HC Deb 27 October 1992 vol 212 cc850-2
3. Mr. Tony Banks

To ask the Secretary of State for Defence what discussions he has had on the establishment of an arms diversification programme.

4. Mr. Bill Michie

To ask the Secretary of State for Defence what representations he has received regarding the establishment of a defence diversification agency.

Mr. Aitken

We exchange views with industry on a wide range of matters, and we participate in the Department of Trade and Industry's regional seminars to help companies to adapt to changing market conditions. However, we have no plans to establish a defence diversification agency.

Mr. Banks

It would have been rather more courteous of the Minister to advise his questioners of the linking of questions 3 and 4.

That was a stunningly complacent reply, even from this politically paralysed Government. Why should defence workers have to pay the price of the peace dividend with their jobs? Does not the Minister recognise that arms conversion schemes are vital to both eastern and western Europe? They are vital to eastern Europe if we are to stop it from sliding into political and economic chaos; they are vital to the west—especially this country—if we are not to put defence workers on the dole. When will the Minister stop fighting the battles of yesterday, and start looking for the opportunities presented by tomorrow?

Mr. Aitken

It is the hon. Gentleman who is fighting the battles of yesterday, and they are battles that have always been lost. If he recollects the days of quangos such as the National Enterprise Board, he will realise that Government attempts to second-guess the elements to which industry should give priority—in connection with any sort of conversion or new policy—usually end with the Government helping to pick losers rather than winners.

Mr. Bill Michie

May I echo the point made by my hon. Friend the Member for Newham, North-West (Mr. Banks)? If the Government cannot at least have the competence and courtesy to inform us when two questions are linked, there is not much hope of their running the country properly.

If the Government can act so swiftly to destroy 30,000 mining jobs, why can they not act equally swiftly to ensure that jobs are created in the engineering and defence industries to prevent further unemployment?

Mr. Aitken

I am sorry that the hon. Gentleman and his hon. Friend the Member for Newham, North-West (Mr. Banks) did not receive prior notification of the linking of the two questions—although I hardly think that it is an error of quite the magnitude that they have suggested.

The Government are spending £9 billion a year on the equipment programme. By any standards, that figure makes the Ministry of Defence British industry's biggest customer. Ours is a strong and credible industrial strategy, and—despite hard times—many companies are still managing to make good products and good profits

Mr. Batiste

Is my hon. Friend aware that the last thing that successful defence contractors want is to be told by the Government how to run their businesses? What they need is good information about the nature of the Government's long-term plans, and plenty of time in which to make any adjustments that may prove essential to the planning of their businesses. Will my hon. Friend commit himself and the Government to the maintaining of good communications with the defence contractors, to help them to make long-term plans?

Mr. Aitken

My hon. Friend has made a good point. We are renewing our efforts to establish a strong and open dialogue with industry. In recent weeks, conferences such as the chief of defence procurement's suppliers' conference and the Seafacts '92 conference have provided excellent information about advance intentions in regard to defence spending, and about the current trends. All the industrialists whom I have met have been very satisfied with the amount of information that is now being provided. It has enabled them to make new plans in connection with diversification and other subjects.

Mr. Burns

Is my hon. Friend aware that, in the past few months, there have been substantial job losses at the GEC—Marconi companies in Chelmsford, which rely heavily on defence contracts? May I have an assurance that, where it is feasible, the British Government will place their contracts with British companies to protect British jobs?

Mr. Aitken

I can already tell my hon. Friend that more than 90 per cent. of Britain's £9 billion equipment budget is spent with British companies. That is a good record. If we were to seek deliberately to exclude foreign companies from business, we should in turn be excluded from the foreign export markets in which we are so remarkably successful. A balance must be struck, but I share entirely the sentiment expressed by my hon. Friend.

Mr. Foulkes

All the Minister has done is to repeat what was said in June. Have the Government not learnt from the debacle over coal that market forces are not very good at determining an industrial strategy? If the peace dividend is to result in new jobs and new wealth for this country instead of more and more unemployment, the Government need to involve the unions and industry in devising an industrial strategy to replace defence jobs. The best way to do that is to set up a defence diversification agency.

Mr. Aitken

All that the hon. Gentleman is doing is to repeat the same old themes that his party produced at the time of the groundnut scheme and of the National Enterprise Board. If he thinks that politicians can do a good job by telling companies such as GEC how to diversify, he needs to think again.