already been covered. I welcome the measures that the Government have put in place to try to ensure that we never repeat the saga of years of failure of equipment and of failure to tackle the problem properly. I look forward to ensuring that our armed forces have the equipment that gives them what they need when they need it.

Thirdly, we accept, especially after 11 September, that no nation's forces are likely to operate alone. It is therefore even more important to consider the interoperability of new equipment, especially with our NATO allies. However, although we try to achieve that, we do not want to rely totally on one other country—the United States—for our defence procurement and equipment. In defence procurement, like other aspects of defence policy, Britain must balance its European and its

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US interests. The rationalisation of the defence industry in Britain, in the US and throughout Europe requires us to perform a tough balancing act.

Although our alliance with the US is close and important, it is not an equal partnership in defence manufacturing. The US admits that it should remove some of the needless bureaucratic and lengthy delays that its system currently imposes on British firms that are trying to compete in its market. However, there is little evidence of its acting on that yet. I would welcome hearing from the Minister whether any recent discussions have taken place between the MOD or the Department of Trade and Industry and the US on providing a more level playing field for British firms.

We cannot and do not want to go it alone in producing all the defence equipment we need or in tackling all the conflicts and challenges with which the world presents us. Britain is rightfully proud of its engineering skills and the reputation of the British armed forces. We must aim to ensure that our defence policy, especially our procurement policy, allows us to build on and maintain that reputation and to be described as "simply the best".

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