Defence Industry (Hansard, 2 July 1991)

§ 1. Mr. Thurnham
To ask the Secretary of State for Defence what representations he has received about the future prospects of the British defence industry; and if he will make a statement.

§ The Minister of State for Defence Procurement (Mr. Alan Clark)
I have received a number of representations from hon. Members and others.

§ Mr. Thurnham
Will my right hon. Friend promote the best interests of all sectors of the British defence industry, including those of missile manufacturing? Does he agree that defence jobs are more secure with the policies of this Government than with those of the Labour party?

§ Mr. Clark
My hon. Friend is entirely right. From my own conversations with management and work forces, I can confirm that the defence industry knows well what its prospects would be if Labour ever got its hands on the defence budget.

§ Mr. Ashdown
Does the Minister realise the damage that is being done through uncertainty, speculation and rumour as a result of the Government's continued inability to make a decision on the EH101? Will he say today when that decision will be made? I plead with him, for goodness sake say something, because the uncertainty now risks 148 killing jobs, undermining orders, threatening European co-operation and delaying Westland providing a piece of equipment that the Navy desperately needs to do its job.

§ Mr. Clark
The right hon. Gentleman, for constituency reasons, chooses to depict that problem in lurid colours. In doing so, he is being somewhat irresponsible because he knows that this is a highly important procurement decision in which a number of factors must be weighed carefully. As the right hon. Gentleman also knows, we are appointing a prime contractor. In the fullness of time, the results of the tender will be made known. It is not for me to accelerate that process, because all the data must be weighed carefully and I do not want to cut any corners.

§ Mr. Burns
Is my right hon. Friend aware that the English Electric Valve company in my constituency is a world leader in the manufacture of third-generation image intensifiers? Does he agree that there is something inherently unfair in the fact that, although American companies can tender or compete for supplying the British armed forces with equipment, the EEV cannot compete in the American market to supply the Americans with image intensifiers because the American Government have stressed that non-American companies cannot take part in the tendering process? I should be extremely grateful if my right hon. Friend could look into the matter and try to persuade the American Government to have a more realistic and fair tendering policy.

§ Mr. Clark
My hon. Friend draws attention to an extremely important point. He says that the American Government "have stressed" that that cannot happen, but there is no hard and fast rule. From time to time, cases of United States arms procurement protectionism occur and I am always glad to have them drawn to my attention. I shall do my best to raise them in the appropriate quarters in Washington, if my hon. Friend will give me fuller details as soon as possible.

§ Sir Patrick Duffy
Is the Minister aware that, in contradistinction to the offensive remarks about the Opposition that were made by the hon. Member for Bolton, North-East (Mr. Thurnham), 1 million skilled workers are engaged in defence work and that, although they understand the need to restructure the forces and for the "Options for Change" exercise, their trade union leaders are concerned that the outcome will bite deep into the core of our high-tech industries? What, then, of our future design teams and professional and highly skilled workers?

§ Mr. Clark
Defence spending is set to decline by only 6 per cent. over the next three years. That is no more serious an impact than that which many specialised industries suffer in a time of recession. Equally, I would not want to deny the validity of much that the hon. Gentleman says, because he has deep and sympathetic experience in this area. My hope and belief is that redundancies in highly skilled sectors will rapidly be absorbed in the civilian sector, particularly as the recession turns round and we move back to greater prosperity.

§ Mr. Latham
Will my right hon. Friend ensure that when redundancies are about to be announced at Ministry of Defence workplaces, hon. Members are informed of them in advance? Is he aware that I have received letters from trade unions at 35 Base Workshop, Old Dalby, in my 149 constituency, saying that they were told about redundancies, yet the constituency hon. Member was not aware of them?

§ Mr. Clark
This is the first that I have heard of that. Had my hon. Friend written to me or my right hon. Friend the Secretary of State we would have tried to deal with the matter circumspectly. In so far as any discourtesy has been suffered or felt by my hon. Friend, I apologise to him.

§ Mr. Rogers
In the past two years I have asked the Secretary of State about the Government's defence sales to Saddam Hussein and Iraq. Even in yesterday's debate on the Army, Ministers denied selling arms and defence materials to Iraq. Now that we can prove—the circumstances are outlined in the Financial Times today—that International Military Services Limited, a wholly owned subsidiary responsible directly to the Secretary of State, has been selling arms to the Iraqis, will the Minister make a statement and apologise for misleading the House?

§ Mr. Clark
The House does not like Members to read from prepared matter at Question Time, but I hope that I shall be forgiven for doing so on this occasion. IMS was given a licence by the Ministry of Defence to market the design in 1979. A contract was signed in 1981 for the design and supervision of the construction, supply and installation of safety and monitoring equipment. The contract was completed in 1987, as there was a two-year delay in letting the construction contracts, which went to a South Korean firm. Originally, the facility was due to be finished in 1984, and the safety and monitoring equipment was shipped in 1983. All necessary Government approvals were obtained prior to IMS signing the contract in 1981.