HC Deb 09 July 1997 vol 297 cc849-71

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Clelland.]

9.35 am
Mr. Lindsay Hoyle (Chorley)

I am grateful for the opportunity to raise the crucial issue of the European fighter aircraft, and I am also grateful to the Under-Secretary of State for Defence, my hon. Friend the Member for Warley (Mr. Spellar), for being here to listen and reply to the debate. It is nice to remember that this is the 60th anniversary of Whittle's jet engine, which was developed in the north-west, so it is an opportune moment to discuss the future of the aircraft industry in the area. Clearly, this issue remains important to many hon. Members, and it is good to see several colleagues here to join the debate. This is also a timely moment to raise the subject once again.

One set of our partners in the project—the Germans—may well take a decision on their participation in the programme at a Cabinet meeting this week, on 11 July. In the past couple of weeks, press reports have suggested that the Treasury is unhappy with the costs of the Eurofighter and is looking to reduce our commitment to it, or to cancel it altogether. Since the Government have given assurances on numerous occasions that the project will proceed, I regard those reports as nothing more than inaccurate. However, it is helpful for the Government once more to have the opportunity to reaffirm their support for the EFA project, and I hope that Ministers from the Foreign and Commonwealth Office and the Treasury will bear in mind the points that are raised in this morning's debate.

The aerospace industry is without question one of the major sources of employment in the north-west, and the EFA is a major aerospace project in the United Kingdom at present.

Aerospace is a major employer in Lancashire, where it forms the backbone of the county's economy. Lancashire represents the largest concentration of aerospace production in the UK. However, it is not only Lancashire that is the beneficiary of this project, as there are more than 100,000 direct employees in the aerospace sector throughout Britain. In total, 500 establishments employ people directly in the aerospace sector. The EFA project includes sites in Surrey, Hampshire, Bristol and Humberside—it is truly a national project.

In Lancashire last year, 13,000 people, or 10 per cent. of the county's total manufacturing work force, were employed directly by the industry in more than 40 different establishments. Lancashire also accounts for 13 per cent. of the national total employment in the industry. In my constituency alone in 1995, 400 people were working in the aerospace industry. Having said that, we must remember that many principal contractors buy in up to 70 per cent. of their requirements. The number of indirect jobs created by the aerospace sector is therefore higher than in many other industries.

Among the major employers are British Aerospace—particularly in Salmesbury and at Warton—Lucas Aerospace, and Rolls-Royce. In addition to the main contractors involved in the Eurofighter programme—British Aerospace, Rolls-Royce and GEC Marconi—there are 32 major equipment suppliers and 60 sub-suppliers involved in contracts for the manufacture of the airframe equipment and engine accessories.

Mr. Eric Forth (Bromley and Chislehurst)

Is the hon. Gentleman's entire argument to be based on a job creation scheme, which is what it sounds like at the moment, or will he advance any arguments about the capability of the aircraft or defence capability generally?

Mr. Hoyle

The right hon. Gentleman seems to be a little impatient. Obviously a bad night's sleep has not done him much good—he might get better rest tonight, and become more responsible tomorrow morning.

So far, 11,000 people have been employed in the development phase, and estimates from the industry suggest that the peak of production could provide 16,000 jobs directly and another 16,000 among suppliers of goods and services. However, there are countless other firms and many more thousands of people who are linked directly to the aerospace industry, but not employed in it. For example, there are firms in precision and high-technology engineering and electronics, metals treatment, rubber, plastics, software development and design and testing services. More than 120 companies in Lancashire alone are directly or indirectly linked to the industry.

One example in my constituency is Computer Science Corporation of America. It has sited a new office on the Royal Ordnance factory site in Chorley, which Conservatives should remember as the subject of the disastrous decision that led to the factory's closure. CSC has created 400 jobs there, and is looking to double that number. Those are not aerospace jobs, but are linked to the aerospace industry, and more directly to the EFA. If the EFA were to be cancelled, CSC would have to consider its expansion plans.

Other examples of firms in my constituency of Chorley alone that are closely involved in the EFA programme include: Royal Ordnance, which makes weaponry and ammunition for the project; Lyndhurst Precision Engineering Ltd.; NIS Ltd., which undertakes engineering and design of equipment and is one of the leading firms in Europe in its field; and Xelflex Precision Moulders, which makes engineering and moulding equipment. All those firms play a key role in the success of the EFA project. The aerospace industry in Lancashire has been making purchases of raw materials, components and manufacturing supplies totalling more than £1 billion per annum, and it has spent more than £70 million on industrial services.

The EFA has not had the easiest history, because of changes in the international scene, notably the end of the cold war, and it has faced opposition because of budgetary pressures within the partner nations. Most notably, the German Government, faced with the huge costs of unification and the need to cut expenditure to meet Maastricht criteria, dragged their feet on the programme for many years. In fact, in 1995 they denied their commitment, and we are back at the same point today. In mid-1992, Germany announced its reluctance to go ahead with the production as then envisaged and even hinted that it wanted to halt the programme altogether, arguing instead for a cheaper, lighter version.

The Spanish and Italian Governments also dragged their feet, and it was decided to scale down the technical specifications in order to make the version cheaper. After a full review of the specifications and production method, a deal was reached in late 1995: Germany proposed to increase its purchase of Eurofighters from 140 to 180, while the UK would reduce its purchases by 20 to around 230. There has been continuing speculation about German involvement, despite that agreement and despite the fact that Germany is benefiting from 30 per cent. of the production work and will benefit also from future sales or the aircraft. Even now, there seem to be great doubts among certain sections of the German Government and Administration about the importance of the EFA.

I was grateful for the support of my right hon. Friend the Prime Minister, who, in one of his first trips abroad after taking office, went to Bonn and made a point of lobbying Chancellor Kohl for stronger support for the programme. On 18 June, when he came to the House to make a statement about the Amsterdam summit, I asked my right hon. Friend about German support for EFA and expressed gratitude for his continuing efforts. He said:

I raised that issue with Chancellor Kohl in Bonn a short time ago and I was pleased that he confirmed that he still desires to proceed with the project. Apparently, budget discussions are going on in Germany at present, but I think it is very important that the project proceeds, for the defence of the country and for jobs and skills.''—[Official Report, 18 June 1997; Vol. 296, c. 327.] We are now told that the German Government will make a final decision on the programme at their Cabinet meeting this week on 11 July. I urge Chancellor Kohl and his Cabinet to re-affirm, once and for all, their commitment to this vital project. I see no reason other than internal politicking for this procrastination, and I hope that Ministers in the Foreign Office will make use of the last couple of days before that German Cabinet meeting to present the case for the EFA project. Once the decision to participate fully is taken—as I am sure it will be taken—I urge the Germans to consider it final. There should be no more lingering uncertainty and no more rumours about doubts or cancellations.

Another line of criticism of the EFA has been unattributable complaints that its technical performance is not up to scratch. The German magazine Der Speigel claimed recently that the steering and radar mechanisms were so bad that a complete overhaul of the design was necessary. It said: The flight control system is so slow that the plane is in danger of falling out of the sky at high speeds". Yet the aircraft has already flown 370 flight hours in prototype without any problems. It was warmly greeted at Farnborough last year, and it gave an impressive performance at Paris last month.

Most important, the plane's pilots testified to its ability. One pilot said:

"The general impressions resulting from this sortie were of a fantastically powerful aircraft that was easy to operate and fly accurately". Another stated: The cockpit promotes the feeling of being right on the cutting edge". That does not sound like a plane with problems and, although nobody would expect it to be perfect at this stage in development, it is clearly not the liability that some parts of the press make it out to be.

Part of the problem may be the divisions within the German Government on this matter and I fear that it is being used as a political football. Sadly, with rumours and recent press reports of Treasury anxiety, I hope that similar tactics of doubt expressed by unattributed experts will not be used by the EFA's opponents in this country.

Having said that, I cannot understand the opposition to the EFA. It has the potential to be a world-beating product, with technology and design to last us for many years, yet its opponents continue to criticise. Sometimes I wonder whether the British tendency to knock our successes is the root cause of opposition in this country—the desire to pour cold water over anything at which we do well. Perhaps some individuals or groups are waiting for the Germans to delay further or to pull out completely, so that we have a face-saving excuse to cancel the British participation in the programme.

However, if people really do want us to cancel the EFA project, they must propose an alternative and, although there are no real arguments in favour of cancellation, we must listen to what others have to say. Of course, we could simply not replace the existing equipment and allow the country's defences to age and become obsolete. Then again, we could buy an off-the-shelf replacement from abroad. The only aircraft that can match the EFA in terms of technical ability is the American F22. Yet—at this point I am addressing the Treasury as well as the House—it is not a cheaper alternative. The Americans are not simply going to give us a fleet of their most advanced fighters; if we want the aircraft, we will have to pay for them.

The price of such a purchase would be high, albeit cheaper than developing our own alternative; but what would be the additional costs—the costs to the British aerospace sector and to British manufacturing industry? The money is going to be spent, so why not spend it in Britain and in Europe? More than 100,000 people are employed in the aerospace sector in this country; and, at the peak of manufacturing in the EFA programme, up to 250,000 will be employed throughout all the partner nations of Europe.

If we were to buy from abroad, most of those jobs would be lost. They are largely high-skilled, hi-tech manufacturing jobs, with high value added to the economy. They epitomise the way in which the Government have stated they want our economy to develop. As an illustration, in Lancashire the average wage in manufacturing is £14,400, yet in the aerospace sector it is £18,600.

To lose such an important part of our economy would be a catastrophic blow, which becomes even worse when we take account of the effect on the whole country and not just the north west. Just as important, we would be signalling our intention to leave the aerospace sector. That is the danger.

The development of technology which can be transferred to other sectors, not simply to commercial aviation, would be lost, as would design and computer systems development—such as that carried out by CSC in my constituency. We would damage our position within the Airbus consortium. The strength and ability of Airbus to continu e technological development and to maintain the challenge to the major American manufacturers would also be damaged. Boeing and McDonnell Douglas were last week given outline permission to complete their merger, which will have a damaging effect on our aircraft industry.

Our ability to maintain the future large aircraft project, which is both a military and a civil design, would be put in jeopardy if the parallel project of the EFA development were to be taken away. That would affect the viability of BAe regional jet production, based mainly in Hatfield, where the BAe 146 aircraft has been a major success, and one of the country's most valuable exports. Indeed, the sale of BAe Hawk aircraft throughout the world generated £12 billion of business for the UK, with about £5 billion being returned to the Treasury—a fivefold return on investment. The EFA would give similar returns.

Some of the largest export contracts ever have involved British Aerospace projects, and have made significant contributions to Britain's balance of payments. The defence division of British Aerospace had a turnover of £5.3 billion last year. Already there has been sales interest in the EFA in countries as varied as Norway and the United Arab Emirates.

If press reports are to be believed that some forces in the Treasury are looking critically at the EFA programme, that Department has a simple choice. It can pull the plug on the Eurofighter programme, to save £16 billion. It can leave the Ministry of Defence to defend our country with obsolete equipment. Alternatively, having saved £16 billion, it can spend a large part of that on a suitable replacement, and spend the rest of the money paying for the huge unemployment in the aerospace sector and all those industries that rely on it.

Twenty years from now, we will still be paying for that unemployment because we no longer have an aerospace industry, our design and computing sectors are second-rate, and our balance of payments is damaged by the need to import those services from abroad, along with aircraft, while our aerospace exports have ceased to exist. All of a sudden, £16 billion does not seem a huge liability, but starts to appear more like a major investment in this country's future.

We have sold off our motor industry and run down our shipbuilding industry. During the past 18 years, our heavy engineering and manufacturing industry has fallen to a third of its previous capacity; yet in aerospace we remain a world leader. We cannot allow the Pacific rim and tiger economies to overtake us in that sector as well, and we cannot present our American competitors with a free hand to dominate the world market for aerospace. The technology that is developed with the aircraft can be transferred to the civil aviation industry and the future large aircraft programme.

For the sake of the Royal Air Force pilots who will have to defend this country, for the sake of the hundreds of thousands of jobs that rely on the Eurofighter project, and for the sake of the aerospace industry in Britain, which has been a success for us in terms of technology and exports, it is vital that we remove all doubt, that rumours from HM Treasury cease, and that we give our full support to the Eurofighter project.

9.52 am
Mr. Alan Clark (Kensington and Chelsea)

A rumour is going around that the defence review will be shelved or diluted out of sight. I very much hope that the Minister can deny that. I welcome the projected defence review for several reasons—partly because it was long needed, and partly because the Secretary of State said that it would be policy-driven, not Treasury-driven. It is high time that proper consideration of policy in its widest sense governed our defence spending and deployment.

Defence policy is made up of three components: an evaluation of our national security, a projection of our foreign policy direction over the next 20 years, and an anticipation of the industrial and economic consequences of weapons procurement. All three headings have their lobbies.

The services are always keen to lobby for items of equipment, and in this instance the Royal Air Force undoubtedly believes its entire career structure to depend on the Eurofighter aircraft. Indeed, some argue that its survival as a service depends on it, because there is an argument—which has much to be said for it—that the Royal Air Force should be dispensed with, and that an Army air corps should support the Army, the Fleet Air Arm should support the Navy, and there should be a transport command to arrange back-up services. I am not arguing that, but the RAF is well aware of that argument, so its advocacy of EFA has an edge to it.

The Foreign Office wants EFA mainly because of its collaborative aspects, because it regards it as a major purchasing contract that will provide cement for our relations in Europe. Then there are the arguments of the industrial lobbies, whose validity I do not doubt. I congratulate the hon. Member for Chorley (Mr. Hoyle) on the way in which he advanced those arguments. However, he would probably be outnumbered by Labour colleagues who say that the whole sum should be spent on hospitals, schools, kidney machines and so on.

First I shall discuss the issue of national security evaluation. EFA is not an effective weapon system. It is a short-range interceptor fighter, conceived at the height of the cold war, the need for which has been overtaken by events. It has a very short loiter time, and must operate from sophisticated and hardened airfields. It does not have buddy refuelling, which means that it cannot be refuelled from tanker aircraft of identical type, but must wait and locate a slow and vulnerable dedicated tanker if it needs to take on more fuel. It has doubtful software in its targeting and direction-finding equipment, and it has as yet unsolved deficiencies in the fly-by-wire system.

It is likely that the article in Der Spiegel exaggerated those failings, but the statement by the hon. Member for Chorley that the EFA has flown for 340 hours without problems can only be based on a press release from British Aerospace or another source; it does not relate to the facts.

I shall now discuss the Foreign Office implications. The Foreign Office is probably in favour of the EFA because of the collaborative aspect. If the Foreign Office did its job properly, and if its staff applied their minds to the commitments that we are likely to have to undertake during the next 20 years, they would see that what is required is an aircraft with very long range, which can operate off rough local airfields, and which has a relatively low-tech requirement in terms of spares and logistics—something that does not have practically every component in its structure to be new and prototypical.

I shall now discuss the industrial and economic consequences, under three headings. The first consideration is the possibility of exporting or selling the EFA, which I believe to be nil. As the EFA does not meet our national security requirements, it is hardly likely to meet those of potential customer countries, who will undoubtedly buy something that suits their requirements better.

Secondly, under the industrial heading, we must consider the consequences that relate directly to employment and to profits in the aerospace industry. Although the hon. Member for Chorley argued in terms of employment, he is well aware that those who are giving him his briefings are probably very profit-oriented also. The Minister will have very much in mind the fact that among the problems of United Kingdom defence procurement is the almost unbreakable interdependence between British Aerospace and his Department's procurement desk.

Surely, now that the cold war has abated, we could look more widely—not necessarily to the United States—to meet some of our requirements in this area. In any case, if EFA is to be presented as a job creation scheme— I always have some sympathy with the Keynesian ethic—we must find a less extravagant way of paying people to make buckets with holes in them.

The real problem is that a great deal of investment—prestige, money and service commitment—is going into a project that is essentially flawed and out of date. I agree with the hon. Member for Chorley that we must not abandon leading edge technologies. To do so would be extremely dangerous; it would mean finally forfeiting our independence as producers.

What we have to do—it is the hardest thing of all to get past the Treasury—is maintain the research and development on the aircraft and fly prototypes, defective and dangerous though they may often be, so as to maintain our capability. At the same time, we must get out of the commitment to going into production of a large number of these aircraft. We do not need them, and they are already obsolete. They lack variable nozzle technology and other details with which I will not weary the House this morning.

Mr. John Wilkinson (Ruislip-Northwood)

Will my right hon. Friend give way?

Mr. Clark

Not at the moment. Everyone knows that EFA's life expectancy, even if it has a dominant capability, is only four or five years; and the likelihood of our involvement in the kind of conflict where it would be needed is probably more than four or five years distant.

I am not arguing for the elimination of the whole project. I am saying that producing these aircraft and buying them at colossal individual cost in numbers far greater than we need would be wrong. We do not want to stock up with obsolete weaponry at this stage. On the other hand, the need to maintain our R and D capability and fly prototypes is clear. So the Minister and the Department must find a way of getting out of the production contract while maintaining the capability. It will be hard; the Treasury will never fund R and D if it possibly can. There is no end product—or if there is, it will be of a type which the Treasury believes will ultimately commit it to greater expenditure: best, therefore, to throttle it at birth.

I have described what the Minister must do; it is never too late to do it. The aircraft is not yet in production. The cost overruns are stupendous. Many sectors within its specification are defective and will need huge expenditure to put right. This is the time to close down any idea of producing the aircraft, but to maintain the research and development.

Mr. Wilkinson

I am grateful to my right hon. Friend for giving way—

Mr. Clark

I have finished my speech.

Mr. Deputy Speaker (Sir Alan Haselhurst)

Order. It is clear that the right hon. Gentleman has sat down.

10.2 am

Mr. Lawrence Cunliffe (Leigh)

I congratulate my hon. Friend the Member for Chorley (Mr. Hoyle) on his lucid presentation. For a new Member, he has an effective insight into the problem—[HON. MEMBERS: "Of jobs"] It is my hon. Friend's privilege to concentrate on jobs. It enables him to get some experience in the Chamber, and I commend his speech this morning.

I applaud the fact that we are having this debate. It is entirely understandable that hon. Members whose constituents work in the defence industries should be concerned about jobs for their people. The right hon. Member for Kensington and Chelsea (Mr. Clark) seems to think it wrong to battle too hard for Britain because, in an age of new technologies, things move too fast for us to keep up.

I am a long-standing member of the aerospace and technology committee of the Western European Union, where we have been battling away with the Germans and French over the airbus for some time. Not long ago, we unfortunately lost out in the helicopter argument. Our cardinal objective in all these arguments is to present a good economic case for the viability of British aerospace productive capacity, especially when it comes to making specialist aircraft of this type.

Rev. Martin Smyth (Belfast, South)

Does the hon. Gentleman agree that it is important to maintain our manufacturing capacity, and that relying on service industries alone would impoverish us all? Does he agree that the Treasury has a case to answer over research and development? As I understand it, it has not matched British aerospace's R and D investment pound for pound, as it should have done.

Mr. Cunliffe

I agree. It is imperative to keep up the progress in this area, because it will affect the whole future of British aerospace technology. Treasury mandarins have always been the same. Some present in the Chamber today who have had ministerial experience can, I am sure, quote chapter and verse to show how the Treasury cuts off or isolates funding.

We have been discussing these matters in the WEU aerospace committee. Next week, I shall have talks with Karl Lenzer, the acting chairman of our committee, who will be in America for discussions. Understandably, German politicians, just like their British counterparts, want value for money. We are all in the same game; no one wants to be frivolous about public money. We are talking about 16,000 German and 10,000 British jobs.

The right hon. Member for Kensington and Chelsea questioned the performance of the aircraft. We take pride in British quality—indeed, we claim to be the best in the world—but we need to be competitive as well as technologically sound. We have always proceeded on the basis of open competition.

We are assured by Labour Ministers now that the Eurofighter is not to be considered under the defence review. I call that backing Britain with confidence—

Mr. Wilkinson

The hon. Gentleman should get his facts right. I am as strong a supporter of the aircraft as he is, and I recognise the excellent work being done by the WEU committee on which he serves. I also recognise the importance of positive, joint decisions with the Germans.

However, it is inaccurate to say that the aircraft is not to be included in the defence review. When the Chief Secretary to the Treasury made his statement on departmental reviews of spending, I questioned him on this very point. He replied that both Trident and EFA were in the review. That is not to say that the Government will not come up with a positive decision. Labour has always supported the project, and we hope that the Government will maintain that support, despite the review.

Mr. Cunliffe

There appears to be some confusion between the information that the hon. Gentleman has and what I have been told. It is important that the House be informed as soon as possible, because that is the only way to guarantee democratic accountability.

When I first went to the Council of Europe, there were 18 member countries. Now 40 nations belong to it. In WEU—the European wing of NATO—and the Council of Europe all the British political parties have always flown the flag together to support British interests in Europe. There has never been a division. The previous Prime Minister congratulated the delegation to the Council of Europe on how we tackled the problem of securing and advancing British interests in co-operation with our European colleagues.

The American disposition within the defence framework is clear. I have no scruples about predicting that, in 10 to 15 years' time, American and NATO services will have disappeared from the European theatre. It is evident from the political scene on the horizon that, now that the Russians have been accepted into NATO—other countries are coming in daily—rather than deal with short-term aircraft, as the right hon. Member for Kensington and Chelsea said, the Eurofighter will fit the bill for Europe in 10 years' time, which is why the project is necessary.

We will be dealing with a new type of NATO, with Russia playing a part—it now has a consultative role. It sounds a bit funny to say that it will be a North Atlantic Treaty Organisation within the framework of Europe, but a new European defence organisation will emerge through the evolving nations that will become new members. We are perfectly capable of looking to Europe for our defence.

Whether in technology or in performance, other parts of the world, such as Scandinavia and Asia, are declaring an interest in our project. When Japan was made an observer to the Council of Europe—America and Canada have also been made observers—it expressed an interest in the European defence scene. We therefore have allies throughout the world who support, in principle, Eurofighter's claim to be an effective weapon within our defence framework.

Mr. Nigel Evans (Ribble Valley)

Does the hon. Gentleman dismiss, as I do, the argument, which we hear time and again, that, for reasons of cost and capability, we should put EFA to one side and buy an effective and proven alternative from the United States? Does he agree that, if we do that, the jobs he mentioned—10,000 in Britain and 16,000 in Germany—would be put in jeopardy, and manufacturing skills in both countries would be lost? If those skills were lost, they would be lost for ever, and it would be extremely difficult to say whether those teams would ever work again for European defence manufacturing interests.

Mr. Cunliffe

The hon. Gentleman makes a succinct point. The bulk of my constituents who work in the Lostock factories in Bolton and on aircraft wings in Chadderton are highly skilled technicians, from planners on the drawing board to electricians and fitters, which is why I have a direct interest in this matter. The new skill training programme introduced by the Labour Government will do much to reassure the hon. Gentleman that the skills, dedication and loyalty that now exist will be part of a follow-on process, with new apprentices in that category.

Mr. Alan Clark

Will the hon. Gentleman give way?

Mr. Cunliffe

The right hon. Gentleman would not give way to any of his parliamentary colleagues, but, being a charitable new Labour socialist, I shall give way.

Mr. Clark

I am grateful to the hon. Gentleman for giving way, and particularly grateful for the candour with which he declared his political affiliation. I did not give way to my hon. Friends because I had completed my speech.

Further to what my hon. Friend the Member for Ribble Valley (Mr. Evans) just said, I want to distinguish between manufacturing skills and design capability. In the same unpunctuated sentence, the hon. Member for Leigh (Mr. Cunliffe) referred to drawing board technicians and fitters, which are totally different categories. It is essential to maintain the drawing board capability, and full research and development. The point about full-scale employment is that the fitters' skills will be wasted if they make something that is of no use. That was the point that I was making.

Mr. Cunliffe

If something is wrong with the design, the manpower is wasted. The right hon. Gentleman is right about design engineers. I have some in my constituency who are specialists in every sense of the word, and we are proud of that. Their work must complement that of the other workers, whether on the tool bench or on the drawing board. The right hon. Gentleman makes a fair comment, but I did not understand when he said that he knows of many design defects at this time. I shall ask my design boys to see whether there is some logic in his presentation.

Our wonderful achievements in collaboration with our European colleagues, from airbuses to helicopters, augur well, and should bring confidence and trust in the future. We are Europeans in the true sense, and are becoming totally interdependent in Europe in terms of jobs and education. That is the great case for Europe. European countries need one another, politically, economically and socially, but we must continue to plug British interests.

10.16 am
Mr. Michael Jack (Fylde)

I am delighted to see the unanimity of Lancashire Members in the Chamber today, including my hon. Friend the Member for Ribble Valley (Mr. Evans) and the hon. Members for Preston (Audrey Wise), for Blackpool, South (Mr. Marsden), for Chorley (Mr. Hoyle), and myself from Fylde.

I congratulate the hon. Member for Chorley on how he laid out not only the strategic but the industrial case for Eurofighter 2000. He made a clear and justifiable case for the project's continuity, in contrast to my right hon. Friend the Member for Kensington and Chelsea (Mr. Clark), who was long on criticism but short on objectivity in suggesting an alternative to the Eurofighter 2000. It sounded like the knocking copy that I have heard emanating from north American sources, who for so long have sought to do the project down. Those of us who have lived with it for many a long year have heard this story before.

I respectfully point out to my right hon. Friend that he was in post in the Ministry of Defence when some of the specifications for the Eurofighter were being written, so perhaps at some stage outside the Chamber he will tell me whether his hand was on any of the specifications that he now denounces as inappropriate.

May I put on record words of praise for our former colleagues, Mr. Keith Mans, Mr. Robert Atkins and Mr. Den Dover, for their fight to keep this project alive? Without their efforts, I doubt whether we would be having this debate.

A tremendous campaign was orchestrated to influence Members of the Bundestag when it last had to make a decision on that matter. The Secretary of State wrote a helpful letter to me on this subject, saying that he would come back to me with ideas about how the current generation of Members of Parliament might also communicate with colleagues in the Bundestag, because they have the final decision on the German financial position. I should be grateful if the Minister, if not in his reply then subsequently, would be willing to act as a falcon for the exercise that this Parliament can have in influencing our German counterparts.

I also pay tribute to the work of the trade unions. It may sound odd coming from a Conservative Member, but the trade union movement, based as it is in my constituency of Fylde, at Warton and Samlesbury, has campaigned professionally and skilfully in ensuring that its German, Italian and Spanish counterparts are on side in terms of the Eurofighter project. The project is a joint effort of so many in the House and outside. We now move to a crucial phase for my constituents and those who are working on the successful prototypes operating from Warton.

The vital success of the project, to which the hon. Member for Chorley (Mr. Hoyle) referred, is crucial to the future of the entire European aerospace industry. Without it, a great prize could be missed. In a rationalised Europe there is the opportunity for British Aerospace and the United Kingdom to be the centre of that industry. The maintenance of the technologies that the hon. Gentleman so ably described lie at the heart of the achievement of that objective.

If the European fighter aircraft is not built, we will simply become a jobbing shop for the United States. We will lose the technology base for that and the other aerospace projects that the hon. Gentleman mentioned.

The project is entering a crucial phase, about which I shall ask the Minister some specific questions. I know that the German Government have written into their budgetary plans a four-year sum for Eurofighter's production phase. I should be grateful if the Minister would address himself to the money that will be required in an interim period to finance the further development of production work up to the production phase itself. Is he confident that the German Government and others in German industry will find that crucial bridging finance to take us to the end of the year?

In the Minister's judgment, is there the remotest possibility that the German Government might fast-forward their budgetary procedure, so that we might all go away for our summer holidays less concerned about the matter, or is the relevant date the autumn? Such guidance is important to us as parliamentarians, so that we might influence our colleagues in the Bundestag.

Can the Minister assure me that he and his colleagues in the Ministry of Defence will assist right hon. and hon. Members who want to make representations to other countries in Europe?

I watched "Newsnight", and was somewhat concerned when I heard the Minister of State for Defence Procurement say in an interview from the Paris airshow that the number of aircraft might be subject to the defence review. Can the Minister unequivocally put it on the record that not only will we order and buy the 232 aircraft, but that we will also review the Harrier GR7 replacement in the light of the European fighter aircraft, and that those numbers will not be part of that exercise?

The Parliamentary Under—Secretary of State for Defence (Mr. John Spellar)

I put that on the record in a written parliamentary answer to the right hon. Gentleman on 26 June at column 627 of Hansard.

Mr. Jack

I am grateful to the Minister for reaffirming that. We have had so many different stories when one Minister appears on television and another Minister puts something in writing. I wanted to make certain that the two lined up together.

I seek an assurance from the Minister that he and his right hon. Friends are not under any pressure from the Treasury to review the project in terms of numbers. That might not be in his review, but I know that the Treasury never misses an opportunity to have a go at such projects. I should be grateful for the Minister's comments.

Can the Minister tell us what he thinks is the source of briefings that continue to find their place in the pages of our aviation journals and newspapers—the endless knocking copy on such a splendid project? I want an end to such copy. We are now committed to EFA 2000. We want the aircraft to be built and properly funded. Both sides of the House—with the odd exception—are unified in our purpose. The Minister's reassurance from the Front Bench today that the project has the unequivocal support of the Ministry of Defence would be welcome.

10.23 am
Mr. David Borrow (South Ribble)

Mindful of the time, I shall keep my comments fairly short and to the point. I had the pleasure of attending the launch of the Eurofighter in Warton in the constituency of the right hon. Member for Fylde (Mr. Jack) several years ago, when I was leader of the council in Preston. I also had the pleasure on 19 June of seeing the Eurofighter fly at the Paris airshow.

During the intervening years my commitment to the Eurofighter and my confidence in it have not wavered. I have heard nothing to challenge the conviction that the Eurofighter is the right plane for the Royal Air Force. I find it strange that doubts about the Eurofighter surfaced only after 1 May. As Lord Gilbert said at the Paris airshow, the decision to go ahead with the Eurofighter as the right plane for the RAF was taken by the previous Government. In many ways it is too late now to revisit that decision.

I shall deal with two other issues—first, the link between industrial policy, defence policy and defence procurement policy. It is essential that Britain retains the capability to produce defence equipment at the cutting edge of technology, rather than becoming entirely dependent on the United States as a monopoly supplier. That may mean that we operate in collaboration with other countries, as we have worked with other European countries on EFA.

To abandon the project and buy an off-the-peg plane from the US would imply that, although we are committed to a defence policy that looks after our armed forces with good equipment, we are not committed to retaining the manufacturing base to build that equipment. We would be dependent on monopoly suppliers from overseas. We might save money in the short term and the Treasury might find savings if we bought the F22 instead of the Eurofighter, but 10 years down the track when the development of the next plane begins, we will not have the capability in Britain or in collaboration with other European countries. We will be held hostage to the monopoly supplier. That does not make sense from a defence or a Treasury point of view.

Secondly, it is important to recognise the industrial strategy and the link between defence manufacture and manufacturing in general. That is particularly the case in the aerospace industry. The advances made in military aircraft development have a spin-off effect on and a cross-fertilisation with civil aviation development.

Mr. Barry Jones (Alyn and Deeside)

Does my hon. Friend agree that the civil side of British Aerospace's business would take a severe knock if the Eurofighter project fell apart? Does he know that 2,800 of my constituents make the wing of the Airbus? As it happens, I am taking a deputation today to the Ministry of Defence on the future large aircraft.

Mr. Borrow

I agree with my hon. Friend's comment. It is interesting that the future large aircraft is linked to civil aircraft through the Airbus, and there are links between the Eurofighter and other civil projects.

The right hon. Member for Kensington and Chelsea (Mr. Clark) argued that we could concentrate on research and development, and that we do not need to employ people to carry out projects for the Eurofighter. That is nonsense. People who live in my constituency and work in the constituencies of the right hon. Member for Fylde and the hon. Member for Ribble Valley (Mr. Evans) at Warton and Salmsbury have skills that are not transferable to other parts of the engineering industry. If the Tornado and Hawk work going on at British Aircraft military division is blocked because the Eurofighter does not go ahead, the skills that exist in central Lancashire to assemble those planes will not exist in 10 or 15 years, when the next development comes along. It is a matter not simply of R and D, but of hands-on skills that are of little use to any other industry.

In the past, my colleagues have raised the question of arms diversification. However, the skills involved in the aerospace industry are not readily transferable. The Preston technology management centre on the old British Aerospace Strand road site in Preston is considering a diversification strategy by using the intellectual property rights of British Aerospace to help small and medium-sized enterprises produce products that are not defence-based. That is one area where diversification may occur. The skills of my constituents who work for British Aerospace in Lancashire—who are among the most skilled manufacturing workers in this country—are not transferable. Arms diversification is not easy.

We will always need a good defence industry, and our armed forces will always need good equipment, so it makes sense to ensure that we have the manufacturing base to provide that equipment. Some 620 Eurofighter aircraft will be produced initially, with 232 destined for the Royal Air Force, 180 for Germany and the others will be supplied to Italy and Spain. I had received submissions from the industry, and I do not accept that the aircraft has no export potential.

When air forces fly planes that are made in this country, foreign countries decide that they want to buy them. A few weeks ago, the Secretary of State for Defence visited Warton in the constituency of the right hon. Member for Fylde with the Prime Minister of Australia, Mr. Howard, in order to agree the sale of Hawk aircraft to Australia. It is significant that that deal envisages an offset agreement, whereby several aircraft will be produced in Australia. If we abandon aircraft manufacturing in this country, rather than simply buying from abroad, we have the option of offset agreements. However, we would not have mastery of research into and development of those aircraft, and we would get the back end of the job.

I want the British aircraft industry to be at the cutting edge. The Minister must recognise the importance of defence procurement in industrial policy. I should be very worried if the EFA project were delayed, cut or abandoned. That would have serious implications not only for defence but for the future of manufacturing industry in this country in general, and in central Lancashire in particular.

10.32 am
Mr. Menzies Campbell (North-East Fife)

I agree with much of what the hon. Member for South Ribble (Mr. Borrow) has said. However, I think that he is wrong to claim that doubts about the Eurofighter have surfaced only since 1 May. Doubts surfaced immediately after the general election in 1992. At that time, several hon. Members, under the leadership of Keith Mans—who had a long and distinguished commitment to the Eurofighter project—and by arrangement with the Secretary of State for Defence, who laid on an aircraft for the purpose, travelled to Germany so that we could lobby our party equivalents in the German parliamentary system.

That may be the answer to the question raised a moment ago about how best hon. Members from all parties could apply pressure to their equivalents in Germany. If the Minister has an aircraft standing by, I have no doubt that he will find many volunteers to take part in such an operation.

In the short time available, I shall concentrate on the military elements of the matter. I start from the fundamental position that the Royal Air Force should remain a strategic service and that any effort to alter it or downgrade it to the kind of support service for which some argue would be wholly against the best defence interests of the United Kingdom. If we start from the proposition that the Royal Air Force must be a strategic service, we must accept that it has to be equipped properly. It can be equipped properly for the next 25 or 30 years only if it has Eurofighter.

The right hon. Member for Kensington and Chelsea (Mr. Clark) described the Eurofighter as an interceptor aircraft. I must adopt a slightly different view: I have always understood the aircraft to be an agile fighter. It was designed to overcome the defects that had been demonstrated in the Tornado F3, which is an interceptor and was designed to intercept Russian bombers over the North sea from the squadron base at RAF Leuchars in my constituency. That interceptor aircraft was modified from an aircraft that had been designed as a ground-attack aircraft, and it lacks the agility of modern aircraft. That is why the F3 squadrons, of necessity, performed such a limited role in the Gulf war, and why they have been unable to fulfil all the roles that might have been expected of them in operations in Bosnia.

Mr. Gerald Howarth (Aldershot)

The hon. and learned Gentleman is absolutely right: one of the problems with the Tornado was that it was designed as a multi-role combat aircraft and therefore did not perform well as an interceptor fighter aircraft. Does he agree that the key point about the Eurofighter is that it is a dedicated fighter with air superiority capabilities, which is what Britain badly needs at present?

Mr. Campbell

The hon. Gentleman is correct: the Eurofighter is capable of achieving air superiority.

However, as the Minister pointed out in a written answer on 17 June this year, it also has the capacity to take part in ground-attack operations. That is why any review of Eurofighter numbers should accept the proposition that, instead of 232 or 238 aircraft, we need 80 more than that in order to fill the gap caused by the eventual withdrawal of the Jaguar from service.

Some hon. Members have talked about alternatives. The Grippin and the Rafale are possible alternatives, but we must accept that they have lower capabilities. There are American alternatives. We should remember that, in the last Parliament, Michael Portillo flirted—if I may use that word—with the proposition of leasing in second-hand F16s at the same time as we were leasing out second-hand F3s to the Italians. The Italians, for reasons that I need not go into, are grossly embarrassed in the fighter aircraft area. Eurofighter is probably more essential for them than for the other three project partners.

If we went down the American route, we might get cheap unit costs, but the through-life costs would kill us—if I may put it that way. When one is gauging the cost of these projects, one must have regard to the cost not of buying an aircraft off the shelf but of maintaining and running that aircraft over its lifetime. We certainly cannot afford the F22. However, if we were to buy it, you can bet your bottom dollar that the United States would not provide all the black boxes that are essential to maximising its full capability. We would always receive an aircraft that was less capable than the top-of-the-range aircraft that the United States would maintain for itself.

The Eurofighter aircraft has been designed to fly against the SU27—perhaps one of the most dramatic developments in aircraft design since the creation of the jet engine—and all its derivatives. SU27s are available to countries all over the world as a result of Russian export policies. Therefore, it is not inconceivable that Royal Air Force pilots, while carrying out future operations on behalf of the United Nations and exercising its peacekeeping, peace-making or peace-enforcing responsibilities, will have to fly directly against the SU27. That is why anything less than Eurofighter would be inadequate for the Royal Air Force's purposes.

10.38 am
Mr. Robert Key (Salisbury)

I congratulate the hon. Member for Chorley (Mr. Hoyle) on introducing this short, but timely, debate. I also congratulate my right hon. Friend the Member for Kensington and Chelsea (Mr. Clark) on his usual robust and challenging speech and my right hon. Friend the Member for Fylde (Mr. Jack) on his very persuasive arguments.

I also congratulate all the men and women of the Royal Air Force and their civilian support staff, and thank them for demonstrating superb professionalism at a very difficult time of adjustment. The structure and the functions of the Royal Air Force have changed. I have seen that in my constituency, and when I have visited the RAF overseas, whether in the Falkland Islands, Belize, Gibraltar, at the sharp end in Incirlik and in Germany, where the changes have been greatest. I found that at Rheindahlen and Brüggen last year, which I visited as a member of the Armed Forces Bill Select Committee.

The RAF's withdrawal is not just an operational change; it is a fundamental change to the way of life of the RAF and all the families who so loyally follow the flag. By 2002, the Tornados will have come home. The upgrading of the Tornado F3 and GR1 will give them another 20 years of service, but by then they will to all intents and purposes be the equivalent of the RAF flying Spitfires today.

Michael Portillo's decision last September to tell our project partners that we are ready to move ahead to the production and in-service support phases of Eurofighter reflected the Ministry of Defence's conclusion that Eurofighter was the best available combat aircraft for the United Kingdom. All other considerations, including jobs, must be secondary to the military decision, but the decision has been clearly and decisively made.

The decision was good news not just for the Royal Air Force—it was good news for Munich, Turin and Madrid—but most of all for the best aerospace work force in the world, at British Aerospace in Lancashire, and at Rolls-Royce in Bristol and Derby, as well as some 200 UK defence companies involved in the development and production of equipment for Eurofighter. It will mean up to 80,000 jobs in the UK, and some say up to 250,000 jobs across Europe, although I find that latter estimate somewhat far-fetched.

The trouble is that there are three spectres at the defence procurement party. First is the shadow of TSR2. The week before the 1964 general election, Harold Wilson went to the north-west and promised that TSR2 would go ahead. Labour was elected. Labour cancelled it. That ghost still walks. Will Labour stick to the agreement between the Conservative Government and British Aerospace to buy 232 EF2000s? The Minister says that he will, but we will come to the reason why I believe that he should not be quite so certain.

The second spectre is the weakened German economy. The day after tomorrow, as the hon. Member for Chorley said, is crucial to this argument, as it is when the German Cabinet holds its budget meeting. Unlike this Parliament, there is no party political consensus in the German Parliament, as members of the House of Commons Defence Committee discovered when the Bundestag Committee visited us last year. Furthermore, what assurances are there from the Minister's Spanish and Italian counterparts that they will honour the agreement to buy their complement of the EF2000s?

Does the Minister accept that Eurofighter should be cheaper to maintain than the Tornado that it is to replace, since Eurofighter will be built with under 15,000 airframe parts, compared with 32,000 for the Tornado?

Has the Minister decided to include thrust-vectoring in the UK specification for Eurofighter, like the Spanish? So far, only the Spanish have said that they definitely want the upgrade, which will increase the speed and manoeuvrability of the aircraft.

Can the Minister confirm reports—which I have heard—that his Department has told British Aerospace to slash its agreed costs by 15 per cent.? If that is true, it would be very hard for the aerospace industry in this country. First the Labour Government decimated the private finance initiative programme without paying compensation to the companies, and now BAe may be forced to make savings that would put jobs at risks.

Mr. Michael Colvin (Romsey)

Will my hon. Friend acknowledge that being permitted to make a reasonable profit on a military project such as this ensures reinvestment into research and development, on which the next generation of aerospace projects depends?

Mr. Key

Of course, my hon. Friend is absolutely right. Those profits are reasonable. They were extremely tight—let no one be in any doubt about that—given the international nature of this market.

The third spectre at the party is Her Majesty's Treasury and the strategic defence review. I do not doubt for a moment the sincerity of the Secretary of State for Defence, the Minister for Defence Procurement, or the Under-Secretary of State who will answer today, but not once has any of them been able to deny the bottom line of a Treasury veto. In none of the Parliamentary Questions that they have answered have they been able to make that commitment.

The strategic defence review report will go to the Secretary of State by the end of December, as he said. I believe that it will be completed—considered by Ministers—around the turn of the year, which, as a former Minister. I know only too well can mean anything up to March, which is the financial year anyway, not the calendar year. The Treasury cannot allow the defence budget to be excluded from normal spending round bargaining.

The March 1998 Budget spending plans will be followed by a defence White Paper. Would the Minister like to deny any of this? Only after that White Paper, after the Budget, will we know the truth about the strategic defence review and the fate of Eurofighter.

The Conservative Government put in place a defence procurement programme of which our forces and our nation can be proud. The Labour Government cannot expect—and will not get—cross-party consensus on their defence stance until the spectres of German uncertainty and the Treasury veto are laid to rest.

10.45 am
The Parliamentary Under-Secretary of State for Defence (Mr. John Speliar)

I welcome the hon. Member for Salisbury (Mr. Key) to his new responsibilities. I also congratulate my hon. Friend the Member for Chorley (Mr. Hoyle) on securing the debate and on his vigorously presented case for EFA, for the aerospace industry and, indeed, for his constituency.

We heard worthwhile and helpful speeches from the right hon. Member for Fylde (Mr. Jack), from the hon. Member for Ribble Valley (Mr. Evans), from my hon. Friends the Members for South Ribble (Mr. Borrow), and for Leigh (Mr. Cunliffe). We also heard an interesting speech from the right hon. Member for Kensington and Chelsea (Mr. Clark).

The interest of my hon. Friend the Member for Chorley in this vital subject is obviously shared by most hon. Members on both sides of the House, so I welcome the opportunity to underline the Government's strong commitment to Eurofighter, which will form the primary component of the RAF's future fighting capability. We are right to stress that as the key aspect to the debate.

Hon. Members raised a number of points, which I hope to dress during my reply. The Gulf conflict and operations in the former Yugoslavia demonstrated the supreme importance of effective air power. The number of countries that possess highly manoeuvrable, high-performance aircraft equipped with modern sensors, defensive aids and missiles is expected to increase. The Russian MiG 29, and the SU27, both of which are being exported and upgraded, are representative of the potential threat that Eurofighter could face over its planned 25-year life. United Kingdom forces deployed on operations in Europe and beyond are therefore likely to encounter aircraft that could out-perform existing RAF and other NATO fighters. We must not underestimate the vital importance to our forces of control of the skies.

We all recognise that the RAF's F3 Tornado has a limited further life. It is not, as has been mentioned, an agile aircraft. It was designed to deal with the cold war threat of Soviet long-range bomber attack on the United Kingdom. The missile upgrade currently being implemented will, of course, make it a much more effective system, but that can be no more than a relatively short-term solution. The RAF's Jaguar aircraft suffers similar limitations. It is clear that both aircraft need replacement from early in the next century. That, I believe, is common ground to all concerned.

Eurofighter will be capable of providing for air superiority and air defence—gaining control of airspace, whether to protect territory, or to enable other operations by land, sea or air to achieve their objectives. The same aircraft will also provide for ground attack and, potentially, tactical reconnaissance. Eurofighter will be able to offer operational flexibility in response to the uncertain demands of the new strategic environment and enable the RAF to reduce its current aircraft types. Indeed, this is characterised by the aircraft's short take-off and landing capability, which will allow it—contrary to the allegations of the right hon. Member for Kensington and Chelsea—to operate from a range of airfields.

Furthermore, I can confirm that it has been designed to meet the range requirements of all envisaged missions. Eurofighter will provide interoperability with three key NATO allies. This will yield important operational advantages as well as the financial benefits flowing from economies in support.

On the technical performance side, I am pleased to report that recent progress on the Eurofighter development programme has been excellent and that all key technical maturity criteria for entry into the production phase have now been met. That was demonstrated by the two Eurofighters that flew in formation at the Paris air show. All the seven development aircraft, two of which are twin-seaters are now flying. At the end of June they had flown more than 441 flights, amounting to about 377 hours. I am pleased to announce that the UK twin-seater development aircraft flew for the first time with two people on board on 2 July. Of the seven development aircraft, five are flying with the specifically designed EJ200 engines and two with ECR90 radar.

The aircraft is already flying at mach 1.8. Reports from our test pilots and those of other countries who have flown the aircraft confirm that they are delighted—the aircraft is simple to fly and its performance closely matches predictions. The field of view from the cockpit is excellent. I am surprised that some press comments underrate that consideration and the importance of it. Pilot work load during the normal operation is low. That is particularly important for a single-seat fighter, as I am sure we are all aware.

One of our test pilots said that Eurofighter is ahead of anything I have ever flown before. That is clear testimony to the value of involving pilots at an early stage in the design process. That was a valuable contribution by the Ministry of Defence, the Royal Air Force and British Aerospace.

As my hon. Friend the Member for Chorley has said, there have been recent newspaper reports criticising technical aspects of the Eurofighter programme, focusing especially on the radar and flight-control system. One does wonder where this knocking copy comes from. I think that the right hon. Member for Fylde was right to identify the possible sources.

First, I shall mention the specially developed radar system for the Eurofighter and the article that has been much quoted, which appeared in Der Spiegel. The real situation concerning the radar system, the ECR90, is that it is newly designed by a consortium led by GEC involving electronics companies from the other Eurofighter partner nations. Those companies are European and world leaders in radar technology. The ECR90 is the latest design. It comprises modern high-performance, high-reliability electronic technology with automated digital processing and reconfigurable software. In short, it is a world-beating airborne radar system and we should be proud of it.

Progress on the development of the ECR90 radar has been very satisfactory. It has successfully undergone flights in two of the Eurofighter development aircraft. It is in line with the scheduled programme and our expectation is that the radar will meet its full specifications. Those specifications include the ability, contrary to various articles, to counter clusters of closely spaced aircraft and to discriminate precisely the high-priority target or targets.

I move on to the flight-control systems. It is important to stress, as has already been done by the hon. and leaned Member for North-East Fife (Mr. Campbell), that the Eurofighter is aerodynamically unstable by design to enhance its extremely high levels of agility, reducing drag and enabling enhanced lift to be achieved. That makes it impossible to fly the aircraft by conventional means. The pilot controls the aircraft through a computerised digital flight-control system. That eases enormously the work load on the pilot. Among other things, the flight-control system is designed so that, in the event of pilot disorientation, rapid and automatic recovery is achieved by the simple press of a button.

The flight-control system is clearly critical to the performance and safety of the aircraft. Accordingly, flight clearance for such a safety-critical system has been approached with great caution and rigour. In two official flight assessments so far carried out, satisfactory handling has been demonstrated.

The engine, the EJ200, fitted to five of the development aircraft, has accumulated more than 1,000 hours of successful running time, including 300 hours in flight, as well as excellent test-bed performance. That is a tribute to the builders at Rolls-Royce.

There has been unhelpful speculation in the media that we are seeking to cancel the Eurofighter programme or reduce the number of aircraft to be purchased. In answer to the right hon. Member for Fylde, I never cease to wonder where those stories come from. Are journalists sometimes looking for a story to file so that they can get off home? We recognise, of course, that such speculation causes difficulties. That is why I very much welcome the opportunity today to set the record straight once more.

In 1995, two parallel studies were conducted into the number of Eurofighters required. Allowance was made for training, support and attrition. It was concluded that 232 Eurofighters would be required to replace the Tornado F3 and Jaguar fleets. Of the 232, 35 will be twin-seaters and used for training purposes, although they would also have an operational capability.

My right hon. Friend the Secretary of State for Defence has made clear the Government's intention to order Eurofighter according to the conditions and numbers established by the previous Administration. We made that clear also when we were in Opposition. We are therefore committed to the purchase of 232 Eurofighters. I made that clear in a written answer to the right hon. Member for Fylde as recently as 26 June, and I reinforced that answer in my intervention. I regret, therefore, that the hon. Member for Salisbury sought to cast doubt on this matter, which can cause only confusion elsewhere, especially with a critical decision being made this week.

I understand that there have been criticisms of the cost of Eurofighter, and suggestions that alternative aircraft could be purchased instead. One wonders which aircraft, and that issue has been dealt with in previous speeches. Extensive operational analysis has been carried out to compare the cost-effectiveness of Eurofighter with a variety of other potentially available aircraft types and, of course, combinations, in a range of scenarios against opposing aircraft. The analysis demonstrated the excellent technical capability that Eurofighter will provide in the air-superiority and air-defence roles, and in ground-attack missions.

When costs and the multi-role capabilities of Eurofighter were taken into account, it was clear that an all-Eurofighter fleet would be substantially more cost-effective than any of the alternative aircraft options or mixes. Compared with other solutions, the potential cost savings are considerable. Logistic costs for a single type are significantly lower. In addition, pilot training costs are reduced. A single type of full-mission simulator covers all training requirements.

What I have said so far sets the scene on the justification for Eurofighter and the progress achieved in development phase, the numbers required and the technical position. The Government's position on the commitment to future phases is well known, and I have reinforced it this morning. We are now ready to sign the memorandum of understanding for the production of Eurofighter. We earnestly hope that our partners will also be in a position to proceed very shortly.

We understand—this has been mentioned by a number of hon. Members, including the hon. Member for Salisbury—that there are domestic pressures in Germany. In the interests of the programme, however, decisions must be made and priorities set. We are doing all we can to urge our German counterparts to proceed with the project as soon as possible. My right hon. Friend the Secretary of State met the German Defence Minister, Mr. Ruhe, last month. He confirmed that Germany both wanted and needed Eurofighter. When my right hon. Friend the Prime Minister met Chancellor Kohl on 6 June, the Chancellor made clear his personal commitment to Eurofighter.

We were greatly encouraged, as, I am sure, were all right hon. and hon. Members, by the announcement last Friday by the German Finance Minister, Dr Waigel, that funding for the production phase has been included in the draft 1998 budget. We are hopeful that, when it meets to discuss the 1998 federal budget on Friday, the German Cabinet will take the decision to proceed to the production phase. Bundestag approval would be sought in September. I take on board the suggestion of the hon. and learned Member for North-East Fife that there is a need to involve Members on both sides of the House in lobbying in support of that decision.

Eurofighter is the largest European collaborative defence programme. I am confident that Germany, along with Italy and Spain, will join us in the production of this highly capable aircraft. As has been said, Eurofighter will sustain tens of thousands of high technology jobs in the four Eurofighter partner nations. The UK's Eurofighter will be assembled at British Aerospace's Warton site in Lancashire from components manufactured by industries of the four partner nations, with work on the EJ200 engine concentrated at the Rolls-Royce plant in Filton, Bristol.

The export potential for Eurofighter has been mentioned by my hon. Friend the Member for Leigh and others, and it is good. A number of countries have already expressed interest in Eurofighter. Further delays to the production phase of the programme run the risk of jeopardising Eurofighter's export potential, especially in the face of fierce and fairly ruthless competition.

Eurofighter is also an important element of European defence co-operation. That was stressed by my hon. Friend the Member for Leigh. It is central to the future of European defence and crucial also to the future of the European aerospace industry because of the key skills, particularly those relating to systems integration, that are supported by defence investment. In short, I confirm once again that the Government are totally committed to the Eurofighter programme and are determined that it will succeed.

Air power is an essential component of the United Kingdom's defence capabilities, and it will remain so into the future. The Government are committed to providing our forces with the best equipment available to meet the role that we demand of them on behalf of the British people as a whole. It would be indefensible to ask our brave airmen and women to undertake the hazardous missions that we may demand of them without giving them the tools for the job. We must act now for the replacement of aircraft that will reach the end of their lives in the next decade. Eurofighter is demonstrably the most cost-effective and capable solution to the clear requirement for a new fighter aircraft to meet the challenges of the next century.

It is incumbent on us to provide this aircraft for the Royal Air Force. It will give it the aircraft that it wants and needs and help to guarantee the future of the European aerospace industry and the maintenance of tens of thousands—

Mr. Deputy Speaker


Mr. Alan Clark

On a point of order, Mr. Deputy Speaker. It is listed in the Register of Members' Interests that my family trust is a shareholder in Boeing aircraft. I believe that by no stretch of the imagination could Boeing be considered as an alternative supplier to EFA. The House may feel that I should have declared that interest at the outset of my speech, and I apologise for not having done so.

Mr. Deputy Speaker

I am sure that the House is grateful to the right hon. Member.

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