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Mr. Havard: I shall not take interventions because I want to give others the time to speak.
The other collaborators are political collaborators. I do not have time to support some of the remarks of my hon. Friends about the situation between the UK and the United States. Sometimes I ask myself why we are having this aeroplane anyway. Perhaps we should say that we do not want it. Let us have a plan B, C or D. Frankly, the situation is unacceptable. I really resent people who are involved in pork barrel politics in America who pretend to be the great free traders lecturing us on this issue.
BAE Systems has huge interests in the United States. However, its interests in the USA try to pretend that they are not British and that they are magically part of the USA. The reality is that American companies are the largest investors in the Welsh economy, which has been the situation for years. The interrelationships are not as the prejudiced describe them, and it is about time that those in the USA who peddle such prejudice woke up, conducted an accurate analysis and reached a proper understanding of technology transfer and the relationship between the two countries.
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Mr. Havard: I am glad that the hon. Member for Wantage (Mr. Vaizey) is enjoying it.
The Minister has mentioned the key word, "sustainability", and the policy and strategy must together result in correct, sustainable decisions, which is the key to the whole process. Sustainability requires money, so perhaps the question is not who replaces Tony Blair, but who replaces Gordon Brown.
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Mr. Michael Jack (Fylde) (Con): We have heard some interesting and robust speeches, but I want to pick up a point raised by my right hon. Friend the Member for North-East Hampshire (Mr. Arbuthnot), the Chairman of the Defence Committee, about Lord Drayson. I want to express my appreciation for the time that Lord Drayson spent with me explaining the thinking behind the defence industrial strategy, and I also pay tribute to his predecessor, Lord Bach, who worked on the issue as a precursor to this exercise.
I welcome the DIS from the standpoint of a constituency where employment is dominated by BAE Systems, which has argued for so long for a recognition by the MOD of the economic and industrial problems that it faces in meeting the exacting requirements of its principal customer. If, for example, the recognition in the DIS that companies need to make a proper rate of return translates into reality, I hope that it will finally remove the element of suspicion that seems to have dominated the MOD's dealings with business. The MOD has acted as though business might not tell it the truth or that BAE systems might have been overly favoured because of the size and strength of its position in the defence industry. If that openness means genuine partnership and the removal of suspicion, then I, for one, welcome the strategy.
There is an element of sadness to the strategy, because, as has been said, it signals the end of the UK's ability to build complete military aircraft, something at which we have been singularly good for a long period of time. My concern is that if we need to buy a whole aircraft at some point in the next 30 years, we have signalled that we are not capable of providing an alternative. If those who seek to gain our business are not in partnership with us, they will therefore know, in the nicest sense, that they have got us over a barrel. I would not like to see Lockheed Martin become the Microsoft of military aviation supply, so that whatever is done has to be done with it.
John Smith: We will not necessarily lose that capacity. The skills retained by upgrading and improving existing platforms will allow us to retain the capacity to build, because of the level of systems integration.
Mr. Jack:
As I shall say about the joint combat aircraft, the hon. Gentleman's observation is true, if we retain the ability to alter the basic structure. In fairness, the DIS states that the unmanned air vehicle scenario is another way of keeping those technologies alive. At the moment, we have an advantage, because we have some
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of the most modern equipment in the pipeline, but what will happen if the technical advantage degrades over time? There is an awful lot of money in this world, and we have heard that a lot of states could afford to acquire nuclear weapons. Furthermore, Russia has the ability to build advanced fighter aircraft, which it could supply to others.
I do not know what will happen in the next 30 years. I just want to make certain that my concept of technological deterrence is maintained at a high level to put off other people, and that if we do have to return to building a fast jet, we truly have the capability to do so.
I want to explore a little further the present situation as regards the Eurofighter Typhoon. The defence industrial strategy is silent as regards the third tranche of that aircraft. I guess that a discussion must be going on in the Ministry of Defence about how many of these aircraft we will want to have an operational capability at any one time, because that will determine the number of aircraft that we buy. If we wanted, say, 40 aircraft, we could do away with tranche 3; if we wanted 80, we would have to keep it. Can the Minister enlighten us on how the thinking is going on that?
I congratulate all those involved in winning the order from Saudi Arabia for up to 72 Eurofighter Typhoons; that is welcome. However, this is a Government-to-Government arrangement, and at a certain moment in time the aircraft that are going from the second tranche to fulfil the order for the first 24 will be technically owned by the UK Government. Can the Minister therefore assure me that we are not about to be subjected to an example of smoke and mirrors whereby the Government magically acquire 72 of these aircraft, which is more or less tranche 3, sell them to Saudi Arabia, and then put their hands up and say, "Right, we've bought 232 of these, we've done what we said", when in fact they have not answered the question of the RAF's actual requirement. We need clarity on that.
The defence industrial strategy is also silent on the successor to Hawk. The Government are buying the advanced jet trainer, and I am glad about that. However, at some stage in the next decade there may be a world demand for a successor, and the DIS says nothing on that subject.
The hon. Member for Bolton, North-East (Mr. Crausby) said everything that needs to be said on the joint combat aircraft. He said it with passion and elegance and I agree with him. However, I draw the House's attention to paragraph A2.12 of the strategy, which says:
"We welcome the progress made in establishing understandings on Security of Supply (the US/UK Declaration of Principles and the Letter of Intent Framework Agreement)."
We all welcome it, but the Minister did not give us a clear and detailed explanation of exactly where he thinks Ministers stand in a Government-to-Government sense. I hope that he will be able to comment on that in more detail. Paragraph B4.42 of the strategy says, in reference to the joint combat aircraft,
"As part of this performance based arrangement, the UK also intends to establish sovereign support capabilities which would provide, inter alia, in-country facilities to maintain, repair and upgrade the UK fleet and an integrated Pilot and Maintenance Training Centre."
None of that will happen unless the points made by the hon. Member for Bolton, North-East are fully addressed.
Another part of the latter paragraph deals with the question of whether it is necessary for the United Kingdom, in addition to maintaining and upgrading the aircraft—which is essential for the reasons given by the hon. Member for Vale of Glamorgan (John Smith)—to have a final assembly and checkout unit. I think that it is necessary in order to maintain our skills base. More importantly, as the Minister will know, the success of Case White, the method by which the Eurofighter Typhoons were initially inducted into RAF service, with the RAF squadron based at BAE Warton, demonstrates that a final assembly and checkout unit is a prerequisite of the good introduction into service of this vital aircraft.
On a slightly discordant note, it is disappointing that while we are arguing about BAE's further involvement in this project, we have seen the silent exit, apart from parts of the STOVL—short take-off and vertical landing—version of the aircraft, of Rolls-Royce as a second engine supplier. If there was any communication—I gather that there was—between our Prime Minister and President Bush, it seems to have been one way. Again, I agree with the hon. Member for Bolton, North-East. It is vital that we say to our American counterparts, "If you really think that partnership means something, you have to come to the party and trust your closest ally with these technologies." There is no point in having the aircraft in service if one cannot look after it, and the best way to understand it is to make it.
I want to consider some of the inconsistencies in the strategy that appear under the heading, "Sustainment strategy". Although I appreciate that the strategy is designed to sustain and maintain our capabilities, one or two paragraphs require further explanation. Paragraph B4.39 states:
"Our need to retain a minimum level of onshore capability does not necessarily mean that we will need to support all aspects of our aircraft in the UK."
What do the Government mean by that? On the one hand, they want to sustain companies such as BAE Systems, but on the other, they appear to suggest that, if they get a good offer for doing some of the sustaining, maintenance and upgrade work from somewhere else, they might accept it. One cannot have one's cake and eat it if one wants an up-to-date military aircraft industry in this country that maintains its capabilities.
"For any particular aircraft type there may also be a middle ground where, to secure value for money for example, we may rely on off-shore suppliers for major upgrade".
Does that mean that the Eurofighter could go to Italy for upgrading? I should be grateful if the Minister enlightened us further.
"However, major changes must be made in the management and operation of the supply chain to incentivise continued improvements in the support arrangements for this aircraft, ensuring that we retain onshore our ability".
On the one hand, the document specifies "offshore", and on the other, "onshore". The Government must be clearer, especially given their comments on the joint combat aircraft.
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"We must maintain the appropriate degree of sovereignty over industrial skills, capacities, capabilities and technology to ensure operational independence against the range of operations that we wish to be able to conduct."
That is vital, especially in the light of the Minister's comments at the beginning of the debate that operations occur in which we need to act quickly. Unless we have 100 per cent. capability, we cannot fulfil that requirement.
There are further inconsistencies. Paragraph B4.23, which covers aerospace systems and enabling skills and technologies, states:
"Whilst the UK will have an enduring need for access to world leading technology across the range of aerospace systems, it is neither practical nor affordable to retain all the relevant skills and technologies onshore."
It continues by referring to the underpinning skills and what the Government want to achieve.
When considering key ingredients in the systems that we currently operate—described as "mission systems"—the strategy states:
"There is a strong UK based capability in the Mission Systems area, which has enabled the UK to deploy world-class capability without undue dependence on other nations".
Again, one cannot have one's cake and eat it. The capabilities must be maintained.
I am worried that the time scale of up to 10 or 15 years for further developments of unmanned air vehicles is too long. The use of autonomous air vehicles will be a vital part of future strategy and I hope that the Under-Secretary can tell hon. Members that the time scale will be shortened. I congratulate BAE Systems on its investment in the prototypes and on its achievements.
When will the decision on Nimrod be made? Is it likely that 12 aircraft will be organised? I welcome the strategy but I hope that the Under-Secretary will acknowledge that we cannot simply pick and choose or have our cake and eat it. We must invest in the best of British technology.
3.49 pm
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