HC Deb 01 March 1982 vol 19 cc128-34

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lang.]

11.56 pm
Lord James Douglas-Hamilton (Edinburgh, West)

While I have a general interest, as a Reserve Army Officer, in the P110 aircraft, in very much the same way as my hon. Friend the Member for Ilford, South (Mr. Thorne), I have a direct constituency interest, as many hundreds of my constituents work for Ferranti in Edinburgh. I think that my hon. Friend the Member for Nelson and Colne (Mr. Lee) also has many constituents who work for Ferranti.

I thank the Minister in particular most warmly for having taken the trouble to visit Ferranti in Scotland recently in order to see the very important work that is done by the company. A considerable number of people work for the company and make the inertial navigation system and the combined display for the Tornado. It is a matter of concern for my constituents that eventually there will be slow-down in the Tornado programme, but a subject of similar concern might arise if the P110 is not developed.

The P110 today, quite simply, has a similar significance for the security of Britain as the Spitfire had in its day. It is a single-seat twin-engined fighter and will be the best of its kind in the world. Like the Spitfire, it is entirely British. It bears all the hallmarks of the same genius and initiative. Indeed, the whole British aerospace industry regards the P110 as having a better performance for its cost than any competitor expected to be available between 1989 and 2000.

The confidence of British Aerospace that the P110 is a world-beater is evident from the amount of money already invested in it by all concerned, British Aerospace having already invested £9 million to date. However, the risks of private funding beyond mid-1982 will rapidly become unacceptable without a Government commitment to the project, which is why an early statement of intent is essential.

The P110 in its air-to-air role is an aircraft capable of very quick reaction and response. It can take off in 300 metres and can climb vertically, accelerating as it goes. It is a fighter with a multi-role capability and has exceptional performance in both air combat and ground attack roles. Excluding the United States of America, it is likely that there will be requirements for many hundreds of this category of aircraft.

This totally British venture is vital to the future of the British aerospace industry. As well as British Aerospace and Ferranti, Rolls-Royce, Marconi, Lucas, Dowty and Smith's Industries are all involved and are contributing to the project.

Moreover, it is estimated that by the end of the decade at least 50, 000 jobs in the aerospace industry and its suppliers in the supply and service industries may depend on it.

Ferranti is involved in many of the technologies that would be used in equipping the P110, including the inertial navigation system, the advanced electronic and moving map displays, the laser rangers and the radars, as well as other forms of equipment. Taking the lowest sales estimate for such an advanced fighter as the P110, its importance to Ferranti in future years would probably be equal to, or greater than, the current Tornado programme.

However, towards the end of the 1980s, Tornado orders will be largely fulfilled and, unless other programmes arrive to fill the gap, the large production base and skilled work force built up to meet current commitments will be run down to a level sufficient to deal with a much lower level of activity. That would probably cause redundancies in an area which can ill afford them.

Furthermore, if the P110 does not go ahead it could lead to an irrevocable loss of the associated indigenous technologies. Yet the military need for such systems will not disappear and, when a new fighter aircraft is finally ordered for the RAF, as must eventually occur, the capability to make vital elements will have vanished and expensive imports would be necessary. The application of craft skills on high technology areas has always been an important element in the pursuit of export business. Now that the Third world, with its abundant labour, can meet the requirements of our former mass markets, it is even more important for us to rely on exporting our high technology.

High technology does not stand still; and if that profitable area of British expertise is to be maintained and extended industry needs to receive timely Government encouragement. Therefore, support for the P110 is crucial for industry, for continuing technological advance and for employment. Many other countries in the Middle East and Europe, including a possible consortium are interested in buying the P110, and thereby contributing to its development.

Those bodies are waiting for the Government to give a commitment in principle to the project. An RAF order would not only strengthen the front-line capability of the RAF but would confer credibility on the programme and it is the key to participation in the project by other countries. Once that is achieved, with the necessary finance, a snowball effect would result.

Aircraft would be sold and other countries outside the initial participants would also order the aircraft, causing the production run to continue and employment to be maintained. The financial return to Britain could be great, including not only the return from direct sales of the P110 to overseas customers but the spin-off in terms of avionics equipment being incorporated in other foreign aircraft programmes.

For example, where a country has an aircraft industry but lacks the capability to design the most advanced military avionics I think of countries such as Brazil, India and Italy—it might make orders for avionics equipment in the wake of the P110 development. However sales to foreign customers of new, untried equipment are rare. Successful export is invariably in equipment which has first been installed and successfully operated in British aircraft.

Apart from any advantages which an industrial alliance could promote, commercial opportunities in areas other than defence are bound to be generated and the implications of that for industry, particularly oil, banking and insurance, should not be overlooked.

As I mentioned at the outset, the P110 can be likened to the Spitfire in its time. Just as the Spitfire played a key role in winning the Battle of Britain, we are now facing a different, but similarly daunting challenge. Today winning the Battle of Britain means securing exports in foreign markets to assist our balance of payments; it means retaining or increasing employment , and it involves remaining in the forefront of aerospace, technology.

It must be impressed on my hon. Friend that if we fail to develop the P110 an estimated 50, 000 jobs in Britain will be at risk by the end of the decade and we will be in danger of losing a huge slice of technology. In short, if we falter or vacillate the British economy will be weakened, because we shall be compelled to rely on a less good aircraft from an overseas supplier and it will probably be equipped with its own national avionics and equipment. It should never be forgotten that the avionics equipment account for about one-third of the total cost of this sort of military aircraft. If we succeed, employment will be retained, as well as creating more, and entire communities will benefit thereby, which must include not least of all local tradesmen and services, as well as everyone else. Above all, our high technology will be maintained, and Britain will continue to be a world leader in aerospace.

I cannot do better than end with the words of the Prime Minister when she spoke at the Farnborough International Eightieth Flying Display dinner on 3 September 1980. What she said then is every bit as important and true today'. She said: The fact is that we will not get the export orders we seek, unless we are also producing for the home market. She also said, with far-sighted realism: A view needs to be taken by the Ministry of Defence and other public procurement authorities of likely requirements well into the future. She continued, well aware of the need to safeguard the national interest in this connection: The procurement budget of Government and the skills of our people, if used together to the best advantage, could bring the country far larger sums, greater benefits both to our Armed Services and to our industries, and more jobs at the same time. Finally, she summed up most powerfully the crux of the matter with these words: The importance of the aerospace industry to the British economy cannot be over-estimated. Indeed, if we had to produce the ideal example of an industry with high added value export products, we need look no further than aerospace.

12.6 am

Mr. John Lee (Nelson and Colne)

I speak with the kind permission of my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton), and I am flattered to follow his excellent speech in favour of the P110.

As my hon. Friend the Minister will know, North-East Lancashire is the centre of a substantial aerospace industry, but it is experiencing severe pressure on two fronts: first, because of the international recessionary effects on Rolls-Royce at Barnoldswick, and secondly because of the rephasing of the Tornado project., As the Member for Nelson and Colne, I have been in correspondence with many of the aerospace subcontractors in my constituency, for whom hundreds of my constituents work—with Lucas, Burnley Engineering Products Ltd., Earby Light Engineers Ltd., Cleveland Guest Ltd. and Weston Electric Units Ltd., as well as Rolls-Royce. I understand that 300 redundancies are a direct result of the rephasing of the Tornado project in North-East Lancashire alone. I am happy to provide my hon. Friend with the evidence that is contained in the correspondence.

Too often the cause of aerospace subcontractors goes by default. The question of jobs in aerospace both for the main contractors and subcontractors has been covered by my hon. Friend the Member for Edinburgh, West. It is vital that we endeavour to keep together our skilled aerospace engineering teams, albeit at the present reduced levels because of the pressures that I mentioned. I hope that the Minister will give some words of encouragement to the aerospace industry in North-East Lancashire, in terms of the prospect of the Government giving substantial backing to the P110, and thus giving my constituents in the aerospace industry some hope in the mid-1980s and beyond.

12.8 am

Mr. Neil Thorne (Ilford, South)

With the permission of my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton), I am delighted to participate in this important debate and follow his excellent speech.

He may know that he has raised a matter that is of considerable interest to a number of hon. Members. My hon. and learned Friend the Member for Colchester (Mr. Buck) is away from the House on parliamentary business, otherwise he and a number of other hon. Members on the same duty would have been here for this debate.

My hon. Friend modestly mentioned his general interest in this subject, without any reference to the long and distinguished connection that his family has had with aviation. If I am not mistaken, his father was the first man to fly over Everest. He did so long before Sir Edmund Hillary and Sherpa Tensing reached the top on foot.

Modesty is a family handicap of the British and it spreads to national matters as well. When we invent a masterpiece, we seem often to let the opportunities to exploit it slip through our fingers. The Plessey company is important to my constituency, with its splendid ability to provide specialist subcontract work in most areas of defence. I hope that my hon. Friend the Under-Secretary of State will be able to give us some encouraging news about an order for the P110. It seems to be another one of the designs that could have a promising future if the Government are prepared to show their confidence in the home product.

12.10 am
The Under-Secretary of State for Defence Procurement (Mr. Geoffrey Pattie)

I am glad to have the opportunity to respond to the debate. I congratulate my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) on the diligence and tenacity with which he has pursued this project and the interests of his constituents. Within a few weeks he has written to me about the P110, asked a question about it and achieved the hat trick of raising the matter on the Adjournment.

I am glad that my hon. Friends the Members for Nelson and Colne (Mr. Lee) and for Ilford, South (Mr. Thorne) have been able to contribute to the debate. The comments that they have made have been noted by me, especially those of my hon. Friend the Member for Nelson and Colne. It is well appreciated that when the prime contractors are pulling back work inside the factory the smaller companies tend to suffer. We are well aware of that but doubly grateful to him for reminding the House of it once again.

My hon. Friend the Member for Edinburgh, West has told us eloquently that the issue is important for his constituency and for the United Kingdom's aerospace industry as a whole. I assure him and my other hon. Friends that we are extremely conscious of the importance of the project. I have visited some of the firms concerned, including British Aerospace at Warton on several occasions, and recently the Ferranti factory at Silverknowse, as my hon. Friend the Member for Edinburgh, West knows. He will appreciate that no opportunity has been lost by those whom I have met during my visits to impress upon me the crucial place that they see for the project in their future programmes.

I know that it will come as no surprise to my hon. Friends, especially my hon. Friend the Member for Edinburgh, West after our recent exchanges, that I am not able at this stage to make the commitment that he would like me to make to back the P110 for the Royal Air Force. While we are doing all that we can through ministerial and other contacts to assist industry in promoting the P110 with potential customers overseas, it is simply not possible, at a time when our future combat aircraft requirements and options are very much under study, to anticipate what the outcome of our studies will be and to make the sort of commitment that he advocates.

To place the subject of the P110 in context, I believe it will be helpful to remind the House of the background to the current situation. The House will know that we are at present up-dating much of the RAF's fleet of front line aircraft by equipping it with the Tornado—the multi-role combat aircraft developed by the United Kingdom in collaboration with the Federal Republic of Germany and with Italy. The interdictor strike version of Tornado is now entering service with the RAF, and deliveries of the air defence variant are expected to commence in the mid-1980s. By the end of the present decade, 385 Tornados will have been delivered to the RAF.

We also plan to bring into service during the 1980s the Harrier GR5 aircraft, which is the product of the joint AV8B programme with the United States of America, to build improved aircraft using the vertical-short take off and landing technology developed on the Harrier. We shall ultimately have 60 GR5s from which to augment the RAF's existing Harrier force.

In addition to these two major programmes, which together involve a massive commitment of defence funds during the current decade, it had been planned to develop against Air Staff target No. 403 a new combat aircraft to replace the Jaguar in the early nineties. To this end the aerospace industries of the United Kingdom, France and Germany, as well as the Air Forces and Government officials of the three countries, have worked together over the past few years on the possible collaborative development of a European combat aircraft.

However, when my right hon. Friend the Secretary of State for Defence carried out his appraisal of the defence programme last year he found that, despite meeting our commitments to NATO to increase the United Kingdom's spending on defence by 3 per cent. in real terms each year, the resources available were unfortunately insufficient to implement all our forward plans and aspirations. If we were to live within our means, some programme adjustments were unavoidable and, after due consideration, my right hon. Friend concluded that we were unable to afford any direct and early replacement for the Jaguar force in Germany and at home. His decision to that effect was published last June in the White Paper on the defence programme, Cmnd. 8288, which went on to say that we were, however, continuing work and discussion with potential partners on future combat aircraft and that possibilities included both advanced VSTOL and Tornado-related developments. The White Paper also made the point that we would have particular regard to collaborative opportunities and to export markets, as well as to the long-term capability of the British aircraft industry.

In accordance with the White Paper decision, no further Government-funded studies on the Jaguar replacement have been authorised. It is envisaged, however, that Royal Air Force and Government officials will keep in touch with their counterparts in France and Germany on the possibility of a collaborative development of a combat aircraft.

That, then, is the background. I return to the P 110. This project has been conceived by industry in anticipation of future requirements. It is being pursued by industry on a private venture basis as a means of meeting what they see as requirements both of the United Kingdom and of overseas Governments. It also sees it as a means of employing to best advantage the skills and resources of the industry in the years ahead and as work on the Tornado runs down. Among the companies involved are British Aerospace, Rolls-Royce, Lucas Aerospace, Smiths Industries, Marconi and Dowty, as well as Ferranti, in which my hon. Friend the Member for Edinburgh, West has his particular constituency interest.

Industry sees this aircraft as the third member of a family of combat aircraft based on the Tornado technology but embodying significant technological advances beyond the Tornado. It is, I understand, planned as a twin-engined single-seat fighter to be powered by an improved version of the Turbo Union RB199 engine fitted in the Tornado. I understand also that some 40 per cent. of the P110's airframe, including the wings, are planned to be made of carbon fibre composite materials and that the aircraft is to have a "fly-by-wire" active controls system. In both these respects, the project would benefit from the advances made in both carbon fibre composites and fly-by-wire technology at BAe's Warton Division resulting from technology demonstrator programmes funded primarily by the Ministry of Defence.

BAe has made it clear that if full-scale development of the P110 is to take place it will need a partner or major customer by the end of 1982 or early 1983. It judges that the build-up of investment which is needed beyond that time is such that it must identify a launch aid partner if the project is to continue on its present schedule. This is necessary if the P110 is to match the delivery time scale of other aircraft such as the French Mirage 4000 which is competing in the same export markets.

The P110 has been designed primarily for the air defence role, although it could have a capability in other roles. BAe has approached a number of other countries which have shown interest in the project, with a view to their sharing the costs of a joint development programme. In its efforts to sell the P110 BAe has, as my hon. Friend knows from our correspondence, been assisted by the sales organisation of the Ministry of Defence and by other Government representatives serving in certain countries.

I readily understand industry's concern that there should be a commitment by the Ministry of Defence to purchase the P110 for the Royal Air Force and its judgment that this would enhance enormously its prospects of selling the aircraft to foreign customers. However, although it is true that the P110's design might have enabled it to meet many of the requirements of AST 403, the Jaguar replacement, last summer's White Paper on the defence programme made it clear, as I mentioned earlier, that we shall not be able to afford any direct and early replacement for the Jaguar force. That position has not changed.

I should also make the point that a Tornado-related development such as P110 is only one of the possible ways of meeting the Royal Air Force's longer-term requirement for combat aircraft. As last summer's White Paper foreshadowed, we are also considering the possibility of advanced VSTOL aircraft which would capitalise on the successful Harrier concept.

In concluding, I emphasise that no decisions have yet been taken on the next generation of combat aircraft for the Royal Air Force. The options set out in last June's White Paper remain open. Our studies are still at an early stage and we shall, of course, have regard not only to meeting the operational requirements of the Royal Air Force but also to the needs of the aerospace industry in this country. My right hon. Friend the Secretary of State is very conscious of the sort of problem that my hon. Friend has described. We understand the anxieties which the industry feels about the future, and we shall take them fully into account in reaching a decision on future combat aircraft. These are extremely important issues. We shall need to weigh them very carefully, with full regard to the constraints of the defence budget. Meanwhile, we are continuing to assist BAe's endeavours to sell the P110 in the export market.

Question put and agreed to.

Adjourned accordingly at twenty minutes past Twelve o'clock.