Examination of Witness (Questions 180-185)
12 MAY 2004
SIR PETER
SPENCER
Q180 Mike Gapes: Can I put it to you
that we had a Cold War aircraft and now we are dealing with a
different environment. Would it not be an option, and have you
considered the option, of restricting the Eurofighter to an air-to-air
role and buying an off-the-shelf air-to-ground aircraft separately?
In that context, do we need 232, could we not just stick with
the 55, or 55 plus 89, and then buy something else to do the other
role?
Sir Peter Spencer: You would have
to ask General Fulton the answer to that question.
Q181 Mike Gapes: He gave his answer,
I am asking you.
Sir Peter Spencer: He is the person
who makes those judgments. Why would I give you a different answer
as the supplier to the military customer?
Q182 Mike Gapes: Because of the cost.
He is not interested in the cost, he is just interested in getting
the kit to perform the role.
Sir Peter Spencer: General Fulton
is interested in the cost. General Fulton as the Deputy Chief
of Defence Staff (Equipment Capability) has to live within a budget,
so he is very interested in the cost and, quite rightly, he challenges
me on the costs, and my job is to get the best deal I can on his
behalf from defence. The question resolves itself into, "Is
this aircraft genuinely adaptable?" Yes, it is. It has been
built at the outset with the stretch potential to be able to do
air defence and also air-to-ground. The judgment we have at the
moment is that we have more need for air-to-ground than we had
previously anticipated, and the most cost effective way of doing
this is with these incremental enhancements, and, because the
aircraft was designed to be adapted from the outset, the cost
of those is not a redesign of the basic aircraft, it is changes
to the aircraft software.
Q183 Mike Gapes: My question was, have
you looked at the option of restricting the number of aircraft
and restricting it to the air-to-air role and buying something
else off-the-shelf to do air-to-ground?
Sir Peter Spencer: As a hypothetical
exercise, I would always be required to demonstrate the range
of options to meet any future capability.
Q184 Mike Gapes: So that is a yes, is
it?
Sir Peter Spencer: We have not
got that far yet, because we are not due to make the submission
to the Investment Approvals Board until we have priced this contract.
Q185 Mike Gapes: So you are not ruling
it out as a possibility?
Sir Peter Spencer: I am not ruling
anything in or out because it is not something I do. I will cost
the options I am invited to cost. The position of the Ministry
of Defence at the moment is quite clear, which is we accept that
we have signed a MOU for 232 aircraft, we have signed an overarching
contract for 232 aircraft, we have the means of adapting those
to deliver the capabilities which we need, and that is where we
are. As we go through time, as with the aircraft carrier proposal
which goes forward, we will also look at hypothetical other ways
of doing it, because we always do in an investment appraisal.
So the literal answer is, yes, but it does not mean to say there
is any serious thought being given in that direction. At the moment
we are content to live with the requirement we have declared and
with the obligations we have signed up to internationally and
contractually.
Mike Gapes: Sir Peter, I suspect we will
come back to this one at some stage in the not-too-distant future.
Chairman: I think if that idea of Mike's
was implemented we should get out of shares in BAE Systems but
it is far-fetched. Thank you very much; very forthcoming, Sir
Peter, we enjoyed it.
| 
