HC Deb 27 March 1987 vol 113 cc736-42

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

2.31 pm
Mr. Neil Thorne (Ilford, South)

As you know, Mr. Deputy Speaker, I am a well-known supporter of the North Atlantic Alliance. Allies need to co-operate with one another in many ways. They need to co-operate on the battlefield and in the preparation of their munitions arid equipment. That co-operation is an important part of the Alliance. Facing us are the Warsaw pact countries which are dominated by the Soviet Union. A large measure of interoperability exists between the countries in the Warsaw pact in terms of equipment. Indeed, their interoperability is total and we cannot neglect this aspect of our defence.

When we have to decide what equipment to use, the choice initially depends on market forces within the Alliance. The companies that produce the equipment must carry out a large amount of research and production, and the Government have embarked upon a major exercise in cost cutting to ensure that the taxpayer gets good value for money. Neither the suppliers nor the services and certainly not the taxpayer would object to that. It is important that the matter is dealt with fairly and reasonably.

I think that my hon. Friend the Minister knows that I am anxious about the two-way street—that is to say, the sale and passage of equipment from the United States of America to Britain. We know that for many years a flood of equipment was purchased by the British taxpayers for our defence and, at the same time, we were selling only a small trickle of equipment to the United States. This has gone on for many years. However, I am delighted to find that the Government have been making strenuous efforts, with the assistance of Mr. Peter Levene and others, to redress the balance. There is still a long way to go before we can acknowledge that that is a reality.

In any alliance one must expect fairness and evenhandedness between the partners. I am not suggesting that the United States of America should purchase all its equipment overseas, but it should be prepared to purchase a proportion of its equipment equivalent to the amount that it sells overseas. My sole criticism of the Trident programme is that we did not enter into a direct offset arrangement when the contract was agreed. I advocated that at the time, so Ministers will be well aware of that need. I greatly regret that we did not make that demand then. It would have been particularly helpful to us in subsequent negotiations, and it would have had a marked effect on negotiations on the contract for the multiple subscriber equipment that the United States decided to pruchase from overseas. In the end, as my hon. Friend the Minister knows, for some extraordinary reason the United States chose outdated analogue equipment because of its price, not because of the quality of the equipment.

Why was the price so high? The competing companies in the United States were required to have a local partner. In the case of at least one British contestant, the difference between the bid that was accepted and the bid that the British company made was greater than the total cost of the equipment that it was to manufacture and supply.

In a true alliance, one should expect to work on equal terms. It is wrong for the United States to force United Kingdom suppliers to choose a local American contractor as a partner, unless we do the same. I understand that we rarely require United States contractors to accept a local partner here for any of the equipment that they supply, and I do not think that the United States should impose such conditions either.

In the case that I have mentioned, the contract was lost. The French, who had tied up the deal with another contractor in the United States, were able to undercut it, but the technology that they supplied was outdated at the time of purchase and will grow progressively more so. It was 100 per cent. analogue equipment, whereas the Ptarmigan alternative is 80 per cent. digital and 20 per cent. analogue. That is the next development in the area.

The problem is likely to get worse because of the enormous purchasing power of the United States. The Americans are now in the process of choosing more extensive battlefield equipment. Initially, they are trying to do that by means of their own local systems and through the operation of the single channel ground airborne radio system—SINCGARS. Compared with the most modern technology, that system is already outdated. The Americans have enormous resources and buying power. However, interoperability with the equipment used by the rest of NATO will not be obtained if United States forces have to take that equipment, because the other services in the NATO Alliance will not be able to communicate directly and fully with the United States, unless they adopt its outdated technology themselves.

Originally, SINCGARS was due to be introduced in 1990, but considerable slippage put that back to 1994. Because some pressure has been applied, it is now said that it may be ready by 1991. It is two or three years behind British equipment which has already been tested and is available because of research work carried out by various companies in Britain. It would be wrong if out-dated equipment were imposed on us, and thereby the British taxpayer.

A system called Raven has already been designed in Britain for the Australian forces. The Australian forces carried out considerable research to establish what they should buy to bring their forces up to date and into the 21st century. Following many trials, they decided to adopt a Plessey system based on the Plessey System 4000 as the basis for Raven. Raven is far advanced beyond the outdated SINCGARS. We should ask why.

The specification given by the American Government was relatively modest. They required the equipment merely to channel-hop so that it would be difficult for an enemy to pick up signals. By channel-hopping, it is possible to disguise messages being transmitted and thereby avoid much encoding and decoding, and to give a much clearer aspect of the battlefield.

The Plessey equipment has the advantage of many additional features, including maintenance sub-systems, frequency management facilities, frequency hopping, encryption abilities, null steering antenae, interference cancellation systems, burst transmissions and spread spectrum techniques, using low data rates. All those additional advantages have been built in to the Raven system and were not part of the specification for SINCGARS, which had a relatively low specification.

I understand that the United States has a requirement that the equipment should be capable of operating before breakdown on average for 1,200 hours. The best it has managed to reach so far on its limited equipment is 400 hours. The United States is now talking about the possibility of reaching 800 hours. The specification for Raven is more than 2,000 hours— a significant improvement. All those points show that we should make strong representations within the Alliance to ensure that we are not sold off with some outdated system, purely because it is provided by the might of the United States, when we have something much better to offer.

I urge my hon. Friend the Under-Secretary of State for Defence Procurement to ensure that our employment potential is reached, that the taxpayers get good value for money and that the equipment is obtained in this country. We have an excellent record which is second to none. For us to accept anything less than the best when other countries in Asia and elsewhere, particularly Australia, are actively buying the equipment that is being produced here would be entirely and utterly wrong. Therefore, I urge my hon. Friend to use his influence with the United States of America to ensure that it realises the seriousness of the situation and that it is prepared to accept and play its part in a true partnership.

2.44 pm
Sir Antony Buck (Colchester, North)

The House should be grateful to my hon. Friend the Member for Ilford, South (Mr. Thorne) for raising this matter; and we look forward to hearing the Minister's response.

The interoperability of NATO is tied in with the two-way street. Almost every time that we speak on defence-related matters we pay a tribute to our United States allies because it keeps so many of its boys in Europe and it is the sheet anchor of NATO. However, it must start taking more of our European equipment. We must have more reality in the two-way street which, I am sure my hon. Friend would agree, ties in with the question of interoperability. I look forward to hearing from the Minister on the question on interoperability that my hon. Friend has raised, and perhaps he will also touch on the two-way street.

We have sold a certain amount of equipment to the United States of America over the years. The biggest triumph was selling 113 Harrier aircraft to the United States of America. We are something of a pillar in NATO, and also something of a bridge between the European members of NATO and the United States of America because of the special relationship that we have with it. It is important— despite the fact that we owe so much to the United States of America— that there should be a balance in buying equipment, especially when— bearing in mind the case that my hon. Friend cited—that which is available on this side of the Atlantic is better than that available from the United States.

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

I am grateful to my hon. Friend the Member for Ilford, South (Mr. Thorne) for raising this important and complex subject of the interoperability of NATO communications, which has military as well as economic implications. The degree of interoperability that is required within and between our national headquarters, sea, land and air forces becomes a far more complicated matter when placed in the context of communications between NATO commanders and the assigned mixed forces of the Alliance. Appropriate security protection is a further significant military consideration.

My hon. Friend referred to the fact that the Warsaw Pact has a high degree of interoperability which is not currently shared by the NATO allies. That is one of the advantages of a Communist system. A degree of uniformity can be imposed on allies, and one of the disadvantages of a more free market system is that everyone does his own thing. The desire and need to have interoperability is something that we fully recognise and are trying to implement.

Communication is not simply a voice and a telegraph. It is also increasingly data transfer and the linking of command and control information systems. The convergence of telecommunications and ADP technologies over the last few years have given us information technology. The House will appreciate that the governing factor affecting NATO's requirements for interoperability of communications is the need for allied formations and units to have the communications necessary to enable them to support and fight under the command of, or alongside, other formations and units, regardless of nationality. That ability gives the commanders the flexibility that is essential to the successful conduct of operations. National differences in the methods of exercising command, including organisational and staff procedures, must also be taken into account, together with difficulties that arise because of language differences.

The many considerations involved in communications interoperability are addressed within NATO under the council and defence planning committee, principally by the military committee and the NATO communications and information systems committee, and their supporting structures, in respect of military policy requirements and procedures; by the Conference of National Armament Directors and its supporting structure such as the armament groups and tri-service group in respect of standards, technologies, standardisation and collaborative opportunities, and by the Military Agency for Standardisation. These are the major forums. The Ministry of Defence pays an active part in all of them, with major support from industrial experts when appropriate. Our defence industry also plays its part in the NATO industrial advisory group advising the Conference of National Armament Directors.

NATO's strategic communications, those down to corps level, generally conform to CCITT— the Committee Communications International Telegraphique et Telephonique— and CCIR (Radio) standards. The major NATO commanders' strategic communication requirements are normally funded from the NATO infrastructure budget. This means that common equipment is purchased and provided, such as those facilities comprising the NATO integrated communications system. Below corps level, tactical communications have been provided by the NATO nations for their own forces at national expense and that led to a variety of systems, some to different standards causing problems of interoperability.

Solutions to those problems for existing and future systems have been sought in NATO both through NATO standardisation agreements—STANAGS—which define standards to be adopted to improve interoperability and through a Eurogroup Defence Ministers initiative to develop European communication standards known as Eurocom standards. Outside of NATO, major support is also given by the Department of Trade and Industry, the Ministry of Defence and industry to the work of the International Standards Organisation so that civil and military standards are harmonised to the maximum possible extent to the benefit of all.

The Alliance has embarked on a three-step programme for interoperability in tactical communications. The first step is for analogue interconnections between any two nations, and STANAG 5040 standards and tactical principals are employed permitting connection by interface equipment at specific interface detachments. The next step, for digital interoperability— the burden of manning liaison vehicles and supporting radio relay link vehicles— will be obviated by direct radio relay interconnection between communication nodes of allied forces. This interconnection, called the digital gateway, is described in STANAG 4206 series. The final step will lead to the fielding of tactical systems built to common standards. Work is under way, under the auspices of the NATO tri-service group on communications-electronics equipment— TSGCEE— on the development of an outline NATO staff target for communications in the land combat zone post the year 2000; an Eurocom is helping in that endeavour.

Development of such common standards will give a unique opportunity to British industry to get access to the wider market place offered by our allies and there is little doubt the industrial competition will be fierce.

My hon. Friend the Member for Ilford, South referred to Ptarmigan and Plessey, in his constituency, which has a big interest in the matter. 1 am sure he knows that Ptarmigan was initally deployed in 1984. It is a mobile, digital, area trunk communication system that will provide a secure, automatic switched network to support army and air tactical operations in north-west Europe. The system will handle command, control, air support and logistic information, providing communication by speech, facsimile, data and telegraph.

For the future, the NATO tri-service group on communications and electronic equipment and Eurocom are considering a programme of pre-feasibility studies in support of the outlined NATO staff target 2000. The United Kingdom is playing a leading part in this activity. It is now generally agreed that ONST 2000 will have to he implemented in an evolutionary way. With this in mind, it will be highly desirable for Ptarmigan's mid-life enhancements to be seen as a positive contribution to that goal.

In November 1985 it was announced that the consortium of Rockwell-Plessey had lost the bid for the supply of communication equipment to the United States army. Many people, including my right hon. Friend the Prime Minister, were distressed about that. The winning bid was some $3 billion cheaper. Plessey bid only 20 per cent. of the total mobile subscriber equipment requirement, so no direct cost comparison is possible between Ptarmigan and the French RITA system, which formed part of the successful bid.

My hon. Friend mentioned that Plessey had been forced to find an American partner, and that the Americans often did not reciprocate by supplying equipment to us. Consideration must be given to that.

Plessey, and indeed the Government, were disappointed by the result, but it is likely that the company will gain sales from Ptarmigan derivatives and associated future generations of area communication equipment such as its multirole system, which it has developed as a third-generation system using the same well-proven system concepts and taking advantage of updated technology. The new range of products consists of circuit, message and packet switches. The new equipment is able to provide a comparable performance to its predecessors, while offering the advantages of a dramatic reduction in size, weight, power consumption and cost. Improved modular concepts in hardware and software have also been incorporated, which increases the flexibility of the product and allows it to be progressively enhanced to support future C31 requirements. A number of overseas orders have been placed for defence communication projects incorporating multirole system switches.

My hon. Friend referred to the United Kingdom being somehow forced to buy SINCGARS. The United Kingdom is using Ptarmigan and Clansman, and there is no question of our buying SINCGARS. The Ministry is also exploring the use of frequency-hopping techniques in the battlefield.

My hon. Friend the Member for Ilford, South and my hon. and learned Friend the Member for Colchester, North (Sir A. Buck) mentioned the two-way street and the strong desire that we should reciprocate all that is supplied by the United States. The latest figure is down to a ratio of 1.5: 1, so we are down to a very low ratio. It has been more than 2:1.

That brings us to the question of international standards. In the strategic area, standards are largely based on the open systems interconnection reference model, which has been prepared by the International Standards Organisation. The Ministry of Defence has recently issued a statement of intent on support of standards for OSI. These standards are designed to allow the exchange of information between information systems regardless of manufacturer or geographical location.

It is important for suppliers of information technology systems to recognise that it is the MOD's intention to adopt ISO OSI standards as they become sufficiently mature, and towards this aim the MOD is funding work to enhance the military features. This policy relates specifically to non-operational and strategic operational IT systems. Tactical IT systems will be expected to comply with OSI standards as far as is practicable, but the tactical environment does not currently allow adherence to the full set of OSI standards. This statement of intent reflects the belief that that is the most effective way of ensuring the widest possible choice of products and suppliers, while at the same time ensuring that the MOD is able to achieve its overall aim of using IT effectively, and securing the best long-term value for money.

The first of a series of standard NATO agreements (STANAG) giving an overview of the NATO reference model for open systems interconnection was recently promulgated after ratification. Further agreements are expected within the course of the next year, and the United Kingdom is the lead nation in over 50 per cent. of these interoperability standards. The work has relied heavily on the general international activities being pursued via the Standards bodies in each NATO national capital, and on close and regular industrial Government discussions.

To demonstrate international progress, this month the United States Department of Defence has announced, in conjunction with their Government open systems interconnection programme, that future systems— including command and control—will have to install the complete range of ISO protocols in line with the NATO STANAG, although these will need augmenting for tactical systems. We are making progress on that front.

Turning now to the question of international competitive bidding for NATO infrastructure-funded contracts, every NATO nation which acts as the host nation is bound by the principles on which NATO international competitions are run. Those principles include the "Principle of Non Discrimination", which states that eligible firms from other NATO countries must be given no less opportunity to submit their bids than national firms, and that tenders submitted by such foreign firms must not be treated in a less favourable way than those of national competitors.

Should a specification issued by a host nation discriminate against other NATO nations' firms, the nations concerned can seek a review of the specification by the NATO international staff, to bring about amendments to the specification removing the discrimatory elements. British firms engaged in bidding for NATO infrastructure-funded contracts normally keep closely in touch with MOD officials and our national representatives in NATO to make sure that their rights under the principle of nondiscrimination are upheld and they are given strong support when their complaint is justified.

I am grateful to my hon. Friend for raising this important matter. I hope—

The Motion having been made at half-past Two o'clock, and the debate having continued for half a hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing order.

Adjourned at Three o'clock.