HC Deb 12 January 1998 vol 304 cc6-8
5. Mr. Bob Russell

What steps he is taking to promote the consolidation of the European defence industry. [20200]

Mr. Spellar

It is for the defence companies themselves to take the lead in determining the future structure of the industry, but we recognise that Governments have a major constructive influence. Accordingly, the UK, France and Germany, whose industries form the bulk of the European defence industrial base, issued a statement on 9 December with the clear message that they are now working together to facilitate the process of change.

A programme of work to resolve practical issues falling mainly within the sphere of Defence Ministers has been agreed and is being taken forward by the national armaments directors of the three nations.

Mr. Russell

I welcome what the Minister has said, but could we have a bit more enthusiasm during our six months' presidency of the European Union in promoting the British defence industry throughout the EU? I particularly draw attention to companies in Essex which have been hit harder than many others in the defence-related industries, notably, Paxmans in my Colchester constituency and GEC elsewhere in the county.

Mr. Spellar

As my right hon. Friend the Secretary of State flew to Germany during the recess to sign the agreement on Eurofighter, nobody could accuse the Government of a lack of enthusiasm for the British defence industry. We are certainly looking forward during our presidency to proposals from the industry by 31 March setting out its precise views about how the European industry can be restructured so that it can become an even more formidable international competitor.

Mr. Borrow

My constituents, and those of many of my Lancashire colleagues, welcome the Government's decision to complete the signing of the Eurofighter agreement. It is an example of exactly the sort of consolidation of the European defence industry that the question highlights. Does my hon. Friend agree that the example of Eurofighter could be followed by many other parts of the defence industry in the United Kingdom? Does he further agree that the implications for co-ordinating defence and industrial policies are crucial for this country's defence and for the pursuit of a vigorous industry throughout the UK?

Mr. Spellar

I thank my hon. Friend for those comments. Of course, the first decision on Eurofighter was taken in 1982, but it has taken this Government to bring it to completion and to sign the agreement. [Interruption.] The signing of the agreement, the visit to Germany of my right hon. Friend the Secretary of State for Defence at an early stage of this Government's term of office and the Prime Minister's initiative with the German Chancellor all show the impetus and energy that were put behind the decision, which was welcomed by most parts of the industry, if not by some of those on the Conservative Benches who treat it so lightheartedly. Their attitude will be noted by the industry. We are certainly examining the restructuring of industry, particularly on a corporate basis, and therefore the creation of a genuine European defence industrial base.

Mr. Key

I am sure that the Minister is not suggesting that the Germans put off their decision just to wait for the general election result, but he is indeed pushing at the bounds of credibility by telling Britain's defence industries to do it his way or else. Which is in the national interest: is it for those industries to pursue the integration that the Government request when there is no formal legal basis throughout the European Union for such collaboration; or is it to maintain and to promote the interests of the British defence industry with those of the world's greatest defence industries in the United States of America?

Mr. Spellar

I think that the hon. Gentleman is under a misapprehension. A consolidated, stronger European defence industry will be better able not only to compete with the new American giants that have restructured, but, in many cases, to collaborate with them. We cannot have a fragmented industry throughout Europe which is at the mercy of the American industrial giants. We are taking the initiative and the hon. Gentleman should apologise to the House for his lack of action, rather than carping.

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