1. Mr. Laurence Robertson (Tewkesbury) (Con): If he will make a statement on the future of defence equipment orders from UK companies. [193204]
The Minister of State, Ministry of Defence (Mr. Adam Ingram): United Kingdom companies make a huge contribution to the nation's defence capabilities. As we made clear in our defence industrial policy, we consider it very important to sustain a successful defence industry, and we expect UK companies to continue to supply a very high proportion of our defence equipment needs.
Mr. Robertson: I thank the Minister. When does he expect the Government to make a decision on the second tranche of Eurofighter, which is important to companies such as Smiths Aerospace and Ultra Electronics in my constituency? If the order goes ahead, how will the Minister ensure that British companies receive timely payment for their work? They often have to wait an inordinate time to receive money for their work.
Mr. Ingram: I agree with the hon. Gentleman's assessment of the importance of the programme not only to British industry but to the RAF and the armed forces overall. On the tranche 2 contract, negotiations between the partner nations, in respect of national industries, are at an advanced stage. In parallel, the NATO Eurofighter and Tornado Management Agency, or NETMA, is negotiating, on behalf of the four nations, the contract terms and conditions with Eurofighter GmbH. We recognise that the continuity of manufacturing is important, and significant funding has already been committed to avoid a disruptive gap between tranche 1 and tranche 2. As I said, Typhoon is a hugely important investment, and it is important for all concerned to get the contract right before it is placed.
John Mann (Bassetlaw)
(Lab): Why are we alone among European Union countries in the way in which
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we define military uniforms? That has resulted in British soldiers having to wear Chinese garments instead of British ones.
Mr. Ingram: My hon. Friend has got it wrong. The recent cut and sew contract was subject to competitive tender, and a UK company succeeded in winning the contract. All the contractors had a range of options in respect of where they could place certain parts of the contract relating to downstream supply; they all had options outside the UK. It was therefore wrong of my hon. Friend to pose his question as he did.
Mr. Michael Jack (Fylde) (Con): Further to the point made by my hon. Friend the Member for Tewkesbury (Mr. Robertson) and following the Secretary of State's successful conclusion of discussions with BAE Systems about the price of tranche 2 of Eurofighter, and indeed the financial implications for tranche 1, has the Minister seen press reports suggesting that an announcement could be made as early as 22 November? If that is not the case, will he say so in terms, or will he say when the matter will be resolved?
Mr. Ingram: I have seen the press reports, and although I could comment on them, I gave the hon. Member for Tewkesbury (Mr. Robertson) an extensive answer. The right hon. Member for Fylde (Mr. Jack) has been active in this field, and he will know that he must wait for the contracts to be fully completed. It is important to get those negotiations right, and there will be an announcement when they have been completed.
Mr. David Drew (Stroud) (Lab/Co-op): My right hon. Friend will be aware that defence procurement projects seem to involve bigger and bigger combinations of companies. Mawdsley's, in my constituency, a subcontractor that makes gen sets, is in real danger of going under because its parent company, which put together the bid, may fail to secure it. Will my right hon. Friend look at what is happening to British companies to ensure that each company is considered on its merits and that we keep as many in business as possible?
Mr. Ingram: The answer is yes. The whole purpose and underlying principle of defence industrial policy is to get that balance right, to ensure that there is proper encouragement for the UK industrial base and to ensure that companies are well placed to take the opportunities that arise in defence procurement. I am sure that my hon. Friend recognises, however, that we have to set against that quality and value for money, and competition certainly assists us in that; but the overall principle that he mentions is enshrined in our policy.
2. Linda Gilroy (Plymouth, Sutton) (Lab/Co-op): If he will make a statement on the progress of the CVF programme to design and build two new aircraft carriers for the Royal Navy. [193205]
The Minister of State, Ministry of Defence (Mr. Adam Ingram):
The future aircraft carrier programme remains in the assessment phase and continues in line with the statement made to the House on 19 July. The
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programme is making good progress. The assessment phase is about de-risking the various issues involved. The design is well advanced and the partners are working closely together to deliver what undoubtedly will be a major uplift in capabilities. It remains our intention to take the main investment decision for the demonstration and manufacture phases in 2005.
Linda Gilroy: I thank my right hon. Friend for that reply. All the major dockyards will be aware of the important role that the future aircraft carrier will play in our capabilities. He will be aware of the important role played by Devonport in introducing competition to procurement and of the undertaking that the major warship refit programme will be subject to full competition from 2005. Will he assure the people of Devonport that that undertaking in respect of competition will not be affected by capacity issues at the sites where the future aircraft carrier is likely to be built or assembled?
Mr. Ingram: My hon. Friend asks a good and interesting question. In my initial response, I indicated that competition delivers well for us, sharpening both quality and value delivery, and I cannot envisage us departing from that underlying approach. At the same time, of course, we have to ensure that we retain capability both in ship repair and refit, and in build capacity.
Dr. Julian Lewis (New Forest, East) (Con): Who will defend the fleet from aerial attack during the very long gap between the withdrawal of the Sea Harrier and the advent of the new carriers and the joint strike fighter?
Mr. Ingram: I thought that the hon. Gentleman had moved on to new territory, but he is still talking about the Sea Harrier. We have explained repeatedly, but I shall try again to inform the hon. Gentleman. Subjecting the Sea Harrier to a significant upgrade would have come at a cost. I assume that the hon. Gentleman is making a new spending commitment on behalf of the Opposition Front Bench team, although I do not know what their view is: they have said that they will seek to retain the regiments, but I do not know whether they will reinstate the Sea Harrier. Another aspect of the problem was that there was no certainty that the technical upgrade was possible, or that it could be delivered within the time frame. We have explained that the protection of the fleet will be maintained by the weapons systems on board the new ships.
Rachel Squire (Dunfermline, West) (Lab): What commitment will my right hon. Friend give the work force at Rosyth that the dockyard will be awarded a major part of the construction and systems fitting on the future aircraft carrier, as a yard that stands out across the UK for delivering on cost, on time and to the highest standards?
Mr. Ingram:
I would like to be able to announce today precisely what is to happen. I have described the process in which we are involved, which is now in the assessment phase; certain aspects still have to be worked through, although the design is now reaching maturity. Once all that has been finally assessed, apportionment of the
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various elements of the build will take place. My hon. Friend will therefore have to wait for an answer to her question.
Mr. Gerald Howarth (Aldershot) (Con): Surely the appointment of a physical integrator to manage not the project but the contract for the aircraft carrier project will only add a needless extra tier of bureaucracy, increase the cost and further delay that vital programme. Does the right hon. Gentleman still stand by the in-service date of 2012, or will the project go the same way as the Eurofighter Typhoon and the future rapid effects system battlefield vehicle: seven years of hard labourescalating costs to the left of them, delays to the right of them?
Mr. Ingram: Had previous Administrations employed the concept of a physical integrator in some of those previous procurement streams, we might not have experienced the cost overruns and delays that we did. The physical integrator will work with all the potential shipyards, manufacturing facilities and allied participants to draw up a cost-effective strategy covering the manufacturing element of the programme. That part of the process will examine the core requirements: innovation, prioritisation of design activities, block integration and management of the shipbuild strategy. That seems to me to be a sensible approach to ensure that we stay on programme. Finally, yes, we are committed to reach the in-service date as previously announced.
Mr. Neil Turner (Wigan) (Lab): The carrier vessel future programme is vital to our defence and to our shipbuilding industry. Will my right hon. Friend ensure that as much of the design and shipbuilding as possible is given to yards in this country, especially Barrow in the north-west, to ensure that we retain skills within the UK?
Mr. Ingram: I have nothing further to add to what I said to my hon. Friend the Member for Dunfermline, West (Rachel Squire). All of this is being assessed. Those who offer the best solutions, the best innovative skills and are best placed to make a contribution and ensure that we keep on programme will, I am sure, be considered sympathetically in the placing and formulation of the final contractthere is everything to play for.
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