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John Reid: There are obviously some elements of the hon. Gentleman's contribution that I greatly welcome. I think that the document is important and I have no doubt that we will return to it in the course of our debates. Perhaps, as it is a substantial document, we could chat through the usual channels about how best to handle that.

Secondly, I believe that we should try to achieve as much consensus as possible in respect of the document. I have always taken that view on defence as a whole. Issues of national security should, as far as possible, be resolved on a non-party basis. That is not easy and it does not mean the absence of criticism, but the consensual approach should be welcomed.

I note that the hon. Gentleman offers me the opportunity of going, as they would say in East Kilbride, "mob-handed" to meet the Chancellor with the Conservative party behind me. If I do not immediately accept his offer, I am sure that he will understand why. My old friend the Chancellor has overseen and watched from a distance. If the hon. Gentleman looks at the foreword to the document, he will see that one of the three faces pictured at the top is that of the Chief Secretary to the Treasury—and he is smiling. It can also be seen that the word "no" does not appear anywhere under his signature. As far as I can make out, that is a first.

I can assure the hon. Gentleman that there has been a great deal of cross-Government participation. That is why, sitting alongside me on the Front Bench, is the Minister for Industry and the Regions, my right hon. Friend the Member for Cardiff, South and Penarth (Alun Michael) and—a little further down, but close to us in spirit—my right hon. Friend the Paymaster General, who is also smiling. Clearly, the Government have adopted a united approach on this matter.

More seriously, the hon. Gentleman asked me whether the Chancellor has settled with me on the next three spending rounds. Of course he has not settled all that with me. We should remember that the rounds stretch through to 2015 and beyond, and it is obvious that no responsible Government would make commitments that far in advance. Over the past few years, there has been a real increase in defence spending which, as I am sure that the hon. Gentleman would in all fairness admit, was not always the case under the last Conservative Government. In fact, that period saw a 29 per cent. cut in real terms in defence spending. There is a great deal of unity on the part of the Government and I am glad that there is a great deal of consensus on the general direction of where we are going with our defence industrial strategy.

It is a detailed publication and it is divided into three parts. The first provides a strategic overview; the second an analysis of specific sectors; and the third deals with implementation and how we have achieved implementation thus far. On maritime, the hon. Gentleman was good enough to read out the section that said that there would be no blanket requirement for hulls to be built onshore, but he unfortunately missed out the next part of the sentence, which says that there is a need to maintain a sustainable work load for a viable restructured industry in this country.
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Yesterday's announcement that 60 per cent. of the work on the two biggest craft—at 60,000 tonnes—ever to be built by the Navy will be allocated to British shipyards demonstrates clearly that we are trying to maintain a sustainable level of employment and skills, particularly at the high-end sector of the technological development of shipbuilding and refurbishment. We are seeking long-term clarity and attempting to introduce ships at what might be called a regular drumbeat in order to assist the maintenance of skills. If we need a peak capacity at the lower end of production—the sort of craft that would not traditionally be regarded as warships—we reserve the right to go offshore, but yesterday's announcement clearly shows that we intend to maintain a sustainable work load for a viable restructured industry.

The hon. Gentleman asked several detailed questions about aircraft carriers and in-service dates, but he appears to have missed something important from yesterday's announcement. By innovatively involving the companies that are to produce the new carriers—British Aerospace and the rest of the alliance—in the maintenance, updating and refitting of the existing aircraft carriers, we have effectively ensured continuity of capability. That is why the First Sea Lord, the Chief of the Naval Staff, said that yesterday's announcement was the best Christmas present that the Navy could have been given.

On Trident, I have little to add to what I have already said. It is a very important discussion, but we want to take time to reflect on it. With all due respect to the hon. Gentleman, we have clearly said, first, that we will retain the nuclear deterrent. We said that unambiguously six months ago in our manifesto. Secondly, the basis of retention is the assumption that, as long as potential enemies have nuclear weapons, we will retain them. Thirdly, we are not discussing whether to retain Trident, but whether in 15 to 20 years' time we will need something to continue the nuclear deterrent. We have a little more time, therefore, to challenge ourselves and each other on the assumptions and practicalities of the issue. There is no need to take a peremptory decision on that in order to meet the time scale for the defence industrial strategy.

Mr. John Spellar (Warley) (Lab): The Secretary of State said that the UK operates the most open defence market in the world and mentioned efforts to encourage other nations in Europe and further afield to follow suit. No doubt he is often disappointed at their failure in that respect, so to what extent can he frame our policy to ensure reciprocation from others?

Will my right hon. Friend join me in paying tribute to the defence industry, companies, the work force and, indeed, the communities that have given such good service to our forces over so many years? May we have a debate on the effect of the strategy on many of those communities and its impact on our manufacturing base and the Government's wider industrial and regional policy? May we have such a debate early in the new year, so that Members from the affected constituencies can detail the effect on their constituents and attempt to ensure that we have a defence footprint throughout the country, not just in a few southern and eastern counties?

John Reid: Yes, indeed. My right hon. Friend will have noted that yesterday's carrier announcement
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referred not just to Portsmouth and Vosper Thorneycroft, but to Barrow-in-Furness and to Govan, in the constituency of my hon. Friend the Member for Glasgow, South-West (Mr. Davidson). There was a genuine geographical spread among the beneficiaries. Yes, I do pay tribute to the work force and its adaptability, flexibility and willingness to change right across the defence industry. What the document means, I can tell my right hon. Friend, is that we are offering a degree of transparency, information and forward thinking that should give those people a greater degree of stability and security in managing change in a fast-changing world. The trade unions—including John Wall of Amicus and various others—were involved, through the Confederation of Shipbuilding and Engineering Unions. I have written today to those MPs—in all parts of the House—with a particular interest in these sectors, saying that I or the noble Lord Drayson will meet them.

My right hon. Friend also asked what we, probably the most open defence procurers in Europe, are doing to encourage others to follow suit. We are doing three things, the first of which is to illustrate, through the success of our defence industries, that watching the minutes sometimes loses the hours, and that, through a degree of openness and competitiveness, we can develop a healthy industry. Secondly, during our presidency of the European Union we have encouraged our European colleagues to open up a little. Through the European Defence Agency, we have just signed a code of conduct that, although voluntary at this stage, moves matters in the right direction. Thirdly, we are maintaining dialogue with, and pressure on, our friends in the United States Administration—the President, Secretary Rumsfeld and others—with some degree of success. This is proving less successful on the Hill, and we must continue to work on that.

Mr. Michael Moore (Berwickshire, Roxburgh and Selkirk) (LD): I begin by associating myself and my colleagues with the tributes that the Secretary of State paid to our armed forces. This is indeed a very significant statement that will have far-reaching consequences for United Kingdom defence and its supporting industries. As has been acknowledged, we will all need time to study the 140 pages of detail, and I would also welcome the chance of a debate early in the new year on the strategy. But we certainly support the principle of ensuring that our armed forces have appropriate equipment at the right time and at the right cost; sadly, that has not always characterised defence procurement in recent decades.

In giving industry clearer signals about what is essential to national security, how will the Secretary of State ensure proper ongoing public scrutiny of the new partnering arrangements and any other mechanisms, so that we can be confident that we are maintaining competitiveness and value for money at the point of acquisition and throughout the project's life? Given the   ongoing problems associated with technology transfer—from the United States, for example—to which he has alluded, how will he ensure that in the non-core sectors, we do not end up being over-dependent on other countries?
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