§ The Secretary of State for Defence (Mr. Tom King)
With permission, Mr. Speaker, I should like to make a statement on the procurement of a system to meet the RAF's future requirement for a short-range air-to-air missile. The missile will he fitted to RAF Harriers and to the new European fighter aircraft which we expect to come into service with the RAF at the end of the decade. This important project was originally initiated under an international collaborative arrangement with Germany, Norway and Canada. Following the withdrawal of the other partners in 1989 and 1990, we decided to hold a competition for the RAF' requirement.
Both before proceeding with this competition and during the past two years we have reviewed the justification for this requirement against the dramatic changes in the world and our strategy for "Britain's Defence for the 90s" and beyond. In this the air defence of the United Kingdom and the protection of United Kingdom and allied forces wherever they may be deployed remain important priorities.
One consequence of the rapid changes in the former Soviet Union is the increasing availability of very capable aircraft and weapons more widely in the world. Therefore, it remains essential to ensure that the RAF has suitable aircraft and weapons with which to face such potential threats. The Gulf war was the clearest reminder of the importance of air superiority in any conflict.
I can tell the House that the competition for this important order has been very keen and I am grateful to the three bidders, British Aerospace Defence Ltd., GEC Marconi and Bodenseewerk Geratetechnik, for providing the basis for a real choice. The key factors in making our choice have been the total cost to public funds, technical merit, operational effectiveness, and compliance with our requirement for taut contractual terms. Our overall aim has been to maximise value for money in the proposals, while minimising the future risks of either excess cost or delay.
I can now tell the House that subject only to satisfactory agreement on final points of detail, we have selected the British Aerospace proposal for its advanced short-range air-to-air missile—ASRAAM. Our intention now is to place a contract for development and initial production of the missile. The order will be worth about £570 million, which is already provided for in our forward expenditure plans.
The decision will bring welcome work, not only to British Aerospace's dynamics division in Stevenage and Lostock, near Bolton, but also to its principal sub-contractors—Hughes at Glenrothes in Scotland, Royal Ordnance at Kidderminster, Thorn EMI at Feltham, and Lucas at Bradford. In addition, other sub-contract work will be placed with up to 70 further companies in the United Kingdom. More than 80 per cent. of the work in total will be carried out in the United Kingdom.
The Government believe that this new missile will provide a vital enhancement to our air defence capability in the future and is a further demonstration of our commitment to provide our forces with the modern equipment that they need.
§ Mr. Martin O'Neill (Clackmannan)
In thanking the Secretary of State for his statement, may I express our appreciation that it was provided before Defence questions? However, we regret the absence from the Government Front Bench of the right hon. Member for Plymouth, Sutton (Mr. Clark), who would appear either to have gone AWOL, or to be in jankers for the insubordination that he displayed in the interview in the Sunday Times on Sunday.
The statement will come as a relief to the work force of those companies. We shall have to wait until election day to find out whether it will come as a relief to the Conservative candidates in the seats concerned. It is a tribute to the work force, the planners and the engineers that they have been able to crack an extremely difficult technical problem. However, it may not have come soon enough for the 450 people employed by British Aerospace, whose redundancies were announced on 6 February as a result of the delay in the announcement of this project.
When does the Secretary of State expect production to start? He has announced his intention to place the contract. When does he expect it to have an impact on employment? How confident is he that there will be an export market for the missile, given the withdrawal of the Norwegians and the Germans from the earlier stages of the programme?
§ Mr. King
To deal with the first point, I do not know what the workers in British Aerospace and other companies will think of the right hon. Gentleman's rather flippant introduction to an announcement which is of great importance to them. He then went on to express his concern about any workers who might lose their jobs. I should have thought that he would have welcomed this obvious relief.
§ Mr. King
The hon. Gentleman said that 450 people may have received redundancy notices. He will be aware that the prime contractor of British Aerospace has claimed that the announcement will help to secure the jobs of 7,000 people. I like the right hon. Member personally, but it is hypocrisy for him to stand up—seeking to represent a party which has consistently voted for huge cuts in defence —and have the nerve to criticise the Government, who are not merely claiming and asserting that they will order equipment, but are proving it by our statements.
My right hon. Friend the Member for Plymouth, Sutton (Mr. Clark) has been closely involved in the planning of the order and it is a particular disappointment that he is not here. The reason why he is not here is that he is representing the United Kingdom, in support of British industry, at an extremely important air show at my specific request. I am grateful to him for undertaking that. His visit will be appreciated by British industry, even if the hon. Member for Clackmannan makes light of it.
§ Mr. Jonathan Sayeed (Bristol, East)
My right hon. Friend will be aware that the services will welcome this procurement decision because there is a need for an advanced short-range air-to-air missile. My right hon. Friend said that 7,000 jobs would be safeguarded in British Aerospace. Can he say how many jobs in the downstream 163 suppliers are likely to be safeguarded? Would any of them be safeguarded if a £6 billion reduction in defence spending was brought in by the Labour party?
§ Mr. King
My hon. Friend makes the point clearly. We have made it clear that there will be some changes in defence and some reductions in defence expenditure. I have set out before the House—the Government cannot be accused of not telling the country—that those changes will involve savings of about 6 per cent. in real terms. Our proposal is for smaller but better forces which are better equipped.
My statement is of enormous importance, as it will ensure that our future fighter aircraft have the capacity to defend themselves against the modern equipment that they may face. Soviet equipment, which is now much more widely available on the world market, has a sophistication and a capability which pose a real threat. Were we not to proceed in this way, our pilots could be at a severe disadvantage. Hon. Members know that that is true.
My announcement is important to our defence and it is a proper reward to many who work in the industry and for their skills. I mentioned the figure of 7,000 which the prime contractor has estimated will be the number of people involved in one way or another in the contracts. I also referred to the figure of £570 million—the House can draw its own conclusions about that—which will be spent over the next 10 years. The weapon will come into service first in 1998–99. It is a very important project indeed.
§ Mr. Menzies Campbell (Fife, North-East)
I welcome the Secretary of State's statement. I also offer my congratulations to British Aerospace because, as the Secretary of State would acknowledge, it has fought long and hard for the order. Is not the announcement significant because the combination of the European fighter aircraft and the missile will contribute to the air defence of the United Kingdom and, without that marriage, that would be difficult to achieve?
§ Mr. King
Yes. First, we will install it to all RAF Harriers and then expect it to be installed on to the EFA. Although the hon. Member for Clackmannan (Mr. O'Neill) said that export sales will be difficult if the collaborative partners have fallen out, I think that there will be important export opportunities for this weapon as there is no equivalent weapon available, with the exception of a Russian variety. I have taken steps with the United States and have spoken with Defence Secretary Cheney to ensure that we have the best export opportunities. Although Hughes manufactures in Glenrothes in Scotland, it will be keen to do development work in the United States and, to pursue opportunities that may well exist within the United States, the United States forces and third countries to which the United States exports aircraft.
§ Sir Geoffrey Johnson Smith (Wealden)
I welcome my right hon. Friend's statement, which underpins the strategy of flexibility outlined in "Options for Change". Can he assure us that Hughes, whose parent company is based in the United States, will not run into problems of technology transfer when seeking to export?
§ Mr. King
There is an inter-company agreement between Hughes and British Aerospace on that. Hughes has a United States Government export licence for the 164 early stages of the programme and, as I have said, I have been in touch with my friend and colleague in NATO, the United States Secretary of Defence Dick Cheney. I have a satisfactory letter of assurance from him on their best efforts in that respect.
§ Mr. John Home Robertson (East Lothian)
Elections are better than Christmas for some industries. In view of the long delay that there has been in the programme for the replacement of Sidewinder, will the Secretary of State acknowledge that that breached the original memorandum of understanding between the United Kingdom and the United States? That means that we have lost the opportunity to export many of these systems to the United States.
§ Mr. King
Let us wait and see. The arrangements may have been lost under the old programme—we know that the collaborative arrangement did not work out—but let us wait and see if there is a better alternative. There are those who believe that this will prove an outstandingly effective weapon, and it is fair to say that the Select Committee on Defence supports the programme and sees the merits that could lie in it. I am encouraged by what I see in the technical assessment of it. We have taken the decision to go ahead, so we are under way. Let us see who else is around and whether this weapon will command some quite interesting export opportunities.
§ Mr. Robert Hayward (Kingswood)
Will my right hon. Friend accept the appreciation of Bristol Members and my hon. Friend the Member for Stevenage (Mr. Wood), who is unable to speak this afternoon? We have worked long and hard on the ASRAAM project and we welcome the decision announced this afternoon, which involves literally hundreds of millions of pounds. Will my right hon. Friend press British Aerospace and Hughes to take immediate action in encouraging the United States Government to look seriously at the commitment that the British Government have made, with the prospect of further orders all over the world?
§ Mr. King
I appreciate my hon. Friend's remarks. While my hon. Friend the Member for Stevenage is not able to speak, he is certainly not inarticulate in support of his constituents, as the whole House knows.
The hon. Member for East Lothian (Mr. Home Robertson) will understand when I say that I am struck by the contrast. Here we have an opportunity. We are investing in British technology and development—also in a collaborative international project—for a new system which can be of great benefit. We get sniping from Opposition Members about not doing something, and when we do it, we get them carping about some problem, with technicalities or whatever.
§ Mr. Dick Douglas (Dunfermline, West)
Can the Secretary of State give more information about numbers? He gave the raw statistics and referred to 7,000 jobs, and we gather that they will be preserved or created by this order. In the last few weeks, we have had procurement orders worth over £1 billion—[HON. MEMBERS: "Hear, hear."] But all those were announced in connection with the defence White Paper, so the right hon. Gentleman is doing this merely for election purposes. I am not quarrelling with that, because all parties do it. I am seeking further information from the Scottish point of view. The only jobs that we can see being safeguarded as a result of 165 this order relate to Hughes in Glenrothes. Can the right hon. Gentleman give further information about the number of jobs in Scotland which will come directly or indirectly from this order?
§ Mr. King
I was careful—the hon. Gentleman will recognise this straight away—not myself to attribute claims to the number of jobs involved. It depends on how the companies handle the business and the number of subcontractors they use. The figure of 7,000 to which I referred was used by British Aerospace in the material that the company sent to a number of hon. Members in support of its case, saying that that would be the number of people involved in this country in the programme.
I cannot give specific figures for Hughes in Glenrothes —[Interruption.] Is it suggested that there is something wrong with investing in our armed forces? I do not know whether Opposition Members disapprove of the fact that we have been able to come forward with orders for new frigates, for new tanks, for a new helicopter with an anti-submarine capability, the Merlin, for the Royal Navy, with a new package for the Harrier, with an order for ALARM, the air-launched anti-radiation missile, and that we are giving our forces the resources and equipment that they need. Yes, they will be smaller, but they will be better equipped than ever in our history, and surely that is appropriate in an uncertain and unstable world.
§ Mr. Kenneth Hind (Lancashire, West)
Will my right hon. Friend accept the deep thanks of hon. Members who represent north-west constituencies for the order, and in particular the thanks of my hon. Friend the Member for Bolton, West (Mr. Sackville) who, because he is in the Whips Office, is unable to express his thanks personally in the House? Will my right hon. Friend confirm that the order is in addition—to the £3.5 billion worth of defence orders placed with firms in the north-west about which he spoke some 20 minutes ago?
§ Mr. King
I certainly confirm that. I referred to £540 million as being the contract in Lancashire for defence contractors. That did not include this announcement, which I was not able to make until 3.30 this afternoon. I can confirm that, as a member of the Government, my hon. Friend the Member for Bolton, West (Mr. Sackville) cannot speak in support of the measure, but that does not disqualify him from representing his constituents in this matter. Like my hon. Friend the Member for Stevenage (Mr. Wood), he has done that most effectively. Lancashire will benefit significantly from the order.
§ Mr. Tam Dalyell (Linlithgow)
In the third paragraph of his statement, the Secretary of State referred tothe increasing availability of very capable aircraft and weaponsfrom the Soviet Union being availablemore widely in the world.Factually, is there any evidence to suggest that Russia, the Ukraine, Kazakhstan or any other republic is exporting sophisticated Russian weapons? If so, to whom? To Iraq, Iran, Muslim states, Libya—
§ Mr. Speaker
Order. I am intrigued to know how the hon. Gentleman's question relates to the statement.
§ Mr. Dalyell
I quoted the actual words of the third paragraph of the statement. The rationale of the whole statement is that we must have those orders rather than peaceful developments because Russian arms are being 166 scattered around the world. I was pressing the Secretary of State to tell me what the evidence is for Russian arms being exported and to whom they are being exported. Surely it should be conditional that aid to scientists and to the Soviet Union will not be given if arms are being exported. If the Ministry of Defence is right, the matter is extremely serious. What is the evidence?
§ Mr. King
The hon. Gentleman is usually better informed on these matters. There is nothing new about it. The Soviet Union has been exporting weapons to a number of those countries for some time. One missile—the Archer missile—represents a serious threat and is probably superior to Sidewinder. That is already in service in the former Soviet Union and with certain export customers—
§ Mr. King
In Poland, Bulgaria, Czechoslovakia, Yugoslavia. It was used by the East German air force and is believed to be used by Cuba, India, Iran, Iraq, North Korea and Syria. I wonder occasionally whether the hon. Gentleman knows what is going on. Perhaps he is so busy interrupting that he does not hear the answer.
§ Mr. Bowen Wells (Hertford and Stortford)
I congratulate and thank my right hon. Friend for the order on behalf of my constituents who live around Stevenage. Does he agree that the crucial point about the order is that it will keep the technical teams together and enable us to keep ahead of the competition, not only with the air-to-air missile but with other related technologies that we need to boost our exports militarily and in civil industry?
§ Mr. King
That is right, and I pay tribute to the proposals that British Aerospace submitted. I said in my statement that the competition had been keenly fought and I pay tribute to GEC Marconi, which also submitted excellent proposals. We are fortunate to have two such excellent defence contractors in this country which can put forward proposals for such a sophisticated and complex project. I am grateful to them both.
§ Mr. David Winnick (Walsall, North)
Is the Secretary of State aware that, since these pre-election statements have been made in the past fortnight, some £2 billion in public expenditure has been announced up to the end of last week? Why should Ministers believe that a country which has suffered such devastating unemployment and two major recessions will accept as genuine a dying Government giving goodies to certain marginal areas at this time?
§ Mr. King
I wonder what people working in British Aerospace, Hughes, Lucas Aerospace and Royal Ordnance will think of the hon. Gentleman's intervention, asking why we worry about unemployment. Those people are worried about unemployment. I have been criticised for announcing measures already foreshadowed in the defence White Paper. In this respect, a competition has been held and it was right to give the results of that 167 competition as soon as we could so that people know who the winners are. That is what we have done, and I make no apology for it.
§ Mr. Hugh Dykes (Harrow, East)
Of course, the equipment is essential and vital for the future defence of the realm and we are proud that missile equipment of that sort is British. But is my right hon. Friend aware that I believe that he has picked the wrong contractor, which will be a bitter blow for GEC Marconi, the headquarters of which is in my constituency? Will he explain the details again to consider the applications and the possibility of an independent investigation? What promise does he hold out to GEC Marconi for further contracts to preserve employment, when jobs are already threatened both at Stanmore and elsewhere? What can he say about the superior technology of the GEC Marconi application, which was a genuinely all-British bid?
§ Mr. King
I understand my hon. Friend's disappointment. I have just paid tribute to GEC Marconi for the quality of the bid that it tendered. My hon. Friend has made a judgment—he is no doubt well qualified to do so —as to why the Marconi bid ought to have been chosen. It is a matter of huge importance to the Royal Air Force, and one on which the most thorough assessment has to be made. We are talking about an air defence weapon to equip our aircraft and fighter bombers for their fighter defence and self-protection role. The equipment will not come into service until the end of the decade, and it will have to serve and protect our country and pilots for the next 20 to 25 years. It is not a decision to be taken lightly, and it has been a matter of the most thorough assessment to determine which proposal should be chosen.
We have made it quite clear to GEC Marconi, as it would wish, that we wish to make a full presentation to it on the circumstances of its bid and the reasons why it was not successful on this occasion. I have a list of orders that have been placed. GEC Marconi is an important defence contractor. There has been an announcement in the past two weeks on air-launched anti-radar missiles, with which GEC Marconi is involved, and other defence contracts. There was an earlier announcement on the frigates for Yarrow, which is part of GEC Marconi, which remains and will continue to be an important defence contractor.
§ Mr. John McFall (Dumbarton)
I have a short question requiring a short answer. Does the weapon have the same capability as the original staff requirement SR(A) 1234 called for?
§ Mr. Nicholas Winterton (Macclesfield)
Having made representations about the project to my right hon. Friend and the Ministry of Defence 18 months ago, I warmly welcome my right hon. Friend's decision, which I believe is the correct one. Does he believe that it will maintain the vanguard position for the United Kingdom in that sphere? Will he be as sensitive in respect of the British Aerospace project which will replace the Hercules as he has been about ASRAAM?
§ Mr. King
Certainly not a stool pigeon.
168 If it were Vanguard, it would roll out tomorrow. It is not Vanguard, but an alternative weapon system, which will certainly put us in the lead and give our air force a valuable capability which it might otherwise lack. The appetite of my hon. Friend the Member for Macclesfield (Mr. Winterton) in his new-found mode—to put it in defence terms—is insatiable. I cannot comment on the alternatives that he mentioned.
§ Mr. Skinner
Is not the truth that today's statement is not about defence, but about Tory marginal seats and another example of pork-barrel politics? There have been several references to exports and selling all around the world. We have already heard several times since the Gulf war about selling arms to Iraq and the penalties to be incurred as a result. Does the Secretary of State have a list of prohibited countries to which the weapon will not be sold?
§ Mr. King
Despite the hon. Gentleman's new-found interest in these matters, he may not be aware that we are involved in large-scale arrangements with the kingdom of Saudi Arabia, to try to support its defence. There are those who believe that, if the Gulf countries' defences had been better equipped and resourced, we might not have had to ask our forces to go to their assistance.
We certainly sell to some countries; there are other regimes to which we would certainly not sell or provide our equipment.
§ Mr. Speaker
Order. I will allow questions to go on —exceptionally—for five more minutes, but there is another statement after this, so I ask for brief questions so that we may have brief answers too.
§ Mr. Andrew Hargreaves (Birmingham, Hall Green)
Will my right hon. Friend accept the warm appreciation of Conservative Members for this order, which fully enables him to live up to his word, given when outlining "Options for Change", that the forces would be smaller but better equipped. There will be many who had doubts at the time when "Options for Change" was announced who will warmly welcome today's statement—as they have welcomed similar statements in recent months.
§ Mr. David Sumberg (Bury, South)
A number of my constituents are employed at the Bolton plant, and I congratulate my right hon. Friend on this excellent news for the north-west of England.
Whenever there is bad news for the north-west, Labour Members queue up to condemn the Government. Today, in stark contrast, not one of them has come to the House to thank my right hon. Friend for this excellent news.
§ Mr. Michael Stern (Bristol, North-West)
My right hon. Friend is right not to try to translate this order into exact numbers of jobs, but does he agree that the undoubted effect at British Aerospace in the north-west and at the design section of British Aerospace defence division at Filton in my constituency will be to ensure that a company which has suffered a steady succession of job losses in the past couple of years can look forward to a future in which jobs are secure and, if export orders come in, job numbers will increase?
§ Mr. John Wilkinson (Ruislip-Northwood)
I warmly express my appreciation to my right hon. Friend and remind him that, some 10 years ago, when the task force sailed south, Her Majesty's Government had, as an emergency measure, to buy at very short notice large stocks of AIM9L Sidewinders from the United States because we did not have enough effective short-range air-to-air missiles. As a result of that purchase, we had air superiority and the war was won, but this time the Government are taking the right decisions in advance.
§ Mr. John Browne (Winchester)
Does my right hon. Friend accept that, since the collapse of the Soviet empire, the strategic threat to our country is far less certain in origin, and that air power with its flexibility has become even more significant in meeting and delivering strategic force to any area of threat? Does he agree that this weapons system will protect 7,000 jobs in vital high-tech areas, that it is a defensive weapon, and that the fact that it has been accepted by the Royal Air Force, whose standards are respected throughout the world, will greatly enhance its marketability throughout the world?
§ Mr. King
1 am grateful to my hon. Friend for his last point—that the system may well give us a lead in certain countries. Apart from the former Soviet Union, we are not aware of any country with a weapon that could match our system when it eventually comes into service. Its potential to bring jobs and earnings to our country could be quite significant.
§ Mr. Geoffrey Dickens (Littleborough and Saddleworth)
Will my right hon. Friend confirm that he has been sending out clear messages to the rest of the world? Those messages are that whether it is the purchase for the Army of the Chieftain tank, the fourth Trident submarine for the Royal Navy, or today's announcement about a sophisticated British Aerospace weapon for the Royal Air Force, those are the deterrents that we must have. We are saying, "If you take on the United Kingdom, you do so at your peril."
§ Mr. King
It seems almost superfluous to add to the excellent and rousing words of my hon. Friend. He is precisely right. Although there are changes in the world and although it is possible to make some reductions, none the less instability and insecurity give rise to great fear among many of our friends and allies in the most unstable parts of the world. Our message of great comfort to them is that we are not retreating into isolation and adopting a little England policy of defending only our own shores but are ensuring that our forces have the requisite capability so that if our allies and friends are threatened we shall be ready and able to play our part in the United Nations, in NATO or in whatever international co-operation or coalition seems appropriate.