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John Reid: I thank the hon. Gentleman for his remarks and I hope that the opportunity for such a debate arises. A defence debate is coming up early in the new year and Members may want to make representations about the topic of that debate. I would welcome our building a cross-party consensus on this issue. In a way, I regard the defence industrial strategy as a parallel of the strategic defence review, which I had the honour to oversee in 1997–98. It constituted a thorough review of the operational capabilities, configuration and direction of our armed forces, and I hope that this strategy proves similarly effective. There will be plenty of opportunities for scrutiny by, for example, the National Audit Office and Parliament, and the right hon. Member for North-East Hampshire (Mr. Arbuthnot)—he is with us today—who presides over the Defence Committee, will doubtless take an interest in this issue and in the project itself. The difficulty lies not in that but in getting the balance right between what we open up to competition, and what we maintain here as a strategic and sovereign requirement. I welcome all contributions to the debate on that issue, because I genuinely believe that it is not a party political one.

Several hon. Members rose—

Madam Deputy Speaker (Sylvia Heal): Order. I am keen to call as many Back Benchers as possible on this statement, but I am also mindful that there is other business of the House, which must be protected. May I please make a plea for brief questions and answers?

Linda Gilroy (Plymouth, Sutton) (Lab/Co-op): I congratulate my right hon. Friend on introducing this strategy, which is in the long-term interest of our defence capability and of value for money for the taxpayer. As the Member of Parliament for a naval constituency, may I ask him to recognise the important role that Plymouth workers have played in submarine and surface fleet support? Does he agree that Devonport has everything to gain from engaging positively with the plans laid out in the strategy? What will happen to the marine industrial strategy? I would welcome the early opportunity to discuss these issues with him, particularly the role of Devonport.

John Reid: The answer to the first question is yes: the contribution made by the work force to which my hon. Friend refers is substantial. The answer to the second question is also yes: Devonport has everything to gain from participating in the strategy, just as work force and company representatives have gained from participating in the strategy thus far. On the third question, I look forward to discussing the maritime strategy with her and others. I am glad that we were able to announce yesterday a further stage in the reaffirmation of the carrier, and the allocation of work to the south—to Vosper Thornycroft—as well as to Barrow-in-Furness and to places further north. Everyone has an interest in making this work: the work force, management, shareholders, certainly the Ministry of Defence—hopefully, it will sharpen its act—and the armed forces themselves.

Mr. James Arbuthnot (North-East Hampshire) (Con): I am grateful to the Secretary of State for giving
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me advance notice of this document and I agree with him that it is very important. My Committee will examine it very closely at the beginning of the new year. Does he agree that the key issue is how we put this document into practice? We need action, rather than words. Does he further agree that, despite the strategy's welcome clarity in some areas, on one of the most important—research and technology—it leaves rather a lot unsaid? For example, it states:

Can the Secretary of State reassure me that this is not simply a case of pushing the most difficult questions off into the future? That is a very important issue.

John Reid: Yes, I can. First, I welcome the interest that the right hon. Gentleman and the Defence Committee have shown in this issue. Secondly, I entirely agree with him that this is not a document for philosophical consideration; we hope that it is intellectually rigorous, but it is a blueprint for action. Thirdly, we have spent six months on this issue since I came in as Defence Secretary and it is not unusual to find that a document on a mammoth topic such as this needs further work in certain areas, and the right hon. Gentleman has highlighted one of them. There is a lot of grit in this oyster, but we welcome discussion and contributions in order to add more flesh to the bones.

Mark Tami (Alyn and Deeside) (Lab): I welcome the review but there has been some speculation about the air tanker project and a possible reduction in the number of aircraft to be ordered. Can my right hon. Friend enlighten us as to the review's impact on that project, and on how the discussions are going?

John Reid: I am glad to confirm that this document does not affect in any way the future direction of the tanker project. We continue to have detailed and complex discussions with financial institutions about the private finance initiative side of the project; there is no real question of the operational requirement being changed. Far from backing off this project, at the last informal meeting of our European presidency—it was held at RAF Lyneham and the central item for discussion was the tanker project—I encouraged our European allies to follow the direction that we are taking.

Robert Key (Salisbury) (Con): I am sure that the Secretary of State's judgment in putting his trust in respect of our chemical and biological defence into the hands of the Defence Science and Technology Laboratory at Porton Down in my constituency is entirely correct. He gave an assurance about the testing and evaluation work carried out by Qinetiq at Boscombe Down, also in my constituency, but said that he wants the European Defence Agency to consider whether we should amalgamate and rationalise some of that work across Europe. However, what about the intellectual property rights that we share with our American allies? What will their reaction be if they know that we are working with European companies, some of which are sited in a nation that is not even a full NATO member?
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John Reid: Obviously, that is one of the issues that has to be dealt with. Whenever I make a statement on any aspect of defence, the hon. Gentleman always has a perfect right to comment, as his constituency seems to have an interest in almost everything defence-related. He has identified a problem that we must resolve, but I shall make one general point about the EDA. We do not regard it as an autonomous body that can order and procure on its own. If I may use the expression, we think of it more as a dating agency—a body that brings member states together to collaborate on projects that they consider worthwhile. It does not act over and above the member states, but rather brings them together.

Mr. Ian Davidson (Glasgow, South-West) (Lab/Co-op): I very much welcome this document, and take particular note of the important fact that it has been produced to time. Of course, the devil is in some of the detail, and I seek clarification from the Secretary of State about balance. On the one hand, the document states that "complex vessels" will be built in the UK, but on the other, that "lower-end" manufacturing will be outsourced. Does that apply to a certain category of vessel, or are we talking only about peaks and troughs? When might it be possible to get clarification about how the strategy will be applied to the military afloat reach and sustainability program? Finally, if representatives of the work force feel that it is appropriate, will he be willing to meet them?

John Reid: The answer to the last question is yes: I am always ready for such meetings. I met those representatives recently, as my hon. Friend knows. I am prepared to meet them again, and he can be present again, if he so wishes. He asked about balance, and I assure him that there is no categorisation according to classification. Building what we traditionally regard as major warships at the upper end of the market calls for high technology and high skills, and can be sustained only by a systemic and systematic order process. At the lower end of the market, peaks and troughs occur according to fleet requirements. We are thinking about combining the two approaches, but yesterday's allocation of work—part of which went to my hon. Friend's constituency—makes it clear that my intention is to have a shipbuilding industry that is stable and sustainable in the long term, and which maintains the highest level of skills.

Peter Viggers (Gosport) (Con): This is an ambitious programme of big capital projects, but will the Secretary of State take into account the fact that there seems to be a shortage of cash for detailed implementation? The danger is that these ambitious projects will suffer as a result. There are too many stories about cannibalisation of parts, shortages, and the cancellation of operations. Will the right hon. Gentleman undertake to keep an eye on the detail as well as on the headlines?

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