HC Deb 04 November 1986 vol 103 cc787-8
3. Mr. Stern

asked the Secretary of State for Defence if he will estimate the total value of all contracts recently placed by his Department with Rolls-Royce plc, both in terms of money and estimated man hours.

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

The total value of contracts placed by the Ministry of Defence with Rolls-Royce plc in the first six months of the current financial year amounts to £100 million. However, much of our business with the company, such as RB199 engines for Tornado, is contracted for internationally. We expect our total business this year with the company to amount to about £500 million. It is not possible, I am afraid, to provide a reliable estimate of the man hours involved, though clearly Ministry of Defence business with Rolls-Royce plc sustains a substantial number of jobs.

Mr. Stern

I congratulate my hon. Friend both on the answer and on the fact that he has delivered it. In view of the substantial business from his Department to Rolls-Royce plc this year, on top of the substantial orders that it already holds on behalf of his Department, does he agree that the work force of Rolls-Royce plc need have no fears whatsoever as to their future employment, whether in state or private hands?

Mr. Hamilton

Those employees of Rolls-Royce plc whom I have met relish the idea of privatisation. They foresee themselves as shareholders and coming out from under Government control.

Mr. Park

If Rolls-Royce plc is to continue to gain contracts, does the Minister agree that it will be necessary for it to maintain and even to expand its research and development? Will Government support be forthcoming for research and development if Rolls-Royce plc is privatised?

Mr. Hamilton

Yes. Government support will continue to be forthcoming for research and development in Rolls-Royce plc, whatever the ownership.

Mr. Robert Atkins

I congratulate my hon. Friend on taking up his post as Under-Secretary of State for Defence Procurement. Will he confirm that the order for the Rolls-Royce RB199 engines for Tornado will include the follow-on order, the attrition order for the Royal Air Force, which was reduced by the sale of Tornados to Saudi Arabia? Will he assure me that it is included in that particular order? What is more, if it is not included in that order, I assure my hon. Friend that he will be under even greater pressure than he is now.

Mr. Younger

I thank my hon. Friend for his question. I assure him that we anticipate that the combination of our orders for the RB199, together with those from the Saudis, will take sales through into the mid-1990s.

Mr. Nellist

Is the Minister aware that at my meeting with the trade union representatives at Rolls-Royce, Parkside—[Interruption.]

Mr. Speaker

Order. Give the hon. Member a chance.

Mr. Nellist

Is the Minister aware that at my meeting yesterday with the trade union representatives at Rolls-Royce, Parkside, in Coventry I was told that the proportion of workers opposed to privatisation was about 80 to 85 per cent.? Given the Prime Minister's oft-stated premise that defence is of the highest national priority, would not the privatisation of Rolls-Royce mean that money from the Defence Department would result not only in £500 million being spent on engines but in money being spent on the propping up and subsidisation of shareholders' dividends? How does that equate with the Prime Minister's statement that defence is a national priority?

Mr. Hamilton

We are convinced that the privatisation of Rolls-Royce will give the Ministry of Defence better value for money. The hon. Gentleman mentioned the national interest, but many defence suppliers are already in the private sector, and they play an equally important role.