HC Deb 13 July 1995 vol 263 cc1091-102 3.31 pm
The Secretary of State for Defence (Mr. Michael Portillo)

With permission, Madam Speaker, I should like to make an announcement of two important defence equipment programmes.

In this year's defence White Paper, the Government reaffirmed their commitment to maintaining world-class armed forces to defend our vital national interests in a disordered and turbulent world. To that end, we are continuing our programme of investment in forces and equipment that provide us with enhanced flexibility, combat power and mobility.

The Government have been considering the bids from industry to supply an attack helicopter for the Army to replace the Lynx anti-tank helicopter around the end of this decade. Six companies responded to our invitation to tender—Agusta, offering the A129; Boeing-Sikorsky, with the Comanche; Atlas, with the Rooivalk; Westland helicopters, with a version of the McDonnell Douglas Apache; British Aerospace, with the Eurocopter Tiger; and GEC-Marconi Avionics with the Bell Cobra Venom. All the bids were of high quality, offering capable helicopters. I am grateful for the assistance that each of those companies has offered to us in this competition.

The Ministry of Defence has conducted a competition of the utmost rigour and objectivity, assessing the military capability and cost-effectiveness of each bid in the varied war-fighting scenarios where we might need it. The assessment criteria included operational effectiveness, crew safety, through life costs, technical risk and industrial implications.

I can announce that, subject to the negotiation of satisfactory contract terms, we have decided to buy 67 Westland Apache helicopters with Rolls-Royce engines. They will operate, as required, in support of the Army's two armoured divisions, 24 Airmobile Brigade and the Royal Marines.

This order, with a value of around £2.5 billion, will be warmly welcomed by the armed forces. Apache has demonstrated its value in service with the United States army, and the version that we shall buy is equipped with the new Longbow radar, which will significantly enhance its effectiveness. It will provide the British Army with a world-class capability, a generation ahead of the Lynx helicopter, offering us the right combination of mobility, rapid deployment, reach and firepower. I regard it as vital that those who risk their lives for this country be provided with the helicopter that we believe can destroy the highest number of enemy targets with the least loss of life among our crews.

This decision will bring many jobs in British industry. Westland, Britain's only maker of helicopters, will assemble Apache and manufacture its transmission at Yeovil. Around 180 other UK companies will participate in the programme, including Rolls-Royce, which at its plant in Bristol will manufacture the RTM 322 engine. That modern engine will provide long-term growth potential and commonality with the engines in the Navy's Merlin and the RAF's EH101 helicopter fleets.

There will be significant work for Shorts of Belfast on the Apache's Hellfire anti-armour missile. We are ordering a helicopter built by Westland, powered by Rolls-Royce, and equipped with missiles supplied by Shorts.

In total, British industry will do at least 50 per cent. of the work on the Apaches that we buy. Moreover, Westland's US subcontractors have undertaken to provide additional defence work for British industry, including work on Apaches for supply to the US army, to the full value of the overseas content of the contract. That means that orders worth £2.5 billion will be placed with British companies, of which half will be for work on the British Army helicopter.

We believe that in total the order will sustain some 3,000 jobs a year in our defence industry. In addition, we have negotiated rights for the maintenance and repair of Apache in the UK and will be offering that service to all other Apache users in Europe, with further significant benefits to UK industry.

I have a second announcement. My predecessor, now the Foreign Secretary, announced last year that the "Front Line First" reforms would allow us to proceed with a programme of investment necessary to maintain operational effectiveness within a reduced defence budget. He said that the Government were examining the case for acquiring conventionally armed Tomahawk land attack missiles. Feasibility studies with the US Government and with industry have confirmed that we can operate Tomahawk from Royal Navy nuclear-powered submarines.

Tomahawk's very long range and great accuracy will enable the UK to threaten limited action against selected targets as a means of persuading an aggressor to desist from hostile activity. In today's strategic conditions, it is important to have that capability to carry out precision attacks, minimising the risk to our own forces, as well as to civilians.

We believe that that system will provide a significant addition to our military capability. Today we have formally applied to the US Government to acquire Tomahawk. Subject to the necessary agreements, our aim would be for the system to enter service with the Royal Navy by 1998. Although we are buying an American weapon, we expect over 30 per cent. of the value of the work to be done in Britain.

The Government are committed to ensuring that the British armed forces receive the best possible equipment available. With these announcements they can continue, in the next century, to have the flexibility, mobility and firepower to engage in a range of operations, from war fighting to peacekeeping, with the skill and professionalism that all of us in the House admire.

Dr. David Clark (South Shields)

May I welcome the Secretary of State to his new Department? He comes with quite a reputation—a factor which I feel has been reflected in today's announcement.

The Opposition welcome this afternoon's announcement that the Army has finally got the attack helicopter that it wanted, although I would suggest that it will be somewhat disappointed that it is getting a much smaller number than it originally anticipated.

We share the relief of the workers at Westland, Rolls-Royce and Shorts and their subcontractors that they have been successful, and we commiserate with the losers. However, a number of questions are raised by the Secretary of State's announcement, especially as it affects our industrial base.

We note that the Secretary of State has brought with him the rigours of Treasury thinking and that the Army is getting fewer helicopters than it and the Ministry of Defence considered the minimum for our effective defence. He will recall that the tender specification was for 91 helicopters, and in the Army debate as recently as 23 February, the then Minister of State for Defence Procurement spoke of "approximately 100". Sixty-seven is not approximately 100. It is nowhere near 100. What has changed? If 100 was necessary for the effective defence of Britain three years ago, why can we settle for 67 now? I press the Secretary of State to say what has changed, or is this further cut another example of his Treasury thinking?

May I also ask the Secretary of State whether any of those helicopters are being adapted to operate from ships? As the Americans would say, are they being "marinised"? Given the possible future scenarios for theatre operations by the Army, that would be a sensible option. Has the Secretary of State taken that into account?

Will the Secretary of State also say a word about the long-range TRIGAT missile system, which would have been part of the Euro Tiger deal? Will he confirm that the taxpayer has already invested £210 million in that venture and that, contractually, British Aerospace will have to pull out of the collaborative scheme now that Tiger is not being ordered by the British forces? What implications do his decisions have for British Aerospace factories at Lostock and Stevenage? Does he anticipate any redundancies?

As the Secretary of State said, all the helicopters met the specifications and I therefore presume that wider industrial and political implications were considered. The Secretary of State's well-known Euro-scepticism clearly meant that the European collaborative Tiger was not in the running. But what assessment has been made of the effect of that order on future European collaboration? Has he examined the implications that buying American in this instance will have for other collaborative ventures? What assessment has he made of the employment prospects for the unsuccessful bidders? Are we likely to see further job losses among our most skilled workers? Will we see further factory closures and a restructuring of the ownership of the British defence industry?

The Secretary of State mentioned offset. What specific guarantees has he obtained? As he knows from his previous experience, there is considerable evidence that, more often than not, those offsets are not delivered, especially in the high-tech field.

We accept that Tomahawk missiles proved to be an incredibly accurate and effective weapon in the Gulf war and that they will enhance our forces' capabilities, but we are disappointed to note that only 30 per cent. of British work is involved and there is no mention of offset. Will the Secretary of State say a little more about that aspect and assure the House that it is not envisaged that those Tomahawk missiles will carry nuclear warheads?

We hope that today's decision will prove to be wise. We hope that, by turning his back on European collaborative ventures, the Secretary of State has not jeopardised further other European collaboration. If we are to retain the skills of our workers and the presence of a defence industry in Britain, not only must we keep pressing for orders in the United States, but we need to work much more with our European partners.

Mr. Portillo

I thank the hon. Member for South Shields (Dr. Clark) for his welcome to me and his welcome, at least in his first sentence or two, of the order and the provision of these important new capabilities for our armed services.

I thought it a bit rich that I was being criticised for announcing a cut. I have announced an order of £2.5 billion for the attack helicopter and made a further important announcement in respect of Tomahawk. I thought it especially ironic and paradoxical that the accusation of a cut in defence spending should come from a party that, at its last conference, was pledged to reduce our defence spending by £6 billion. It makes one wonder how many helicopters could be bought in such a situation.

The hon. Gentleman wants to know why there are 67 helicopters. We are buying a helicopter with an enhanced radar—the Longbow radar. We have subjected it to the most intense scrutiny and we are convinced that it can do the job that we need it to do in those numbers because it has a very good survivability rate. That is one of the main features of the aircraft and it also means that it will save lives among British forces.

It is true that about £200 million has been invested in the long-range third-generation anti-tank guided weapons system, but I do not believe that decisions for the future can be taken on the basis of sunk costs of the past. We must make the decision about the best equipment for our armed forces for the future. We are not considering using it on ships. It will be able to operate with the Marines, but it is basically a land attack helicopter and tanks will be among its most important targets.

I cannot anticipate the consequences at British Aerospace and GEC. They competed very well. There will be many other opportunities for defence orders and I wish them well for the future. What I can say with precision is that today's announcement creates 3,000 jobs in British industry.

On European collaboration, the hon. Gentleman reached the zenith of his absurdity—as if my ideas about Europe, whatever they might be, would have influenced a decision of that magnitude, and during the past week.

Recently, the Dutch decided to buy the Apache. I assume that the hon. Gentleman will not rise in wrath in his place, point the accusing finger at the Government of the Netherlands and accuse them of Euro-scepticism. We have more collaboration with France than with any other single country on defence matters. We continue to have about 30 joint projects with Europe, and I have written to my colleagues in Europe—in France and Germany—assuring them of on-going collaboration in other projects.

We have a guarantee that 50 per cent. of the helicopter will be British work, and we have a promise of offset agreements taking us up to the full 100 per cent.

On the Tomahawk, I believe that the hon. Gentleman will recognise that there is no British or European equivalent that can be bought. In the circumstances, I think that to get 30 per cent. of the work in Britain is a considerable achievement. There will be many opportunities for future collaboration with the United States, and I am pleased to confirm that that is a conventional missile; we have no intention whatever of nuclear-arming that missile.

I am disappointed that the hon. Gentleman did not rise to give a more cheery response to an order that means that our armed forces will be equipped with the very best. Our primary consideration in the House should be the way in which we can enable our troops, our men, our forces, to have the equipment in which they have the greatest confidence when we in the House are potentially asking them to put their lives at risk.

Mr. Michael Colvin (Romsey and Waterside)

May I congratulate my right hon. Friend, not only on his appointment, but on making a statement that will certainly earn him cheers in Middle Wallop, where the Army Air Corps is based? It has lobbied hard for that aircraft.

Can my right hon. Friend confirm that the £200 million spent on long-range TRIGAT will not be wasted, because that weapon can be used in armoured vehicles to knock out tanks? Will he tell us what will happen to the Lynx helicopters at present used in an anti-tank role? Will they be converted to light support helicopters to replace the Wessex? Lastly, can he confirm that it will be the Army Air Corps that will fly that aircraft?

Mr. Portillo

On the last point, yes, this helicopter is for the Army to operate. It is, effectively, a flying tank and it seems best that it should be operated by the Army. I reiterate that we also see it being used by the Royal Marines. The Lynx helicopters will be converted to general purpose and reconnaissance use. My hon. Friend is right to say that the fact that the long-range TRIGAT is not being purchased by the Government for this order does not mean that the £200 million has been wasted. In turn, I congratulate my hon. Friend because he has just become Chairman of the Select Committee on Defence.

Mr. Menzies Campbell (Fife, North-East)

I welcome the Secretary of State to his new post and I welcome, without qualification, his statement, especially the decision to order the Longbow version of the Apache helicopter. Does the right hon. Gentleman recognise two points of similarity between the two programmes? First, both the Apache and the Tomahawk cruise missiles proved their effectiveness during the Gulf war. Secondly, both bring to the United Kingdom additional flexibility, which is undoubtedly necessary during a time of static defence budgets.

Mr. Portillo

I am pleased to receive the hon. and learned Gentleman's welcome—I am not sure whether it is influenced by the position in Yeovil. The announcement will, indeed, be good news all round. The hon. and learned Gentleman is absolutely right to say that these weapons have recently proved their effectiveness. I made the point in my statement that we are in an era of limited defence budgets. Through the defence costs study, we have been able to find savings in the defence budget, and my predecessor made it clear that that gave us the opportunity to provide flexible, up-to-date equipment for our forces to make them battle-ready and to give them the firepower that they needed.

Dame Peggy Fenner (Medway)

My right hon. Friend will understand that, although his announcement may be good news for Yeovil, it is not good news for Medway because we hoped very much that the GEC-Marconi Avionics Cobra Venom would win the battle. It is extremely unusual for the Treasury to spurn the lowest tender, so one must be impressed by the service chiefs who insisted that the Apache was their favourite option.

My right hon. Friend added that the Apache gives 3,000 extra jobs. As I understand it—different companies around the United Kingdom will be affected—the GEC-Marconi Avionics Cobra Venom would have given rather more jobs than that. What considerations meant that the lowest tender was not accepted? I am, of course, impressed by the support for the Apache in the west country, but I believe that it is not quite such a marvellous decision for my workers, who suffered the biggest loss from the peace dividend when they lost 7,000 jobs at Her Majesty's dockyard and naval base.

Mr. Portillo

Nothing could give me greater sorrow than to disappoint my hon. Friend as I have to today. It is, however, inevitable that in a competition in which there are three finalists, approximately two thirds of Members of Parliament may be disappointed by the decision, at least vis-a-vis their own constituencies. I hope none the less that my hon. Friend and others will be able to see the merits of the decision and the high quality of the equipment that we are buying.

The circumstances, conditions and criteria were as laid out in my statement. We were dealing with considerations such as the effectiveness of the aircraft, the cost-effectiveness of the decision, the industrial implications and the industrial risks. That combination of circumstances led to our choice. It would not be helpful at this stage to go into any greater detail about how one bid compared with another, not least because they were all good bids and I hope to see all the contenders doing well in world markets.

Mr. Frank Cook (Stockton, North)

May I compliment the Secretary of State on his good fortune in being able to announce to the House, so early in his new-found position, the acquisition of a piece of kit that has an attrition rate, proven in action, that is so low that it is mathematically incalculable? Will all 67 models that we are buying have the Longbow radar rather than the less effective system bought by the Netherlands? When can the military expect the first delivery? How long will the programme take and when will the contract be completed?

Mr. Portillo

I am most grateful to the hon. Gentleman for his warm words of welcome. On his last point, I am not prepared to say more than that we see an entry into service date of the end of the decade. As to his first point, all the helicopters that we are ordering will be equipped with the Longbow radar.

Sir Jim Spicer (Dorset, West)

My right hon. Friend has made a very auspicious start in his new office. His announcement today will be warmly welcomed by the many friends of Westland in the House. But it goes beyond that. The friends of Westland are thinking not just about that company, but about the other companies and subcontractors that will also benefit from the order.

Could my right hon. Friend go a little beyond his announcement and say whether it is a good platform from which Westland could take off and move into export orders on a scale that we have not seen previously, with an attack helicopter that will almost certainly dominate all the export orders from this country and from the United States in the next 15 or 20 years?

Mr. Portillo

I am most grateful to my hon. Friend. He is very generous in saying that I have made an auspicious start, but it must be apparent to him and to the House that I have inherited a huge amount of work done by my predecessor.

I am very pleased for Westland. My right hon. Friend the Minister with responsibility for industry and energy visited Westland this morning and presumably he was extremely upset that he was unable to give any hint about the good news. I hope that export opportunities will be created. There is obviously a huge advantage in being linked with a very successful United States programme that already has a very large order book.

Mr. Paddy Ashdown (Yeovil)

I am very grateful to the right hon. Gentleman. As the hon. Member for Dorset, West (Sir J. Spicer) said, it is his first substantive decision in his new post. If the rest of the decisions that he takes in that post show an equivalent wisdom, I am sure that the nation's defences will have nothing to worry about.

The right hon. Gentleman will understand that my constituents warmly welcome his announcement and, as the hon. Member for Dorset, West said, so will many others across Britain, because the built-in content of the helicopters will provide a boost to British industry across the spectrum. Perhaps one of the most significant features of the decision is the fact that, during a time when everyone recognises that the world helicopter market will change substantially, it places Westland and British industry in a very good position to be able to take advantage of that period of change from a position of strength. That is a considerable testimony to the strength and the skill of Westland and its work force. As I am sure the right hon. Gentleman will agree, it also puts Westland in a very good position in the long term.

Mr. Portillo

I thank the right hon. Gentleman very warmly. I quiver under the gusts of his praise. I am not sure that I aspire to be always so popular with him, but I am very pleased to be so today.

Westland is well placed. If the right hon. Gentleman will be so generous as to share the day with Rolls-Royce, I think that the larger Rolls-Royce engines offer an opportunity for expansion and development of the model over time. That engine has greater flexibility to take us into the future.

Mr. James Couchman (Gillingham)

My right hon. Friend will understand that, like my hon. Friend the Member for Medway (Dame P. Fenner), I am disappointed by the result of the competition. GEC has produced a leading-edge technology avionics cockpit. Has my right hon. Friend investigated the possibility of persuading Westland that GEC might make a contribution to the order? Can he confirm whether the fact that we are ordering 67 rather than 91 helicopters is a measure of how much more expensive the Apache was compared with the other two contenders?

Mr. Portillo

There is always great disappointment among those who are not successful in a bid, but I do not think that it benefits anyone to start knocking one model or another. We established a series of criteria and we judged the helicopters on that basis. One criterion was cost-effectiveness. We are able to do the job with the 67 Apaches, as I announced to the House today. I do not want to engage in any sort of banter about the prices of the different helicopters or their performance capabilities, other than to say that it was a fair and objective competition and that there has been a winner.

We have been able to negotiate a 50 per cent. UK content in this helicopter deal. I do not at the moment envisage other opportunities, but of course I would be very happy indeed if different British companies were able to collaborate and if there were any way of increasing, in this or in future orders, the quantity of UK content.

Rev. Martin Smyth (Belfast, South)

I welcome the Secretary of State's new appointment. Some of us have been concerned about a fair bit of what we called cowboy advertising, so we are delighted that the Apache has been selected. The decision encourages industry all over. Specifically, on behalf of the people not only in Belfast but in Northern Ireland, I welcome the fact that Shorts will have a part to play. Does the Minister agree that there is also international co-operation, since Bombardier in Canada, Thomsons in France and Shorts in Belfast are all joining the team?

Mr. Portillo

I am most grateful to the hon. Gentleman. His point is perfectly valid. Nowadays there is international collaboration in almost any defence contract one cares to mention. Certainly, it is very good news that Shorts will play such an important part in the production of the Hellfire missiles.

Sir Peter Emery (Honiton)

Does my right hon. Friend accept the unmitigated praise of people in the west country, not only because of our constituents who will work on the contract, but because it meets the Army's demand? Will he answer two questions? Is it a fixed-price contract, or will there be any escalation of cost in later deliveries above that announced? Further to other questions, will he ensure co-operation between his Department, Westland and the Department of Trade and Industry, to do everything to maximise the export potential of this aircraft? It seems that, as long as such co-operation can be brought about, there is a very good chance of obtaining overseas orders that we have never achieved before.

Mr. Portillo

I thank my right hon. Friend. Certainly, on his last point, I give him an absolute reassurance that we shall collaborate to maximise export potential, as on all defence issues and products. We have not yet signed the contracts, of course, but it is my intention that they should be most rigorous. The propositions put forward during the bidding process should be confirmed and cemented in the contracts to be signed.

Mr. John Wilkinson (Ruislip-Northwood)

May I also most warmly congratulate my right hon. Friend? He has fulfilled two crucial criteria: the operational and the industrial. On the operational side, has he not bought the aeroplane that best met the Army's requirements on payload, range, survivability and all-weather operation? In the industrial context, will he not greatly bolster the long-term future of GKN Westland, in as much as the last aeroplane, the EH101, was an Italian-British collaboration, but the Apache balances that co-operation with an American dimension—the McDonnell Douglas—and furthermore a French dimension, since a significant part of the power plant, the RTM 322, is built at Pau in the south of France?

Mr. Portillo

My hon. Friend has made some helpful additional points. He is absolutely right to say that the Rolls-Royce engine has a large French component. Perhaps I should have been quicker on my feet and mentioned that when I was replying to the hon. Member for South Shields (Dr. Clark). It is worth emphasising—I mentioned it in the statement—that Westland is this country's only helicopter maker and the deal is a very important buttress to its position. Certainly, my hon. Friend can be assured that the operational needs of the helicopter were very high in our minds indeed. As I have said before to the House, we are asking people to risk their lives and it is important that the equipment should be able to do the job and that they should have absolute confidence in it.

Sir John Cope (Northavon)

My right hon. Friend's decision was bound to please some and disappoint others. In my constituency, there will be great disappointment at British Aerospace on the dynamic side because the long-range TRIGAT was not chosen, but on the other hand there will be great pleasure at Rolls-Royce at the choice of engines. The Anglo-French engine is a very good example of European co-operation, which my right hon. Friend has backed. Will he do his best to try to ensure that the Dutch also choose that engine for their Apache helicopters?

Mr. Portillo

As to my right hon. Friend's last point, I am unsighted as to the stage that the Dutch have reached in making their decision, but it is certainly a good engine. We are buying it partly because we believe that it is suitable for the helicopter and partly because of the commonality that it offers. As to my right hon. Friend's dilemma, in that some of his constituents find themselves happy this evening and some disappointed, I wish him all good luck on his interviews with the local media tonight, but I am sure that he is up to the task.

Sir Kenneth Carlisle (Lincoln)

Does my right hon. Friend accept that although we need a reliable attack helicopter, he has made a wrong and strange decision in respect of the engine? The T700 is fitted to existing Apaches and has proved reliable and cheaper. The Americans have it on their attack helicopter, and the Dutch have chosen it for their helicopter. With a fighting machine, one wants something that is proven, can protect lives and has a reliable history. That is certainly not true of the Rolls-Royce engine. The T700, which has as much UK content as the Rolls-Royce engine, is also wanted by the Army. Will my right hon. Friend confirm that the Army requested the T700 engine?

Mr. Portillo

I am sorry that my hon. Friend thinks that my decision is wrong and strange. I do not think that it is, although it may be disappointing from my hon. Friend's point of view. As many other hon. Members said, for them my decision is most welcome. My hon. Friend exaggerates when he says that the Rolls-Royce engine is not proven, because clearly it is. It is flying today and available on the EH 101 and the Merlin, but it has not yet been used on the Apache. It obviously offers the possibility on the Apache of future growth.

I hope that my hon. Friend, on reflection, will not feel that my decision is as he said. I make it perfectly clear to him that the decision taken today was more broadly based than consideration of the Army. The unit that we established in the Ministry of Defence to conduct the competition took into account the full range of criteria mentioned in my statement, which went beyond some of the criteria of direct concern to the Army—such as the industrial implications. The decision was taken on the basis of the full range of criteria, including the choice of engine.

Several hon. Members

rose—

Madam Speaker

Order. I am anxious to call a number of Back Benchers who are still trying to catch my eye, but I cannot do so if there are long statements by Back Benchers and from the Dispatch Box. I hope that questions and answers will be brief.

Mr. Mark Robinson (Somerton and Frome)

I join hon. Members who welcome my right hon. Friend's decision, which is good news for Somerset and the west country, and a good confidence booster for Westland, which now has important work to do in export markets as well as in the domestic market. With reference to the comments of the hon. Member for South Shields (Dr. Clark), one always knows good news—

Madam Speaker

Order. The hon. Gentleman is the first to offend. I asked for questions, not statements. If the hon. Gentleman has a question, let me hear it. I am not prepared to listen to further statements by any other Back Benchers. Does the hon. Gentleman have a question?

Mr. Robinson

Yes, Madam Speaker. My question is, is not my right hon. Friend's statement good news in our export markets?

Mr. Portillo

It is good news. I am pleased that my hon. Friend is pleased, and I value his support.

Sir Jerry Wiggin (Weston-super-Mare)

Will my right hon. Friend acknowledge that the absence of a purpose-built attack helicopter has been a serious deficiency in the British armed forces for some time and that one important aspect of his announcement is the rectifying of that problem? As I represent a constituency in which Westland is the largest employer, I need hardly say that I welcome my right hon. Friend's announcement, but will he condemn some of the irrelevant and misleading advertising that accompanied the contract and deplore it for the future?

Mr. Dennis Skinner (Bolsover)

Is it in order for him to ask his own question?

Madam Speaker

Order. It is not in order to answer one's own questions.

Mr. Portillo

This is certainly an important capability, which our armed forces must have. Any deficiency that there has been is to be dealt with by my announcement today. I do not want to get into battles with any contractor over this matter. We have had a fair competition and a fair result.

Mr. Keith Mans (Wyre)

My right hon. Friend will not be surprised to learn that his decision will come as a shock and a disappointment to those of us from the north-west of England, as he has picked the wrong helicopter with the wrong engine. Can he confirm that all the Apaches will be equipped with Longbow? Will he tell the House the extra costs of fitting the Rolls-Royce engine to the Apache, because it has not flown with it before? Will British companies be involved in the production of the long-range TRIGAT?

Mr. Portillo

Our commitment on the TRIGAT was to the end of the development phase: that remains the position. We cease our involvement at the end of that phase. I am sorry that my hon. Friend thinks this the wrong decision. I can confirm again that the helicopters will be equipped with Longbow. There is a small additional cost, which I am not at liberty to reveal, for the Rolls-Royce engine. Nevertheless, the decision passed the test of cost-effectiveness.

Sir Alan Haselhurst (Saffron Walden)

On the basis that we must look to the future rather than the past, does my right hon. Friend agree that there must be some further consolidation of British resource in helicopter manufacture if we are to maintain the research and development capability that will enable us meaningfully to participate in future projects?

Mr. Portillo

Those matters go beyond my remit, but perhaps into the remit of the President of the Board of Trade. Certainly, a decision to award a £2.5 billion contract in itself has a fairly important formative effect on the industry.

Mr. Richard Tracey (Surbiton)

My right hon. Friend will understand that, in a collaborative venture such as this, the likes of Westland, Rolls-Royce and Shorts will inevitably hit the spotlight; but he should know that the many other companies that he mentioned will also greatly welcome the success of the contract. I am thinking particularly of Racal Defence in Chessington, in my constituency, and in New Maiden. Will my right hon. Friend ensure by means of publicity that all the towns and cities affected by the contract in the form of new jobs are told the facts about it?

Mr. Portillo

My hon. Friend makes an important point. We estimate that 180 companies will benefit from this order, spread throughout the length and breadth of the United Kingdom. Some of them may even be in the constituencies of hon. Members who today have sounded disappointed.

Mr. Henry Bellingham (Norfolk, North-West)

Is my right hon. Friend aware that this decision will go down particularly well in East Anglia, where the Airmobile Brigade is based and where it is shortly to have a new training facility at the former RAF Sculthorpe? As the brigade prepares to go to Bosnia, does he agree that today's decision will do a great deal for its morale?

Mr. Portillo

I thank my hon. Friend. I believe that the decision will indeed be good for morale. It is important that our troops should know that they will get the equipment that they need and that the defence cost studies translate into better equipment for the future.

Mr. Edward Garnier (Harborough)

May I, as a recent visitor to 24 Airmobile Brigade in Colchester, confirm what my hon. Friend the Member for Norfolk, North-West (Mr. Bellingham) has just said—that the order just announced will be widely welcomed in military circles? May I also urge my right hon. Friend and the new Minister of State for Defence Procurement—I congratulate them both on their new appointments— whenever there is an opportunity to place large orders of this sort, to keep the British element in the components package well to the fore? If, for example, he is thinking of buying new heavy trailers for tanks, he should think hard about King Trailers in Market Harborough.

Mr. Portillo

I congratulate my hon. and learned Friend on getting in an early bid for a future announcement. I also echo what he said about 24 Airmobile Brigade. As this is my first opportunity to say so as Defence Secretary, I send that brigade my best wishes on its deployment.

Lady Olga Maitland (Sutton and Cheam)

I welcome the fact that 3,000 new jobs are likely to result from the decision to buy the Apache helicopter, but will my right hon. Friend tell us how many jobs could have been created by the alternative bids?

Mr. Portillo

I am not prepared to get into that discussion this afternoon, if my hon. Friend will forgive me. The decision has been taken on a whole range of criteria, including the effectiveness of the aircraft, the cost-effectiveness of the aircraft, its performance in the battlefield and its implications for industry. It has been on the balance of those considerations that today's decision has been taken. I put it to my hon. Friend that if I started to unpick one element of that, I would have to start talking about the comparison across the range of how one helicopter performed against another. I am just not at liberty to do that.

Mr. Alan Howarth (Stratford-on-Avon)

As my right hon. Friend has shown today, his first concern must be to ensure that our armed forces are properly equipped and supported, to enable them to fulfil their necessary task of defending Britain and our interests. Will he as Secretary of State for Defence think anew and deeply about the economic, strategic and ethical distortions that arise from Britain's excessive dependence on arms manufacture and exports?

Mr. Portillo

I am bound to say to my hon. Friend that my view of the world is different from his. I do not believe it to be disproportionate. I believe that we are involved in equipping our own forces, and in the process we very often produce products of great use to other countries, and other countries have the right to defend themselves, as well as the United Kingdom.