§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Arbuthnot.]
§ 10 pm
§ Dr. Gavin Strang (Edinburgh, East)I am grateful for the opportunity to raise this topic in the first week of the House's return after the summer recess. No hon. Member doubts the importance of the European fighter aircraft project. It is important from both the military and the industrial point of view. It is also important because of its cost to the public purse.
The design and development of military aircraft is a long process. EFA is no exception. Discussions about a possible European combat aircraft began in the late 1970s. The outline staff target for a future EFA was agreed between the air staffs of France, West Germany, Italy and Spain in 1983. France pulled out in 1985. In April 1988, the British Government announced their decision to embark on the full development of EFA, subject to similar decisions by the three other collaborating countries.
By the end of November 1988, all four countries had signed a memorandum of understanding. The two main EFA development contracts were awarded to two consortia. Both consortia were comprised of one company from each collaborating nation. Euro-fighter was commissioned to develop the airframe and weapons systems. Eurojet was awarded the contract for the development of the engine.
As set out in the memorandum of understanding, the work carried out and subcontracted by each consortium is divided so that Germany and Britain both take 33 per cent. of the work share, Italy 21 per cent. and Spain 13 per cent., each nation then paying for the work done within its borders.
There is all-party agreement on the military requirement for EFA. While the dissolution of the Soviet Union and the Warsaw pact means that nobody now can be anticipating a threat from the eastern bloc, EFA was intended to match the possible threat posed by Russian aircraft. The Mig29 Fulcrum has been exported to Cuba, India, Iraq, Iran, North Korea and Syria. The SU27 Flanker has been sold to China. We have no reason to believe that export contracts with other nations are not being pursued by Russia.
The British people will not forgive the Government if they saddle the RAF with a plane of inferior capability to those of a future enemy. The German Government's proposed EFA Lite would be just such a plane. As it would involve the redesign of the airframe, engine and installed equipment, it is certain that that plane would be militarily inadequate. Furthermore, it is by no means certain that to abandon EFA and embark on this new project would work out cheaper then the completion of EFA. All alternatives to EFA have been found to be more expensive, less capable, or both.
The only plane that is superior in capability will be the United States F22 ATT. It is widely estimated that that would be at least 60 per cent. more expensive than EFA. Furthermore, it is doubtful whether the United States would make the plane available for export, even to Britain.
The chiefs of staff of all four EFA nations reaffirmed the need for EFA in March. The House of Commons Select Committee on Defence concluded that the high levels of reliability, coupled with the ease of maintenance 664 and testing of EFA, should result in EFA being significantly cheaper to operate. I pay tribute to the report of the Select Committee on Defence, published on 11 March, and quote exactly what it said on page xxx:
The current indications are, however, that the possible alternative aircraft to EFA would have significantly inferior performance, and yet would offer limited or no savings in cost. The higher levels of reliability, coupled with ease of maintenance and testing of EFA, should result in EFA being significantly cheaper to operate and having higher levels of availability than any alternative aircraft. There is currently no sign of any suitable alternative to EFA which could begin to offer the same level of performance at an acceptable cost, with anything approaching comparable technological benefits.That is still true, and the House would welcome the Minister's reaffirmation that it is still the view of the Government.There are obvious benefits from international collaboration in a military project such as EFA—the sharing of the burden of costs and technological co-operation between nations being two such advantages. Operationally, there are tremendous benefits if partners in a conflict are using the same aircraft—for example, common servicing, spares and training. The tragic events in Yugoslavia show that it is not fanciful to contemplate Britain, in alliance with other Western European Union countries, being involved in major peacekeeping activities in central and eastern Europe. We have only to look at the serious economic, social and political difficulties in the former Warsaw pact satellite states and in the former Soviet Union to understand that there may be a very real need for collective military action to prevent ethnic rivalries and territorial disputes from leading to the disintegration of states and civil war.
Control of the air is a key factor in any military conflict. The aim of Governments must be the avoidance of active service for the air force and other services, but long-term decisions on procurement must assume that planes will see real combat. The British Government should now tell our German ally firmly and publicly that we are not prepared to contemplate Royal Air Force pilots going into combat with planes which have a markedly inferior capability to those of the enemy.
The study commissioned by the four Defence Ministers in August to consider the feasibility of a plane 30 per cent. cheaper than EFA may suggest worthwhile economies, but everyone knows that the 30 per cent. saving will be obtained only at the cost of much inferior aircraft.
EFA is crucial to British industry. Without it, jobs would be lost in Germany, Italy and Spain, but the consequences for Britain's aerospace industry could be catastrophic. The United Kingdom's aerospace industry is world class, second only in turnover to the United States. Tragically, as a result of the collapse of manufacturing industry in Britain in the early 1980s, the elimination of about 25 per cent. of capacity and the further contraction of industry, more and more of our industrial base is associated with firms which have a military purpose and produce military products. The cancellation of EFA would result in the long-term elimination of some of the most modern engineering facilities in Britain. Almost all the developing technologies that will feature in tomorrow's aerospace business, both civil and military, are part and parcel of the EFA development programme. For example, the only military airborne radar capability that Britain now has is GEC Ferranti, based in Edinburgh. If the ECR 90 radar system—the system for EFA—is not developed 665 and operated by EFA, that British airborne radar capability will be lost for all time. I am sure that the Minister is conscious of the importance of that radar contract.
GEC Ferranti now operates from plants in Edinburgh, Donibristle in Fife, Boreham Wood, and Milton Keynes. The company estimates that 905 jobs are directly dependent on EFA development work—570 with GEC Ferranti and 335 with sub-contractors.
Ferranti has a tremendous history in airborne radar. It provided the radar for the Lightning aircraft in the 1950s, and the Blue Fox radar, which performed well in the Sea Harriers during the Falklands war, and the Blue Vixen for the updated Sea Harrier is accepted by all to be performing well. All the evidence suggests that the ECR90 system which will go into EFA will be a world beater. After that we shall have Radar 2000, which will also be developed.
What I am saying is not unique to GEC Ferranti, but applies to other aspects of the project. We are at the forefront of technological development. If the ECR90 radar system does not go into service, GEC Ferranti will not be able to stay in business. It will not have the profits from that production to develop Radar 2000, and that capability will be lost for good. That will be a tremendous loss to the whole of British industry, not only to my constituents in Edinburgh.
The cancellation of EFA would have serious consequences for three of our most important companies—British Aerospace, GEC and Rolls-Royce. Many of the 34 main United Kingdom suppliers and 60 sub-suppliers are high-tech companies of strategic importance to manufacturing in this country. It has been estimated that 40,000 jobs will be lost in the United Kingdom if EFA is cancelled, but that does not take into account the fact that the supplying firms have a range of other engineering activities which would be put into jeopardy.
The Labour party wants companies heavily dependent on military contracts to diversify into civil production. It is our policy to set up a defence diversification agency to help secure that end. Many of the high-technology engineering teams involved in EFA have the capability to originate civil products which will create jobs and wealth for this country. The cancellation of EFA would lead to the disbandment of the high-technology engineering teams required for alternative products in the future. It is impossible to emphasise too strongly the fact that, especially in view of the state of British industry in the present recession, it would be absolutely devastating if the EFA project were not to go ahead. We can be proud of our aerospace industry. We must nourish and encourage it, and the Government should support it. It may be regrettable that it is still so dependent on EFA, but that is the truth, and not to face up to it would be damaging to this country.
As the Ministers knows, the four Defence Ministers last met in Madrid on 4 August. This is our first opportunity to discuss the outcome of that meeting. Eurofighter was commissioned to identify means by which the plane's production costs could be reduced. From reports in the press, I understand that significant possible cost savings have been identified; up to 20 per cent. has been suggested. I hope that the Minister will be willing to give us further information about that this evening. The air staff of each nation are re-examining their military requirements. Both 666 studies were due for completion by the end of this month, and were to be considered at the meeting of Defence Ministers in December.
A third decision taken at that meeting, which has not been much publicised, was to impose a moratorium on all future development side contracts. I believe that the Secretary of State referred to the moratorium as symbolic, and I accept that all the main development work is going ahead and that the plane's production will not be significantly slowed down by the decision. But some important contracts have been suspended, and I am sorry to say that some of those should have been placed by GEC Ferranti by now. One significant example is the laser warning system, which will enable the crew to tell whether the plane is being tracked by laser.
It is important that a clear timetable be established for the development of the plane. It is not possible for the companies involved to put their engineering teams on hold. I hope that the Minister will give us an assurance that when the Secretary of State meets his counterparts he will make it clear that they must take practical decisions. It is no use pretending that we can put the decision off indefinitely. There must be a decision on investment for production within the next two or three months. Clearly, the companies cannot afford to maintain the staff unless the development and production programmes go forward.
The fundamental case for EFA is the British military requirement for an agile aircraft with modern radar. Nobody disputes that the RAF will require a new fighter plane by the turn of the century. It, or its variants, could be in service for 30 years or more.
The Government have three choices. First, Britain can go along with the German position, which means building a plane with a much inferior military capability. That could only mean asking our Royal Air Force pilots to operate in the next century with planes much inferior to those in service with the air forces of some third-world countries. As hon. Members know, when we talk about an inferior capability in air combat, we are talking about the survivability of the planes and their pilots. I am sure that no British Government would want to go down in history as having been responsible for equipping the RAF with sub-standard planes.
Secondly, the Government can buy an off-the-shelf new plane, possibly from Russia, but more likely from the United States. That would cost many thousands of British jobs and destroy for ever our capability in many areas of advanced technology, including airborne radar—not to mention the effect on our balance of trade.
Thirdly, the Government can do what is right for Britain and make it clear to our European partners that Britain is absolutely determined to press ahead with the European fighter aircraft.
§ Mr. George Foulkes (Carrick, Cumnock and Doon Valley)I am grateful to my hon. Friend the Member for Edinburgh, East (Dr. Strang), and even more so to the Minister, for allowing me to say a few words from the Opposition Front Bench in this important debate. As my hon. Friend said, Labour party spokesmen have on a number of occasions expressed their support for EFA on the basis that it offers the best capability at the best price to fulfil a vital military role.
667 Equally importantly, as my hon. Friend the Member for Edinburgh, East said, the project will safeguard thousands of jobs and will help to preserve a United Kingdom defence and aerospace industry. As a Member of Parliament who represents a mining constituency, I point out that those jobs are just as vital in the areas in which they are situated as the pit jobs are in the coal mining areas, and the loss of those jobs might be just as devastating to the economy of the United Kingdom as the loss of mining jobs.
I am grateful for this brief opportunity to restate the Labour party's support for the project and our desire that the Government's priority now should be to keep this collaborative European venture together.
Like my hon. Friend the Member for Edinburgh, East, we believe that the alternative EFA Lite proposed by the Germans does not fulfil the requirements necessary for the next generation of British fighter aircraft, especially the need to have the ability to take part in United Nations operations and to compete effectively with the Mig 29s and the SU27s which, as my hon. Friend said, are increasingly available to countries around the world which are potential aggressors.
The need for the resolution of the differences between the four co-operating countries in the venture is all the more pressing. As that will be achieved only by a cheaper aircraft, we welcome, as my hon. Friend did, the suggested savings of up to 20 per cent. in cost and we should welcome any further potential savings, whether proposed by the United Kingdom, by Germany or by any of the other partners so long as they do not undermine the original operational capability and concept of EFA. As my hon. Friend said, our pilots must have a plane which is equal to or preferably better than that of any potential aggressor. We hope that the cost-cutting exercise can open a door to the continuation of a multinational project. We urge the Government to increase the diplomatic and other pressures—perhaps a little bit more diplomatically than Volker Ruehe did; I know that British Defence Ministers are likely to be a little more diplomatic than he is.
§ Mr. Menzies Campbell (Fife, North-East)Even more than our Ministers?
§ Mr. FoulkesEven more than our Ministers. I assure the Minister and all the other Defence Ministers that in those efforts they will have the total support of the Labour Front Bench and of the other Opposition parties.
§ The Minister of State for the Armed Forces (Mr. Archie Hamilton)I congratulate the hon. Member for Edinburgh, East (Dr. Strang) on securing this debate and on initiating it this evening. I am also grateful to the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) for the official support from the Opposition for the EFA project.
The interest in and support for the EFA programme of the hon. Member for Edinburgh, East is very much appreciated, as is the presence here tonight of my hon. Friends the Members for Blackpool, North (Mr. Elletson), for Blackpool, South (Mr. Hawkins), for Ribble Valley (Mr. Evans), for Wyre (Mr. Mans) and for Woodspring 668 (Dr. Fox). All have constituents who are very much involved in the future of the project and whose livelihoods very much depend on the project going ahead.
I know that the hon. Member for Edinburgh, East has had two meetings, on 25 June and 9 September, with my hon. Friend the Minister of State for Defence Procurement, who regrets that an official visit to Sweden prevents him from being present tonight. The eloquent defence of the EFA which we have heard from the hon. Gentleman underlines the measure of all-party support for it which exists in the House and the country as a whole. This was underlined also in the sixth report of the Defence Select Committee, which concluded:
there is currently no sign of any suitable alternative to EFA that could begin to offer the same level of performance at an acceptable cost with anything approaching comparable technological benefits".The German Minister of Defence, to whom reference has been made this evening, has said that the project is too expensive and that an aircraft of this capability is an anachronism in the changed security environment that has followed the demise of the Warsaw pact and other radical changes in eastern Europe. We and the other partners, Italy and Spain, share some of Herr Ruehe's concern about the cost of the project. I will return to this point later, but first I would like to deal with the point about the military need for EFA.It is true that the international security environment has changed radically since the EFA was originally conceived. The direct threat of a massive attack on NATO previously posed by the Warsaw pact and the Soviet Union has disappeared. That said, we plan that EFA will be in service throughout the first quarter of the next century. The world could be a very different place by 2020. That is why it is important to look at capabilities rather than intentions.
There is considerable and growing instability in areas close to NATO both within and outside Europe. There is ethnic and territorial conflict in eastern Europe and within the former Soviet Union. The middle east remains unpredictable. Despite the collapse of the former monolithic threat, there exist a number of risks to security. The United Kingdom could be involved in joint military action with our allies designated to promote stability or halt aggression.
There are a large number of sophisticated aircraft on the territories of the former Soviet Union. Some of those aircraft have been widely exported. The MiG29 Fulcrum has been delivered to all former Warsaw pact countries, except Hungary, and to a number of other countries, including Cuba, Iraq, Iran, Syria, North Korea and the former Yugoslavia. The SU27 Flanker has been sold to China. Improved variants of the SU27 and the MiG29 are being developed.
We need to provide an effective defence of the United Kingdom and British forces wherever they may be deployed. Our current air defence aircraft, the Tornado F3, was designed to intercept bombers at long range. It is not a suitable match for such hostile agile fighters as the MiG29 and the SU27, let alone future upgrades of those types or more modern aircraft.
We also recognise the need to provide an offensive support and tactical reconnaissance capability. Although they performed well last year in the Gulf, the Jaguars are aging and will become more difficult to support in the 669 future. The Jaguar is unlikely to survive in combat against modern aircraft much beyond the middle of the next decade.
Thus the RAF has a need for an agile aircraft with a modern radar 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 Defence Select Committee reported in April that there remains a requirement for a technically advanced multi-role aircraft.
As the aircraft that we procure will have to meet the needs of the Royal Air Force for the next 25 years, we must ensure that it is at least as good as the aircraft of any potential adversary that it might be called upon to face during that time. We owe it to our pilots to give them the tools that they need to do their job. An aircraft of broadly EFA's capability is essential to counter potentially hostile aircraft.
In summary, it is true that the risk to our security has reduced quantitatively, and that may have a bearing on the number of new aircraft we require. But, in qualitative terms, potentially hostile aircraft are as sophisticated today as was anticipated when EFA was conceived, and we face far greater uncertainty about the direction from which trouble might come.
Of course it is right to review the military requirement. That is why, in August, the Ministers of Defence of the four partner nations asked their military chiefs to conduct a full review of the original requirement and to report whether any relaxations might be possible. The hon. Gentleman referred to that point. We do not yet have that advice. We will take full account of it when we receive it at the end of this month.
Mr. Ruehe is right when he says that EFA is expensive. Indeed, what sparked off the present debate about the project was the fact that the quotations for the production phase which the manufacturers presented last April were higher than expected and judged by all the partner Governments to be unaffordable. When they met last August, the four Ministers of Defence therefore commissioned studies into ways of reducing the cost of the programme.
Those studies have looked at a wide range of options. They started by looking at ways to reduce the cost of the present aircraft through more efficient sharing of the production work between the partner companies, by savings in the logistic support arrangements and by generally sharpening their prices and those of the equipment suppliers.
They then looked at the savings that might be achieved by removing some of the more sophisticated equipments from the aircraft, either replacing them with cheaper alternatives, or perhaps leaving them out initially while keeping open the possibility of fitting them later when funds permit. Lastly, the studies examined seven alternative aircraft designs to establish whether a change of design would actually achieve the cost savings which the German Minister had suggested.
The report on the first of those studies was presented to the four Governments at the end of last week. It is an extremely detailed piece of work, and it will take some time for officials of the four Ministries of Defence to analyse it and to decide which of the many options it offers represents the best way forward for the particular 670 circumstances of the four partner nations. The four Ministers plan to meet again in December to consider those conclusions and the review of the military requirement.
It is, however, possible to say already that the broad conclusions of the report were that substantial savings of between 12 and 21 per cent. were possible without any changes to the aircraft specification or its military capability. Greater savings are possible by deleting certain equipments, although that will lead to some degradation of performance. In all circumstances, retaining the present airframe and engine combination offers better value for money than changing course in mid-stream to a new design.
The effect of a new design would mean writing off most of the £5 billion which the four Governments have collectively invested in the development of EFA, and necessitate repeating much of the work already done. In consequence, any new design with an acceptable level of performance would have higher cost than the present EFA programme. Of the seven designs studied, only two could conceivably be marginally cheaper than continuing with the existing airframe and engine. Both would be single-engined aircraft inferior in performance to the present MiG29 and SU27. Going down that road would make no sense at all.
It is regrettable that the German Minister is continuing to argue in favour of a reorientation of the project in favour of a new smaller design when the facts do not support his arguments. We shall seek to convince him that he is wrong and to persuade the German Government that it is in their own best interests, as well as those of the other partners, that Germany should remain in the European fighter aircraft programme. On that point, as it seems not to be generally appreciated, I should make it clear that Germany is still participating in the project, development of EFA is continuing generally according to the originally agreed programme, and we expect the first flight of the aircraft around the end of this year.
The Government not only believe that the operational requirement for EFA remains valid and that continuing with the present programme is the best way forward but are very conscious of the enormous industrial importance of EFA to the United Kingdom aerospace industry. EFA is the only advanced fixed-wing military combat aircraft under development in the United Kingdom. If the project were to collapse, the design and development teams at British Aerospace, Rolls-Royce, GEC and the many other British companies working on the programme would be dispersed. That would probably be the end of military aircraft development in the United Kingdom. One cannot keep aerospace factories idle for up to five years and expect at the end of that time to find a skilled labour force ready and waiting to start work again.
EFA is also pushing at the frontiers of advanced technology. Many of the equipments being developed for EFA will find their way in due course into new civil aircraft, and some of the technology is capable also of being exploited for non-aviation uses. All that potential spin-off would be lost if the project did not proceed.
There are also a large number of jobs dependent on EFA. There are about 9,400 people directly employed on the development of EFA today, and, when the aircraft goes into production, the number will rise to 28,000. Those 671 jobs directly related to EFA will also sustain a large measure of indirect employment outside the aerospace industry.
For all those reasons, the Government place considerable importance on the continuation of the EFA programme, if possible on a four-nation basis with German participation. If, however, Germany should decide to leave the project, the Government would wish to explore with Italy and Spain the possibility of continuing trilaterally. Neither of the other partners has ruled that 672 out, and the conclusions of the cost reduction study to which I have already referred give grounds for optimism.
The Spanish Minister of Defence, for instance, told the BBC earlier this week, during the NATO Nuclear Planning Group meeting at Gleneagles, that he believed that, in the light of the substantial savings now available, EFA's prospects looked much better and Spain believed that it had a future.
§ The motion having been made at Ten o'clock and the debate having continued for half an hour, MADAM SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
§ Adjourned at half-past Ten o'clock.