HC Deb 09 July 1992 vol 211 cc604-23 12.37 am
Dr. John Reid (Motherwell, North)

This is another opportunity to discuss a matter that is vital to our industry, to thousands of our workers, and to the future strategic requirements of the British armed forces. We are discussing the provision of the best possible equipment at the best possible cost to the world's best airmen. Therefore, it is fitting to place on record my condolences and those of the whole House to the family of Flight Lieutenant James Henderson who was tragically killed yesterday evening on a training flight in a Buccaneer jet. When I last checked the news agency tapes, his navigator was still missing. I am sure that I speak for the whole House when I say that our thoughts are with the families of both airmen.

In terms of the armed forces in general, the past two years have not been good for the Government. They managed to lose the confidence of many of their Back Benchers over "Options for Change", especially over regimental changes. They found themselves in conflict with the Select Committee on Defence, dominated by Conservative Back Benchers, over the way that the changes were carried out. As I checked the tapes tonight, I saw that in another place Lord Chalfont has criticised the Government's defence policy as being trapped in a time warp and increasingly out of touch with international realities. The Minister will be pleased to know we support him this evening, or at least his position on the European fighter aircraft. I say his position because, clearly, it is not necessarily that of the Government as a whole if we are to believe the press reports to which I shall refer later. In all humility, I hope that the support that he has received and will continue to receive from my party for the Ministry of Defence's declared position will be of not insignificant, although not earth-shattering, use to him as he continues the labyrinthine discussions with his ministerial colleagues.

Tonight's debate provides us with a welcome opportunity to discuss more fully the implications of the decision, taken by the German Government some days ago, not to proceed with the production phase of the European fighter aircraft programme. It is especially important that we have this opportunity as, in the past few weeks, there has been a disturbingly large amount of ill-informed comment on the subject not only in some sections of the press but in some sections of the Government.

I hope that it will be useful if I make it plain for those who have commented in the press on the Opposition's position that it does not stem from a knee-jerk reaction which is somehow required of us because of past defence mistakes. While I have the highest regard for the psycho-analytical powers of some commentators in the press, they would be better served studying the objective analysis of future military needs than delving into the supposed psycho-analytical processes of the collective Labour party and its need to prove itself more macho than the Conservatives. I assure the House that that is not the reason we support the continuation of EFA.

Nor do we believe that the continuation of the EFA is only a matter of jobs or of industry. Again, that is a supposition made by people who are usually more sympathetic to my party but who, for some reason, believe that we could not possibly defend the aircraft because in their analysis—which I believe to be mistaken —of the current military situation, it is no longer required. We do not believe that.

There are two essential points that must be grasped before the relative merits of the project are discussed. First, if the Gulf war taught us nothing else, it taught us that the provision of modern, state-of-the-art air power is an essential ingredient in any successful military operation. It may not be a sufficient condition, but it is increasingly becoming a necessary condition. Therefore, allied air supremacy of itself could not have ended the Iraqi occupation of Kuwait, but it ensured the rapid success of the ground operation with the minimum number of casualties in the shortest possible period.

Secondly, if the United Kingdom is to retain an effective air power capability into the next century, we shall need to undertake a replacement programme for many of our existing aircraft. Anyone who examines the issues objectively must come to that conclusion unless one believes that we no longer need an air force. The RAF's Phantoms and Jaguars, in their respective air defence and offensive support roles, are becoming technically obsolete and will in any case be uneconomic or unsafe to operate by the turn of the century. According to the Select Committee on Defence, our other air defence fighter, the Tornado F3, will also have reached the end of its useful service life by about the year 2005.

As our equipment is approaching obsolescence, we see the development and proliferation—the latter perhaps being the most important—of a new generation of Soviet-made, latterly Russian-made, aircraft with superior avionics, and greater combat effectiveness. The MiG29 is the most frequently mentioned of those aircraft and, although it entered service with the Soviet air force in 1983, it remains a highly potent threat. This should be of interest to those who think that the dissolution of the Soviet Union necessarily means the wholesale dissolution of the hardware which it produced. The countries currently in possession of MiG29s include several with a proven track record of authoritarianism at best and external aggression at worst—I refer to Iraq, Iran, North Korea and Syria.

Although Iraq, for reasons best known to itself and perhaps to some of our airmen, chose not to deploy MiG29s during the Gulf war, it would be naive to assume that they do not pose a considerable threat, or could not be deployed and employed by Iraq, Iran, North Korea or Syria, among others, in future. With the extremely harsh economic conditions being experienced in the former Soviet republics, we must expect—despite our hopes—that these aircraft will become available to other unsavoury clients along with even more sophisticated designs, such as the Su27 and the MiG33.

Those who have argued that the EFA was designed to meet a threat that no longer exists have missed a vital point. The Soviet Union and the Warsaw pact no longer exist but their hardware has not evaporated into thin air. It is being acquired increasingly by regimes whose intentions remain suspect to say the least. We would be failing in our duty if we did not take account of that in future provision for our airmen and airwomen.

The case for a new aircraft that is capable of carrying out both air defence and offensive support missions is undeniable. It is incumbent on those who argue against the EFA, including those in the Government—there are those in the Treasury who have been muttering behind their collective hands —to say which other options would fulfil the requirement at a lower cost to the public purse or with a better cost-capability. I issue the challenge because it is perhaps easier for me to do so than the Minister, although I know that the Treasury will have noted his long-term commitment to open government. Against that background I have no doubt that the Treasury will be prepared to come out into the open to tell us which option it would prefer if the EFA were not to proceed.

Every authoritative survey has arrived at the same conclusion: each of the available options to the EFA is either less capable or more expensive. Some of the options are both less capable and more expensive. Of the American options, the F15s and F16s are both designs of the 1970s and significantly less capable than the aircraft that the EFA is intended to counter. Similarly, the F18 is regarded as a less capable aircraft. It may even have a higher unit cost than the EFA. The remaining American option, the F22, will not be ready for three or four years after the EFA. It is not designed as a multi-role aircraft and it is expected to cost about 60 per cent. more than the EFA. The F22 is certainly the most capable fighter currently under development—we could have disputes about whether the marginal increase in capability is compatible with the supposed 60 per cent. extra cost—and it is unlikely that the United States Government would allow it to be sold abroad for many years. If they did, it is at least questionable, and perhaps highly suspect, whether they would allow the full array of avionics that accompanies the aircraft to be part of the agreement.

Of the European options. the French Rafale is the most often cited. The French pulled out of the EFA project in 1985 because their requirements for a future fighter differed from ours. The Rafale has therefore been developed primarily as a replacement for the Jaguar in an offensive support role, whereas our priority—mainly but not exclusively—is for an agile air-defence fighter. The Rafale is judged to be a less effective fighter and it is expected to be more expensive than the EFA.

As I watched some of the interviews that took place last week, especially of Conservative Back-Bench Members, I could not help being suspicious that at least some of their opposition to the EFA was because it was a European collaborative project. It seemed that it was becoming deeply embroiled in the Eurosceptic or anti-European section of Tory Back-Bench Members. I hope that I was wrong. I hope that a judgment was being made purely on the basis of future military need, cost and capability. It seemed, however, that some of the comments were inspired by a deep suspicion of anything that smacked of co-operation between European nations.

As I said, of the European options the French Rafale has been most often cited, and I have tried to explain why that would not fit the bill for us. Another favourite solution of the EFA sceptics is that we should buy MiG29s and Su27s from Russia because they are the aircraft that we expect to counter. The flaws in that argument are manifold, but there is one that I put above the rest. It is the duty of the Government and of the House to give our airmen equipment that is better than that of our potential enemies and will offer them more than a 50–50 chance of survival in combat. If, within cost-capability limits, we can produce a fighter that will, by objective standards and judgments, give an 80–20 chance against MiGs, we would be lacking in our duty to our airmen if we produced one with only a 50–50 chance.

Secondly, while theoretically the purchase of Russian aircraft would undoubtedly be cheaper initially, it may turn out to be a false economy in the longer run. It is now widely recognised that the airframe life of a MiG29 is estimated to be as little as one third of the airframe life of an EFA. It is also said that the MiG29 is much more expensive to maintain and purchasing countries have already experienced significant problems obtaining spare parts. There appears to be no doubt that long-term servicing support for MiG29s —or, indeed, any other MiG—would be highly suspect.

Surely the most absurd idea that we have heard over the past two or three weeks is that we should begin to develop from scratch what has become known as a lighter, cheaper aircraft. Given that the whole point of the exercise would be to save money, and given that the £5 billion spent so far on developing EFA would be wasted, the argument cannot stand up under the weight of its own contradictions. Not only would we end up with a less capable aircraft, which would probably cost us more, but it would not be ready for service until many years after the withdrawal of those that it is supposed to replace. Whichever way we look at it, we are driven to the same conclusion—the EFA is the best option available. Surveys show that it is second only to the F22 in fleet and combat effectiveness, and in cost-effectiveness it has a clear lead over the F22.

Those who have argued for abandonment of the EFA have palpably failed to make a credible case for any alternative programme. As I said earlier, the only sustainable argument that they could make is that we do not really need an air force. If they maintain that we do, the obligation is upon them—commentators, the Treasury, Back Benchers, political analysts and military strategists—to tell us how we could possibly achieve an equally effective fighter at a lesser cost with guaranteed servicing, and which would meet the requirement of the Royal Air Force. They have failed to make any credible case on any of those points for any alternative programme.

Even if we could achieve the savings sometimes imagined —and they are imagined —they would be dwarfed in public expenditure terms by the devastating effect that they would have on the British economy. I have tried to make plain our view that we base that not purely on either jobs or industry, but also on military and defence requirements. It would be wrong to make the case for the EFA purely or even primarily on the basis of its effect on employment. We should not fall into a trap of seeing defence procurement as some sort of grand job creation scheme. I hope that I have made clear the overwhelming strategic case for the continuation of the EFA programme.

However, it would be equally wrong of us wholly to exclude economic considerations from the equation, especially as the case against the EFA is supposed to be financial—at least in the arguments of many of those who oppose it. There is not a British-made alternative to the EFA. Any foreign import, even one that involves some workshare arrangement, would lead to the loss of tens of thousands of mainly skilled jobs. In what possible sense would that lead to budgetary savings for the Treasury or the Government?

We welcome recent orders won for the airbus by British industry but, notwithstanding that, the loss of the EFA would be a major disaster for our aerospace industry. We are talking not only about the loss of thousands of jobs, but about the loss of an entire industry; an industry of vital strategic importance to Britain. If the EFA programme is abandoned and we are forced to import the next generation of fighters from abroad, we risk destroying our aerospace industry altogether, civil as well as military, because the two are inextricably interlinked. To put ourselves at the mercy of foreign suppliers for all time and pay for the privilege would serve neither our security nor our economic interests.

There may be a case for adjustment of the original numbers of EFAs ordered, and there may even be a dispute between the Government and the Opposition Front-Bench spokesmen when we come to discuss those numbers—it is widely recognised that there may well be some adjustment to those numbers because the original calculations were made in about 1986 and the world has moved on—and while I would urge the Minister to continue in his efforts to keep the costs of the EFA down, because, obviously, every time we can reduce the cost, the cost capability factor is far more beneficial from everyone's point of view, it remains the Opposition's view that the continuation of the programme is vital for our defence needs and represents the most economical option available.

If any other option met our defence needs and requirements, saved those numbers of jobs and advanced an industry which is not only strategic but at the forefront of technology, the Opposition, like anyone else, would be prepared to accept it. Thus far, that alternative has not been put forward by anyone inside or outside the House, and until we see it we shall continue to support the Ministry of Defence and trust that we shall be able to ensure that the EFA will be produced and eventually supplied to the Royal Air Force.

12.56 am
Mr. John Wilkinson (Ruislip-Northwood)

We all owe a debt of gratitude to the hon. Member for Motherwell, North (Dr. Reid) for introducing this important debate. He has, as is his wont, done much research and produced thoughtful and cogent arguments in favour of pursuing the European fighter aircraft programme to a successful conclusion whereby it is purchased by Her Majesty's Government to enter service with the Royal Air Force, where I am sure that it will fulfil an invaluable and essential function.

It is a comment on our somewhat arcane parliamentary practices that a debate on the single most important military procurement issue of our time should take place in the middle of the night by virtue of an initiative of this kind under the Consolidated Fund Bill. It would have been better if we had been able to have the two-day defence debate before the summer recess. Over the years, I have always argued that the White Paper should be published as near to the spring as possible. In that way we could have a debate before we all disappeared for the recess and if there were a major issue hanging over us, as is the case now with the future of EFA, we could dispose of it in a proper manner and in the right time scale.

I do not wish to be over-critical because, by our presence in the long watches of the night, we have shown that we seek not so much to be in our beds but to be vigilant and evidently concerned for the future defence of our country and our country's defence industrial base.

That said, I must wholeheartedly welcome my right hon. and learned Friend the Secretary of State's robust reply to the private notice question on Tuesday, following the visit to the United Kingdom of the Defence Minister of the Federal German Republic, Herr Volker Rae. I thought that my right hon. and learned Friend's replies were admirable. They showed an unequivocal personal commitment—as well as an unequivocal commitment on the part of the Ministry—to this important programme. They also showed a clear determination to take on all corners, from the Treasury or from other quarters, who might make his life difficult over the future of the European fighter aircraft, the Panther, or Panthera, as I prefer to call it.

The German Government's decision to withdraw from the production of the project once the development phase has been completed poses a challenge to us, but we may well obtain commensurate benefits. I hope that the production process will be rationalised. The proliferation of assembly lines and flight test centres never made much sense; nor did the strong desire—which was put into effect —to re-invent the management wheel by having a Eurofighter organisation in addition to the Panavia one. Eurofighter could have grown organically from Panavia, as the Airbus consortium was able to produce a whole family of Airbus aeroplanes. The creation of a NATO European Fighter Management Agency, NEFMA, when there was already a NATO Aircraft Management Agency, NAMA, to manage Tornado also struck me as unnecessary.

Those are little quibbles relating to the past, however. We must now show that there is a requirement which really needs to be met. There is a strong temptation to be project-led—to be so keen to replace particular aeroplanes, in this case the Phantom, the Jaguar and the Tornado F3, that we lose strategic perspective and may forget what we are actually seeking to do. We are seeking to procure for the United Kingdom—and, we hope, for our Italian and Spanish friends, and the Germans if they come to their senses—the most flexible instrument to project military power, not only within the NATO theatre but, if need be, outside it, to deter aggression and to secure our commercial and strategic interests and our security.

In recent years, we have seen—from Korea through the Arab-Israeli wars, through the Falklands conflict to the Gulf campaign—that air power is critical to the security of the west and for the preservation of our values and our way of life. Consciously to forgo the most effective instrument available to us for the pursuit of such a strategy would indeed be perverse.

I go so far as to say that if the worst comes to the worst we ought to be prepared as a nation to build EFA alone. I hope that our Ministers will, by means of good diplomacy and by maintaining effective collaboration, make certain that the Italians and the Spanish stay in the programme. If not, however, I believe that the industrial and military stakes are so high that we ought ultimately to be prepared to go it alone. In the last analysis, there is no task more crucial than preserving the peace and defending the integrity of these islands. We discovered that just over 50 years ago, at the time of the battle of Britain, and the lessons learnt then are just as real today.

In the 1920s and 1930s, there were those who thought that we could afford to disarm. They were disabused of the idea in a most painful way—it was a close-run thing.

As the gestation time of modern combat aircraft is so long, it behoves us to make the appropriate dispositions now, and not to throw away the advantage that we have gained from all the time, effort and investment already put into the development phase. Nor do I believe that we should allow the Swedes and the French a virtual monopoly in western Europe of the construction capability for high performance military aircraft. We should stay in the business ourselves.

There may have to be commensurate savings in the defence budget, because at a time of negative growth it will not be easy for the Treasury to provide additional funds. If so, we ought to look to where the problem lies—to Germany itself. If the German Defence Minister is correct, then the threat to his country in central Europe is greatly diminished by the end of the cold war, the break-up and dissolution of the Warsaw pact, and the disintegration of the Soviet Union into its constituent republics, many of which now have values similar to our own. If that changes the security situation in central Europe so dramatically, especially if the Russians withdraw from eastern Germany and Poland on schedule—and ultimately, one earnestly hopes, from the Baltic states, too—any savings necessary should be made in the forces we intend to maintain in Germany. Those forces are relatively inflexible and costly in foreign exchange, whereas a combat aircraft is infinitely flexible. It is essential for the defence of these islands and it can be projected rapidly around the globe to wherever it is required. The same cannot be said of tanks by the banks of the Rhine.

I repeat that we owe the hon. Member for Motherwell, North a debt of gratitude, and that we appreciate the firm and rational stance of the Government to date. I shall not repeat the arguments so well expressed by the hon. Member for Motherwell, North, but I will express my personal commitment to the success of the programme. I want to see the Panther flying in Royal Air Force colours and, it is to be hoped, in Italian and Spanish colours—perhaps even in German colours, too. I believe that it will sell in substantial numbers around the globe, because there is no other aeroplane in its class.

1.7 am

Mr. Keith Mans (Wyre)

I am grateful for the opportunity to say a few words in the debate, and I reiterate the congratulations offered by my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) to the hon. Member for Motherwell, North (Dr. Reid) on securing the debate and allowing us to discuss this important topic, even at this late hour. I am grateful that the project has cross-party support. Its chances of going ahead are greater as a result of that support.

Over the decades aircraft projects have always had a drama and excitement about them, and not a little political controversy, too. I remember most poignantly from the past the TSR2 project. I joined the Air Force four months before the aircraft was cancelled—I, together with a number of others, had been recruited specifically to fly it. I saw it fly once, then it was cancelled by the incoming Labour Government.

I recently read Lord Jenkins's autobiography, and until then I had not appreciated how close the decision was on whether to cancel TSR2 or Concorde. One reason that the former course was chosen was that the TSR2 was a national project and Concorde a collaborative project. The latter may, by their very nature, be difficult to devise initially, but once the partners have been assembled, the contract makes it difficult for them to pull out. That is how it should be. Aircraft contracts span decades, whereas Governments and individual politicians have much shorter lives.

As to the EFA, we are currently tightly tied—as are the three other nations—to its development phase. Its cost is about £7 billion, split between the four partners dependent upon the number of aircraft that they said at the beginning that they wanted to purchase. Thirty three per cent. of that cost will be borne by ourselves, the same percentage by the Germans, 21 per cent. by the Italians and the remainder by the Spanish.

Many billions of pounds have already been spent by the German Government on developing the EFA. They and the new German Defence Minister, Herr Volker Rühe, make it clear that Germany intends to remain in the programme. Herr Rühe pointed that out to me on Monday, when he confirmed that the first prototype will take off from a German airfield at the beginning of next year.

Given that the Germans will remain in the programme —which lasts until 1998—they will spend more than £2 billion developing an aircraft that they accept they will not put into production. It is worth bearing in mind that they do not have to decide until midway through next year—when all four partners will determine whether to go ahead with the EFA's production, dependent on the progress of the development programme and, more specifically, how the aircraft flies.

I believe that most right hon. Members agree that that picture is very different from the one painted by the newspapers over the past two weeks. If one believed the leader writers, even in the better newspapers, one would think that Germany had totally withdrawn from the project. Nothing could be further from the truth. At the very time that those words were being printed, the Bundestag had voted £300 million in this coming year's federal budget for the EFA's further development.

In analysing why Herr Rühe said that Germany would not produce the aircraft, it is worth considering the original requirement. I will not reiterate the points made by the hon. Member for Motherwell, North but I will add to them. Despite the German Defence Minister's comments, I believe that the requirement itself is more relevant today than in 1985, and not, as the Germans would have us believe, the other way round.

Built into the EFA requirement was not only the need to move out of area but sufficient range to deal with threats—particularly in Africa and the middle east. That was prompted not only by us but by the Italians and Spaniards, who said that their countries were threatened just as much from the south as from the east. If nothing else, that demonstrates the problem of analysing the German's present position.

The Germans maintain that, because the threat has changed, there is no longer a need for such a large, long-range aircraft. However, one could argue that, as a result of the changing threat, there is a greater need for such an aircraft.

If the threat is less than before, we must bear in mind that the capacity —the aircraft opposing NATO which EFA was designed to deter—has not changed. As the hon. Member for Motherwell, North said, the MiG27s, MiG29s, Su27s and MiG33s are increasingly being dispersed around the rim of the Mediterranean. That is a potent potential threat.

If the German Government honestly believe that they can meet that threat, which they will have to in the NATO context, with a smaller, lighter and inferior aircraft, they have got their calculations totally wrong. When the German Defence Minister made that point, he also said that the rest of the German armed forces—apart from the Luftwaffe—would have to become more mobile and more able to move to the peripheries of NATO and, provided that they changed their constitution, even beyond the edge of NATO.

I believe that there is a big conflict between what the German Defence Minister said and the reality of the next five or 10 years. A much more rational reason for the German decision is that it is based on short-term politics and, more specifically, the popularity of the Christian Democratic Union and, in financial terms, the problems that it will have with the budget over the next two or three years in respect of reunification. I believe that the smaller, lighter aircraft is simply a paper exercise to keep the German aerospace industry quiet.

The hon. Member for Motherwell, North made a very good point about the alternatives. Looking at the other options and off-the-shelf purchases—the only option for the Germans if they do not want the EFA—I agree with the hon. Member. If we analyse the alternatives aircraft by aircraft, none of them comes up to the EFA's specifications. The exception is the F22, but that is very expensive. The newspapers failed to point out that the F22 is not actually for sale. It contains much technology that the Americans would not like any nation—and certainly not the Germans and the others—to take on board just yet. The F22 is not an alternative to the EFA.

I want now to consider some of the consequences of the German withdrawal from the production phase of the project. The programme is going to be disrupted. A four-nation programme, with all the involved management referred to by my hon. Friend the Member for Ruislip-Northwood, is bound to be disrupted if 33 per cent. of the project is removed. That will cause problems, particularly in respect of the teams that have been brought together for specific purposes, for example, in respect of the fly-by-wire system and the compressor for the engine, both of which are the responsibility of the German contingent.

However, savings can be made by reducing the tooling up of a reduced number of production lines. A larger number of contracts can be awarded based on cost rather than work-share arrangements. There should be consider-able savings in respect of the project's cost that fully outweigh the smaller production which will increase costs. The two should balance out: the smaller production line against the cost reductions, because fewer units will be needed.

There is another point: if we decided that one of the member states had to leave the project in order to keep the costs down, we would choose the Germans because their production costs are between 20 and 25 per cent. higher than ours and those of the Italians.

We can produce the aircraft as cheaply or nearly as cheaply without the Germans as we can with them. Equally, the reasons for the Germans withdrawing do not relate to the other two countries that remain with us in the project. They do not have the same problems with budgets and reunifications. They also stated in their original specifications that they need an aircraft with a longer range that can operate over the Mediterranean. There is no reason at the moment to suggest that either of the other two countries would, in any foreseeable circumstances, want to withdraw from the project.

What should we do now? We should do very little. We are in the development programme. No decisions have to be made about the production programme until midway through next year. All that we have to do is sit tight. By all means, we should listen to any suggestions from Germany about the new lighter, inferior fighter, but I strongly recommend my hon. Friend the Minister to ask for further and better particulars of that aircraft, just to see what it actually amounts to. Bearing in mind the stringent economic requirements put on it by the German Defence Minister, that it will cost the same as the EFA and, taking into account the remaining development funds available in the programme, we will end up with a brand new Hawk 200 as a result of that exercise. We are still developing the EFA, the Germans are still paying for it, and, half way through next year it will become only too clear that the production of the EFA is the most cost-effective solution for the Royal Air Force and the other two air forces remaining in the project.

Like the hon. Member for Motherwell, North, I have not based my argument on employment or technology reasons. Those matters are important in my area of Lancashire, where jobs and technology are at stake. British Aerospace is the high-tech part of Lancashire. Without it, we would be in a sorry state. The project represents the right aircraft for the three air forces. I end on a personal note. I have mentioned factories around Preston. I have flown every aircraft that those factories have produced and that the Air Force has bought since the war—the Canberra, the Lightning, the Jaguar and the Tornado. I have no doubt that, when British Aerospace gets around to producing a two-seater, I shall be able to have a trip in that as well.

1.22 am
Mr. Julian Brazier (Canterbury)

Like my hon. Friends, I congratulate the hon. Member for Motherwell, North (Dr. Reid) on initiating the debate and on his well-informed and well-researched speech. We have heard three excellent speeches, and I do not want to duplicate the points that have already been made. I should like, first, to dig a little deeper into the German question—what exactly is the German stance on the EFA and what implications does it have'? Secondly, I shall refer briefly to the case for the EFA and, thirdly, discuss where we go from here in a slightly wider context.

In several speeches on defence procurement, I have tried to stress that the spirit of a defence contract is as important as the letter. For example, even with an ordinary national contract, it is important in respect of intellectual property rights that, if a certain company has developed a good idea, even if the idea is the property of the Ministry of Defence, it is almost always right to let the company that has come up with it go as far as the production phase, because it will do it best. That means that there is an added incentive for excellence in the industry. We saw the best form of spirit coming out of our defence contractors in the Falklands war and the Gulf conflict, with the extra mile and the extra mile beyond the extra mile to which they were willing to go in supporting British armed forces.

The central problem with the EFA project is the fact that the Germans have so manifestly breached the spirit that lies behind the contract, and breached it in a fashion that we should find profoundly worrying in ways that go well beyond the contract.

In order to see the size of the breach, we have to look, as my hon. Friend the Member for Wyre (Mr. Mans) has just done, at the words of Chancellor Kohl and Herr Volker Rühe and their approach to the project. They have continuously reminded us of the disjunction and the great change in Europe as a result of the collapse of the Soviet Union. They and, indeed, the press have made many references to the terrifically changed climate in Germany. There is overwhelming opposition among the German people and in their Parliament to the project.

However, no serious effort has been made to address the military position. If the EFA is not appropriate, what is appropriate? I have heard nothing from any German source about what possible threat any aircraft that could be purchased for the Luftwaffe, even only the Hawk 200, would be supposed to face. We certainly have not heard any discussion of what aeroplanes such an aircraft could expect to face. We now hear that the Germans are seeking a new format for which there is no intellectual basis whatever.

The problem for Britain is that our most important European ally appears to have closed its eyes completely. The Germans are fulfilling the letter of the contract. They are paying a lot of money to complete the development. But we have to realise that by withdrawing from the production phase because of sheer emotion—to put it bluntly, sheer political pressure—without making any effort to examine the military rationale for any subsequent course of action, the Germans have changed. That is important.

Germany has been overwhelmingly the most important continental European prop for NATO in the past. It is also the paymaster of the EC. In the past generation, while the French have been in "internal exile" within NATO—nominally a member but outside the command—Britain and America have looked to Germany as the main continental prop for NATO. The fact that the Germans have treated the most important collaborative venture within European NATO in this fashion has profound consequences for foreign as well as defence policy. We must address those consequences.

My second question goes back to back with the German issue. Why do we need the European fighter aircraft'? We have heard cogent expositions already in the speeches of my hon. Friends the Members for Wyre and for Ruislip-Northwood (Mr. Wilkinson) and the hon. Member for Motherwell, North. We must remember how dangerous the world is. Two conflicts are going on side by side in Yugoslavia. In Moldova a bloody little war is going on which is not being reported on television screens. Fighting in Azerbaijan continues sporadically. Nuclear technology is spreading into Algeria, Libya, Syria and Iraq.

We do not know how long Boris Yeltsin will last. Mr Gorbachev disappeared in a hurry. We can only admire Boris Yeltsin for the way in which he overcame the coup, but he may not last long and, if he does not, we do not know who his successors will be. Of course, the military capability remains in Russia. A formidable array of aircraft remains in Russia, as well as all the countries to which the Russians have sold them.

In Britain we are trying to make a desperately difficult decision. A substantial peace dividend has been extracted from our defence budget in the past five years. The percentage of gross domestic product that we spend on defence has fallen by a quarter in the past five years.

What should be our approach to the EFA? I share the view of my hon. Friends the Members for Wyre and for Ruislip-Northwood and the hon. Member for Motherwell, North that we must have the EFA. We must have it ultimately for the reason expressed by Enoch Powell in an article in The Field, which has been largely overlooked. He said that if one has only a limited amount of money which cannot possibly cover all the commitments and all the things that we should like to buy, one must give priority to projects with the longest lead time for rebuilding. In reality, that means that the Air Force comes first, the Navy second and the Army last—I come from a long line of soldiers—and land forces have to put a greater reliance on reserves.

In a modern world, in which aerospace technology has travelled so far, armed forces without a modern fighter are not worth having. That is the central case for having a modern aeroplane. and the only one on offer that can fit the bill, I am afraid, is the EFA. That is why I share the view that my hon. Friend the Member for Wyre has just articulated so clearly, that even if we have to go it alone on the EFA, it is worth doing.

I also endorse the remarks of my hon. Friends the Members for Wyre and for Ruislip-Northwood when they said that many of the extra costs associated with a shorter production run can be balanced by eliminating the vast amount of extra work involved in trying to produce the parts in four different places, and with the vast costs in paperwork and inefficiencies in project management that stem from being based in four different languages and places. The biggest loss through costs of scale is in the development phase, which we do not have to worry about. The case for going ahead with the EFA is overwhelming.

On the industrial and defence side, we must go ahead with the EFA. It can be done within a reasonable price. We must be clear that if we go ahead with the project, within a shrunken defence budget, the Royal Air Force must look to other areas to save money, because it has not suffered the same cuts in manpower as the other two services. The manpower of the Army and Navy is so overstretched that it is beginning seriously to affect the morale of soldiers and sailors, who see their families more and more rarely. The Air Force must take its share of manpower cuts to help to pay for this machine.

I hope and believe that we shall build the aircraft, but we must not lose sight of the frightening wider implications of the German withdrawal from the EFA. The fact that the country has so strongly, emotionally and irrationally turned against the project, and that the German leadership has buckled in the face of political pressure, should worry us severely.

There is no Consolidated Fund debate on Yugoslavia, although a British warship has been sent, and British troops are on the ground there in various non-combatant roles; and at a time when emotions, largely stemming from Germany, persuaded the countries of the west—wrongly, in my view—to recognise Croatia, it should worry us that our most important European ally is apparently being driven by emotion. I welcome the Government's stance. I shall not stray too far from the strict confines of the debate, but I welcome the sensible and cautious view that the British Government are taking on developments in Yugoslavia.

During the next few weeks and months it will be important for us to remember that we are dealing with an ally whose attitude towards defence has changed profoundly, and their attitude to foreign policy too. I fear. A great deal may be required of our political leadership during the next few months to keep rational thinking alive in Europe, and to remain strong in our capabilities and cautious in our willingness to use them. It looks as though Britain may have to adopt that role, as the only country in western Europe which still espouses what used to be the view of NATO as a whole—that we do not want to deploy force unless we have to, but we have the force there if we need it. That has been the traditional NATO stance, and I am glad that it remains British policy. I am also glad that we are firmly committed to developing the EFA.

1.34 am
Mr. Nigel Evans (Ribble Valley)

I am grateful to the hon. Member for Motherwell, North (Dr. Reid) for instigating the debate. In common with those who have already spoken, I shall not put the case for the EFA simply on the grounds of jobs. We would be insane, however, if we did not recognise the jobs and skills implications behind any decision. Should the Germans decide not to continue with production, which looks increasingly likely, they will make a false economy if they look for a cheaper aircraft.

This week Volker Rühe addressed Members of the House and I was singularly unimpressed with his arguments for not continuing with the production of the EFA. I am proud that we have participated in a project that will produce an aircraft with the technology suited to the next century.

I am not sure whether the hon. Member for Motherwell, North included me when he spoke of some hon. Members who have doubts about European union and who see the EFA problem as a reason for not going ahead with that. I should much prefer to see four countries acting in unison to produce the aircraft so that we retain a defence capability which can compete with the Americans and the Russians. It would be a mistake and short-sighted to argue that we should buy our equipment off the shelf from the Americans and the Russians. Such a decision would have dangerous implications for defence and our defence equipment manufacturing capability.

Hon. Members will know that British Aerospace has a factory in my constituency. Many of its workers would feel that their jobs were under threat should the Germans pull out. Given the all-party support for the project, I cannot imagine that the Government would decide to pull out of it. But were that to happen, imagine how difficult it would be to build up our skills base again once it had been lost. If the Germans decide to buy their aircraft off the shelf from another country, they will be exporting German jobs and future skills to other countries.

I strongly believe that one gets what one pays for, no matter what it is. Volker Rühe said that one must decide what one can afford to pay and then discover what one can get. That is an extremely naive approach. When it comes to the defence of the European alliance, the last thing one wants to do is to end up with an aircraft that is less capable than that of one's aggressor. That is what would happen were we to choose a less capable aircraft.

I was proud to visit Germany recently with colleagues from all parties to try to persuade our German parliamentarians of the need to continue the EFA project. Many of them appreciated the need for the EFA and were searching for ways in which to continue in that project. They know that, like Britain, Germany will need a replacement aircraft sooner rather than later. If we can act in unison on that project that would benefit all of us.

My hon. Friend the Member for Canterbury (Mr. Brazier) mentioned that much has changed in the past three years and said how easily things could change again. Who could have predicted the break-up of the Soviet Union in such a short time? Who can say what will happen over the eight years that it will take us to reach the year 2000? We need to be prepared for all eventualities. There have been options to save and I am sure that all parties have looked at them. However, there is no option to axe. We should all work as hard as we can to persuade those who need to be persuaded—whether it is the Germans or people on our own side—of the need for the EFA project to continue, and of the fact that this is the best course for Britain and the best course for Europe.

1.40 am
Mr. Harold Elletson (Blackpool, North)

I, too, am grateful to the hon. Member for Motherwell. North (Dr. Reid) for drawing this issue to the attention of the House, because it is one which concerns the large number of my constituents who work at British Aerospace plants in Lancashire. I want to pick up on one or two of the comments made by my hon. Friends the Members for Wyre (Mr. Mans) and for Canterbury (Mr. Brazier). In doing so. I pay tribute to the remarkable all-party campaign mounted in defence of the European fighter aircraft project, largely through the efforts of my hon. Friend the Member for Wyre.

My hon. Friend mentioned what he perceived as being the main underlying political reason for the German withdrawal—that the German Government think that the threat in Europe and the world has changed. That is right, but it has not diminished, and the German Government seem not to be sufficiently aware of that point. The House has a great understanding of the tremendous insecurity that has arisen in Europe as a result of the break-up of the former Soviet Union. We can all cite areas—Moldova, the Baltic states, the Ukraine, Azerbaijan, the various Muslim states—n which conflict could arise at any moment for a number of reasons which we cannot, perhaps, immediately call to mind but which make the whole region unstable.

What is even more worrying than the growing political instability in the region is the other issue which has resulted from the break-up of the Soviet Union—the proliferation of the sale of former Soviet Union military technology, advice, hardware and expertise to out-of-area countries, particularly third world countries. I am aware, as I am sure my hon. Friend the Minister is aware, of a number of recent instances of former Soviet military and security service personnel being involved in the sale of nuclear materials and military technology, advice and hardware to third world states which we would regard as unsavoury.

What worries me about the German Government's attitude is that they seem not to be taking any notice of the dangers inherent in the situation. They seem not to understand the responsibility that we in Europe have for the defence of freedom out of area. That is something which is always at the forefront of our thinking, and this attitude leads one to question the German Government's motives, as my hon. Friend the Member for Canterbury said.

What underlies the fears of my hon. Friends about the German Government's withdrawal from the EFA project is the suspicion that it is part of a somewhat wider shift in German foreign policy which may lead them not to amend their constitution to allow German armed forces to take part in out-of-area activities with NATO. That must be of great concern to the House because if that is right, we should know about it. We should question the German Government in detail about that. Will my hon. Friend the Minister give that matter careful consideration and make our concerns known to the German Government?

1.45 am
Mr. Bill Walker (Tayside, North)

I shall be brief as I have come from Committee. I share the views of my hon. Friends the Members for Wyre (Mr. Mans) and for Ruislip-Northwood (Mr. Wilkinson) who, like me, wore the light blue uniform of the Royal Air Force earlier in their lives. There is no question but that RAF crews, particularly pilots, would expect the RAF to have an aircraft that could compete on at least favourable, if not better, terms with an opposition aircraft that they were likely to meet in the skies.

No one denies the fact that the RAF requires an air superiority, agile aircraft. Some people suggest that we should buy the F22, which is a fine aircraft. Whether the Americans will ever sell it to anyone must be questionable, but even if they were to, it is an expensive aeroplane and is probably much more sophisticated than we require. I doubt whether we shall ever fight the Americans, so that aircraft will not be an enemy aircraft. The likely enemy aircraft are those that have their origins in the former Soviet Union, and they will become more available in those parts of the world where we would rather they were not.

Experience in the Gulf demonstrated clearly that if one has command of the skies, the ground casualties can be relatively light. The RAF must have the European fighter aircraft for that reason, if no other. But there is also the issue of Britain's base in the aerospace industry, and the high technology involved in manufacturing the EFA, particularly technology in the use of composite materials, is something that we abandon at our peril. In addition, the aircraft will carry modern avionics and a range of weapon systems. Therefore, there is no question but that the RAF needs the EFA. The doubters should remember that, in 1940 the Luftwaffe would have been delighted to have bought the Spitfire, and I judge that, in future, it would be happy to buy the EFA.

1.47 am
The Minister of State for Defence Procurement (Mr. Jonathan Aitken)

This has been a debate remarkable for its quality, expertise and thoughtfulness, and I shall do my best to respond to the—

Madam Deputy Speaker (Dame Janet Fookes)

Order. The Minister requires the leave of the House to speak again. I am sure that it will be granted, but we must go through the motions.

Mr. Aitken

With the leave of the House, I should like to begin by associating the Government and the House with the kind and thoughtful words of condolence that the hon. Member for Motherwell, North (Dr. Reid) expressed to the families of the late Flight Lieutenant Henderson and his missing navigator. They were the crew members of the Buccaneer that so sadly crashed on training earlier today. I know that the House will wish to join in those expressions of sympathy for the families of those who lost their lives in that tragic accident.

The hon. Gentleman began by drawing attention to the unity of view of the two Front Bench teams on the EFA. That unity is valuable, much appreciated and remarkable for the Labour party. The EFA was planned as a peacekeeper, but I am sure that, even in their wildest dreams, its designers did not think that, long before it flew, it would become a peacekeeper for the Labour party, whose defence policies have hitherto been more notable for discord than for harmony. However, I do not wish to look a gift horse in the mouth and I thank the hon. Gentleman for initiating the debate. He showed sound military and strategic sense. I agreed with almost every word that he said.

I thank my hon. Friends the Members for Ruislip-Northwood (Mr. Wilkinson), for Wyre (Mr. Mans), for Ribble Valley (Mr. Evans), for Blackpool, North (Mr. Elletson) and for Tayside. North (Mr. Walker) for their contributions. It has been a debate of experts. We have heard a wealth of aviation, military, Anglo-German and Lancastrian expertise.

The calm and thoughtful nature of the debate is in sharp contrast to much of the debate outside, because many commentators seem to be flying by the seat of their pants, often through a fog of ignorance about an aircraft that has not yet flown.

My hon. Friends spoke about the threat to which the EFA is being built to respond. My hon. Friend the Member for Ruislip-Northwood put it well when he said that air power is critical for the security of the west. The international security environment has changed radically since the EFA was originally conceived. The direct threat posed by the Warsaw pact and the Soviet Union has disappeared. However, the EFA will be in service throughout the first quarter of the next century and the world could be a very different place by 2020. That is why it is important to look at capabilities rather than intentions and at a realistic assessment of the scenarios that might unfold on the international scene over the next quarter of a century.

We all recognise that there is considerable and growing instability in areas adjacent to NATO within and outside Europe. There is ethnic and territorial conflict in eastern Europe and within the former Soviet Union, where the race between the new democracy and a return to the old despotism with new faces could yet be close run.

The middle east remains unpredictable and, despite the collapse of the former monolithic threat posed by the Soviet Union, there still exists a number of risks to security and the United Kingdom could be involved in joint military action with our allies designed to promote stability or halt aggression. It is essential for our armed forces to be fully equipped to cope with any emergency requiring military intervention.

My hon. Friend the Member for Blackpool, North spoke about large numbers of sophisticated aircraft being sold around the world. There has been a widespread export drive. The MiG29 Fulcrum has been delivered to all former Warsaw pact countries except Hungary and to some other countries including Cuba, Iraq, Iran, Syria, North Korea and former Yugoslavia. The Su27 Flanker has been sold to China. The Russians are also developing new fighters, including improved variants of the Su27 and the MiG29 which could be exported. Observant hon. Members may have read in the technical press of a recent briefing by the Mikoyan design bureau about the remarkable capabilities of the MiG33. Many sophisticated American aircraft have also been sold in the middle east and elsewhere.

Against that background, an aircraft of EFA's capability is essential to match potential threat aircraft. We need to provide an effective defence of the UK and of British forces wherever they may be deployed. Our current air defence aircraft, the Tornado F3, was designed to intercept bombers at long range. It does not have the agility to defeat hostile agile fighters in the former Soviet arsenal. It is not a suitable match for aircraft such as the MiG29 and Su27, let alone future upgrades of these types or even more modern Russian aircraft.

Thus there is a need for an agile aircraft with a modern radar, other sensors to enable it to exploit modern weapons, and a sophisticated electronic warfare suite to enable it to survive. Today's greater emphasis on NATO rapid reaction forces reinforces the case for a multi-role capability. Multi-role aircraft should offer economies in support and operational flexibility. It is not surprising, therefore, that the chiefs of air staff of the four EFA partner nations, including Germany, reaffirmed as recently as 10 March that they considered that the requirement for an aircraft of the EFA's capabilities was still valid.

The recent visit of Herr Rühe has attracted much comment in the debate. As the House is aware, Herr Rühe, the German Defence Minister, visited London on 6 July. He told my right hon. and learned Friend the Secretary of State and myself that Germany did not intend to proceed with the production of the EFA and would like to redirect the unspent EFA development money to the construction of a completely new smaller aircraft with much lower production costs for delivery about the end of the century, just two years after the date planned for the EFA. The Germans wish that activity to be undertaken collaboratively by the present EFA partners and perhaps also France. He confirmed, however, that Germany would nevertheless honour its obligations under the memorandum of understanding to complete the remainder of the present development phase which will continue until 1999.

Herr Rühe cited two reasons for his interest in a new but less capable aircraft. First, he said that Germany would have difficulty accommodating the cost of producing the EFA in its budget, alongside the heavy expenditure it faces for reconstruction of the former GDR. Secondly, he considers that since the threat of a massive Warsaw pact attack, against which the EFA was originally designed, has completely disappeared, an aircraft of the EFA's capability is now an anachronism.

I found Herr Rühe a captivating and charismatic political personality, but I thought that his EFA Lite thinking—as it is known—was seriously flawed on economic and military grounds. As I listened to him, his performance reminded me of what is perhaps one of the most dramatic moments in Wagner's great opera "Das Rheingold" when Donner, the god of lightning and thunder strides on to the stage with a hammer which he whirls above his head. He brings it down on the anvil with an ear-splitting crash and, at that moment, the clouds roll away, there is clarity in the sky and the shining Valhalla appears. One realises that a great moment of truth has arrived. The difference with Herr Rate's performance is that his hammer blow had the opposite effect to Milner's: instead of the clouds rolling away, there was a thickening of the clouds; instead of clarity, there was obscurity; and instead of the shining Valhalla or EFA, one could see only an absurd spatchcock political contraption known as EFA Lite.

My hon. Friend the Member for Wyre was right to pour a little political scorn on the nature of a fairly transparent device. The smaller aircraft that Herr Rühe is proposing could not, using present technology, possibly provide the performance needed in the air defence role to match potential threat aircraft. There is no point in building an aircraft which cannot do the job that we require of it. If we introduced EFA Lite, the old SAS motto "Who dares wins" would create a new motto for the RAF, "Who flies loses". We would be sending our pilots up, destined to lose in combat.

Moreover, it is unrealistic on financial grounds to think that, given the seven years and £5 billion which we have jointly already effectively spent on the development of the EFA, developing a completely new aircraft could be any cheaper than continuing with the present EFA airframe and engine combination or that it could be done in half the time of the EFA programme. We would have to go back to the drawing board. It would mean throwing away the EFA prototypes and engines and repeating much of the development work which, together with the preliminary studies, has taken us seven years to reach the present point.

What Herr Rühe is suggesting is likely to result in an inferior product, some five to eight years later than the EFA and costing more rather than less. It would be like building an expensive loser, and I think that that description would stand even if we followed the good advice of my hon. Friend the Member for Wyre and sought further and better particulars. I think the more we got of those further and better particulars, the more we would find that my description and that of many hon. Members was correct.

I shall say a word about the costs, which are central to the project. The EFA is admittedly an expensive programme. The United Kingdom's share of development amounts to about £2.7 billion and if we were to buy 250 aircraft, which is the number we forecast at the start of the programme, it would cost us another £9 billion for production. Therefore, there is a common interest on the part of all four partners in getting the costs down. We are determined to do just that, but, before Germany's decision not to proceed to the production of the EFA, we had agreed to seek ways to reduce the costs of the programme to make it affordable to all the partners.

The German Ministry of Defence is not unique in having pressures on its budget. We have already made encouraging progress in identifying savings, and industry had unilaterally offered a 5 per cent. cut in its production prices before the present German demarche occurred. We believe that there are further savings to be made, and we shall continue to examine them in co-operation with our partners.

The best way forward must be to build on our investment in the EFA, not to throw it away. If Germany perceives a reduced threat, it can by all means opt to fit less capable equipment in the aircraft, but a new airframe and new engines at this stage is merely a recipe for delay and extra expense. The delay involved would not only add to the cost but would cause massive disruption to the aerospace industry in the four EFA nations. Indeed, it is questionable whether, when the time came, the capability would still exist to build the new aircraft that Germany has proposed. Technological development is an ongoing capacity. We cannot put it down and expect to start again with it intact several years later. My hon. Friends who represent Lancashire constituencies are well aware of that. Nor can we keep aircraft factories idle for up to five years and then expect to find a skilled labour force that is ready and waiting to start work again. I am sure that my hon. Friends the Members for Ribble Valley, for Blackpool, North and for Wyre all know that if we take the present German route there would almost certainly be serious disruption and reduced employment prospects and technical skills in factories in their constituencies.

Dr. Reid

I know that the Minister is pushed for time and I do not want to delay him for long. All of the discussion tonight has focused on the British and German angles on the EFA. Will he take the opportunity to tell us whether he is aware of the latest developments in the thinking of the Italians, especially in view of their budget deficit and the cuts that they have made in the past few days?

Mr. Aitken

I shall be glad to deal with those matters in a moment.

The House will want to know what we propose to do in the light of the meeting of my right hon. and learned Friend the Secretary of State with Herr Rühe earlier this week. We are talking, of course, about a collaborative programme that involves four partners. Perhaps there are only three partners now, but we are not sure of even that yet. First, we need to discuss Germany's stated position with our partners. We need also to discuss any detailed proposals that Germany may make about the smaller aircraft that Herr Rühe has been suggesting. We think that the first priority is for my right hon. and learned Friend to meet his Italian and Spanish colleagues at the earliest opportunity to discuss the implications of the EFA programme in the light of the German decision. The signs that have come from the Italian and Spanish Governments have been distinctly encouraging. Robust views have been expressed in support of the aircraft. However, all Governments are committed to attempting to reduce costs. All the three remaining partners are determined to meet at the earliest opportunity, and I think that an announcement about such a meeting will he made shortly. As partners, we wish coolly and calmly to find the right way ahead for the project.

We shall take a measured approach. The signs are that our partners wish also to take that approach. They do not wish to waste, as the German Government appear to be willing to do, the £5 billion that has already been spent on development. We all feel that it would he wrong to rush into decisions about the EFA before we are sure that what is proposed represents the most cost-effective way forward, that it represents value for money and that it is affordable for all the Governments concerned. We shall not know this until we have examined and debated all the options with our EFA partners.

It was always the plan and the timetable that these matters would be discussed when the development phase reached its end, or moved towards it, early next year. We are now having discussions a little earlier than expected. Germany has said that it will continue to meet its obligations in the development of the EFA, and final discussions about production are still some way off. It remains the Government's hope that we shall be able to continue with the programme with or without Germany. As one of my hon. Friends said, we are optimistic that, even if we were to go ahead with a three-nation programme only, the costs would be no more than they were planned to be had Germany not withdrawn from the project.

As the debate has shown, the EFA project has profound industrial, political, strategic and economic implications, as well as fundamental military ones, which I have been outlining and concentrating upon tonight. Decisions on its future will therefore rightly be subjected to intense scrutiny and debate within the Government, in the House, in the country generally and by all our EFA partners. We should welcome that debate, which can be a well-informed one only if the facts are coolly and quietly analysed. The aircraft has not yet flown, but some of those who are talking and writing about it seem to have become airborne far too excitably and far too soon. I believe that tonight's debate has been a welcome contrast to some of the ill-informed debate that has taken place outside the House. As I have said, the debate has shown real expertise and knowledge among Members. We are grateful to the hon. Member for Motherwell, North for initiating it and for his lucid presentation. I hope that I have answered all my hon. Friends' questions. I trust that I have indicated that we think that a calm, thoughtful and positive way forward can be found in conjunction with our remaining EFA partners.