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30 Jan 2003 : Column 1038—continued
Mr. David Chidgey (Eastleigh): Returning to the Secretary of State's comments on the partnership role of the MOD in regard to trained manpower, I am sure that he will be aware that Vosper Thornycroft has headquarters in Eastleigh. In the package that it put forward in the bidding process in partnership with BAE Systems, Vosper Thornycroft offered to provide high-skilled training for 1,000 people over the course of the project. That is vital to the future economy of my constituency and the wider area. Can the Secretary of State assure the House that that part of the BAE Systems proposal remains part of the project?
Mr. Hoon: It would not be right at this stage for me to give specific assurances of that kind. What I can say is that there will be enormous demand for high-skilled employees as a result of our decisions, and Vosper Thornycroft's investment and commitment to the skills of its work force has been enormously impressive as it has taken on a number of challenging contracts that ultimately come from the Ministry of Defence. I have every confidence in the company's ability to deliver on shipbuilding and on the training required for a skilled work force.
Mr. Kevan Jones (North Durham): I warmly welcome today's announcement, which is good news for the north-east economy and particularly for Swan Hunter on the Tyne, a company that was closed by the Conservative Government but given a bright future by Labour. Can my right hon. Friend assure us that the MOD and contractors work with organisations such as Northern Defence Industries to ensure that the maximum number of small and medium-sized enterprises can obtain work from the massive contract, which will be a great boost to the north-east in general.
Mr. Hoon: I have been in regular correspondence with Northern Defence Industries, which performs a valuable role on behalf of the defence industry and defence companies in the north-east. As one who represents an entirely land-locked constituency, I can say that one of the significant consequences of the announcement is that the benefits clearly available to the north-east and other shipbuilding areas flow right across the United Kingdom.
Mr. Henry Bellingham (North-West Norfolk): The Secretary of State did not point out that a commitment to build two strike carriers appeared in the 1997 Tory manifesto. I am glad that he has caught up with our plans and ambitions.
Why is the Secretary of State withdrawing Sea Harriers before the two strike carriers come into commission? Will that not leave the Royal Navy vulnerable? Would it not be possible to bring forward the in-service dates, given that 2012 is a long way off? After all, it took the Germans just two years to build Bismarck and the Americans two and a half years to build USS Missouri. I appreciate that those were less sophisticated vessels, but is there any chance of bringing forward the in-service date?
Mr. Hoon: The hon. Gentleman unfortunately overlooked the fact that the two huge new carriers will
be equipped with the latest and most technologically advanced stealthy aircraft—the joint strike fighter. I would be more enthusiastic about his questions if, rather than just talking about investment, he had been more enthusiastic about the massive investment that the Government have made.
John Robertson (Glasgow, Anniesland): As the Member of Parliament who represents the Scotstoun yard, I hope that its name was missing from my right hon. Friend's statement only because Govan includes Scotstoun. I welcome the statement with open arms as it is good news for the Clyde and the country as a whole, but I am slightly disappointed that BAE Systems did not win the design part of the contract. In Scotstoun, a magnificent design office has been set up, especially for the Type 45 destroyers. It is an unmitigated success, but with the announcement of 265 job losses last week, I am concerned that there might be problems for that drawing office in years to come.
Mr. Hoon: My hon. Friend has been a constant champion of the Clyde and has argued long and successfully for precisely the kind of investment that we are now able to make in relation to the Clyde and BAE Systems' role there. I know that my hon. Friend will continue to ensure that his constituents are properly represented in guaranteeing that the kind of work available to them will continue long into the future.
John Thurso (Caithness, Sutherland and Easter Ross): Although I generally welcome the jobs that will be coming to Scotland, may I draw the Secretary of State's attention to the potential of the Nigg yard in Easter Ross? Given that the people of Easter Ross have borne with fortitude the inconvenience of the bombing range at Tain, would it not be a just reward for some of the jobs from the contract to come to Easter Ross, too?
Mr. Hoon: In my statement, I made it clear that the involvement of other yards was not ruled out. I have already pointed out, in response to a question from one of my hon. Friends, that I anticipated a significant amount of subcontract would benefit parts of the UK other than those that I have identified specifically so far. I am sure that the hon. Gentleman will be able to make representations in due course.
Andy King (Rugby and Kenilworth): I, too, welcome my right hon. Friend's statement. I am extremely concerned on behalf of the 3,000 workers at Alsthom in Rugby, 200 of whom are to be made redundant in March owing to the failure of international contract and who will be greatly relieved that there will be work for the manufacturing industry. As my right hon. Friend said, the contracts relate not only to shipyards but to manufacturing as a whole. How many jobs are there likely to be in the manufacturing industry, especially at Alsthom, which is a major part—supposedly—of the foreign business partnership?
Mr. Hoon: As I have already indicated, we anticipate that about 10,000 jobs will be either created or preserved as a result of the announcement. There will be significant
opportunities for landlocked constituencies such as that of my hon. Friend and indeed mine to benefit from the subcontract work that will flow from these decisions. I look forward to hearing from my hon. Friend that that is indeed the case for his constituency.
Mr. Mark Francois (Rayleigh): Does the Secretary of State agree that the welcome for his statement from the Liberal Democrat Front Bench was a combination of four classic naval commands—full ahead, full astern, abandon ship, and make smoke—all at the same time?
May I ask the right hon. Gentleman about the implications of his announcement for procurement policy? The history of defence procurement under Governments of all colours is littered with examples of projects that went horribly wrong because it was never clear who was actually in charge. How can the Ministry of Defence credibly run future competitions if bidders see that despite all their efforts—and irrespective of the merits of the two bids in this case—Ministers can intervene at the last minute to create what is in effect a shotgun marriage between two different bids?
Mr. Hoon: If the hon. Gentleman will forgive me for saying so, there might be a fifth naval command that applies to the Conservative party: take to the lifeboats.
Mr. Francois: Answer the question.
Mr. Keith Simpson (Mid-Norfolk): It was supposed to be a joke—very funny.
Mr. Hoon: I am grateful for all the applause I can get.
I dealt with the specific question put by the hon. Member for Rayleigh (Mr. Francois) in my answer to the Opposition spokesman. By incorporating the best elements of both bids we obtain the best British manufacturing contribution to this excellent British project.
Mr. John Burnett (Torridge and West Devon): I foresee that the robust contractual arrangements that the Secretary of State described will provide a rich harvest for the legal profession in due course.
The Secretary of State listed four shipyards where the main sections of the carriers will be built. Will he confirm that all UK shipyards, including Appledore in my constituency, will have a fair opportunity to tender for all subcontract work for the vessels?
Mr. Hoon: Having just answered a similar question from one of the hon. Gentleman's hon. Friends in relation to a different yard, I can assure him that the same opportunities will be available. I am sure that his former colleagues in the legal profession will welcome the contractual work that the decision offers.
Dr. Vincent Cable (Twickenham): Now that BAE Systems has won this major and lucrative contract, will the company be required to honour outstanding cost overruns on existing contracts, such as the submarines and Nimrod, thereby sending a clear signal to all
partners in the aircraft carrier contract that contractual failure will be penalised and not automatically paid for by the taxpayer?
Mr. Hoon: It has never been suggested that, under existing contracts, the taxpayer will automatically have to fund any cost overrun. Indeed, that is central to the discussions that are being held between the Ministry of Defence and the company concerned. I can assure the hon. Gentleman that this contract has been dealt with by both companies in an extremely professional and sophisticated way, and that the United Kingdom should be grateful that there are two companies operating in the country that are capable of producing such outstanding work.
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