Airborne Early Warning System

HC Deb 18 December 1986 vol 107 cc1409-54

7 pm

Mr. Denzil Davies (Llanelli)

I beg to move, That this House do now adjourn.

Leave having been given this day under Standing Order No. 20 to discuss: the need for an independent and urgent inquiry into the purchase of a new airborne early warning system for the Royal Air Force. Several questions arise out of the statement of the Secretary of State for Defence. It was a long and detailed statement and I may come to it in my speech. However, I have no doubt that the Secretary of State for Defence or the Under-Secretary of State for Defence Procurement will attempt to deal with it in their respective speeches.

Most hon. Members including the Secretary of State would agree on at least one thing—that decisions on defence procurement are seldom easy. They are seldom easy, obviously, because there are so many considerations that must be taken into account. Those considerations often appear to be in conflict with each other. First, there are the military considerations, then the industrial considerations and then the financial consequences for public finance and public expenditure.

The industrial considerations cannot and should not be separated from the defence considerations. A country's ability to defend itself and, indeed, to wage war if necessary in its own defence, is invariably and obviously bound up with its defence industries and industrial base. A country that does not have a strong industrial and technological base cannot, in the modern world, wage war for very long. Recently there have been many examples of countries with strong industrial bases being able to wage war against seemingly larger and more powerful countries. We won the last war partly because of the strength at that time of our industry and, of course, of our technical expertise and innovation.

I agree with the Prime Minister that defence interests are paramount, but defence interests include military and industrial interests. It is no coincidence that President Eisenhower spoke of the military-industrial complex, because without an industry and without that base it would not be possible to provide the wherewithal to wage war and to defend one's country.

No other major nation in the West would have taken the decision that this Government have taken today. I do not believe that the French, the Germans, and certainly not the Americans, would have given the sort of kick in the teeth to their own industry which this Government have done. It is no good the Secretary of State or Conservative Members saying, "Well, it is all right, you know. There is a sub-contract here for Plessey and a bit there for Racal, and Ferranti comes in with another sub-contract." That does not show an understanding of modern defence procurement. Sub-contracts are all right but the main objective should be to secure the prime system and to ensure that one's industry can compete and carry out the prime system. If we merely produce components under sub-contracts, we shall lose the expertise to carry out the prime system which we need to maintain our base and to remain a viable industrial nation.

I said that these decisions are never easy. Perhaps I should have qualified that remark by saying that they are never easy if they are considered and looked at rationally and objectively. They are, of course, much easier if the person who is taking them is driven by some sort of simple absolutism that is nurtured by half-baked economic theories, personal spleen and a besotted adoration, sometimes, of all things American.

The Government have not considered this problem objectively and rationally. The Secretary of State said in his statement that the decision was a matter of judgment. I am sorry to tell him that we do not have confidence in the Government's judgment on this matter or in their judgment on matters of defence procurement. That is why we say that there should be a second opinion on, and an independent inquiry into, the technical matters involved.

Mr. Robert Atkins (South Ribble)

I am exceedingly grateful to the right hon. Gentleman for giving way. Will he comment on remarks attributed to the chief Royal Air Force officer responsible for this project, who was reported in The Times on Monday as saying, with the blessing of the Chief of the Air Staff: I simply cannot accept these allegations that there had been some sort of bias in the evaluation. There has been the most thorough, far-reaching evaluation of the competing proposals … over the last six months. The suggestion that the assessment is a biased RAF exercise impugns the integrity not only of the RAF but also of all those individuals involved in this difficult task. Does the right hon. Gentleman accept that?

Mr. Davies

The gentleman concerned is perfectly entitled to express his view. During the past two or three weeks many things have been said in the newpapers on this matter. However, we do not trust the Government's judgment on defence procurement, or on the question of protecting British industry and British technology in general, because their record is not good. It is unnecessary to have a long memory—

Mr. Gerald Howarth (Cannock and Burntwood)

The right hon. Gentleman suggests that the judgment of the Labour party might be better than the judgment of the Conservative party. If the Labour Government's judgment was so wonderful why was the TSR2 cancelled in favour of the F111, which was then also cancelled? Perhaps he will tell the House about their surfeit of judgment in that regard.

Mr. Davies

We did not order a foreign aircraft.

Let us look briefly at the Government's record on procurement during the past three or four years. It is not necessary to have a long memory to remember what happened the last time the Government became involved in defence procurement. About a year ago there was lie question of the purchase of Westland or of a share in it. Perhaps I should remind Conservative Members what happened—[Interruption.] We are discussing an important matter of procurement. I am trying to show that the Government's judgment is not particularly good on these matters. What happened? Two Secretaries of State resigned. The Prime Minister was so determined that shareholder power should overrule the national interest and that the Americans should control Westland that she was prepared to subvert many of the conventions of the constitution to get her way. She got herself into such a pickle that she had to call upon Sir Robert Armstrong—that well known linguistic gymnast—to rescue her from her difficulties.

Mr. Robert Atkins

That has nothing to do with it.

Mr. Davies

The Secretary of State said that it was a matter of judgment, and I am trying to show that the Government's judgment in these matters has not been very good. Let us see how good the Government's judgment has been in respect of defence procurement and the royal ordnance factories. We all know what has happened to them during the past year. Let us see what has happened to the royal dockyards following the hare-brained scheme proposed by the former Secretary of State for Defence, the right hon. Member for Henley (Mr. Heseltine). They are being decimated and destroyed by the Government's procurement policy.

Let us look at the general policy of competition within the Department. If the Government continue with some of their competition policies, our defence industrial base will soon go the same way as our civilian manufacturing base has gone. If Conservative Members do not realise that, they should start to think about it. To some extent, our defence industries have always been protected. They have been protected by Governments of both parties in two ways. First, they have been protected by a virtual block on imports, with certain exceptions. That was one form of protection, although it was not an exact import control. Secondly, our defence industries have been protected to some extent over price in order to enable them to carry on. However, the Government are taking that protection away, and opening the industry up to competition from other countries that would never allow us to compete in the way that they compete here. That is what is happening, and if it continues there will be a substantial diminution in our defence industrial base.

Sir Antony Buck (Colchester, North)

If what the right hon. Gentleman has just said is true, is it not remarkable that we have managed to export 113 Harriers to the United States?

Mr. Davies

There is obviously a two-way trade, but the danger is that our defence industrial base will be destroyed as a result of the Government's policies.

Let us briefly look at the record on the civilian manufacturing side. Not long ago, the Prime Minister wanted to sell off our last remaining motor manufacturer to the Americans as well as Land-Rover, but she was stopped by opposition from Labour Members and by many other hon. Members. Again, that shows that the Government do not have a very good record on judgment in these matters.

Mr. Michael Heseltine (Henley)

How does the right hon. Gentleman square his suggestion that we do not support Britain's defence industrial base with the fact that 95 per cent. of procurement is bought through British industry or collaborative projects?

Mr. Davies

That used to be the case, but there is a great danger that that percentage will reduce rapidly as a result of the Secretary of State's policies. Given the mess that the right hon. Member for Henley made of the royal dockyards and the royal ordnance factories, he should be the last person to stand up and say anything.

As the Secretary of State said in his statement, the latest instalment in the long Nimrod saga commenced in March 1986, when the Ministry of Defence announced an open competition for an early warning system for the RAF. As the House well knows, three American companies — Boeing, Lockheed and Grumman — entered the competition, as did GEC. After the preliminary examinations, Lockheed and Grumman dropped out because I understand that their systems were not considered suitable. Thus, the two companies left, GEC and Boeing, were presumably thought to be suitable to go into the final round of the competition.

I think it is fair to say that the competition at least spurred GEC into action. I understand that during the next few months several improvements were made to its system. The transmitter was improved, as was the range and the overland capability. The receiver capacity was enhanced to prevent overloading, the tracking programme was improved, and the central computer was made to work three times as fast. No doubt there were other improvements as well, which were carried out in the fairly short period between March and the competition's final stages.

Indeed, the position had improved sufficiently for the editor of Flight International—a respectable publication that is well thought of—to write towards the end of the year: The Royal Air Force choice must be for quality. It is becoming evident that the GEC equipment is performing almost impeccably, and is at least equal to the Westinghouse equivalent in the E-3A, if not some years in advance of it. Confidence in the system was enhanced when Lockheed decided that it would insert the system into its aircraft in order to try to sell the system worldwide. Again, I should have thought that Lockheed would not have done that unless it was satisfied that the system worked. We are talking about an American company that is a very close competitor of Boeing. Hon. Members may say that that is not enough for them, and that they are not prepared to take Lockheed's view, the view expressed by the editor of Flight International, and so on. In that case, perhaps they will take it from the horse's mouth, from the Secretary of State for Defence.

Mr. Robert Atkins

What about Jane's "All the World's Aircraft"?

Mr. Doug Hoyle (Warrington, North)

Shut up and listen. You might learn something.

Mr. Speaker

Order. This debate is of great interest and I ask the House to listen quietly to what the Opposition spokesman has to say.

Mr. Davies

On 5 December, two weeks ago, the Secretary of State made a clear statement. He has been challenged about it in the House and he has not denied it, and so I shall repeat it tonight. Quite gratuitously, when asked, he said that "both systems work." He need not have said anything. He did not even qualify that. He went on to qualify the position in terms of cost, but there was no qualification of technical matters. He did not say that in one of those fireside chats that he gives on Radio Ayr, such as the one that he gave before the bombing of Libya. This was prime time stuff, on "News At Ten". He clearly said that the two systems work. I am not sure what the Secretary of State said this afternoon. I think that he said that they did not work. By implication, his statement shows that the two systems—[HON. MEMBERS: "No!"] The Secretary of State is perfectly capable of answering for himself. I can only repeat what he said.

Mr. Jonathan Sayeed (Bristol, East)

Does not my right hon. Friend's earlier statement show that he was bending over backwards to be fair to GEC? Surely the purpose of airborne early warning is to give a better warning than ground radar pictures can do. As the GEC Nimrod gave a worse picture, would it not be better to buy an aircraft that gives a better picture?

Mr. Davies

All I know is that on 5 December, the Secretary of State bent one way, and today he has bent another. Perhaps he will tell us how he squares that statement with what has been said today. Within 48 hours of the Secretary of State's statement on television, there was a barrage of propaganda in the press rubbishing GEC and Nimrod. The two stories from the Sunday newspapers that I shall quote were probably written within 24 hours. I shall quote stories from The Observer and The Sunday Times of 7 December, stories written on Saturday afternoon. The story in The Observer was written by Adam Raphael and Victor Smart. It said, under the headline: Cabinet gets set to ditch Nimrod. The Cabinet's defence committee is expected to decide this week between the rival bids … But with Mrs. Thatcher firmly in the Boeing camp the Government are likely to go for the AWACS system. James Adams, the defence correspondence of The Sunday Times said: The project is three years late, more than £600 million has been spent … George Younger, the defence secretary, received the report from the equipment policy committee on Friday and is studying it over the weekend. He had not studied it on the Friday, when he went on television.

We need to be told how the Secretary of State squares his statement that both systems work with the leaks that came from his Department. They could not have come from anywhere else, and there is a quotation from somebody in his Department who is not named. Was the Department trying to get at the right hon. Gentleman? Was it trying to change his mind? Was it a coincidence or a consequence? It is no good the Secretary of State smiling about it—he owes the House an explanation of what went on, especially when the conclusions of committees that are supposed to be secret are found in all the newspapers on the following Sunday. Has he lost control of his Department or is he still in control?

AWACS is not perfect either, and the Secretary of State knows that. It took 16 years to develop and its technology is quite old. As Boeing confirmed, it has had to be substantially updated over the years and those updatings are not done by Boeing for nothing—it charges the United States military. Many would say that AWACS was not designed to work in Europe.

There is then the question of jobs. The Government, and in particular the Secretary of State in his statement today, have tried to say that more jobs would be created. We know that jobs will be lost. We do not know how many—perhaps 2,000 or 2,500. In his statement, the Secretary of State said that Boeing had entered into a contractual obligation to provide £130 worth of work for every £100 of work on the AWACS. When I asked the Secretary of State whether any penalties would be applied if Boeing failed to carry out this obligation, he said that they would not. It is a strange contractual obligation where if one person breaks the contract there are no sanctions.

We know what it is in the contract. Boeing says that it will use its best endeavours to find the jobs and do the offset. The Secretary of State cannot tell me that, if Boeing fails to provide that £130 worth of jobs, there is a procedure for suing the company or getting damages. We have seen this arrangement time and again, as in the case of Trident when few jobs and orders came. We also saw it in the case of star wars. The right hon. Member for Henley rushed off to the Pentagon and signed an agreement to provide £1 billion, but look what has happened. Time and again, when we enter offset agreements with the United States, a mere trickle of jobs results, for the simple reason that the Americans are not as daft and soft as we are and they keep their defence contracting, in the main, to themselves. Perhaps the Secretary of State will confirm that there is no way that he can make Boeing live up to its promise of £130 worth of jobs for every £100 of work.

The Secretary of State said that the money that would be lost as a result of this exercise was about £600 million, and that the cost of AWACS would be £860 million for six. He went on to say that there was an option within six months to acquire another two. Would he explain that option a little more? Do we need six or eight aircraft? Presumably the Secretary of State knows how many we need—or does he need another six months? We should be told how many we need because no doubt the threat has been assessed, and I would have thought that the military conclusion would tell the Secretary of State how many he needs. If he orders another two within six months, how much more will that cost?

The Secretary of State then said that the £860 million was at 1986–87 prices. Perhaps I am being obtuse, but is that the fixed price? I take it that it is the fixed price, irrespective of what happens to inflation, but we should be told whether that is the actual sum in sterling that the British Government will have to pay. We were then told that the money would be found within public expenditure totals. By when does the money have to be found? The public expenditure totals do not go for more than three years, as there is now a three-year public expenditure review. Will the money be found within those three years or will it be paid in 1991, when the Boeing aircraft are delivered? We should be told what the implications for expenditure are, and we should be told whether the Government intend to lease three aircraft between now and 1991. The Secretary of State said that no offer had been made, and he was choosing his words carefully. Perhaps no formal offer has come, but have negotiations been started? Would the aircraft come from Boeing or the US Air Force, and how much would they cost the British taxpayer?

The Government's judgment on this matter is suspect, and the Secretary of State has said that he cannot prove anything and that it is a matter of judgment. In view of that, of the considerable consequences of the Government's decision for Britain's defence interests, British industry, for jobs and the economy, the history of the matter and the statements that have been made, the prudent course is to seek a second opinion by setting up an independent technical inquiry. It need not take too long. It should not take very long. There is no great rush as the contract does not have to be signed immediately.

Mr. Robert Key (Salisbury)

Will the right hon. Gentleman give way?

Mr. Davies

No, I have taken enough time.

The aircraft will not be with us until 1991, so it will be possible for the Government to satisfy everybody, including industry, by setting up an independent inquiry to look at the technical matters once and for all. We would all accept the results of such an inquiry.

If the Government do not do this, we must conclude that it is not just scientific and engineering matters that have been decided in this case, but that there is an element of malice towards GEC and perhaps towards some of its leading personnel. If the Government fail to set up an inquiry, we must also conclude that what they have done and what they will do by deciding in this way shows their contempt for British industry, defence interests and technology.

7.29 pm

The Secretary of State for Defence (Mr. George Younger)

I am very grateful to the right hon. Member for Llanelli (Mr. Davies) for providing us with the opportunity to have a debate so soon after the difficult decision that I had to announce this afternoon. However, with best of goodwill towards the right hon. Gentleman, the kindest description I can give of his speech is that it was a bit of a struggle. I thought that we were going to hear a clear and specific definition of the Opposition's views on the Nimrod decision, what they would have done themselves, and why. Instead, we were given a long tour d'horizon of the right hon. Gentleman's ideas on defence policy generally.

I have to offer my apologies to the right hon. Gentleman. It was somewhat tactless of me to have answered in my statement this afternoon all the questions that he was going to ask. I appreciate that it was difficult for him to recast his speech, so I was interested in some of the thinking on his feet in which the right hon. Gentleman indulged. It showed that he has a flexible attitude towards dealing with policies, if they can be made up as he talks.

He announced that in the past there was a virtual blockage of imports of defence products. If the right hon. Member for Leeds, East (Mr. Healey) had been here to hear his vast purchases of equipment from other countries, particularly from the United States during his time as a Defence Minister, described as a virtual blockage of imports, I think that he would have derived some wry amusement from it.

Mr. Neil Kinnock (Islwyn)

It is plain that the Secretary of State is not very good on percentages. Is 5 per cent. a large amount or a small amount? Will he also give us the answer that he did not give this afternoon? What is the enforceable power in respect of the alleged 130 per cent. contract that he is supposed to be setting up with Boeing?

Mr. Younger

I understand why the Leader of the Opposition feels the need to try to make the speech of his right hon. Friend the Member for Llanelli again. On the 90 or 95 per cent. figure, or whatever it is, the correct figure is over 90 per cent. But that was not my point. It was the point of the right hon. Member for Llanelli. The right hon. Gentleman cannot get away from the fact that he said that there was a virtual blockage of imports, but he moved his stance when he saw he was getting nowhere. A few bars later, if that is the right way to describe it, he said, "No, no, there is a two-way trade between the two sides of the Atlantic. We are buying and selling both ways." He was moving his stance as he went along.

Then he came to his great panacea for our defence industries and exports. [Interruption.] I am trying to inform the House of the views on the Labour side, which I am sure the right hon. Member for Llanelli will be most entertained to hear. This great leader on the other side, who is so keen on defence exports and defence industries, has committed himself in a paper, which I read with great interest, which was produced by the national executive committee of the Labour party. It says: There are strong arguments for a policy against the arms trade. Far too many jobs are dependent on other people's wars. There are also strong, less widely publicised economic arguments. We"— that is a Labour Government, if ever there should be another one— will disband the defence export services organisation. It is very nice to know that the Labour party has such a high regard for this organisation. I should point out that it is not the sales organisation that it intends to disband, but the defence export services organisation. Those who buy defence equipment, and, by doing so, create jobs in this country, will find that a Labour Government, should there ever again be one, will disband that organisation.

The right hon. Gentleman asked a number of questions which I shall do my best to answer, although I think that I have answered all of them already. First, he asked whether we need six or eight E3A aircraft. To fulfil the full and necessary policy that we want and that NATO wants us to provide, we need eight. In my statement I committed this country to buying six now and I have taken an option, with Boeing, to buy two more within six months at the same price. I wish to keep those two in reserve until I know the outcome of the annual review of our long-term costings. It is most important to see everything in the round so that we can make sensible decisions.

I said this afternoon that the price that had been offered by Boeing had been quoted in sterling. It is a fixed price that contains an allowance for inflation. There will only be an addition for excess costs and inflation if a point above a certain threshold is reached. The rest of the information is confidential, but that is the general line and it is a very full answer to the right hon. Gentleman's question.

Mr. Denzil Davies

The right hon. Gentleman did not say this afternoon that there would be an allowance for inflation. Is that British inflation or American inflation? How is it to be calculated in the contract?

Mr. Younger

The details are part of the contract. The right hon. Gentleman knows that we do not make details of that sort public, for obvious reasons. [HON. MEMBERS: "Why not?"] Nor did any of my predecessors in this job.

The right hon. Gentleman also asked where the money would come from. I made it clear this afternoon that the money will come from within the Ministry of Defence's expenditure patterns which have already been published—[Interruption.] The right hon. Gentleman would hear a great deal better if he did not talk so much himself. The money has to be found from within the Ministry of Defence's expenditure patterns which have been published by my right hon. Friend the Chancellor of the Exchequer. There is no mystery about that.

Lastly, the right hon. Gentleman asked whether any offer on leasing had been made. I made it clear this afternoon that there has been no offer, but that if there were such an offer I should consider it, if it were necessary to do so. I repeat that I have not had an offer, but if I receive one I shall consider it carefully.

Mr. Denzil Davies

I asked the right hon. Gentleman when the expenditure would start and when the payments would be made. Will there be payments within the next three years? The public expenditure assessment is for the next three years.

Mr. Younger

That is a perfectly good point. There will be some expenditure in the next three years, but there will be savings in the earlier years, because of the expenditure profile. I have given the totals, but the right hon. Gentleman will have to wait until he sees the breakdown and what, exactly, the cost works out at.

Mr. John Wilkinson (Ruislip-Northwood)

Will my right hon. Friend clarify the options? Is the issue of whether the option is to be taken up at a later date in any sense contingent upon a potential order by the French air force? Will Royal Air Force aeroplanes have the CFM56 engine—the Franco-American engine—which is certificated for the Saudi Arabian air force?

Mr. Younger

The option is not dependent upon the French taking up an order for AWACS, but I have made it clear that if the French decide to take AWACS, which is not at all unlikely, we shall be willing to co-operate with them over the procurement of AWACS and the support facilities for it. That has been very much welcomed by the French Government.

Mr. Frank Cook (Stockton. North)

Will the right hon. Gentleman give way?

Mr. Younger

No, not for the moment.

As for the rest of the option—[Interruption.] I am trying to answer the first part of the question, but the right hon. Member for Llanelli is much more interested in asking the questions than in hearing the answers. However, that is understandable. [Interruption.] The right hon. Gentleman is more interested in asking questions than in getting answers. My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) asked a valid question about the option. It will be exercised entirely at our discretion. If the French buy some AWACS aircraft, it will be a matter for negotiation between us and Boeing about whether that makes a difference. The engine laid on by Boeing is exactly the same as the engine in the existing AWACS aircraft.

Mr. Frank Cook

The French are interested in an airborne early warning system and have already expressed an intense interest in Nimrod. If they pursue that interest and intend to purchase the whole system lock, stock and barrel from GEC Avionics, what will be the Government's attitude? Would they permit such a purchase or would they try to block it?

Mr. Younger

I am always keen to encourage defence exports and should be very pleased if the French want to buy Nimrod. That is an excellent idea. The right hon. Member for Llanelli was somewhat unwise to pour cold water on the value of the offset deals. Whatever else one says about Boeing, it has an extremely good record in delivering what it promises on offset. When we bought Chinook helicopters from Boeing, the company more than fulfilled its undertaking on the offset. What is more, as has been made clear not only by me but by some of the contractors concerned, the offset being offered in this deal is good and of a high quality. If the right hon. Gentleman does not believe that, he should speak to the firms concerned and they will tell him that that is the case.

Mr. Denzil Davies

In his statement the right hon. Gentleman said that there was a contractual obligation. I asked if there were any penalties and he said no, but if Boeing fails to exercise its best efforts the Government have no sanction in law against Boeing. Is that the case?

Mr. Younger

I have already answered that question but I shall answer it again. In the case of the contract to supply the aircraft there are penalty clauses on Boeing if it fails to deliver on time and so on. There are no penalty clauses about the offset but Boeing has an exceptionally good record—[Interruption.] Apart from the fertile imagination of the right hon. Gentleman, there is no reason to think that Boeing will not fulfil its obligations. It will probably exceed them.

Mr. Churchill (Davyhulme)

Does my right hon. Friend agree that it comes ill from the Leader of the Opposition to impugn the good faith of our American allies on whom he intends to rely for the ultimate nuclear defence of our nation? Is it not rather cheap for the right hon. Member for Llanelli (Mr. Davies), who has no great technical knowledge and expertise, to impugn the integrity and judgment of the scientific and service expert advice tendered to my right hon. Friend?

Mr. Younger

My hon. Friend is correct. However, he is expecting a great deal too much if he expects logic from the Opposition. I urge him to be a little more realistic in what he expects from the Opposition. One cannot expect the right hon. Member for Llanelli to be logical because he made a long speech about how good our defence industry and exports are and yet proposes to abolish the whole organisation if the Labour party come to power.

My statement was rather long and I shall not weary the House by repeating all the points that I have already made, although I seem to have had to do so for the right hon. Member for Llanelli. In the short time available to me I should like to concentrate on the most difficult and controversial issue arising from my decision—my assessment of GEC's prospects of achieving the required performance with the Nimrod system. That is probably what the House will find most useful to hear.

Airborne early warning is a fundamental requirement of modern warfare and our lack of this capability, for instance during the Falklands conflict, had consequences which we all clearly saw. In layman's language, the purpose of AEW is to put radar into the sky so that it can look far beyond the horizon of any radar system on the ground. This should give a clear picture of all flying objects over a long range, including those at low altitudes at which a hostile aircraft could conceal itself beyond the earth's curvature.

The AEW first detects hostile aircraft and then tracks their movement and, if possible, identifies their type. Friendly forces can then be alerted and fighters scrambled to intercept the intruder. The AEW aircraft will then guide them to the target. The AEW ensures that our fighters and aircrew do not wear themselves out on speculative patrols, but are called up when needed and directed straight to their targets. In this way the effectiveness of our fighter force is greatly enhanced. In other words, AEW is a force multipler in the truest sense.

Mr. Tam Dalyell (Linlithgow)

The Secretary of State for Defence stressed the importance of a vital secure data link. Does he agree with the chairman of GEC who said in a broadcast at 5 pm that in three years' time Nimrod will be much better? In the view of the right hon. Gentleman's ministerial experts would GEC have solved the problem of the secure data link within three years? That is a purely factual question but it is important in terms of judgment.

Mr. Younger

The unanimous view of the experts was that with the best will in the world—it is only their judgment—GEC would not have been able to solve all the problems in that time.

Mr. Dalyell

The data link problem?

Mr. Younger

Yes, especially the data link problem, and that problem is also experienced in the AWACS. It is not a matter of dispute between the two companies.

Mr. Dalyell

So Boeing is not better than GEC. On the data link problem, are we being told that Boeing has no great advantage over GEC? These are difficult systems. Is Boeing not much better than GEC?

Mr. Younger

I have made it clear that there is nothing between the two on that point. All hon. Members should know that, but if they do not I make it clear now that those items are still—

Mr. Dalyell

That alters it.

Mr. Younger

This is nothing new and it is perfectly well known by everybody concerned that the data link is still in the development phase. It is not a problem—

Mr. Dalyell

It is the reason given in the right hon. Gentleman's statement. Look at paragraph 5.

Mr. Younger

I know exactly what is in the statement. With respect, the hon. Gentleman has a great talent for making something out of nothing. I was quite open about it and I still say that on that aspect there is no difference between the two. I looked carefully at my statement and if the hon. Gentleman reads the text he will find that that is borne out word for word. This is a short debate and I do not want to take up time by going into a non issue.

Mr. Dalyell

On a Point of order, Mr. Speaker. I am told that I have a talent for making something out of nothing. For 20 years I have been the weekly columnist of the New Scientist and I know something about the subject.

Mr. Younger

I hope that the hon. Gentleman will not be too sensitive. I am not trying to be disrespectful to him but, as I have said, this is a short debate and many hon. Members wish to speak.

Mr. Dalyell

The right hon. Gentleman has been technically caught out.

Mr. Younger

This early warning system is the essential and demanding role for which Nimrod has been planned for nearly a decade. The recent flight trials were carried out with great care. I flew in one of the sorties, as did my hon. Friend the Minister of State for Defence Procurement. As a result of the trials we have been able to form a clear picture of Nimrod's performance against the air staff requirement.

It must be emphasised that we did not conduct a sudden death play-off between Nimrod and the E3A, as has been represented. Nimrod was tested against the air staff requirement. Neither did we move the goal posts, although perhaps we would have been justified in doing so in view of the increase in the air threat since 1977. We did not specify, as has been suggested, that the AEW system must track aircraft targets over densely populated land. We said that this would be a valuable bonus in the competition, but it was never part of the baseline specifications against which Nimrod and AWACS were measured. I make that clear again.

Mr. George Park (Coventry, North-East)

Is the Minister asserting that the specifications were never altered during the life of this contract and that GEC never got altered specifications or amendments during the whole life of the contract? Is that what the Minister is saying, because if so it runs entirely contrary to the evidence that was given to the Public Accounts Committee?

Mr. Younger

The hon. Gentleman must understand that they are two different things. I have never heard of a contract that has gone through without the specifications being altered many times and on many points. Air staff requirement 400, against which this project is measured, has not been altered except in one respect, in that in-flight refuelling was added to it with the agreement of everybody. There is no problem about that because both of the contenders have in-flight refuelling capabilities.

This is a very short debate and I should conclude my speech as soon as possible because many people wish to speak.

Dr. Keith Hampson (Leeds, North-West)

rose—

Mr. Tony Favell (Stockport)

rose—

Mr. Younger

It is most unfair on other people.

Mr. Favell

I am grateful to my right hon. Friend. As he is aware, many of my constituents are employed at British Aerospace at Woodford. Will he please assure them and the whole of the north-west that there is no criticism of the way in which they have carried out their work on the 11 airframes? What will happen to the 11 aircraft which have been constructed by British Aerospace?

Mr. Younger

My hon. Friend has made a valid point. I should like to take the opportunity of saying again, as I said in my statement, that British Aerospace carried out its part in the contract excellently and completely to the stage that it had reached. It has done a good job in providing the aircraft and I should like to make that clear.

We shall have to give urgent consideration to the future use of those aircraft. I have begun to identify a number of possible uses for them. Nothing definite has yet been put forward, but, naturally, this is an important matter. The future of that airfield will, of course, also have to be considered. I accept my hon. Friend's great concern about that matter and I assure him that it will be addressed as soon as possible.

The air staff requirement specifies a number of performance characteristics that must be achieved, of which two are of fundamental importance. The first is the detection range which must be long enough to give the fighters time to scramble and intercept. The second is continuity of tracking. That is to say, the signature of the target aircraft must remain in and be displayed by the AEW computer system for as long as the aircraft remains within range. If the life of the track is too short, the signal may disappear and then reappear apparently as a new signal, thus giving the false impression that there are two aircraft instead of one and confusing not only the operators in the AEW aircraft, but users of the information in the air, on the ground or at sea.

We had hoped that our experts' appraisal of Nimrod and the programme of flight trials would ideally demonstrate that the system was within sight of achieving the required standard, or failing that, that there was at least a good prospect that it would achieve it within an acceptable time scale. Regrettably, my experts were unable to reach that conclusion. The flight trials yielded no consistent or reliable pattern or results. Those results, which GEC was content for us to use, generally showed a detection range significantly below what we had specified. The mean track life of the system was less than half of what we specified.

That is the performance of the system today, which the company would accept falls well below our standards now. However, the company has proposed technical solutions to overcome those various shortcomings. Taking each shortcoming and each proposed solution in isolation, it is possible that the system might approach the required standard, but even so, its performance would be marginal and on GEC's own showing the system would have only 70 per cent. of the reliability that we have specified.

My experts had to judge the system as a whole and not each of its component parts separately. All the individual improvements would have to be integrated into a system which would perform well in all respects. Sadly, our experience in recent months has been that as the firm has made an improvement in one area, that has resulted in the degradation of some other aspect of performance. The experts judged that that pattern was likely to continue and that the required performance was unlikely to be achieved before the mid-1990s at the earliest, if then.

Mr. Cranley Onslow (Woking)

Is the ceiling of the aircraft relevant to the detection range? In that context, is it important that the Nimrod can attain a ceiling of about 25,000 feet and that the AWACS can attain a ceiling about 10,000 feet higher?

Mr. Younger

My hon. Friend has made a good technical point. The range at which each aircraft is effective is affected by its height because it can see that much further, the higher it can get. However, I stress that all the testing that we have done of the ability of Nimrod to operate is against ASR 400 and not against the AWACS aircraft.

Mr. Kinnock

On the basis of the appraisal that the Secretary of State has rightly offered us as a matter of public record tonight, if Lockheed were to approach him what advice would he offer it about the installation of the GEC system for its aircraft? If the French were to approach him on the subject, what advice would he tender to them about that British product?

Mr. Younger

I am not quite sure what the right hon. Gentleman means by the word "advice".

Mr. Dalyell

That is a very good question and the Secretary of State should answer it.

Mr. Younger

I am endeavouring to do just that. I and not quite sure what the right hon. Gentleman means by the word "advice".

Mr. Kinnock

The right hon. Gentleman is rubbishing British products.

Mr. Younger

I am trying to be open with the House about the sort of considerations that led me to take a very difficult decision. If the right hon. Gentleman is asking me to say nothing about that, I am very surprised. I have made it clear all along, and particularly this afternoon, that I regard GEC as a good company doing much very good work for the Ministry of Defence. I expect it to continue to do that for a long time in the future.

It is a great mistake and a damaging error to make out that because this contract ran into difficulties, anything else that GEC does is also inefficient. That is not the case. The company is a valued contractor and I wish it to remain so.

It is easy for hon. Members to criticise the judgment that we have made, but it is much more difficult to be the person who makes it. The one thing which, sadly, was missing from the speech of the right hon. Member for Llanelli was a balance between the considerations that he would have had to take if he had been in my position. He rightly emphasised the effect of a decision of this sort on the industry concerned, the company concerned and the reputation of British industry. That has been very much in my mind when making this difficult decision.

However, the right hon. Gentleman made no mention of the other criteria—the equipment and the standard of the equipment that the RAF requires to do its job. With respect to the right hon. Gentleman it is no good taking one of the criteria and letting it drive the whole thing because the whole is a balance between the various criteria that have to be taken into account. If I take the right hon. Gentleman's argument at its most literal, he is saying that the overwhelming importance of British industry having the work must take complete precedence over whether, at the end of the day, the equipment has worked.

Mr. Hugh Dykes (Harrow, East)

The difficulty of my right hon. Friend's decision is appreciated by everybody and there is great sympathy for it. The great tragedy of the post-war period is that again and again we surrender to American technology. That weakens the country and the whole of Europe because we do not develop our own high technology.

Mr. Younger

I thank my hon. Friend for his absolutely valid point with which I totally agree. However, one cannot understand from that that we are in a position to do everything ourselves. It is better to collaborate on some things. To be fair to the Americans, they have taken the same view in reverse and have not attempted, because they could not beat it, to make a competitor to the Harrier. They have bought our Harriers and they are now, under licence and in agreement with us, co-operating and building them for themselves.

This is a very short debate and it is high time that I brought my remarks to a conclusion. I should simply like to say that if this is an effort by the Opposition to paint a picture that shows our decision to have been a wrong one, they have so far not addressed themselves to the principal issues. I cannot take seriously a case which rests on a series of assertions about other matters and which does not get down to the real nub of the issue, which is that the RAF requires aircraft up to a certain standard to do the job. Could GEC's equipment have got up to that standard in three years? I have faced up to the truth, have faced the fact that I do not believe that it could, and I have taken the necessary decision. I hope that the House will back me in that decision.

Several Hon. Members

rose—

Mr. Speaker

Order. The House knows that this is a three-hour debate. A great many right hon. and hon. Members wish to take part, so I plead for short contributions, please.

7.59 pm

Mr. James Wallace (Orkney and Shetland)

Many hon. Members recognise that decision that the Secretary of State has announced today was a difficult one. We have made it clear that, if it had been possible, we should have liked to see a decision in favour of the GEC option. There are obvious reasons in terms of British jobs, technology and export opportunities why that should have been the case. However, at the end of the day it is the defence considerations that matter. We have said that if only one option met the air staff requirements, that would be the proper decision for the Secretary of State to take.

Mr. Robert C. Brown (Newcastle upon Tyne, North)

When the hon. Gentleman says "we", does he mean the Liberals, or the Liberals and the Social Democrats?

Mr. Wallace

I am speaking on behalf of my Liberal and Social Democratic colleagues in this matter.

At the end of the day we are dealing with a matter of judgment, and the House is being asked to accept the Secretary of State's judgment on which of the two options before him met the air staff requirement. He has told the House that on the advice available to him only the Boeing option met those requirements.

Because of the important consequences that that decision has for one of Britain's home-based companies, it is important that as much information as possible is made public. The decision must be seen to be right as well as be right.

In his statement this afternoon the Secretary of State described some of the considerations which led him to that decision. He has expanded on them in a letter which he sent to all right hon. and hon. Members and he has given more this evening. I urge the Secretary of State to place in the Library or to put on public record as much declassified information on this matter as possible because it is important that such information should be before the public. That is particularly important because, in statements made earlier this week, GEC has said that it felt that in some way it had been cheated. The more information that is available the more will GEC be able to challenge the various considerations that led the Secretary of State to his decision, if it feels it necessary to do so.

When the Leader of the Opposition intervened and said that the Secretary of State was rubbishing GEC by explaining to the House what had led him to his decision, he was being disingenuous. If the Secretary of State had tried to withhold from the House his reasons for coming to his decision, the Leader of the Opposition would have been on his feet crying foul again and saying that we were being kept in the dark. It is important that as much information as possible is made available.

Mr. Key

Does the hon. Gentleman agree that it is time to give the lie to the idea that no proper assessment has been made and that there should be some so-called independent assessment? As most of the assessment was done at the arms and armaments experimental establishment at Boscombe Down in my constituency, does the hon. Gentleman share with me an understanding of the deep offence caused to the scientific Civil Service by such allegations?

Mr. Wallace

I accept the hon. Gentleman's point. I have no reason to believe that anything other than the best military and technical advice was given to the Secretary of State.

Key points of concern were jobs and the quality of jobs. Boeing has made various promises and claims which it says will accompany the selection of its option. It has talked of a 130 per cent. offset and in one letter it has said that the high-tech involvement will lead to new products with guaranteed new markets and export sales. I think that the House would like to know precisely what those new markets and export sales that have been guaranteed are.

We have been told that British companies will be involved in further development of the AEW system and that there will be E3A sales to other countries in which British industry will have an opportunity to participate. If those guarantees come to pass they will be welcome. My hon. Friend the Member for Isle of Wight (Mr. Ross), who has aviation industries within his constituency in which Boeing has had some involvement, has found that Boeing has been good in keeping its word.

On this occasion, however, there has been serious competition, and in those circumstances I should have thought that the Ministry of Defence was in a strong bargaining position. Therefore, I do not understand why the Secretary of State was not able to get a better belt-and-braces clause in the contract to hold Boeing to the 130 per cent. offset. It is all very well to go on good faith and previous performance, but the history of the project has been so marred by what could be called weak contractual arrangements that, as we are taking it forward, one would hope that the Ministry of Defence could be much stricter in the conditions that it sought to impose.

Indeed, the Comptroller and Auditor General, in his report published in July this year with particular reference to this project, said that one of the main lessons to be learnt for project management was to establish contractual terms to put the contractor under effective discipline". There is considerable justifiable anxiety on the Opposition Benches that such an opportunity has not been taken.

A further point on the contract which I raised with the Secretary of State earlier this afternoon relates to extraterritoriality laws. As I understand his reply, it was open to contracting parties to choose which law they wanted and it has been the practice of the Ministry of Defence to seek United Kingdom law. Fears on this matter arise from previous experience with several contracts involving IBM when the United States Government have sought to assert their law over matters which are very much within the United Kingdom regarding whether certain equipment could be moved within the United Kingdom and having a clear say in which countries goods may be exported to from the United Kingdom. Again, we should like some assurance that it is perfectly clear in the contract that the United States will not be able at any subsequent date to claim that its law could apply to this contract.

Mr. Wilkinson

Will the hon. Gentleman clarify one simple point? Is his party, or the alliance that he is representing, in favour of the Royal Air Force having the best aircraft in defence of Britain as regards airborne early warning? That is not clear.

Mr. Wallace

I am working on the basis that the Government have made their decision, and I am trying to make it clear that, having entered into a contract, it is important that we get the best deal. One of my points concerned extra-territoriality. That is an important point that should be covered in the contract.

The Secretary of State said in a statement this afternoon that costs would be contained within the defence budget as outlined by the Chancellor in his autumn statement. However, it has already been confirmed in news reports that the Ministry of Defence states that the defence estimates do not include any additional spending for AWACs. As the Secretary of State said, the greater costs will come in the later stages in the early 1990s. That is the very time when the bulk of expenditure on Trident is expected. Therefore, the House should be told how the Secretary of State sees the defence budget panning out in the late 1980s and early 1990s when those two major projects will have to be funded. What will give? The Secretary of State has said in the past that some hard decisions will have to be made. Can he give the House any idea of the way in which his mind is working on those hard decisions?

Mr. Cyril D. Townsend (Bexleyheath)

Will the hon. Gentleman give way?

Mr. Wallace

I have given way a lot and I know that other hon. Members want to speak.

The project is a sorry tale which shows up some serious deficiencies in the Ministry of Defence's procurement policy. With his usual disarming frankness this afternoon the Secretary of State said that he did not seek to evade his Department's share of responsibility. We look forward to a clearer explanation of where he sees his Department having gone wrong. The Comptroller and Auditor General in his report to which I have referred identifies many areas in which it has gone wrong.

Mr. Townsend

Will the hon. Gentleman put the House out of its misery? Is the hon. Gentleman recommending that his hon. Friends should support the bold decision to give the RAF the best possible system or not?

Mr. Wallace

We have supported the Secretary of State's brave decision. I cannot make it any clearer than that. However, many other questions have to be asked, such as how we ever got to this position in the first place. There are serious matters, such as £660 million of taxpayers' money having gone down the drain, that we wish to examine. The Public Accounts Committee is already examining it and I am sure that the Select Committee on Defence will wish to examine it. If local authorities had mismanaged that amount of money, Conservative Members would have been down their throats calling for surcharges.

The Government have a responsibility to the taxpayer for the way in which they manage the public purse and there have been serious shortcomings in that. We will be looking for those shortcomings to be examined and to ensure that lessons are learned and that proper procedures are implemented in the future. However, as I have said, it is a brave decision and we hope that the Secretary of State can give more information to the public to show the full basis and jusfication for his decision.

Mr. Stuart Bell (Middlesbrough)

On a point of order, Mr. Deputy Speaker. Is it not appropriate to write into Hansard the fact that the hon. Member for Orkney and Shetland (Mr. Wallace), representing the alliance, spoke entirely on his own without a single member—

Mr. Deputy Speaker (Mr. Ernest Armstrong)

Order. This is a short debate and we should not waste time. The hon. Gentleman knows that that is not a matter for me.

8.11 pm

Mr. Julian Amery (Brighton, Pavilion)

All my instincts incline me towards supporting the Nimrod project. It is a British project, we have sunk a lot of money into it, there are many jobs at stake and it is a pillar of our defence industries. It would be a popular decision for the Government to take and every consideration would seem to favour it—except one. My right hon. Friend the Secretary of State says that it does not do the job that is required. That is a strange and saddening reversal of fortunes.

Long ago, almost before the flood, I was responsible for recommending to the RAF and the Government what sort of aircraft they should have. I produced a programme that included the TSR2, the P1154, and the HS681. Nobody questioned the fact that they were technologically better than anything that could be obtained in the United States, France or anywhere else. The only criticism was based on cost. The Tory Cabinet accepted them. Then Mr. Wilson came into office with the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) as the Minister responsible for aviation. They cancelled all of those on the grounds of cost, not technology. They cancelled them roughly, but I do not want to go into that story now.

It is sad that we appear to be cancelling a project now, not on grounds of cost but because it is technologically not as sound as it should be. If it was technologically good and cost more, I would be in favour of supporting it. However, my right hon. Friend the Secretary of State has told us that it is not up to the job, technologically.

It is a difficult assessment for us to make. There are always people in the House who can make technical assessments, but there are not so many of us, I suspect, who can form a judgment on what is the margin between the two projects. I shall give only my own rough and ready measuring rod. When a Tory Government, in an election year on a defence issue, take an unpopular line they must have a damned good reason for doing so. Therefore, while I cannot say what the exact assessment may be, even with my own aviation background, it seems that the gap is pretty big.

If the world was peaceful and there was a general staff assessment that there would be no major conflict in the next 10 years, we could say that we could take second best for the RAF in the hope that it would help the defence industry to produce first best later on. I am afraid that the world is not like that. It is a dangerous world. The rearmament of the West is almost closing the window of opportunity that the Soviets have enjoyed since President Carter's time. That may make them more amenable to a return to detente, but it could precipitate adventures and risks. In that situation it seems to me that the interests of the Royal Air Force must be paramount. We cannot take risks with the men who may—I hope that they will not—have to defend our shores, convoys and other interests at home and perhaps beyond the NATO area. They must have the best equipment available.

It is rather striking that the chiefs of staff, as I understand it—those who represent the Navy and the Army—have gone along with the decision made by my right hon. Friend although it is not necessarily the cheapest and may deprive them of some things to which they attach importance. The interests of the fighting services must be paramount in a dangerous time such as this and it is for that reason that, in spite of all my inclinations to buy British whenever we can, I support the Government wholeheartedly.

8.17 pm

Mr. Doug Hoyle (Warrington, North)

When my right hon. Friend the Member for Llanelli (Mr. Davies) began his speech he said something that is true and that cannot be denied. He said that the sort of debate we are having tonight would not happen anywhere else. It certainly would not occur in the United States, France, Germany or Italy, because they would not surrender their technology in the way that ours is being thrown away tonight. We are trying to examine whether the British system, Nimrod, works. Indeed, we have it on the record from the Secretary of State that it does work. However, I should like the Secretary of State to answer the question that was put to him by my right hon. Friend the Member for Llanelli.

There was great play made in the statement by the Secretary of State, of the point that the failing of the British system was that when it comes to the final stage it would require the installation of a secure data link. I want to know whether AWACS has a secure data link. It is not clear from the statement. One would think that only Nimrod does not have a secure data link. If AWACS does not have a secure data link, what is the time scale for it to have one? Many technical questions have been asked but that is a technical question that we do not have an answer to.

Mr. Younger

There is a genuine misunderstanding here. I ask the hon. Gentleman to read the words of the statement very carefully. The reference in paragraph five is specifically to make it clear that GEC was offering to produce six aircraft between mid-1989 and mid-1990 which would approach the final standard"— That is fine so far— subject to certain exclusions, of which the most important is a vital secure data link". That is an exclusion from what it was expecting or expected to provide at that stage. That is because it is still under development. The same is true of the secure data link for AWACS. There is no difference between Nimrod and AWACS on that issue. There are plenty of differences in other ways but the systems are exactly on a par on that issue. I hope that that has clarified the matter.

Mr. Hoyle

I thank the right hon. Gentleman for his explanation. It does clarify the matter to some extent. However, it would not be clear from the statement that AWACS does not have a secure data link.

It is history and the role that the Ministry of Defence has had to play that I want to talk about. No one could ever accuse me of being a great friend of GEC. When it came to the Plessey takeover, I was on the side of Plessey. In this instance, however, I think that GEC is more sinned against than sinning. Many of the problems that have arisen are not its fault, and much of the responsibility for the time that has been taken rests with the Ministry of Defence. Many of us spent a great deal of time in 1977 persuading the then Secretary of State for Defence that it would be right to order Nimrod. The order was placed and at the very beginning GEC made it clear—this was done at one of the first meetings to be held—that one of the problems would lie with the computer. The civil servant concerned was a Mr. Geoffrey Stone, who was in charge of the project. Despite GEC stating that there would be problems with the computer—attention was drawn to the inadequacy of the performance of the 480 computer—nothing was done.

In 1978, GEC said that for £10 million—that must be set against the overall cost of the scheme now—it could filter out the misleading signals that were being picked up from cars and other man-made objects. Unfortunately, nothing was done from that time onwards. The Secretary of State has said that the goal posts have not been moved and the specification has not been altered, but it is my understanding that when the Nimrod contract was first arranged the purpose of Nimrod was largely to fly over the seas and the sparsely populated northern region. As recently as 1985 the specification was altered and it was—

Mr. Younger

indicated dissent.

Mr. Hoyle

The right hon. Gentleman shakes his head. If I am wrong, I stand corrected. In 1985, the MOD specified that Nimrod should be able to operate over large areas of Britain, and that was a different specification. Is it true that the MOD has asked for that change to be made? Has it asked that Nimrod should be able to fly over Britain? When the project started, it was never to be compared with AWACS in that respect. It would seem that the project has been changed.

Mr. Younger

I apologise to the hon. Gentleman for interrupting him again.

Mr. Hoyle

I welcome the right hon. Gentleman's intervention. We want the answers.

Mr. Younger

The hon. Gentleman is making a genuine point but I wish to make it clear yet again that air staff requirement 400, which is what the products are being tested against, did not, does not and, as far as I am concerned, will not, require any competitors to operate over heavily populated land. That was never the position, it is not the position now and it will not be the position. It was said when the product went into competition that such a function was not part of ASR 400, but that if those entering the competition wished to add that capability they could do so. The important decision that I have announced today takes no account of this. It was not a requirement of GEC to produce a system that would work over heavily populated land. That was not the position and it is not the position now, and as far as I am concerned that is the end of the matter.

Mr. Hoyle

I thank the right hon. Gentleman for clarifying some of the issues. He has responded to some of the questions to which we were trying to get answers earlier on. I thank him for dealing with the technical data. I think he will agree with me, however, that although a caveat was added by saying that if a system could operate over heavily populated land it would be in a more favourable position, I was saying that when the order for Nimrod was placed, that capability was not set out in the specification or requirement.

Dr. Hampson

It would seem that the precise requirements stayed the same and that the RAF's interpretation of them changed. We have experienced enormous expense and delay because the RAF changed its view. It found that as Nimrod flew near land there was a flutter problem caused by low-speed items being picked up, such as motor traffic. AWACS never picks up moving items below 80 knots whereas Nimrod picks them up at 20 knots. The RAF took the view that the flutter with Nimrod was intolerable.

Mr. Hoyle

The hon. Gentleman is correct. I am glad that we are getting down to the nitty-gritty, to the technical specifications that we want to discuss. It is on these issues that we should be making our decision.

I am saying that many of the problems have been caused by the MOD. There have been problems because of the way in which the contract was placed in the first instance. The Ministry was reluctant to see costs increased, but the problems that arose could have been rectified early on if additional moneys had been made available. GEC drew attention to the problems at an early stage in meetings with the MOD and it was only when GEC took over the project in the last nine months and spent £50 million of its own money in doing so that the deficiencies were overcome. It got rid of the original computer and a new computer was installed along with a filtering system that stopped flutter. GEC says that the project is 85 per cent. efficient when set against the specification, which is an enlarged specification, and that is not denied. Indeed, I think that the Secretary of State has acknowledged that that is so. If GEC can fulfil 85 per cent. of the specification and if it has made so much progress in the past nine months, why throw it all away now?

Sir Adam Butler (Bosworth)

Will the hon. Gentleman give way?

Mr. Hoyle

I do not really wish to give way because many other right hon. Members wish to contribute to the debate, but I shall do so in this instance. We are establishing some facts.

Sir Adam Butler

As an advocate of the GEC case, the hon. Gentleman has made a remarkable statement. He has said that progress in the past nine months has been excellent, and I think that we are agreed about that, but he is implying that GEC knew the answers before that period and did nothing to produce them.

Mr. Hoyle

No. The right hon. Gentleman has it wrong. GEC wanted to produce the answers and wanted to put things right, but it could not obtain the funds to allow it to do so and it was not allowed by the MOD to take that course. The fact is that the Ministry was trying to work to a specification that was unworkable. In the end, however, GEC tried to put things right. That is why I am saying that, once GEC took over responsibility for the contract, great progress began to be made. I repeat my statement that the progress that it has made is remarkable. Bearing that in mind, surely we should be able to give GEC a little more time.

Mr. Nicholas Winterton (Macclesfield)

Bearing in mind that the first six units will not be delivered until 1991, does the hon. Gentleman agree that so much progress has been made by GEC that it is insanity to sacrifice a system that is more sophisticated and advanced than AWACS, especially when we consider the public investment that has been made? By 1991 we could have six British Aerospace Nimrod 3s working to the specification of the Ministry of Defence.

Mr. Hoyle

I am so pleased to hear a Conservative Member speaking up for Britain.

I recall that when many of us were pressing the Secretary of State for Defence to order the Nimrod project, the RAF was against it. It has never changed its mind. It wanted AWACS originally and it wants AWACS now. As the RAF does not want Nimrod, would it not be better to initiate an independent assessment of the sort that has been pressed for by both sides of the House? Surely such an assessment would reveal the facts. It is wrong that the RAF should be the prosecutor and a witness at the same time, and that is what is wrong with the case which has been built up so far. We would not lose anything by allowing an independent assessment to take place. Indeed, we could gain a great deal.

I remind the right hon. Gentleman that we could save 3,500 jobs in high technology. We could maintain the lead that we built up. Apart from America, this is the only country involved in this work. We could be still there. We could gain valuable export markets. We know that Lockheed of Georgia is prepared to put in the C130. It could be exported to many countries.

I do not wish to take up any more time—I could—because many hon. Members wish to speak in the debate and add their expertise. This is a black day for the country. It is a black day among many recent black days, such as when we had the Westland dispute, when the Government tried to give away Land-Rover and Leyland lorries to General Motors and when we knew that Austin Rover was talking to Ford. Perhaps I am unfair to the Government, but it appears that they cannot give British industry to America fast enough. That is not the way that we should go. All hon. Members should stand up for British technology and maintain our belief in it by saying, "Let us give it a little more time. Let us develop it so that we can get into the world market. Let us develop a project of which we could all be proud." Despite the right hon. Gentleman's statement, I hope that he will go away and, over Christmas and new year, when he has a little time—I know that it is difficult in Scotland during Hogmanay—reflect on what has been said in the House. I hope that he will come back and say to GEC, "I shall give you the independent assessment that has been requested."

8.31 pm

Mr. James Prior (Waveney)

I declare a fairly large interest in this debate. I make no bones about it. I do not see why hon. Members who have an interest should not declare it or should not take part in the debate. I think that the House gains something when people who have outside interests are able to play a part in debates.

There was criticism because, on Tuesday, I asked the Prime Minister a question. I gather that the Whips said that they thought that it was unethical that I should do so. I have taken and given a good deal of stick over the years, and I bear no malice. The Government are a good deal better at giving stick than I ever was.

I unreservedly accept that my unpopularity in certain quarters has had nothing to do with this decision. I hope that all hon. Members will accept that I genuinely believe that, even if the national press does not. I regret the decision. It is wrong and it is a setback for Britain. This is an important contract because of its size and, of course, its prestige. It is one large job and it will not materially affect a company as large as GEC. Many lessons are to be learnt from this contract and from what has happened. I hope that there are no more cost-plus contracts, except during the early stages of development. Frankly, this contract has been thoroughly badly handled. GEC must take some of the blame, but the main culprit must be the Ministry of Defence. It was responsible for deciding on the money and the way in which the contract should be operated.

It is common knowledge that, time and again during the course of the contract, there were delays in obtaining equipment that GEC said was necessary. Years ago, it was said that the project would require a much greater capacity computer. I have seen the minutes of the meetings. GEC was not allowed to get the computer.

When it became clear that there was a clutter problem when looking towards land, it was said that there would have to be a traffic correlator, but we were not allowed to put one in. The transmitter is the most important item. Unless the transmitter works effectively and with power, nothing else in the aeroplane can work. The transmitter should have had a complete series of tests on the ground, but they were cut out during the moratorium of 1980–81 because there simply was not the money. The contract was handled on the basis of money, not performance. That is the lesson that we must learn for the future.

Eventually, the contract came to an end. A mistake was made by GEC. It should have stopped work on this contract at least five years ago, but it did not. It is tempting to take the attitude that one is being paid cost plus 4 per cent., so one goes on and hopes that something will turn up. It is a cosy relationship, but it simply does not work.

Since March, we have been operating on an entirely different basis. The right hon. Member for Llanelli (Mr. Davies) was wrong to say that it is £50 million of GEC's money. Since March it has been £25 million of GEC's money and £25 million of the Government's money. Since that time, we have been the main contractor. We told the Ministry of Defence what we would be able to achieve from March to 3 September. During that period, we achieved or exceeded all the items which we set out to improve. Two items in particular were clutter when looking towards land, which required the correlator, and the ability to see targets.

The spirit of the agreement that we entered into was that we would work together. We said that if, at the end of the six-month period, we were not able to make the necessary progress, we would accept that other firms would have to be approached and we would give up the contract. During that period, we made all the progress that we should have made. During that period, five progress reports were sent to the Ministry of Defence. On only the first report was any criticism made to us. I do not believe that anything is now known about the operation of Nimrod as against AWACS that was not known in March or earlier. One of my main contentions is that, quite frankly, from what we have heard today, they should not have gone on working after March. They should have cancelled the project then and gone for AWACS.

That was a difficult time for the Government because it followed the Westland and Rover incidents and there was a lot of anti-Americanism. The Government did not pursue AWACS. They kept on with the contract. There was a case then for cancelling it. The Government should not have taken £25 million of GEC's money in the way that they have since that time. [HON. MEMBERS: "Oh."] I do not expect any sympathy for that point, but it is an important ethical one that we should not forget.

I appreciate that the Secretary of State has had a difficult job. I wish to ask him a few relevant questions about the statement. His fifth point was that the Under-Secretary of State for Defence Procurement announced that, for Nimrod, we had negotiated with GEC revised contractual arrangements involving a sharing of financial risk with the company and giving it adequate incentives for completion. I should like to know what were the adequate incentives for completion. To my knowledge, the only incentives for completion were that, if we were successful in the final contract, we would be paid only 50 per cent. during the course of the contract until we had completed it to the final specification laid down by the Minister of Defence. Until that time, we would have been working entirely with our own money, and it could have cost us as much as £200 million which, even for a company the size of GEC, is a considerable amount.

I agree with my right hon. Friend the Secretary of State that the ASR 400 has not been changed. That is not what matters. The interpretation that has been put on it is what matters. Since 1979 there have been no fewer than 3,845 modifications. That tells us something not only about the complications of the project but about the interpretation of the ASR 400. The truth is that we could have got on with the ASR 400 if we had not been denied or delayed in the resources required at the right time. If we had been able to test the transmitter and it had worked, many of the problems that occurred when the aircraft was in the air and the radar was being tested could have been overcome more quickly.

Point 5 of the speech by my right hon. Friend the Secretary of State refers to the final time scale which is laid down for the provision of these aircraft. My right hon. Friend is right; we would have delivered the aircraft by 1990. The only outstanding problem at that time would be the joint tactical information distribution system. JTIDS is something that the Americans have to produce and that the Ministry of Defence has to buy and something over which GEC would have no control, so please do not let anyone blame us for the delay after 1990. We would deliver the aircraft by 1990. We have said so. If we refused to do so, we would be paid only up to 50 per cent.

My right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) made a remark with which I fully agree. He said that, generally, our technology has been of high quality but our costs have been too high. I talk to our technicians regularly. They are bitterly disappointed because they feel that they have been judged unfairly on their technical performance. During the past few weeks, they have said to me repeatedly, "We would not have minded if we had been beaten on price, but we mind desperately that we have been judged as being beaten on our technical performance."

There have been technical disappointments, but, as I have said, we set out with limited objectives in March and we have fulfilled them. I shall not go into the problems that remain—I have written to my right hon. Friend the Secretary of state about them—but they can be solved. We have shown not only the improvements which we have made but how further improvements can be made to bring us up to the necessary specifications. I do not think that "technical disappointment" is a fair way of expressing what has happened.

I come to the figures in paragraph 10. Frankly, I simply do not understand them. The total figure put in by GEC Avionics for the whole job on a fixed price, including inflation, was £508 million, which was to provide 11 Nimrods to the specifications laid down in ASR 400. Today we were told that we shall get six AWACS for £860 million—which does not allow for inflation, as we heard from my right hon. Friend the Secretary of State—and my right hon. Friend is taking an option on two more. Those eight AWACS are hardly equivalent to 11 Nimrods—in fact, to be on equal grounds, there must be 10 AWACS. But let us say that there are eight AWACS, which is £860 million plus the cost of the two on option, which takes the amount to about £1.1 billion. A little must be added for inflation, because the first aircraft will not be delivered until 1991, so let us say that the amount will be £1.2 billion. That is precisely double the amount that the 11 Nimrods are due to cost, and which we have guaranteed. It is not £200 million more but more than double.

We delude ourselves as a country if we do not get these figures in the right perspective now. I shall not be in the House to complain—I dare say that my hon. Friend the Member for Macclesfield (Mr. Winterton) will be on his feet quickly to complain—in five years' time when the cost has gone up and it is shown that it is double the cost of Nimrod. I am not at all happy about the figures that have been produced.

I can understand that there was not a great argument about the cost by the defence chiefs, because they know that there is not much cost for the next three years. They know that there will probably be less of a cost for the next three years and that the main cost comes later. As we all know from our political experience, we do not really care what happens in four or five years' time because we do not know whether we will be here. It is a problem for someone else to sort out. That is nearly always where we go wrong.

Many subjective judgments have been made, and I do not doubt that I am making a few. It is extraordinary that, in a contract as technically difficult as this, the advice from everyone in the Ministry of Defence has been unanimous. This must be the only time that this has ever happened. It is too good to be true. It leaves me with a sad feeling.

The defence industries are important to this country. It is essential that we do not have this terrible hiatus ever again. The Ministry of Defence must recognise not only that it is a major contractor and customer, which is responsible for a tremendous number of orders, high technology and employment in Britain, but that other countries look at us and see what we are doing. If they see that we are making a mess of this, no matter whose fault it is—we take some of the blame—it has an impact on what happens to other defence contracts. Our competitors abroad will be going around saying to our customers, "Look what they have done. They have left it. They were not satisfied." That is a very dangerous position for this country to get into.

We must co-operate more. There is not enough co-operation between the defence contractors and the Ministry of Defence. In my experience, we talk much more to our other customers than to the Ministry of Defence. We need quickly to look at that aspect. GEC and the Ministry of Defence need to repair a few fences quickly. I say that not necessarily because my making these comments may obtain more orders but because I genuinely believe that, unless there is that good contact and good understanding between the two sides over what is important for Britain, we cannot possibly get it right.

Grave charges are being levelled by GEC employees who have had good relationships with the radar establishment and with the Ministry of Defence for 15 to 20 years and who feel that this time something has gone wrong. They do not know what it is. They have not been told during the past few months what it is.

Mr. Nicholas Winterton

Nor have we.

Mr. Prior

No one has been told. I should expect that, in a contract of this nature, as with most contracts, when things were going wrong, there would be discussion between the contractor and the customer.

Of course, we have to accept the decision. The RAF has always wanted AWACS and I do not see why it should not want AWACS. It has always wanted it and I do not impugn the RAF for that because it flew me across the Irish sea so many times over a three-year period that I would never say that the RAF was not perfectly entitled to fight hard for what it requires. However, the decision is a setback for Britain. It is a great disappointment, especially for the work force. It is a disappointment for those Conservative Members who, in difficult times, have supported me and the company, and I am grateful to them for that. We owe it to all the people who will lose their jobs over the next few weeks in unpleasant circumstances to ensure that this kind of thing never happens again.

It may not be a very good story from the company's point of view, but I think that the Ministry of Defence has a very heavy responsibility for all that has happened which has led to the decision.

8.50 pm

Mr. Lewis Carter-Jones (Eccles)

I am grateful for the opportunity to make my speech after the right hon. Member for Waveney (Mr. Prior). It is a great pity that this debate did not take place earlier. It would have been better if these matters could have been discussed before. I am sorry that the Secretary of State has left the Chamber, but he has been magnificently honest in response to questions. He has clarified many issues for us tonight.

The statement that the Secretary of State made today was particularly helpful. In that statement, he said that it is most important that there is a "vital secure data link". As an ex-RAF navigator during the war, I can appreciate that it is not very funny sending out signals telling the enemy where you are. My hon. Friend the Member for Linlithgow (Mr. Dalyell) asked whether that data link applied to Nimrod as well as to Boeing. There was some confusion but eventually we were given a clear answer. We were told that the "vital secure data link" which, in the statement is said to be a disadvantage to Nimrod, is actually a disadvantage for both aircraft. The Secretary of State was absolutely honest and positive about that. The alleged defect in Nimrod occurs in both aircraft.

Several other points have arisen in the debate that are important. I want to stick briefly, if I may, without romancing too much, to the letter which the Secretary of State produced today and his statement. The Secretary of State has said that the GEC offer covers three levels of attainment. He spells those out. He also referred to the first three aircraft that will be available in 1987 and he said that they will be no good because they are of an unsatisfactory standard for training. I have never heard so much cobblers in my life.

In the RAF, we were trained in what was known as mark 4 AI. We then used mark 8 AI and went operational on mark 10 AI. It is not unusual to be trained in the forces on a piece of equipment that is not completely modern. The Secretary of State and I flew in an aircraft which was perfectly adequate for training purposes. It ought not to have been dismissed in that manner.

Many important points have been raised in connection with phases 2 and 3 regarding the performance of Nimrod. The right hon. Member for Waveney was absolutely correct when he referred to the improvements. I flew on Nimrod and there were GEC boys present who praised Nimrod. Hon. Members have said today that of course they would do that. However, standing behind me at that circuit was a squadron leader radar navigator from the MOD. He said the same so I was not being fed bull; I was being fed the truth.

The GEC boys demonstrated a situation in which there was clutter. My God, there was clutter. It was impossible to pick up anything. They then switched in the computer — which has only recently been fitted — and the performance improvement was remarkable. That factor has not been taken into account.

I have knocked GEC in the past and it is far from blameless in this matter. However, the improvement in the past six months has been demonstrably remarkable. GEC deserves the faith of the Ministry in this matter because it has performed extremely well.

My hon. Friend the Member for Linlithgow and my hon. Friend the Member for Warrington, North (Mr. Hoyle) have managed to discover that the time scale in relation to the "vital secure data link" is not available for either aircraft. That appears in the statement as a criticism of Nimrod, but is not. We must return to the other time scale. In passing, I hope that GEC would not object if the MoD, in its infinite wisdom, decided to invoke and invite other electronics experts in this country to participate to resolve the problem. There would be no harm in that. The main contract remains sacrosanct.

We shall not have a Boeing until 1991, as stated in the fifth point in the statement. The Secretary of State was very honest about that. The implication of that is that he has presented us with a reason why we should persist with the Nimrod project. That is loud and clear.

I hope to God that the House can achieve a deathbed repentance on this occasion and revoke the decision because it is wrong. At the end of the war we had one of the finest air interception facilities in the world called mark 10 AI, but we lost it. That system could have been modern for the next 30 years, but we lost it to the Americans. We have a distinct chance, if we do not proceed with the project, of losing this technology in its entirety. This technology has an advantage outside military use. There is a great problem with clutter at civil airports and with holding people off. The equipment would be extremely useful in civil aviation. There would be that spin-off.

When the Secretary of State referred to cancellation, his hon. Friend the Member for Woking (Mr. Onslow) asked about the horizon issue. He asked if there was a relationship between the horizon and the height at which the aircraft flies. The Secretary of State said that there was a correlation. He said that as if it was a new discovery. However, we knew 15 to 20 years ago that Nimrod operated at 26,000 feet and Boeing at 29,000 feet. The horizon issue was common knowledge all those years ago. It is not a technical point; it is a matter of fact.

I make this plea. I have no commercial or constituency interest in employment terms in who receives the contract. However, I have an interest in the Royal Air Force. I believe that the RAF has been misled on this occasion. The progress that has been made by GEC, for aircraft that have already been paid for, represents a chance for us to lead the world in this technology. We must not throw that chance away.

The row over Westland and the resignation of two Secretaries of State was a great mischief. The row was about helicopters. There was an air staff target for helicopters. AST 402, and the W30 built by Westland, were built to meet that specification. The Ministry of Defence ratted on it, which is why Westland found itself with a massive cash flow problem. At the end of the day, when all the dust has settled, the row has finished and the quarrelling is over, what is the truth? The truth is that we do not haw sufficient helicopters today for the needs of our forces. That is the tragedy.

When one considers the clutter question of ASR400 it seems that GEC has produced equipment higher than the air staff target in urban areas, especially near Sheffield and Edinburgh. I applaud the honesty of the Secretary of State, but I urge right hon. and hon. Members to consider that they are chucking away an important and valuable piece of advanced British technology.

8.59 pm

Mr. Cecil Parkinson (Hertsmere)

I am in the rather strange position of probably being as ignorant about technical matters as it is possible to be, yet having in my constituency industries which are working at the edge of the most advanced technology. I suspect that, in common with many hon. Members tonight, I have the disadvantage of being asked to pass judgment on a project, product and system which few of us understand and on which few of us are qualified to pass any technical judgment.

We may agree on more matters than one would have guessed from listening to some of the debate. Indeed, I am glad that it has settled down after its bad-tempered beginning. No hon. Member, including those on the Front Bench, would not prefer to buy a British AEW system. No hon. Member does not agree that there would be nothing patriotic about landing the RAF with a second-rate system. We are talking about developing an airborne system which is a vital part of the nation's defences and it must be common ground that it must be as good as possible.

We all agree that for the target to be running so late and so heavily over cost suggests either hopeless optimism at an early stage—I suspect there was some of that—or appalling target control or, possibly, a combination of both. Certainly there are many lessons for the Ministry of Defence and the House to learn from the project.

It should be common ground that it cannot be easy for a Government—nor should it be for the House—to decide to write off at the end of a three-hour debate nine years' work of thousands of people and £700 million of taxpayers' money. Tonight we are taking a big decision.

I have one small criticism of the Opposition which is that they were extremely foolish to demand a Standing Order No. 20 debate so soon after such a highly complicated statement. This is probably the last chance that the House will have to debate this subject and we are disposing of it in three hours. The Opposition have nobody but themselves to blame for limiting the time available.

In making his statement, my right hon. Friend, by implication and sometimes directly, acknowledged some of the advantages of Nimrod. He acknowledged the cost and minimised the difference. Indeed, he probably gave a much fairer assessment of the potential savings from buying Nimrod. We should not ignore the fact that the technology, as developed, would have been British and ours to exploit.

Boeing promises to bring jobs here, and I do not doubt its determination to try to honour its word. Nevertheless, it will be bringing us technology for us to work on and we will be surrendering wholly British technology which could have been ours to exploit.

At the end of all this debate, the judgment, which we in this House are barely qualified to make but must do so, is to decide whether the Secretary of State, having taken the best advice he possibly can, and having considered it extremely carefully, is right. I know him personally and I am sure that the House knows that he cannot have found this decision an easy one. I have heard the Secretary of State defend projects in Scotland. We have maintained projects in Scotland when the economic justice for doing so has quite often eluded me. The Secretary of State has strong credentials as a man who likes to back British and would not take a decision like this one easily.

Mr. Dalyell

Scottish or British? GEC in Scotland will be hurt.

Mr. Parkinson

I am including Scotland as part of Britain. I hope that the hon. Gentleman is not offended.

We are told that this project is not capable of working.

Mr. Nigel Spearing (Newham, South)

It is working now.

Mr. Parkinson

We are told that even in the mid-1990s it is not sure that the system would work. What we are effectively being told is that the system will not work. It is on this important issue that I wish to draw on my experience.

In my constituency I have the factory or the base in which most of the technology is being developed. I know many of the scientists and technologists who work there and I have seen with my own eyes the progress that has been made in recent months. It is here that I must part company with my right hon. Friend the Secretary of State for Defence.

I find it impossible to believe that in nine more years—that is the assertion made in the Secretary of State's letter—even by the mid-1990s, we will not have the technologists to crack the problem. I know these people and they are a most impressive group who have made tremendous progress in six months. I find it an incredible statement in the assessment, that in nine more years there is still no certainty that these technologists could crack the problem. The company has made the assertion that it could be done in three years and it has made an offer to back up that assertion with a substantial sum of money.

I started by saying that I was well aware of my lack of qualifications for making what is a technical judgment. What we are saying today is that this House has no confidence in British technologists' ability to crack the Nimrod problem. The Secretary of State believes that he is justified in making that statement. He has considered the matter carefully. I am afraid that I cannot join him in a condemnation of the capabilities of my constituents and those technologists that I know. He may be justified in taking this decision, but I cannot go with him.

9.9 pm

Mr. Tam Dalyell (Linlithgow)

I am not interested in the party politics of this matter but I say to the right hon. Member for Hertsmere (Mr. Parkinson): "Be fair." The Opposition pleaded to have this debate before the Cabinet decision was taken. My hon. Friend the Member for Warrington (Mr. Hoyle) and many others begged the Government to give time so that the House of Commons could have some input in the decision rather than a postmortem afterwards. That is what we were begging for.

It all comes down to the treatment of the House of Commons. I do not make too much complaint that the Prime Minister is not here and that the Secretary of State for Defence has gone off for television engagements, but it is high time that the House asserted itself and expressed its views before, rather than after, decisions are taken. Again, we are crying over spilled milk.

I very much welcome the presence of the chairman of one of our great companies. It may be that the House is a bit poorer for not having the Sir Alfred Monds of the day and the major trade union leaders in the House.

I draw the Minister's attention to paragraph 12 of the Secretary of State's statement, which said: The loss to British defence technology will be solely in this highly specialised field of large and advanced AEW systems, and it is not strategically vital for this capability to be retained in British industry. That is what the Secretary of State said this afternoon, but we should listen to the chairman of GEC who said that our competitors around the world will be making play with what the British Government have done. He is right.

All of us who have industrial concerns in our constituencies and know something about their export difficulties are aware that the decision will be used against us in all sorts of areas. Paragraph 12 of the statement is just not true.

I was a bit shocked because the chairman of GEC said that the decision was not taken in March because of Westland and Leyland. That reveals that the politics of the situation was paramount. I do not want to be cheap about it, but who is playing politics with defence now?

There should be some explanation of the transmitter not being tested on the ground. If the money was not available for such a central and basic issue, what on earth was the reason? I hope that we shall have an answer to that question in the winding-up speech.

I knew that there had been a lot of modifications, but how many hon. Members knew that there had been 3,845? My hon. Friend the Member for Coventry, North-East (Mr. Park) has engineering experience. How can one produce anything with that kind of constant change and nagging? No industrial designer can cope with that, let alone cope with it and keep within cost estimates.

My hon. Friend the Member for Dunfermline, West (Mr. Douglas) is a member of the Defence Select Committee and he said to me, "If you are called, for heaven's sake ask them what are the through-life costs." This is a specific question for the Minister's winding-up speech. What are the comparative through-life costs for AWACS and Nimrod? Perhaps the right hon. Member for Waveney (Mr. Prior) has an answer in his notes. GEC must have given some attention to this problem of through-life costs. The rest of us do not know, however, and it is a vital question. I shall give way to the Minister if he knows. Perhaps he will tell us later.

Boeing has a very good record in offsets. I do not think that anybody can deny that. Indeed, Boeing probably has a better record than any other American company, but that was before the Glenn amendment. The atmosphere in the United States is altering. Ever since Senator Glenn of Ohio brought in that amendment, admittedly in a different context, things have been different. We have seen that with the strategic defence initiative.

My constituents at Heriot-Watt university are doing work on optical physics, and, controversially, have taken £1.2 million or thereabouts from the Pentagon to keep the university physics department going. That is a paltry sum compared to the huge sums that were dangled before the House when my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) and others were asking about the industrial aspects of this matter. We live in a post-Glenn time.

The Royal Air Force has air staff requirement 400. Is that some sort of tablet from on high? Like the chairman of GEC, some of us do not believe that the Ministry of Defence was unanimous in its decision. I repeat the question: are we sure that in the next three or four years it will not dribble out that the decision was far from unanimous? I will bet my bottom dollar that, sooner or later, people will crawl out of the woodwork in the Ministry of Defence saying that they never wanted that decision. That will happen, because it has happened before.

The Secretary of State said that the secure data link was now on a par. A secure data link is absolutely crucial. I do not want to vaunt my qualifications, but for 20 years I have been the weekly columnist for New Scientist. I have many contacts and people tell me that, without a secure data link in the next generation, it is foolhardy to go ahead with the project. The AWACS project is a bit dated. It has already been going for eight years. It has the virtue of being tried but it has problems. I do not say that the secure data link is vital. The Secretary of State said in his opening statement that it was vital that it was sorted out. Who has the greater chance, GEC or Boeing, of coping with this crucial problem? I am told by people who are in a position to know that if they had to put money on who would first arrive at an answer to the secure data link, that money would go on GEC and not on Boeing. What does the Ministry of Defence say to that?

9.16 pm

Mr. Edward Heath (Old Bexley and Sidcup)

In the latter half of the debate we have been getting down to the basic facts about this issue. The Secretary of State said that the issue was complex, and we sympathise with him in having to reach a very difficult decision. The number of right hon. and hon. Members who wish to take part in the debate demonstrates clearly that this announcement should never have been kept until the last Thursday before Christmas. It should not have been left to an emergency debate. The Government should have provided the time for the debate, and they should have provided that time before they reached a decision. That would have given the Secretary of State an opportunity to explain many of the matters which are still confusing to the House and certainly to the public.

My right hon. Friend the Member for Waveney (Mr. Prior) has shown how valuable it is to have someone in the House who holds a pre-eminent position in industry, and who can put the other side of the Government's case. Good government, as we learned above all during the 1930s, depends on having in the House people who have the information themselves, and who can therefore challenge the Government on any big issue. Otherwise the House just becomes a poodle of Government.

There was a time when industrialists and top trade union leaders came to the House in order to make a contribution. They did not seek office, but wanted to give their information and knowledge to the House so that hon. Members could reach better judgments. Those industrialists and trade unionists have all disappeared. We must now wait until a Member of Parliament becomes distinguished in the House. He may then go off to industry and, in some cases, be able to enlighten us.

My view on the decision is that it is sad and regrettable, and I certainly cannot support it. My right hon. Friend the Secretary of State said that the interests of the services and of the Royal Air Force are important. He was absolutely right. I admire very much the work that he is doing as Secretary of State. But I do not accept that the views of the services or of the Royal Air Force, in particular, are paramount. They are not.

I must apologise to my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) if for once in our lives we disagree. The views of the services are not paramount and I suggest that the right hon. Member for Llanelli (Mr. Davies), who opened the debate, has jumped on the bandwagon, just as the Leader of the Opposition jumped on the bandwagon of "paramount" at Question Time today. Those two right hon. Members are in an extremely dangerous position, and they will find themselves tied to it if ever they get into office—which I very much doubt. It is a very unwise position to adopt. Hon. Members should look at the problems to which we are tied now because we were told that the views of the Falkland islanders were paramount. The view of this House is paramount and the view of Parliament as a whole.

The chiefs of staff do not have responsibility for the Budget or for finance. They do not have responsibility for employment and jobs, or for exports and export performance. They do not in the least have that responsibility, and it would be wrong to charge them with it. Therefore, their position is one factor in the overall situation.

It is clear that, from the point of view of the Budget and of finance, of jobs and employment, and of export potential, everything in this case is on the side of GEC, and to a certain extent on the side of Nimrod as a whole. It is only on the argument about technical achievement that there is any difference. Of course, the chiefs of staff and the experts can give their views on that. But it is the Government's responsibility to take the decision and they should not say, "This was the advice that we received from the chiefs of staff." There was a time in the House when no reference was ever made to advice received from chiefs of staff or from any military. It would be a very good thing if we returned to that position. Governments are then prevented from trying to shift the responsibility on to those who are advisers, and no more than that.

I have also been somewhat shocked by the naive simplicity sometimes shown by my right hon. and hon. Friends behind me about the views of experts. The House is not governed by experts. Our task is to take experts' views and to tear them apart as skilfully as we can and as often as necessary. It is only in that way that we shall find the overall solutions that are necessary.

I shall now concentrate on the specific position of GEC, and on some of the confusions surrounding it. I accept that the specification has remained the same except, as we were told, for refueling in the air. But to use a term that is, I believe, now used in fashionable circles, that is an economical use of the truth. It is not only the specification that is important but the steps taken by the Ministry of Defence in order to insist on how that specification should be reached. When there are more than 3,000 alterations, long delays on the part of the Ministry of Defence before it says yes or no to a proposition from the company, and when money is refused for changes that the firm wants in order to reach that specification, we can see a long, sordid history of delay, lack of finance and incompetence by the Ministry of Defence. Nor is it, alas, alone in our post-war history.

For example, we have lost the greater part of our civil aviation industry because the British Overseas Airways Corporation insisted on specifications that prevented the export of aircraft to other countries, because they did not have the same idea of route lengths, and so on. Moreover, there were all the alterations that that company made as the development went along, which led to delays in the production of aircraft. The civil aviation industry tells a sad, sad story.

In this case, the important part is the confusion about specification and about how it is to be implemented, and that is where the Ministry has its say. There is then the question whether the aircraft had to cover overland operations. I do not think that we are talking so much about confusion as about a difference of definition. When dealing with North sea waters, it was found that to a certain extent operations overland were involved. That is quite different from saying that thickly populated areas on the continent of Europe had to be dealt with as well. But those are confusions and an economical use of the truth.

After nearly nine years of delay, obstruction and lack of Ministry finance, the firm managed to make extraordinary progress in nine months once it had taken control of the contract. It is contributing half the finance and is prepared to continue doing so. This is a remarkable change, and I congratulate those who have been responsible for it.

As the firm is now approaching so closely to what is required under ASR 400, my view is that the Government and the Ministry of Defence should work with it to enable it to achieve those financial results. Why should we use our research laboratories and so-called experts only to pull the thing to pieces and engage in this orgy of suicide, from the national point of view, which so many of them want? They should be used to help the firm to overcome the remaining difficulties and solve the problems. That is what they are there for. Why do they not do that?

Where I differ from the judgment of my right hon. Friend the Secretary of State is in my belief that, having achieved so much in nine months, the firm should be given the opportunity of carrying out the timetable into which it is prepared to put its money as well as Government money. Then we shall have the opportunity of more advanced technology than the Americans will provide through Boeing, and the opportunity of selling it in the world markets. We shall maintain British prestige and advance our own technology in a specific but important sector. What is more, we shall maintain the morale of those in industry who have been striving to achieve the target that we have set them.

9.25 pm

Mr. John Wilkinson (Ruislip-Northwood)

The speech of my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) has saddened me. In many ways it was not worthy of the occasion. It was looking backwards and it was not addressing the threat that we face from a greatly enhanced Soviet air force and naval air forces. In the past 10 years, the threat has been growing steadily and it is a threat from such aircraft as the Backfire supersonic bomber and the Fencer fighter bomber. Both these aircraft can strike at these shores, and if they are to be intercepted they have to be intercepted as far away as possible. The Backfire, for example, has a stand-off capability, and that is why interception at long range is so important.

In peacetime, the views of experts, as my right hon. Friend so disdainfully calls them, may not seem important. We can derogate the weight that we attach to the specialist advice of those who may ultimately have to put their lives at risk on our behalf, but I am absolutely certain that if we were to go to war, we should wish for our armed forces the very best. It is most significant that the Army, the Navy and the Air Force are united in their advice to my right hon. Friend the Secretary of State. Most importantly, the Royal Air Force itself—

Dr. Keith Hampson (Leeds, North-West)

Will my hon. Friend give way?

Mr. Wilkinson

No, because time is short.

In making its choice, the Royal Air Force is conscious that it is reducing the amount of money for its future programmes and it attaches great weight to airborne early warning. Neither the land battle nor the war at sea can be won without a favourable air environment. Our own population, our families, cannot sleep safely in their beds unless they know that the United Kingdom air defence region will be properly policed and guarded by interceptors that are directed to their targets by the very best airborne early warning system available.

There is no doubt that the contractors have had time enough. The specification, the air staff requirement, was set back in 1976, the Nimrod AEW programme was initiated in 1977 and the AWACS for the NATO European countries was initiated one year later, in 1978. Yet AWACS came into service in time, in 1982. That was when the first Nimrod AEW aircraft should have been delivered for training to the Royal Air Force. Since then, our NATO partners have had the benefit of this additional security. It is a classic example of what should have been a collaborative programme from the outset.

With hindsight, we all regret that that decision was not taken. However, it was not, and in a cool, calm and highly rational manner my right hon. Friend has had the courage to grasp a difficult political nettle. I have known, literally for years, about the deficiencies of the Nimrod system for airborne early warning. I have not spoken out. To have done so would, I felt, have been prejudicial to this country's security interests.

However, in the spring of 1986 my right hon. Friend the Secretary of State was entirely right to say that enough was enough, that good money could not be thrown after bad, that the contract should be thrown open to competition, to make GEC assume leadership of the project, put in its own money and see if it could come up with a solution that would beat the competition within a reasonable time scale. It could not do so. As it could not do so, my right hon. Friend had to make the appropriate decision. I believe that he has, and his courage deserves to be commended. I am sure that the country will be grateful for his courage, because now our countrymen can sleep more safely in their beds.

9.31 pm

Mr. Robert B. Jones (Hertfordshire, West)

I am grateful to you, Mr. Speaker, for allowing me to catch your eye, because the GEC factory at Hemel Hempstead in my constituency is where much of the work on the development of Nimrod has been done. Those who have been involved with the project are dedicated avionics workers. They are fully committed to the defence of Britain, otherwise they would not be there. There has been uncertainty over their future in the last few months, but in the last few days it has turned to anguish. Therefore I want to identify some of those who I think are responsible for that anguish.

My right hon. Friend the Secretary of State for Defence told us today—although we have heard about it for several days in the press—that Nimrod does not fulfil the requirements and that therefore it must be scrapped. I do not doubt that my right hon. Friend reached his decision after a great deal of difficult and careful consideration. No Government, of whatever complexion, would have done other than buy British, if that had been possible. No Government would unnecessarily waste £660 million. My right hon. Friend must surely, therefore, have satisfied himself that Nimrod was unlikely to work properly on any reasonable time scale.

The historic background is important. My constituents have been working on this project since 1977. By March 1986 the consensus was that the system was not satisfactory. Nobody has challenged that assumption. The Royal Air Force says that it laid down clear requirements. As we have heard tonight, there was only one change—the requirement for an air-to-air refuelling capacity. With that one exception, the requirements remained unaltered until GEC was given a lower revised target, called an "interim operating standard". I am sure that that is true. However, it is misleading.

For the first eight and a half years of its life, the Ministry of Defence effectively ran this project. The MOD determined precisely what work should be carried out by GEC, and in many ways how it should be carried out. The civil servants therefore carry an enormous responsibility for the lack of progress. I should welcome a Select Committee inquiry into the management of the programme. It would, I fear, reveal that a profoundly disturbing system was in operation during that time.

Furthermore, although it is true that the specification, the ASR400, was not changed, much of the detailed requirement—filling in the broader terms of those references—was changed. Some change is inevitable. Neither science nor defence stand still. However, the MOD must stand indicted of gross mismanagement, which has now cost my constituents their immediate jobs. My right hon. Friend should now ensure that MOD heads should roll, too. One of the least acceptable facts of British political life is that those civil servants who have been guilty of mismanagement often get off scot-free. Unfortunately, it cannot be said that GEC itself was anything other than a willing partner in this arrangement. The absurd cost-plus basis of defence procurement leads to a cosy relationship which is beneficial at the time but which in the long term is destructive to the interests of both sides.

We reached the crunch point in early 1985 when, I believe, Ministers were starting to think about pulling the plug. My right hon. Friend the Member for Henley (Mr. Heseltine) and his successor, my right hon. Friend the Member for Ayr (Mr. Younger), decided instead to give GEC a further chance and set about developing a competitive framework and a fixed price basis for payment. It is arguable that at this stage the Ministry of Defence was leading GEC up the garden path.

I shall now turn to a review of progress since the end of March. The new competitive framework has justified itself. GEC was left to its own devices, but with the chill winds of competition blowing, minds at long last became concentrated. By September, progress had certainly been made, but in his statement my right hon. Friend makes it clear that the customer, the RAF, even at that time did not feel that it was good enough. We have learned directly or indirectly that on all major criteria—range, tracking, computer power and filtering—performance was below par. That is not in dispute. GEC argued that the performance was quite close to specification but the RAF argued that it was a long way off. There is some common ground, probably more than appears, because the two sides are measuring things in different ways. It was not the performance that persuaded my right hon. Friend but the expectation, since he had to be mindful of the importance of getting the equipment into use early.

I should now like to turn to my right hon. Friend's comments after the test flight. He and my noble Friend the Minister of State for Defence Procurement say that although the system works in the lay sense of the word, it does not work in the sense of being up to scratch. I hope that my right hon. Friend will agree that even with the best will in the world his public comment on television aroused quite false optimism in GEC. Ministers now say that there were frequent breakdowns in the system and that often, equipment which worked on take-off did not work on landing, and that on that basis they had no confidence in the consistency of the equipment and, therefore, its capacity for early retirement. With hindsight they should surely have sounded a warning note.

A factor in the decision thus faced by the Cabinet appears to be that delay in the supply of the AEW meant that we would not be able to plug our defence gap. AWACS was far from ideal, but it was working and available. Nimrod was crude. All hon. Members will understand that the Cabinet faced a difficult choice and the RAF took the view that enough was enough. I am sure that most of my hon. Friends will agree that one cannot overrule the RAF on a matter of confidence in the equipment that it has to use.

My hon. Friends representing Hertfordshire constituencies are especially disappointed at what happened in the closing days of this tale. Although there is a history of poor project management, enough changes had been made to prompt me vigorously to argue for an extension, at least until March. Unfortunately, quite apart from the growing impatience and scepticism of the RAF, my right hon. Friend the Member for Waveney (Mr. Prior) decided to weigh in with an outspoken attack on the evaluation system. That was profoundly unhelpful and caused the die to be cast. Rightly or wrongly, the RAF had made up its mind and the Cabinet backed the unanimous choice of its scientific advisers. Given those facts it would be a mistake to prolong the agony.

Mr. Prior

Why on earth should my hon. Friend think that a statement I made last Sunday had a damaging effect on getting an extension of a few weeks or a couple of months for the assessment? His remarks are not what I would expect from my hon. Friend, and if it is any help to him I can tell him now that GEC offered to pay to the middle of January so that a further assessment could be made.

Mr. Jones

I am grateful to my right hon. Friend for that intervention. One of the consequences of the information that came out over the weekend was not only damage to the reputation of this piece of equipment and to the chances of continuing with work on it, but also damage to the credibility of GEC on a number of other fronts in which I have a constituency interest and an interest in another sense.

We have spent a great deal of time squabbling about what caused the problem in the past. Surely now we can at least spare a few words for the future. GEC has a great record in many ways and it has brought a great many other products to fruition which are selling well in the world. I hope that when my hon. Friend the Minister replies he will be able to say something about the alternative forms of radar system which it may be possible to develop over the coming years and that that will give hope to this sector of the economy, because that is what is needed.

9.40 pm

Mr. Kevin McNamara (Kingston upon Hull, North)

We have had a remarkable debate this evening, but the most remarkable speech of all was that which came from the right hon. Member for Waveney (Mr. Prior). Basically, he rubbished the whole of the Government's case. There is a duty upon the Minister when he replies to answer point by point, in detail, the questions that were raised by the right hon. Gentleman on cost, because that is fundamental to the case that was given.

Secondly, there is a real duty upon the Minister to justify why, even at this late stage, we cannot have an independent assessment. An extra few weeks, at GEC's cost, would be nothing to settle that matter. It is not as though independent assessors have not been used before. They were brought in last year by the Minister to work out technical details with the Department at Malvern. There was a suggestion within the Minister's Department that that should be done again this year.

There was a suggestion, as late as October, as reported in The Guardian this weekend, that CAP (Scientific), which helped to carry out the inquiry last year, should be brought in again. That was suggested by the risk assessment committee. The Guardian reports: The ministry's 'risk assessment' committee—the group charged with assessing Nimrod's ability to meet the RAF's cardinal points specification—had already approached the British computer specialists CAP (Scientific) and two American radar specialists when it was instructed by another section of the ministry, probably the Procurement Executive, to drop the idea. Therefore, the risk assessment committee wanted that additional support for its judgment, or its criticism for that judgment, and the Government were not prepared to give it or even to think about it.

Dr. Hampson

Will the hon. Gentleman give way?

Mr. McNamara

No. With the greatest respect to the hon. Gentleman, I have surrendered a lot of my time so that everybody could speak, and if I give way once I shall have to do so again.

If the people who carried out that technical assessment felt that they needed it, one cannot but come to the conclusion that there has been that degree of hostility to Nimrod in the Ministry since 1977 such that it was not prepared at any time or any occasion to think again.

But the decision on the contract, as the right hon. Member for Waveney pointed out, despite his tremendous defence of his company on television earlier this evening, has meant that we have told the world that, in one of the most sensitive areas of high technology and defence, Britain cannot make it. That is what we have said and that is what the Government are doing to British industry. They are saying that Britain cannot make it.

Last year the Government threw away our helicopter technology. Last Christmas there was one present—Westland helicopter technology to the United States. This Christmas there is another—early warning technology to the United States. I wonder, if the Prime Minister delays her election until 1988, what she will give them next year.

The Government say that this is not a strategically vital industry and that Westland was not a strategically vital industry. None of them are strategically vital industries, but if they are all given away together there will be no industry. That is what the Government are doing in our important defence base. There is no way that that can be justified.

The only thing that the Government are prepared to proceed with is the defence of a decision to purchase a nuclear warhead and develop that in Britain. But airborne early warning is far more fundamental to Britain's defence than any Trident system. The problem is that the Government, the Prime Minister and the Ministry of Defence are just a lot of nuclear junkies. They are hooked on Trident and everything else in our conventional defence suffers as a result. Airborne early warning, frigates and the Army all go because of the attitude of the right hon. Gentleman the Secretary of State and his right hon. Friends.

We then turn to the argument of offset. The Secretary of State said that Boeing is an honourable company. He promised that it will meet its offset commitments—£130 for every £100. That seems too good to be true until we examine it. The Minister has said that Boeing will be contractually committed, but, in fact, it is committed to nothing by contract, not one job. The Minister did not say whether the non-binding contract is to last beyond the delivery of aircraft or whether it will go on during the life of the aircraft. Can he tell us that? Does it cover spares and replacements or does it end with the delivery?

On top of that, we are told that Boeing always honours its commitments. We should ask the Saudis how they felt when they were promised great things from Boeing. They were promised great offsets for their purchases. They were offered nine tremendous schemes: aerospace maintenance, advanced electronics centres, computer systems, digital telecommunications, a facility for manufacturing Boeing Vertol, a power engineering centre, an applied biotechnology centre and an applied technology centre. Of all those schemes, only two, the cheapest, have got off the ground. That is the truth about Boeing at present and the way in which it honours its commitments. As my hon. Friend the Member for Linlithgow (Mr. Dalyell) pointed out, since the Glenn amendment there will be very little chance of those things coming through.

I next want to come to the comments of the right hon. Member for Old Bexley and Sidcup (Mr. Heath). The Prime Minister said in reply to my right hon. Friend the Member for Llanelli (Mr. Davies) earlier this week that it is the opinion of the RAF, the people who are responsible for the defence of our country, that counts. Does the Minister believe that? Does he believe that it is the opinion of the generals that matter and that it is only they who will press the button? That is what the Government are saying.

Mr. Geoffrey Dickens (Littleborough and Saddleworth)

rose—

Mr. NcNamara

Are the Government abrogating the whole of their political responsibility? We know that it is not true. We know that the Government have made political decisions time and time again over defence contracts and this is nothing but a political decision on which £50 million was spent to buy time, as the right hon. Member for Waveney said.

The hon. Member for Hertfordshire, West (Mr. Jones) said that it is civil servants who are to blame on this contract. We can all blame civil servants. Nobody loves them, everybody hates them. However, this contract has gone on for nine years. For two of those years there was a Labour Government and we bear our share of the responsibility. However, for seven years we have had a Tory Government in control. It has gone on for seven years under four Secretaries of State—the right hon. Member for Cambridgeshire, South-East (Mr. Pym), Sir John Nott, the right hon. Member for Henley (Mr. Heseltine) and now the right hon. Member for Ayr (Mr. Younger). They were all responsible for what is going on. They knew that when Tornado was introduced we would need an airborne early warning system to make it work effectively and properly. In spite of that, they were not prepared to cancel Nimrod or to put the impetus behind it to ensure that it was available when Tornado came on stream. Therefore, when we have our first squadron of Tornado interceptors next year they will be crippled because over the past seven years not one Tory Secretary of State has been prepared to grasp the nettle of airborne early warning and make sure that the RAF has the use of the potential of that system. Now they are doing it at twice the expense—[Interruption.] Yes, Conservative Members do well to cheer. The Government are reacting too late. There has been vulnerability and it will remain for another five or six years. There was no reason why we should not have gone ahead with Nimrod and ironed out the problems that existed.

The Government have announced today the selling out of British jobs, of British technology and of British exports. More importantly, they have left a grave area of vulnerability in our air defences over the past seven years. For that reason rather than all the others, the Opposition will divide the House.

9.50 pm

The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Archie Hamilton)

The Government have been accused of many things tonight, and among the most ludicrous of the accusations is that we are reluctant to buy British. As my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) said, the British solution would be popular. My hon. Friend the Member for Hertfordshire, West (Mr. Jones) said that he believed that the Government would buy British if that were viable. Most of our equipment budget is spent in the United Kingdom, and the GEC group of companies has about £1.8 billion-worth of MOD business on its books, excluding Nimrod.

The House knows also that the British taxpayer has spent about £660 million in cash—worth £930 million in today's money—on Nimrod. Nothing could demonstrate more clearly the commitment of Ministers, MOD officials and the Royal Air Force to ensure that the GEC AEW succeeded and that we could buy British.

It gave my right hon. Friend the Secretary of State no pleasure, and it gives me none, to have to tell the House that, despite this commitment, and despite the expenditure of these large sums, Nimrod does not at present meet the specification required by the RAF, and we have no confidence that it will do so within the time scale laid down.

I do not need to remind the House that the Soviet threat is ever-present and increasing. My hon. Friend the Member for Ruislip-Northwood, (Mr. Wilkinson) recognises this as well as anyone. Despite its economic weakness, the Soviet Union has created as fearsome a fighting machine as the world has ever known, and one that far exceeds its legitimate requirements for defence. It used to be said that although the Soviet Union had greatly superior numbers in troops, tanks, aircraft and many other armaments, the West had a commanding superiority in technology. This is becoming less and less true every day. For example, it is highly likely that the Soviet Union will soon be able to deploy a new generation of cruise missiles that will fly faster and be much more difficult—[Interruption.]

Mr. Speaker

Order. Many questions have been raised in the debate and the Minister is answering them.

Mr. Hamilton

Thank you, Mr. Speaker. I was saying that the Soviet Union will soon be able to deploy a new generation of cruise missiles that will fly faster and be much more difficult to identify than any that can be deployed by either side today. That is why the need for a new look-down AEW system, which was endorsed by Ministers in 1977, is becoming daily more essential for our defence capability.

As my right hon. Friend the Secretary of State told the House earlier today, AWACS meets, or comes close to meeting, the operational standards set in 1977, and the Nimrod AEW, regrettably, does not. Nor is it likely to do so within the required time scale. Indeed, in several respects AWACS significantly exceeds our requirements and so gives us confidence that it will be able to deal with the sort of threat that we anticipate in coming years.

I can assure my hon. Friend the Member for Ruislip-Northwood that we shall fit the CFM56 engine in the E3A. I am confident that the engine will achieve a higher performance.

GEC has made progress in recent months—I fully acknowledge this—in producing a clearer picture, but we found that the system was seeing rather less than 50 per cent. of available targets at any one time. I disagree with my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath): it has not solved all the problems. In addition, its radar detection range was significantly down. False tracks were still appearing and mean track life was less than half of that required.

Mr. Heath

I did not say that it solved all the problems. I said that it had made remarkable progress in nine months. From the company's point of view and the expert advice it has, it will be able to deal with the rest of the problems, certainly as far as AWACS are concerned, in the time schedule.

Mr. Hamilton

The problem has been that it has made advances in some areas and difficulties have cropped up in others. As the House can readily see, the difference is not marginal. Measured against ASR400, the gap in performance of the two systems is wide. My right hon. Friend the Member for Pavilion alluded to that.

GEC says that it never undertook to have a perfect working system at this time and that it has every confidence that it will be able to produce a system that will approach the required standard in three years. That is the company's view, but it is not supported by the judgment of the Ministry of Defence technicians, and their judgment is unanimous. I do not think that the hon. Member for Linlithgow (Mr. Dalyell) will have the satisfaction of seeing these people crawl out from the woodwork in years to come.

I am glad to see the hon. Member for Orkney and Shetland (Mr. Wallace) represent the alliance all on his own. He was very kind and praised my right hon. Friend for his courage in taking this decision. I thank him for that, but I hope that he will not mind me saying how much I regret that there is a horrible rumour going around that the alliance will show its courage tonight by abstaining.

My right hon. Friend the Member for Waveney (Mr. Prior) and the hon. Member for Linlithgow referred to the 3,845 modifications that have taken place on the Nimrod programme since 1979. Perhaps I should explain to the House what a modification is. Each and every change that has been proved necessary to make the equipment during its development programme is called a modification. So the figure of 3,845 is a measure of the complexity of the process of trial and error that is inevitably characteristic of the development programme. Needless to say, it is not a sign that the customer's requirement has changed. My right hon. Friend the Secretary of State has made it clear that the only change in the requirement has been the addition of in-flight refuelling.

I now refer to the accusation that we have moved the goalposts, that we have altered the specification and so made GEC's task impossible. That has remained completely unchanged with the exception of in-flight refuelling.

Lessons have been learned. I totally agree with my right hon. Friend the Member for Waveney who said that he hoped there will be no more cost-plus contracts. I agree also with the hon. Member for Orkney and Shetland who said that there were weak contractual arrangements. That is certainly true.

Mr. McNamara

Will the hon. Gentleman give way?

Mr. Hamilton

I have only three minutes left, so I shall not give way.

In general, it is false to ridicule the offset arrangements, as some hon. Members have done. The Americans, and Boeing in particular, have a good record in fulfilling offset commitments of this sort. The offset programme will involve high technology work across a broad range of activities. Past projects have yielded highly successful offsets. The surface and submarine versions of the McDonnell Douglas Harpoon are the most striking. Almost £700 million of contracted work was achieved against a commitment of £300 million. Boeing's agreement for Chinook, negotiated in 1978 with a Labour Government, specified not a binding arrangement, but a "best endeavour" of 30 per cent. It delivered £100 million, and that was well in excess of what was done.

In its recent confused statements on defence policy, the Labour party favoured strong conventional defence. On the first occasion that this new-found commitment is put to the test, when the Government have to take a difficult and expensive decision in the interests of stronger conventional defence, it is found to be as hollow and empty as we have come to expect of every other election promise from the Labour party.

Another extraordinary attitude is the Opposition's hostility to the Royal Air Force. I believe that the RAF's views on defence procurement are very important, but the Opposition carry on like first world war generals regarding it as unnecessary to consult the poor bloody infantry about the conduct of the war. I hope that my right hon. and non. Friends will join me in voting against this measure.

Mr. John McWilliam (Blaydon)

On a point of order, Mr. Speaker—

Question put:—

The House divided: Ayes 170, Noes 339.

Division No. 48]	[10 pm
AYES
Adams, Allen (Paisley N)	Bell, Stuart
Anderson, Donald	Benn, Rt Hon Tony
Archer, Rt Hon Peter	Bennett, A. (Dent'n & Red'sh)
Ashley, Rt Hon Jack	Bermingham, Gerald
Ashton, Joe	Bidwell, Sydney
Atkinson, N. (Tottenham)	Blair, Anthony
Barnett, Guy	Boothroyd, Miss Betty
Barron, Kevin	Boyes, Roland
Beckett, Mrs Margaret	Bray, Dr Jeremy

Brown, Gordon (D'f'mline E)	Kinnock, Rt Hon Neil
Brown, N. (N'c'tle-u-Tyne E)	Lambie, David
Brown, R. (N'c'tle-u-Tyne N)	Lamond, James
Brown, Ron (E'burgh, Leith)	Leighton, Ronald
Buchan, Norman	Lewis, Ron (Carlisle)
Caborn, Richard	Lewis, Terence (Worsley)
Callaghan, Jim (Heyw'd & M)	Litherland, Robert
Canavan, Dennis	Lloyd, Tony (Stretford)
Carter-Jones, Lewis	Lofthouse, Geoffrey
Clark, Dr David (S Shields)	Loyden, Edward
Clarke, Thomas	McDonald, Dr Oonagh
Clay, Robert	McKelvey, William
Clelland, David Gordon	MacKenzie, Rt Hon Gregor
Clwyd, Mrs Ann	McNamara, Kevin
Cohen, Harry	McTaggart, Robert
Cook, Frank (Stockton North)	McWilliam, John
Cook, Robin F. (Livingston)	Madden, Max
Corbett, Robin	Marek, Dr John
Corbyn, Jeremy	Martin, Michael
Cox, Thomas (Tooting)	Maxton, John
Craigen, J. M.	Maynard, Miss Joan
Crowther, Stan	Meacher, Michael
Cunliffe, Lawrence	Michie, William
Cunningham, Dr John	Millan, Rt Hon Bruce
Dalyell, Tam	Mitchell, Austin (G't Grimsby)
Davies, Rt Hon Denzil (L'lli)	Morris, Rt Hon A. (W'shawe)
Davies, Ronald (Caerphilly)	Morris, Rt Hon J. (Aberavon)
Davis, Terry (B'ham, H'ge H'l)	Nellist, David
Deakins, Eric	O'Brien, William
Dewar, Donald	O'Neill, Martin
Dixon, Donald	Orme, Rt Hon Stanley
Dobson, Frank	Park, George
Dormand, Jack	Parry, Robert
Douglas, Dick	Patchett, Terry
Dover, Den	Pavitt, Laurie
Duffy, A. E. P.	Pendry, Tom
Dunwoody, Hon Mrs G.	Pike, Peter
Eadie, Alex	Powell, Raymond (Ogmore)
Eastham, Ken	Prescott, John
Edwards, Bob (W'h'mpt'n SE)	Radice, Giles
Evans, John (St. Helens N)	Randall, Stuart
Fatchett, Derek	Raynsford, Nick
Faulds, Andrew	Redmond, Martin
Field, Frank (Birkenhead)	Rees, Rt Hon M. (Leeds S)
Fields, T. (L'pool Broad Gn)	Richardson, Ms Jo
Fisher, Mark	Roberts, Ernest (Hackney N)
Flannery, Martin	Robertson, George
Foot, Rt Hon Michael	Robinson, G. (Coventry NW)
Forrester, John	Rogers, Allan
Foster, Derek	Rooker, J. W.
Foulkes, George	Ross, Ernest (Dundee W)
Fraser, J. (Norwood)	Rowlands, Ted
Freeson, Rt Hon Reginald	Sheerman, Barry
Garrett, W. E.	Sheldon, Rt Hon R.
George, Bruce	Shore, Rt Hon Peter
Godman, Dr Norman	Short, Ms Clare (Ladywood)
Golding, Mrs Llin	Short, Mrs R.(W'hampt'n NE)
Gould, Bryan	Silkin, Rt Hon J.
Hamilton, James (M'well N)	Skinner, Dennis
Hamilton, W. W. (Fife Central)	Smith, Rt Hon J. (M'ds E)
Hardy, Peter	Snape, Peter
Harrison, Rt Hon Walter	Soley, Clive
Hart, Rt Hon Dame Judith	Spearing, Nigel
Hattersley, Rt Hon Roy	Straw, Jack
Healey, Rt Hon Denis	Thomas, Dr R. (Carmarthen)
Heddle, John	Thompson, J. (Wansbeck)
Hogg, N. (C'nauld & Kilsyth)	Wardell, Gareth (Gower)
Holland, Stuart (Vauxhall)	Wareing, Robert
Home Robertson, John	Weetch, Ken
Howarth, George (Knowsley, N)	Welsh, Michael
Howell, Rt Hon D. (S'heath)	Williams, Rt Hon A.
Hoyle, Douglas	Winnick, David
Hughes, Robert (Aberdeen N)	Woodall, Alec
Hughes, Roy (Newport East)	Young, David (Bolton SE)
Hughes, Sean (Knowsley S)
Janner, Hon Greville	Tellers for the Ayes:
John, Brynmor	Mr. Allen McKay and
Jones, Barry (Alyn & Deeside)	Mr. Chris Smith.

NOES
Adley, Robert	Durant, Tony
Aitken, Jonathan	Edwards, Rt Hon N. (P'broke)
Alexander, Richard	Evennett, David
Alison, Rt Hon Michael	Eyre, Sir Reginald
Ancram, Michael	Fallon, Michael
Arnold, Tom	Favell, Anthony
Ashby, David	Fletcher, Alexander
Aspinwall, Jack	Fookes, Miss Janet
Atkins, Rt Hon Sir H.	Forman, Nigel
Atkins, Robert (South Ribble)	Forsyth, Michael (Stirling)
Atkinson, David (B'm'th E)	Forth, Eric
Baker, Rt Hon K. (Mole Vall'y)	Fowler, Rt Hon Norman
Baker, Nicholas (Dorset N)	Fox, Sir Marcus
Baldry, Tony	Franks, Cecil
Banks, Robert (Harrogate)	Freeman, Roger
Batiste, Spencer	Fry, Peter
Bellingham, Henry	Gale, Roger
Bendall, Vivian	Galley, Roy
Bennett, Rt Hon Sir Frederic	Gardiner, George (Reigate)
Benyon, William	Gardner, Sir Edward (Fylde)
Best, Keith	Glyn, Dr Alan
Biffen, Rt Hon John	Goodhart, Sir Philip
Biggs-Davison, Sir John	Goodlad, Alastair
Blackburn, John	Gorst, John
Blaker, Rt Hon Sir Peter	Gow, Ian
Body, Sir Richard	Grant, Sir Anthony
Bonsor, Sir Nicholas	Greenway, Harry
Bottomley, Peter	Gregory, Conal
Bottomley, Mrs Virginia	Griffiths, Sir Eldon
Bowden, A. (Brighton K'to'n)	Griffiths, Peter (Portsm'th N)
Bowden, Gerald (Dulwich)	Grist, Ian
Boyson, Dr Rhodes	Ground, Patrick
Braine, Rt Hon Sir Bernard	Grylls, Michael
Brandon-Bravo, Martin	Gummer, Rt Hon John S
Bright, Graham	Hamilton, Hon A. (Epsom)
Brinton, Tim	Hamilton, Neil (Tatton)
Brittan, Rt Hon Leon	Hanley, Jeremy
Brooke, Hon Peter	Hannam, John
Brown, M. (Brigg & Cl'thpes)	Hargreaves, Kenneth
Bruinvels, Peter	Harris, David
Bryan, Sir Paul	Harvey, Robert
Buchanan-Smith, Rt Hon A.	Haselhurst, Alan
Buck, Sir Antony	Havers, Rt Hon Sir Michael
Budgen, Nick	Hawkins, C. (High Peak)
Bulmer, Esmond	Hawkins, Sir Paul (N'folk SW)
Burt, Alistair	Hayes, J.
Butcher, John	Hayhoe, Rt Hon Barney
Butler, Rt Hon Sir Adam	Hayward, Robert
Butterfill, John	Heathcoat-Amory, David
Carlisle, John (Luton N)	Heddle, John
Carlisle, Kenneth (Lincoln)	Henderson, Barry
Cash, William	Heseltine, Rt Hon Michael
Chalker, Mrs Lynda	Hickmet, Richard
Channon, Rt Hon Paul	Hicks, Robert
Chapman, Sydney	Higgins, Rt Hon Terence L.
Chope, Christopher	Hill, James
Clark, Hon A. (Plym'th S'n)	Hind, Kenneth
Clark, Dr Michael (Rochford)	Hirst, Michael
Clark, Sir W. (Croydon S)	Hogg, Hon Douglas (Gr'th'm)
Clarke, Rt Hon K. (Rushcliffe)	Holland, Sir Philip (Gedling)
Cockeram, Eric	Holt, Richard
Colvin, Michael	Hordern, Sir Peter
Conway, Derek	Howard, Michael
Coombs, Simon	Howarth, Alan (Stratf'd-on-A)
Cope, John	Howarth, Gerald (Cannock)
Cormack, Patrick	Howe, Rt Hon Sir Geoffrey
Corrie, John	Howell, Rt Hon D. (G'ldford)
Couchman, James	Howell, Ralph (Norfolk, N)
Cranborne, Viscount	Hubbard-Miles, Peter
Critchley, Julian	Hunt, David (Wirral W)
Crouch, David	Hunt, John (Ravensbourne)
Currie, Mrs Edwina	Hunter, Andrew
Dickens, Geoffrey	Hurd, Rt Hon Douglas
Dicks, Terry	Jackson, Robert
Dorrell, Stephen	Jenkin, Rt Hon Patrick
Douglas-Hamilton, Lord J.	Jessel, Toby
Dover, Den	Johnson Smith, Sir Geoffrey
du Cann, Rt Hon Sir Edward	Jones, Gwilym (Cardiff N)
Dunn, Robert	Jones, Robert (Herts W)

Jopling, Rt Hon Michael	Merchant, Piers
Joseph, Rt Hon Sir Keith	Meyer, Sir Anthony
Kellett-Bowman, Mrs Elaine	Miller, Hal (B'grove)
Kershaw, Sir Anthony	Mills, Iain (Meriden)
Key, Robert	Miscampbell, Norman
King, Rt Hon Tom	Mitchell, David (Hants NW)
Knight, Greg (Derby N)	Moate, Roger
Knight, Dame Jill (Edgbaston)	Monro, Sir Hector
Knowles, Michael	Montgomery, Sir Fergus
Lamont, Rt Hon Norman	Moore, Rt Hon John
Lang, Ian	Morrison, Hon P. (Chester)
Latham, Michael	Moynihan, Hon C.
Lawler, Geoffrey	Murphy, Christopher
Lawrence, Ivan	Neale, Gerrard
Lawson, Rt Hon Nigel	Needham, Richard
Lee, John (Pendle)	Nelson, Anthony
Leigh, Edward (Gainsbor'gh)	Neubert, Michael
Lennox-Boyd, Hon Mark	Newton, Tony
Lewis, Sir Kenneth (Stamf'd)	Nicholls, Patrick
Lightbown, David	Normanton, Tom
Lilley, Peter	Norris, Steven
Lloyd, Sir Ian (Havant)	Onslow, Cranley
Lloyd, Peter (Fareham)	Oppenheim, Phillip
Lord, Michael	Oppenheim, Rt Hon Mrs S.
Luce, Rt Hon Richard	Osborn, Sir John
Lyell, Nicholas	Ottaway, Richard
McCurley, Mrs Anna	Page, Sir John (Harrow W)
Macfarlane, Neil	Page, Richard (Herts SW)
MacGregor, Rt Hon John	Patten, Christopher (Bath)
MacKay, Andrew (Berkshire)	Patten, J. (Oxf W & Abgdn)
MacKay, John (Argyll & Bute)	Pattie, Geoffrey
Maclean, David John	Pawsey, James
McLoughlin, Patrick	Peacock, Mrs Elizabeth
McNair-Wilson, M. (N'bury)	Percival, Rt Hon Sir Ian
McNair-Wilson, P. (New F'st)	Pollock, Alexander
McQuarrie, Albert	Porter, Barry
Major, John	Portillo, Michael
Malins, Humfrey	Powell, William (Corby)
Malone, Gerald	Powley, John
Maples, John	Price, Sir David
Marlow, Antony	Proctor, K. Harvey
Marshall, Michael (Arundel)	Pym, Rt Hon Francis
Mates, Michael	Raffan, Keith
Mather, Carol	Raison, Rt Hon Timothy
Maude, Hon Francis	Rathbone, Tim
Mawhinney, Dr Brian	Rees, Rt Hon Peter (Dover)
Maxwell-Hyslop, Robin	Rhodes James, Robert
Mellor, David	Rhys Williams, Sir Brandon

Ridley, Rt Hon Nicholas	Terlezki, Stefan
Ridsdale, Sir Julian	Thatcher, Rt Hon Mrs M.
Rifkind, Rt Hon Malcolm	Thomas, Rt Hon Peter
Rippon, Rt Hon Geoffrey	Thompson, Donald (Calder V)
Roberts, Wyn (Conwy)	Thompson, Patrick (N'ich N)
Robinson, Mark (N'port W)	Thorne, Neil (Ilford S)
Roe, Mrs Marion	Thornton, Malcolm
Rossi, Sir Hugh	Thurnham, Peter
Rost, Peter	Townend, John (Bridlington)
Rumbold, Mrs Angela	Townsend, Cyril D. (B'heath)
Sackville, Hon Thomas	Tracey, Richard
Sainsbury, Hon Timothy	Trippier, David
St. John-Stevas, Rt Hon N.	Trotter, Neville
Sayeed, Jonathan	Twinn, Dr Ian
Shaw, Giles (Pudsey)	Van Straubenzee, Sir W.
Shaw, Sir Michael (Scarb')	Vaughan, Sir Gerard
Shelton, William (Streatham)	Viggers, Peter
Shepherd, Colin (Hereford)	Waddington, David
Shepherd, Richard (Aldridge)	Wakeham, Rt Hon John
Shersby, Michael	Waldegrave, Hon William
Silvester, Fred	Walden, George
Sims, Roger	Wall, Sir Patrick
Smith, Sir Dudley (Warwick)	Waller, Gary
Smith, Tim (Beaconsfield)	Walters, Dennis
Soames, Hon Nicholas	Ward, John
Speed, Keith	Wardle, C. (Bexhill)
Speller, Tony	Watson, John
Spicer, Jim (Dorset W)	Watts, John
Spicer, Michael (S Worcs)	Wells, Sir John (Maidstone)
Squire, Robin	Wheeler, John
Stanbrook, Ivor	Whitfield, John
Stanley, Rt Hon John	Whitney, Raymond
Steen, Anthony	Wiggin, Jerry
Stern, Michael	Wilkinson, John
Stevens, Lewis (Nuneaton)	Wolfson, Mark
Stewart, Allan (Eastwood)	Wood, Timothy
Stewart, Andrew (Sherwood)	Woodcock, Michael
Stewart, Ian (Hertf'dshire N)	Yeo, Tim
Stradling Thomas, Sir John	Young, Sir George (Acton)
Sumberg, David	Younger, Rt Hon George
Tapsell, Sir Peter
Taylor, John (Solihull)	Tellers for the Noes:
Taylor, Teddy (S'end E)	Mr. Robert Boscawen and Mr. Tristan Garel-Jones.
Tebbit, Rt Hon Norman
Temple-Morris, Peter

Question accordingly negatived.