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Mr. Ingram: I think the hon. Gentleman has made his mind up before listening to the facts. He says that he wants to hear the facts, and I would happy to discuss the details with the trade unions. I have said that the part of   the business at Fleetlands connected with engine support has lost major contracts in a competitive bid. Is the hon. Gentleman saying that we should have ignored that, placing on-costs on the defence budgets? If we are trying to drive efficiency into the system and make the yard competitive, we have to face the consequences of losing bids. That is what happened with engine support and it is not a consequence of any lack of commitment on the part of the work force. The hon. Gentleman is right that they have tried to achieve the new efficiency standards, but the contracts were at a mature point and had to be placed.

The hon. Gentleman is asking an impossible question. He asks me to predict the future of the aerospace market in this country—I do not know how far ahead—but I   cannot do that. No one can do that. If he is saying that the MOD should retain facilities with inefficient operations at extra cost simply because something—we know not what—may happen in the future, he is not living in the real world. The other part of Fleetlands, however, has a future and I do not think that the hon.   Gentleman heard what I said. We took a decision, on which I thought the hon. Gentleman would compliment me, to move work from Army and naval bases back to Fleetlands, providing the civilian work
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force with greater opportunities for the future. I just wish that, in some of his criticisms, he would recognise that.

Sarah McCarthy-Fry (Portsmouth, North) (Lab): People in my constituency who work at Fleetlands will   be deeply affected by today's announcement, and I   should like to express my support for those who will lose their jobs, and for their families. I thank my right hon. Friend for his assurances that all possible help will be given to mitigate the effects of job losses and to help people find alternative employment. There is never a good time for people to lose their jobs, but does my right hon. Friend agree that at least they have a better chance of finding alternative employment when the economy is   successful and thriving? I do not underplay the devastating effect of job losses on people and their families, but it is the Government's responsibility—

Mr. Deputy Speaker (Sir Michael Lord): Order. I   think that the Minister can answer that point with what the hon. Lady has asked so far.

Mr. Ingram: I thank my hon. Friend for her balanced views, and she is right to say that there is never a good time for people to lose their jobs. My father was an aircraft fitter who moved in and out of employment under the Tory Governments of many years past. I   sometimes say that I have oil in my blood, and that makes today's announcement extremely difficult for me, but we have to do what is right for defence. I am grateful that my hon. Friend understands that, and she is right in what she says about job losses in a strong economy. We have created a strong economy and will do everything in our power to ensure that the rest of the Fleetlands facility is maintained. I am sure that many of her constituents are part of what is a first-class work force with a long-term future. The question that we must consider is whether that future lies with the Ministry of Defence or private industry. If people go into industry, there is always the possibility that the rate of growth in that sector will be even greater.

Adam Price (Carmarthen, East and Dinefwr) (PC): The Minister will understand that today's statement is a bitter blow to people in the communities represented by the hon. Member for Vale of Glamorgan (John Smith). In respect of the sale of the VC10 business, how will he   get right the balance between maximising the return on public investment and securing the work force's long-term future? Will potential purchasers have to give guarantees about employment levels and rights, and about the long-term continuation of the remaining business at St. Athan?

Mr. Ingram: We must always balance public investment against all the other issues involved. We must take risk into account as we test the market, and make a judgment about it. We must also ask questions about the identity and commitment of potential purchasers, and determine whether they can guarantee future support. If they cannot make that guarantee, they can go no further with the purchase. I should add that BAE Systems also has an interest in this matter, as it is the design authority.
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I suppose that one should never say never, but I see no   possibility that the work will move away from St.   Athan. With the right ingredients, and if the right company purchases it, the facility could have a greater ability to provide support for wide-bodied, fixed-wing aircraft. Clearly, what is being lost in terms of fast jet support is very painful, and that loss is happening over a relatively short period, but we are trying to put in place the potential for future growth. We will do everything that we can to that end, as we do not want to lose the key workers in that area.

Finally, I remind the hon. Member for Carmarthen, East and Dinefwr (Adam Price) that the VC10 is used extensively in support of NATO forces in Iraq. I do not think that his party supports what we are doing in that particular area.

Mr. Doug Henderson (Newcastle upon Tyne, North) (Lab): I do not want to question my right hon. Friend about any particular element of his statement, as I shall leave that to hon. Members with constituencies that are affected. However, does he accept that the House needs to recognise the general principle involved in this matter—that the Ministry of Defence's logistics organisation can be improved in many ways? The problems—a lot of duplication, and many inefficient structures, both geographical and otherwise—need to be tackled, regardless of which party is in office. The current Government have been tackling the problems and, although I know that my right hon. Friend does not need encouragement, I urge them to press on. If we do not make the savings, we cannot pass them on to the front line, where they are really needed.

Mr. Ingram: I am grateful to my hon. Friend for that comment, and he is right that we have to tackle those inefficiencies. Every penny saved is a penny that goes to the front line. The arrangement with the Treasury is that if we do not save the £2.8 billion, there will not be an investment in the front line. We have to do it. It will be a hard target to reach, but it will ultimately be good for our defence and the men and women on the front line. That is why I will continue to press on with it.

Mr. Gregory Campbell (East Londonderry) (DUP): Are other areas of the Ministry of Defence subject to the   modernisation process likely to yield similarly substantial job losses in the next five years? If so, will there be any consequences for MOD employees in Northern Ireland?

Mr. Ingram: The hon. Gentleman tempts me again. I   visited the Province last Friday. It was not a public visit, but I met the Royal Irish and MOD civilian staff. The closure of Army bases in Northern Ireland will have a significant impact and we are working out how best to   deal with that. We know the numbers, but we are examining the quantum of the financial consequences. However, the consequences arise not from the efficiency savings, but from the peace process that is under way.

We will scrutinise other parts of the MOD to see if there are better ways of doing things. We have made some announcements about co-locating headquarters. If there are two parts of an operation, it is sensible to co-locate them if the business case stacks up. We will continue to consider such cases, because we have to
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achieve a reduction of more than 20,000 back office jobs over the next few years across the MOD to ensure that we achieve the £2.8 billion saving.

I remind the hon. Member for Aldershot (Mr. Howarth) of his additional commitment to £1.6 billion savings on top of our £2.8 billion. We are finding the latter hard, so I do not know where he would get £4.4 billion savings.

Mark Tami (Alyn and Deeside) (Lab): I welcome the statement about DARA at Sealand, although I regret the job losses elsewhere. May we have a period of stability now? That is vital, because having one review after another saps the morale of employees. What plans does my right hon. Friend have to secure the long-term future of DARA at Sealand?

Mr. Ingram: I said in my opening statement that there is no strategic need for Sealand to remain in the MOD, but it is important as we introduce the new aircraft, as well as for the legacy systems. High grade work is carried out at Sealand and it is essential for the new Typhoon that that be maintained. The potential for Sealand is great. Investment will be required to change some of the tooling and support equipment to move from analogue to digital avionics, and that could allow Sealand—whether it is in the public or private sector—the opportunity to join the Typhoon support and supply chain for other countries. I cannot predict that that will happen, but if that part of the business is properly resourced and configured, it could win such additional business. Sealand has a good long-term future.

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