§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Donald Thompson.]
11.26 pm§ Mr. Tom Sackville (Bolton, West)I applied for the debate on the ALARM project first, because of its great importance to the 3,500 employees of British Aerospace at Lostock in my constituency, to their families and to the surrounding economy generally. I did so, secondly, because of its importance to up to 150 other British subcontractors around the country. The third reason was the wide-reaching importance and consequences for the future of the British defence industry and other high technology areas.
I do not need to go into detail about the relative merits of ALARM and HARM. However, the RAF has the requirement for such a defence suppression weapon and British Aerospace has produced a design for a suitable system and has spent millions of pounds of its funds on initial development.
The ALARM system is entirely British designed and involves a great deal of British defence technology. It would be built entirely at Lostock. Against that, the Americans are bidding, through Texas Instruments, for a rival system called HARM. It is similar in application but parts of it have been brought to a more advanced stage of production.
A decision to buy British would appear to be the obvious choice, not least because of the attractions of moving towards Europen self-sufficiency and independence in such weapon systems. Many times during the past few months there have been rumours of an imminent decision, but for reasons at which we can only guess that decision has not been forthcoming. That has led to much speculation and has caused great distress among many of my constituents who are likely to be affected.
The local impact can be summarised as follows. Without the ALARM contract British Aerospace will progressively shed at least 900 of the 3,500 jobs at the Lostock plant. It employs 400 apprentices and without ALARM will be unable to maintain that number. Nor will it be able to offer the 63 new apprentice places to those selected from the 1,700 who applied for this year's apprentice intake. The whole viability of Lostock as an economic production unit may be threatened.
The factory at Lostock is a highly sophisticated unit, responsible for injecting £40 million into the local economy annually — an economy beset by high unemployment. Only a mile away from the factory is the Horwich British Rail engineering works, which is threatened with closure and the loss of more than 1,000 jobs at the end of the year.
I cannot stress too much that British Aerospace Lostock is the linchpin of the local engineering community. The factory boasts one of the largest and best equipped machine shops of its type in Europe. With its new apprentice training school it is one of the most important seats of technician training in the north of England and a vital source of training manpower for other industries. Since 1946, Lostock has trained more than 3,000 apprentices, many of whom have made an invaluable contribution to British industry generally.
The loss of this contract would also have a wider effect on British industry as a whole and in particular on the 988 defence industry. The technology employed in the project involves the use of advanced microwave techniques, including new substrate materials, multistage Kahlman filtering and the latest microflex gyros.
The industrial spin-off of the work involved is enormous, not only at Lostock but over the range of subcontractors who make everything from specialised electronics to parachute retarder material. The spin-off would stretch well beyond defence. Much of this technology would be lost to Britain as a result of the cancellation of the project, but if the project goes ahead the technological lead stays with Britain. The techniques being developed for ALARM would be used in future defence projects such as the advanced short-range air to air missile and the AST 1240, the short-range self-protection anti-radiation missile.
Even more important, the export sales potential for ALARM would provide work for thousands of British people in many industries through to the end of this century to an extent in no way matched by the limited offset work offered by HARM. The Governments of Germany, Switzerland, Italy and Sweden, who all have a known requirement for a defence suppression system of this type, are awaiting the decision of the British Government over the procurement of ALARM before finalising their own procurement. Two major French companies have confirmed their interest in co-operation with British Aerospace for such systems for the French air force and undoubtedly the availability of ALARM would enhance exports of British military aircraft such as Hawk and Tornado.
I am forced to speculate on why the Government have not already decided to buy ALARM. We must suppose that the British Government have been subject to intense diplomatic pressure to buy the American system. This may result from an understandable American desire to dominate the world market for such defence suppression weapons. Such pressure is applied within the context of the so-called two-way street of mutual arms purchases between Britain and America. Indeed, there are large potential sales of aircraft and other armaments to America over which this matter could become a lever.
I would respectfully suggest that we should not create a precedent for giving in to such pressure, particularly in the light of changed circumstances resulting from the 45 per cent. of the Trident missile system which will be spent in the United States of America. This figure works out at approximately £350 million per year over a 10-year period or a 170 per cent. increase over the average historic figure of £200 million per year spent in the United States.
I am forced to wonder whether we are in danger of being deceived into a misplaced concern for future trade with the United States which is definitely threatened by a Congress increasingly protective of politically entrenched arms manufacturers. Are we not bending over backwards to accommodate our American friends when there are interests on the other side doing their best to block purchases of foreign military equipment or subcontract work from going outside the United States? I would cite the Martin Baker ejection seat as a recent example of this danger. Indeed, at present a member of the House Banking Finance and Urban Affairs Committee is seeking to initiate legislation designed to restrict the use of offsets. This would of course put at risk even the offset which has been offered to British firms, such as Lucas, on a British purchase of American HARM.
989 I submit that we would be making a grave long-term error in contemplating the cancellation of the ALARM project for what may prove to be merely short-term considerations. The recent history of British industry has been characterised by our propensity for giving up our lead in vital technological fields. Are we going to do it again, this time in the sphere of defence suppression weapons? Are we thinking of throwing away up-to-the-minute British technology to buy what will soon be outdated United States technology?
Such a course of action would represent a kick in the teeth for British industry as a whole. We talk boldly of wealth creation by investment in new technology and going out to market it aggressively to the world, but how can we keep up in any technology if we do not invest in our own products? Indeed, how can any salesman sell from an empty suitcase? I urge the Minister to consider these points carefully and to ensure that his decision is announced to the House during the remainder of the present Session.
§ Mr. Deputy Speaker (Mr. Paul Dean)Order. I must protect the Adjournment debate of the hon. Member for Bolton, West (Mr. Sackville). Do the hon. Members who are rising have the agreement of that hon. Member and the Minister to intervene?
§ Mr. SackvilleThey do, Mr. Deputy Speaker.
§ Mr. Christopher Murphy (Welwyn Hatfield)As we debate ALARM and future British weapons systems, we are considering not only that most important of Governmental tasks, the defence of the realm, but the development of expertise and technology without which the nation will be the poorer in stature and the more dependent on others. Additionally, the commercial and employment consequences are self-evident. It is regrettable that the SDP-Liberal alliance is not represented at this debate, which is well supported by Government Members.
It is vital that projects such as ALARM, with which my constituency has been closely connected, should receive the support of the Ministry of Defence and the RAF. It is also vital that other projects involving British Aerospace dynamics division, such as ASRAAM, should be afforded priority consideration for relevant Government commitment. That should also be the case for projects involving the British Aerospace aircraft division, such as the A320 airbus.
Britain has for long provided skill and innovation in aerospace which have been a source of justifiable pride and success. Denationalising British Aerospace has added lustre to an already outstanding industry, but inevitably there remains a role for the Government as both sponsor and purchaser. I have long campaigned, with certain positive results, for due recognition to be afforded to British Aerospace projects such as the 146 aircraft, the A300 airbus, the Sea Eagle missile and ALARM. the last named deserves the early and favourable decision for which my hon. Friend I are rightly pressing tonight.
§ Mr. Kenneth Warren (Hastings and Rye)I wish to make three points. First, will my hon. Friend the Minister reiterate the commitment which his predecessor, Lord 990 Trenchard, gave in correspondence with me when he said that, as a matter of principle, in assessing the viability of any British submission for a defence contract, the United Kingdom content in terms of men, taxation, the recycling of that taxation and national insurance would be taken into account in valuing the real net cost of the submission? If he is willing to make that statement again, we are discussing what is without doubt the cheapest system available for the United Kingdom.
Secondly, I commend to my hon. Friend the courage that is being shown by British Aerospace in contracts like this by offering a fixed-price contract. This means that one has the assurance of a fixed expenditure of money, and the whole of British industry is looking to the MOD to have that sort of courage.
My third point is vital. From information that is available in the United States, it is clear that aircraft like the Tornado seeking to penetrate Soviet defensive systems of the kind that are deployed today will not succeed in so doing for more than two missions. The whole of the Royal Air Force would be wiped out in a matter of days of conflict.
It is intolerable that the delay that we are now experiencing should be such that our pilots' capability to defend this country will be inhibited to the point of a danger that is not acceptable to anybody in the House. Every day of delay gives the Soviets a better chance to conquer the abilities of HARM and ALARM. I believe that we need some of both.
§ Mr. Robert Atkins (Ribble, South)I am extremely grateful to my hon. Friend the Member for Bolton, West (Mr. Sackville) for allowing me to have some time to speak on this subject, which we pursued before the general election and will continue to pursue until we get a favourable decision.
I should like to ask my hon. Friend the Minister some questions. He has done much for the British defence industry over the years. I hope that he will continue to do so by encouraging his colleagues to go along with this missile decision. Can my hon. Friend confirm that the ALARM project may not need the transfer of technology that would be needed if we purchased the HARM system? Will he confirm also that it has become evident that the American manufacturers are not prepared to go along with such a transfer of technology for the seeker device in the missile?
Can my hon. Friend confirm that the HARM manufacturers are offering only a cost-plus contract, as opposed to a fixed-price contract, to which my hon. Friend the Member for Bolton, West referred? Will he confirm that the Tornado in its dual role capacity will not be able to carry JP255 as well as the HARM system because of the weight problems and the possible need to rewing the Tornado to carry such a weight? Will he confirm that the requirement of the Royal Air Force does not necessitate having the HARM system, when the ALARM system will do the job just as well at half the price and half the weight?
I am grateful to my hon. Friend the Member for Bolton, West for allowing me to intervene. I hope that the Minister will take into account the views that have been expressed in the debate and press strongly, as I know he is doing already, to ensure that the decision goes the British way, which is the best way in my opinion and that of my hon. Friends.
§ The Minister of State for Defence Procurement (Mr. Geoffrey Pattie)The House is grateful to my hon. Friend the Member for Bolton, West (Mr. Sackville) for raising this subject. It must be some time since we have had such an excellent attendance at an Adjournment debate, which shows the concern in many parts of the House, particularly, though not entirely, on Government Benches, for the future of the project.
As my right hon. Friend the Secretary of State said yesterday in reply to my hon. Friend the Member for Ribble, South (Mr. Atkins), the decision on which weapon to purchase to meet the Royal Air Force's defence suppression requirement is expected in the near future. I can only add that one hopes that it will indeed be the near future.
I shall respond to the points made by my hon. Friend the Member for Hastings and Rye (Mr. Warren). I assure him that what I would call the full cost assessment, looking at what the real costs are, is the basis that we shall use. I have noted the other points that he made.
My hon. Friend the Member for Ribble, South asked me to confirm or deny certain points. It goes without saying that the technology for ALARM would be developed and based here, so no transfer of technology would be relevant, whereas that is not so for HARM, as is well known. It is also true that approximately half the contract price for HARM would be on foreign military service sales terms. They are decided by the United States Government when the purchase is made. There is, therefore, some doubt even at this stage.
I have noted the points about what Tornado should or can carry. I do not want to go into too much detail, but the difference is largely to do with the operational mode. If there is a designated aircraft — I think that that is somewhat risky in wartime—HARM does rather better. If it is decided to carry an anti-radiation missile with others in a mix on several aeroplanes ALARM is favoured. People disagree about whether the designated concept is a good idea. Those who have been involved in wars have a habit of telling us that the designated platform tends to be the one that goes "u/s" on the day and one is left managing without it.
I should like to give the House two assurances. First, I and my right hon. Friends are extremely well aware of the issues that have been raised tonight. They have been taken into account in our assessment of the balance that we must strike between the competing claims of the British Aerospace ALARM and the American-developed HARM which has been offered to us either on co-production between Texas Instruments in the United States and Lucas Aerospace in Britain and known as "British HARM" or directly from the United States Government. I stress that the arguments for each are clear to us. I cannot recall a defence procurement decision for some months that has attracted so much interest.
The considerations that my hon. Friend the Member for Bolton, West highlighted in his excellent speech are foremost among those that we are taking into account. It would be foolish to pretend that both weapons do not have good points. If it were an open and shut case in one direction we should not be having this debate. We must find ways in which to give proper weight to a range of factors, including the following: the various operational and technical characteristics of each weapon and their 992 capabilities against the threat posed by Warsaw pact air defence units in the later years of this decade and in the 1990s when the threat can be expected to be intensified; the maintenance of job creation in British industry—a feature of the ALARM and the "British HARM" bids which has rightly figured prominently in my hon. Friend's case; and the several dimensions to the cost — total programme costs, the unit costs of production weapons, whether costs are fixed in contract or liable to change and, perhaps most important of all, cost effectiveness. We are given to understand that British industry will have the opportunity to bid for places in the HARM programme, although that is not the same as getting them. Nevertheless, the export market appears to be significant.
Much as I might like to enter a detailed comparison of the various factors, that would not be appropriate now. Some details, such as cost figures or relative in-service dates, even though some information has been made available by the competing firms, must remain matters of commercial confidence for the Government. In other areas, such as export potential, British technological and industrial interests and operational effectiveness against the threat, the Government are in the final stages of forming their own conclusions on the relative merits of each proposal.
My hon. Friend the Member for Bolton, West mentioned the guided weapon expertise of British Aerospace. Its achievement in developing and producing guided missiles was amply demonstrated by the successful use during the Falklands crisis of the Sea Skua helicopter-launched anti-ship missile. We also have high hopes for Sea Eagle, the air launched anti-ship missile that is currently being developed by British Aerospace. I pay credit to my hon. Friend the Member for Welwyn and Hatfield (Mr. Murphy) who has espoused the cause of the British Aerospace dynamics group so effectively for so long.
Hon. Members may wonder why I am mentioning the Sting Ray torpedo in the context of the debate, but what is at issue is the continued technological competence of a vital part of British industry. We have to have regard the good performance in the Falklands by Sting Ray, which was rapidly deployed down there. In the event, it was not used, but it was a project that attracted unfavourable attention because of its inadequate performance in its early years. Since it has been taken over and taken in hand by industry, I am glad to be able to tell the House, and also the Public Accounts Committee if it is listening, that its costs have not increased in real terms since 1978–79, and there are not many projects about which one can say that.
My hon. Friend the Member for Bolton, West spoke about the future of Lostock near Bolton and the value of the technologies in ALARM for future missile systems and concepts, not least the technology contributed by Marconi Space and Defence Systems in homing heads. The work at Lostock would be in assembling the production missiles and would, as my hon. Friend will agree, come later in the decade. Before that, in the development stage, there would be significant employment at British Aerospace dynamics group factories at Hatfield, Stevenage and Bracknell. With the current economic circumstances and high unemployment, we are well aware—I once again assure my hon. Friends of this — of the implications of the ALARM programme for British Aerospace and for Lostock, and for employment throughout the country, as well over 100 subcontractors would benefit. This is an important point 993 that needs to he born in mind because usually only the leading companies catch the headlines and are the people about whom we hear. However, there are still 100 other companies involved in this programme.
In regard to future weapon systems, I believe that my hon. Friend would have in mind both the scope for other missile programmes than ALARM for British Aerospace, and the other firms involved, in coming years, and the opportunities that could now be opening up for new missiles fitted with anti-radiation homing heads—or the application of this technology to existing designs. Certainly there are such opportunities.
Seeker technology is the key to many advanced weapon systems and the maintenance and enhancement of our competitive position in this is an important issue that is at the forefront of our considerations. Seekers for anti-radiation missiles are doubly important. These must measure and classify signals from enemy radars, which may be changed quickly and perhaps subtly in some circumstances to outwit the missiles and, of course, decoys may also be used. We must have the capability to react very quickly to such changes and this is best assured when we have the detailed knowledge of the seeker that comes from designing and building it ourselves. Indeed, it is true in electronic warfare as a whole, where it can be said that we own only half the system and the enemy owns the other half. This is a lesson that our experience in the Falklands reinforced and that we must not forget.
994 There are also wider possibilities, some of them collaborative, in the homing head activities generally, which include active radar and infra-red as well as anti-radiation techniques. Potential applications are by no means confined to air-launched weapons. The possibilities also embrace land-based and ship-launched weapon systems. Some of these are much longer term, but we attach high importance to them, as the essay "New Technology, New Tactics" in last week's defence White Paper shows.
I hope that I have said enough to demonstrate lo my hon. Friend the Member for Bolton, West and to the significant number of other hon. Members on both sides of the House who are present and who have been concerned enough to stay after the excitement earlier this evening, that the claims of ALARM to be selected for the new defence suppression weapon requirement are appreciated fully and are being taken into account in detail by us. Certainly the Government need to have regard to a whole range of factors in addition to the traditional ones of cost and delivery timescale.
I warned my hon. Friend before the debate that I should not be able to surprise him this evening, but I hope, as he does, that the decision will not now be long delayed.
Question put and agreed to.
Adjourned accordingly at seven minutes to Twelve o' clock.