HC Deb 11 July 2000 vol 353 cc701-12 3.30 pm
The Secretary of State for Defence (Mr. Geoffrey Hoon)

With permission, Madam Speaker, I would like to make a statement about the procurement of the first type 45 destroyers.

The strategic defence review set out the Government's firm commitment to a modern and effective destroyer and frigate force for the Royal Navy, including substantial investment in new ships.

I am pleased to be able to announce today that we have decided to procure the first type 45 destroyers, part of a planned class of up to 12 ships. The type 45s will be the largest and most powerful air defence destroyers ever ordered for the Royal Navy.

Subject to the satisfactory completion of negotiations, a contract will be placed later this year with BAE Systems for the construction of the first three of these ships, and certain large items such as the propulsion plant for a further three, at a total cost of about £1 billion. The first ship will enter operational service in 2007. 1 expect a contract for the second batch of ships to be placed in about 2004.

These ships represent a huge improvement in capability over the type 42 destroyers that they will replace. Their key weapon system will be the highly advanced and capable principal anti-air missile system—PAAMS—already being procured in collaboration with France and Italy.

The type 45s equipped with PAAMS will defend other ships against the most dangerous supersonic sea-skimming missiles as well as enemy aircraft. In this role, the type 45 will protect a wide range of our maritime assets, from aircraft carriers to logistics vessels. In addition, the type 45 will be a highly potent, multi-role platform capable of operations across the spectrum of tasks from peace support to high-intensity warfare.

The design will be capable of evolutionary improvement over the life of the class, through an incremental acquisition plan—a key feature of smart procurement. Its size, at about 7,200 tonnes, will ensure that space is available to allow for both additional and enhanced capabilities to meet this plan.

Our procurement strategy for the build phase has been developed with the maximum participation of the prime contractor, in line with smart procurement principles. This has allowed a rapid recovery following the demise last year of the tri-national Horizon programme—a programme which had been running since 1994 to meet the Navy's need for a new area air defence ship. Under the control of the prime contractor, a single design definition is being developed involving the two shipbuilders, Vosper Thornycroft and BAE Systems Marine, in a risk-sharing design team. This means that from the outset we have a design that can be efficiently constructed by either company.

Our intention to place a first-build contract for three ships is a further break from the traditional way of contracting for destroyers and frigates. Previously we would have ordered only a single first of class. This approach means better, cheaper procurement.

Our approach in this programme will ensure that experience in type 45 construction is spread between BAE Systems Marine and Vosper Thornycroft. That will assist future competition for follow-on ships.

Radical modular construction techniques will also assist competition. We will invite bids from both traditional shipyards and from wider industry for the manufacture of modules. These might be a section of the ship from keel to main deck, with equipment and systems already installed.

This method of construction represents a revolution for warship building in this country. Although it has been successfully employed in the commercial shipbuilding sector and overseas, we have never before used it for Royal Navy ships. It will permit more efficient construction of the warships and provide a basis for effective competition from a wider industrial base.

Provided that satisfactory arrangements can be agreed between the prime contractor and the two shipbuilders, we intend that the first and third ships will be assembled by BAE Systems Marine and the second ship by Vosper Thornycroft. Both companies will be able to compete independently for the assembly of batches of follow-on ships.

The type 45 programme will sustain up to 3,000 jobs directly in the shipyards over the next 10 years, and it will sustain or create almost as many elsewhere in the defence industry. It is part of the largest programme of warship construction in this country since the second world war. The first of class is expected to be launched from the BAE Systems Marine Scotstoun yard on the Clyde. I understand that Vosper Thornycroft is examining the possibility of building type 45s at Portsmouth as an alternative to Woolston.

Finally, I am pleased to announce that the class is to be named the D class. Her Majesty the Queen has graciously agreed to the first of class being named HMS Daring, and the second HMS Dauntless. This revives two famous names that have served the Royal Navy well since the early 1800s. As the seventh ship to bear the name, Daring's most recent predecessors were destroyers from 1932 to 1940 and from 1952 to 1974. It will be the sixth time that the name Dauntless has been used; the last warship of that name was a cruiser from 1918 to 1946.

Today's announcement clearly demonstrates the Government's commitment to maintaining the shipbuilding industry in this country, and our determination to procure military equipment faster, more cheaply and better than we have in the past. It is good news for Britain and Britain's shipbuilding industry, and it is good news for the Royal Navy. I commend these proposals to the House.

Mr. Iain Duncan Smith (Chingford and Woodford Green)

I start by thanking the Secretary of State for his courtesy in passing the statement to me reasonably early, so that I would be able to respond.

I unequivocally welcome the announcement of the order for the two ships and I congratulate the yards that have been successful in obtaining the orders. Although I welcome the statement, it is worth pointing out—only in passing, of course—that this is the first warship order to be placed by this Government in the past three years. It is good news, but the Secretary of State needs to assure the House that older ships in need of refit will not be paid off early over the next few years as a result of the order. I would like him to make that point unequivocally at the Dispatch Box.

The Secretary of State also referred to the nature of the contract, and said that the design had been produced by two companies that subsequently bid for the contract. Will he tell us how he will balance that fact with the competition element, if yards such as Swan cannot bid because they do not have access to commercially sensitive information? How will he deal with that matter, and maintain a competitive environment?

Today's announcement of the type 45 is in many senses tied up with the roll on/roll off ferry order, which is not, it appears, going to Govan. Will the Secretary of State remove any doubt and tell us whether that order will go to British yards, or is he preparing to let it go overseas? Is he using this announcement as a smokescreen to try to make that sound like good news at this moment?

The Secretary of State referred to the air defence system, but then moved quickly on to other matters. Why was he so coy about all the other systems? An order has been placed for the ships' hulls, but the key question relates to the fact that their capability will depend wholly on the systems used. Therefore, I have a few questions about the systems, which I hope that he will answer.

On Merlin, will the Secretary of State dispel the doubts that have appeared in the press? Will he confirm that the type 45 will be able to carry, and will carry, Merlin helicopters, and that the landing systems on the ships will be designed to carry them? Otherwise, the capabilities of the ships will be much reduced.

Will the Secretary of State assure the House that the ships will receive the very best and latest design of command and control, and that they will not be hamstrung by costs so that they have to accept a lesser system, as has been reported and leaked by the Navy?

Will the ships have surface-to-surface guided weapons capability, and if so, will he tell us which one that will be? Will they have a good close-in weapons system—or is it, as reported, unlikely that they will get one at all?

The launchers will be critical and the Secretary of State referred briefly to them in connection to PAAMS. However, is it the case that the ships will not be able to fire tactical Tomahawks using the launchers because the launchers are not capable of accommodating tactical Tomahawk or Tomahawk as it exists today? Will that not limit their capacity to operate in the environment that the Secretary of State described?

The Secretary of State's strategic defence review rightly said that our troops are likely to be at risk in future from ballistic missiles in theatre. Will these ships have any anti-ballistic missile capability to deal with that, or is the Secretary of State planning to design in any capacity, as referred to in his own SDR? Will he assure the House that the Sylver launcher will be adapted to make such flexibility available, and tell us what the cost of that will be? What is his response to the recommendation of the Select Committee on Defence that such flexibility should be incorporated?

We have heard reports that either the sonar capability will be very limited or there will be none at all, certainly in coastal waters. Is it not a reality that more and more potential aggressors whom we might face are investing money in the coastal capability of submarines? Will the Secretary of State clarify the position, as without either a Merlin or such coastal capability, does this ship not become vulnerable to attack?

The Secretary of State said that the ship would be designed on commercial lines. Will he explain the Navy's attitude to that in relation to the protection of the ship? What lessons have been learned on damage control, especially from the Falklands, and can those be implemented? Will sacrifices on damage control issues be made for commercial reasons?

In conclusion, we welcome today's statement about the order for ships, which we have been urging the Government to make for some time. However, serious questions remain about the systems. The ships alone are not good enough, as they rely on the systems to operate properly. This weekend, the comments of a naval officer were leaked in the press. He said that if the ships do not get the best systems, it will be a case of cut price ships for a cut price Navy. In short, is this going to be a first-rate Royal Navy ship—or a Treasury ship?

Mr. Hoon

I am grateful to the hon. Gentleman, at least for his opening remarks and his conclusion. I am not quite sure about what he said in between, and I shall try to deal with that in due course.

I am not sure that the hon. Gentleman, or any Conservative Back Bencher, is in a position to criticise too much the fact that we have made this announcement today. I mentioned the date that the Horizon programme started, and I would have thought that the hon. Gentleman might just have noticed that that was during the Conservative Administration. The programme failed—and frankly, one reason for the delay in making the announcement is the fact that we had to deal with the failure of the previous Government. We have managed to turn that failure around with the outstanding success that we are announcing today. The hon. Gentleman does not have much ground for complaint. If there were delays, they were the creation of the Government whom he supported.

As for competition with other yards, the idea underlying the use of modules is partly that we can extend the opportunity for constructing parts of these ships to yards other than the two that I mentioned. Equally, clearly we can involve those who are not necessarily shipbuilders, either historically or traditionally, which will be good for competition and for British industry, as it will diversify the necessary skills and ensure that others are involved in the process. There will be real opportunities for the shipyard that the hon. Gentleman mentioned, as well as other shipyards—and, indeed, those who, perhaps, have not previously seen themselves as in the business of making ships.

I see no connection whatever between that and the order for ro-ro ferries. The total of this order already amounts to some £1 billion. I assure the hon. Gentleman, as I do the House, that the Government are not in the business of spending £1 billion of taxpayers' money as a smokescreen. This is a vital capability required for the Royal Navy, and is long overdue as a result of the failure of the previous Government to organise procurement effectively.

The hon. Gentleman asked detailed questions about systems. I shall simply back his concluding point, as he is right to say that it is vital that we rely on the systems to make sure that these ships operate effectively. In the past the Royal Navy, like navies throughout the world, has had the problem that the technology moves on much more quickly than does the ability, for example, to build a ship.

That also applies more generally to procurement of high-technology equipment. Central to the way in which the ships are to be designed is the fact that they will be capable of adjustment as the technology changes and develops. In response to the hon. Gentleman's points about Merlin, command and control, surface-to-surface guided weapons, close-control weapon systems and tactical Tomahawk, there will be an ability to deploy each of those weapons, should they be appropriate when the ships enter service in 2007. We shall be able to consider the strategic situation in the years leading up to 2007.

Let me make it clear that the ship's design and development is firmly in the hands of the Royal Navy, which is advising Ministers about the decisions that are made. The Navy is happy not only with the particular decisions made about these ships, but with the sophisticated range of warship building on which the Government have embarked, so I see no cause for concern. [HON. MEMBERS: "What about Merlin?"]

This will be a very different approach from that taken in the past, when technology has overtaken the vehicle carrying the various systems. Instead, we will be able to adjust. [HON. MEMBERS: "What about Merlin?"] Opposition Members keep repeating the word "Merlin". I have made it clear that it will be possible to use Merlin from the ship, if necessary. Those judgments will have to be made in light of the circumstances closer to the in-service date of 2007.

Mr. Syd Rapson (Portsmouth, North)

I welcome the statement, especially as it places contracts with British shipyards. Of particular interest to me is the possibility—and it is only a possibility—of shipbuilding returning to Portsmouth, whether in my constituency at Vosper Thornycroft or in the dockyard in the constituency of the hon. Member for Portsmouth, South (Mr. Hancock). We would both support that. I hope that the statement does not undermine Vosper in the competition process, or with regard to the company's capacity for ship repair. We will look into that later, but I thank my right hon. Friend for the statement and the welcome possibility of shipbuilding returning to Portsmouth.

Mr. Hoon

I am grateful to my hon. Friend. He is right to use the word "possibility"; ultimately, a commercial decision will be made by Vosper Thornycroft, but I understand that it is considering the matter carefully.

Mr. Menzies Campbell (North-East Fife)

It would be churlish not to welcome the placing of this order—and, in particular, not to recognise the innovative approach being adopted for design, with the involvement of BAE and Vosper at that stage. Will the Secretary of State confirm that one of the advantages of the design will be to provide a higher standard of accommodation for all ranks who serve on the ship?

I respectfully say to the right hon. Gentleman that he rather pushed aside the question of the roll on/roll off ferries, and there is no doubt that there is considerable anxiety about that order. I hope that he will be able to tell the House that he expects to make an announcement about the Government's position very soon.

Should not we recognise the fact that there has been some trade-off between cost and capability because of funding constraints? The Secretary of State does not have to take my word for that; he can accept the conclusions of Jane's Defence Weekly, which said that the type 45 would enter service without some desired capabilities, several of which were referred to by the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), who speaks for the official Opposition. Is not the real question the extent to which the overall capability of the vessel will be affected if it goes into service without them? What assessment have the Government made of its ability to fulfil the likely tasks that will be imposed on it in the foreseeable future without the particular capabilities that have already been drawn to the Secretary of State's attention?

Mr. Hoon

I am grateful for the right hon. and learned Gentleman's observations. He is right to say that one of the advantages of the new designs is significantly to improve accommodation for those who work on board the ship. I know that he had to raise the question of ro-ros, but I am at a loss as to why that is considered relevant to today's statement. [Interruption.] One of my hon. Friends suggests that for the right hon. and learned Gentleman, every cloud has a silver—[Laughter.] Perhaps I will forget about that, but it was a good joke the way my hon. Friend told it to me.

As for cost and capability, we have to recognise that there are limitless capabilities that can be incorporated into any given ship. The right hon. and learned Gentleman mentioned some, and the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) mentioned others. It is always necessary to make an assessment of what we want any given ship to do. The Royal Navy is entirely happy—indeed, pleased—about the prospect that this ship, whose primary function will be defensive, against an attack from the air, will have a full range of equipment for that purpose. In addition, there will be opportunities for adjusting and enhancing that capability in future. That is built into the design. As I have said, the danger, otherwise, is that we design a ship for today's technology, knowing that it cannot enter service until 2007, as this one will. The reality is that technology and the strategic situation will have changed by then, and we shall not have the opportunity of making adjustments to the design. The design of the ship allows for changes and enhancements as we go along; that must be a smart way of dealing with the problem of a changing strategic environment.

Mr. Frank Field (Birkenhead)

Is the Secretary of State aware that as he was preparing his statement, Cammell Laird was declaring record profits, output and employment growth? Does it puzzle my right hon. Friend as much as it puzzles me that this premier group of yards, which wins its orders from a worldwide market, finds it so difficult to fight its way through the public procurement procedure? If he is as puzzled as I am, will he ponder on that before he makes his next group of announcements, to which I look forward?

Mr. Hoon

Certainly, as I made clear, there will be the opportunity for other yards to bid for the modules for the construction of the third ship and for subsequent ships, bearing in mind the fact that we have made an announcement in relation to the first three of a planned class of 12. Clearly there will be opportunities for other yards, including Cammell Laird, to participate in what will be an exciting programme.

Mr. Crispin Blunt (Reigate)

Is it smart procurement to make the statement months before a contract will be placed?

Mr. Hoon

The issue for the House is to be informed of the Government's intentions as soon as those intentions become clear. We have done that. Had we delayed, we would have been criticised for delaying. We are giving the House as much information as we can as early as we can.

Mr. George Galloway (Glasgow, Kelvin)

Please forgive me, Madam Speaker, for appearing before you improperly dressed. I had not expected this statement to be made today.

Will the Secretary of State accept from me that this is wonderful news for the Clyde, for Glasgow and for the hard pressed economy of west central Scotland? It is especially gratifying that the first of class of the new type 45s, which I hope will never have to be used in anger, will go down the slipway of the first-class Yarrow shipbuilders in Scotstoun in my constituency, where the work force is grieving the untimely death, at a very young age, of the shop stewards' convener, Stewart Crawford? In a dark week for the work force, my right hon. Friend's announcement will come as great news.

Will my right hon. Friend accept from me that it is "dauntless", even "daring", for us to have an unexpected visit from the three Scottish National party Members? If they had their way, made England a foreign country and broke up the United Kingdom, none of those ships and none of those jobs would be coming to Scotland.

Mr. Hoon

I am grateful to my hon. Friend. It is certainly good news for Glasgow, for the Clyde and for the United Kingdom, whose Royal Navy is ordering these ships.

Mr. John Wilkinson (Ruislip-Northwood)

Is it not ironic that the most Europhile Secretary of State for Defence that we have had for a long time should be announcing, in essence, a national programme to fulfil an area of our defence requirement for the Royal Navy that could not be fulfilled either by the NFR 90 or by the Horizon project collaborative European programmes before it?

Is there not a risk that the type 42s will have to continue for an inordinately long time—longer than anticipated—at an extra cost to the Exchequer, as estimated by the National Audit Office, of £537 million? Furthermore, is there not a risk that the principal anti-air missile system, which is in essence a Franco-Italian ASTER missile system, could be late, with a further augmentation to cost and a further deficiency in the overall capability of an already under-equipped ship?

Mr. Hoon

As I made clear to the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), who speaks from the Opposition Front Bench on defence, we are making the announcement today because of the failure of a joint programme entered into by the Conservative Government whom the hon. Member for Ruislip-Northwood (Mr. Wilkinson)—sometimes—supported. We had to pick up the pieces from that failure. I made it clear that the reality of modern warfare for a modern Royal Navy is its involvement in sophisticated joint projects. The defence systems that will be employed will be joint projects involving France and Italy. Sophisticated collaborative projects are inevitable in the modern world, and we need to ensure that the Royal Navy is equipped with the very best and latest technology.

Mr. Ian Davidson (Glasgow, Pollok)

May I tell the Secretary of State clearly and unequivocally what a wonderful man he is for announcing the order, which will create and safeguard so many jobs on Clydeside? May I say how much I, and my constituents south of the Clyde, welcome the way in which the ships will be built? That will mean work going to Govan shipyard, as well as to Yarrow. May I ask him, however, about the engines of the ships? Will the Rolls-Royce WR21 engine be selected in due course? As he is probably aware, a number of export orders depend on whether that engine gains credibility by powering the vessel. Finally, although modesty precludes my suggesting any name for the D class, should my own be suggested, I would not resist its use.

Mr. Hoon

I am grateful to my hon. Friend for his observations, although he will forgive me for saying that I have not been used—lately, at any rate—to enjoying such enthusiasm on the part of my hon. Friends north of the border. No decisions have yet been taken about the engines. A fiercely competitive commercial contract is on offer for them. Rolls-Royce is certainly one of the bidders, and I am sure that it will submit an extremely competitive and effective tender. As for my hon. Friend's final observation, I shall have to investigate with my naval historians whether there has ever been an HMS Davidson—although there is a first time for everything.

Mr. Mike Hancock (Portsmouth, South)

I am delighted that the Secretary of State has made the announcement today, and I am sure that everyone in Portsmouth is delighted at the prospect of a return to shipbuilding at its naval base. That will happen only if Fleet Support Ltd. co-operates—and, more importantly, if the Ministry of Defence makes facilities available to Vosper in the naval base and dockyard area. I hope that there will be no impediment in the way of that. I am also grateful for the Secretary of State's comment about module development. I hope that if it is not possible to build the ships in Portsmouth dockyard, the MOD will try to secure Vosper's support at least for the building of some of the modules there.

Mr. Hoon

I am grateful for the hon. Gentleman's constructive approach. I made it clear that ultimately, Vosper Thornycroft must decide on the opportunity. Its facilities in Southampton will certainly be made available for the modular construction process that we anticipate, providing benefits across the country. Instead of the benefits of such a contract being located in a particular yard or two, as has historically been the case, there is an opportunity for the whole of the UK's shipbuilding industry to benefit.

Dr. Alan Whitehead (Southampton, Test)

May I express my delight at the announcement that the second of class will be built on the south coast by Vosper Thornycroft—a shipyard with a proud record of building first-class vessels for the British Navy over many years? Naturally, my personal inclination would be towards ensuring that it was built at Woolston. Bearing in mind what my right hon. Friend has said about the possibility of the work going to Portsmouth, will he assure me that any decisions will be reached purely on commercial considerations, and that the requirement, were production to be transferred, for Vosper to use a Royal Navy dockyard, will not receive any additional consideration other than that of commercial best practice?

Mr. Hoon

I certainly understand my hon. Friend's concern. I have always emphasised the importance of the commercial considerations that will effect any decision taken by Vosper Thornycroft. Whatever decision it takes on the precise location, I am confident that it will continue to require the very considerable skills of the work force in and around Southampton, which have been built up over many years and will still be required to complete such a contract—as well as future warship orders that the Government will be making in due course.

Dr. Norman A. Godman (Greenock and Inverclyde)

As an ex-shipwright—the only one in the House, I think—I am always delighted to hear news of vessels being built in our yards. I only hope that Cammell Laird and other yards will secure orders in the future. I hope that my right hon. Friend will forgive my greed, but I want to see the four ro-ro vessels built on the upper Clyde, by my constituents. I think that I am right in saying that I have more constituents in those yards than any of my hon. Friends. It may not be within my right hon. Friend's gift, but I would be grateful if he would ask BAE to ensure that when workers are recruited to Scotstoun and Govan, they are given decent terms of engagement, not short-term contracts. If the work is there, craftsmen and others should be given security of tenure.

Mr. Hoon

It was only on 6 July that we received the revised bids relating to the ro-ro ferry order. A great deal of detailed work has already gone into an assessment of those bids, and a lot of work was done over the weekend to give us an idea of how they were shaping. More work will still have to be done, but I will certainly try to ensure that the House is given as early a warning as possible of the likely outcome of the bids.

Mr. David Davis (Haltemprice and Howden)

There is much to welcome in the Secretary of State's announcement today, but may I ask him how he will deal with one potential problem? Recurrent in naval systems is the problem of matching—interface. That has led to cost and performance problems over many years, and it is clearly a potential issue with the type 45 and the PAAMS. How will the Secretary of State deal with that, given that there are two separate contracts, one under English law and one under French law?

Mr. Hoon

The right hon. Gentleman is right to raise the issue. We have been concerned about it, because of previous problems that have arisen with closed IT architecture systems. Specifically, for all the reasons that I hope I have set out to the House already, the IT systems need to be capable of being enhanced and developed, and must also able to respond to brand-new systems that may still be in the process of being thought up, never mind designed. Central to our approach is the idea that the IT systems on board the ships will involve an open architecture, and will be capable of being enhanced and of interfacing with new systems dependent, using a completely different approach. Built into the heart of the radar systems is the ability to interface with new, and, I hope, developing technology.

Mr. Roy Beggs (East Antrim)

I welcome the announcement made by the Secretary of State today, on behalf of the Royal Navy and the British shipbuilding industry. I recently welcomed to my constituency HMS Somerset and HMS Quorn, and I hope that I am still around when the first type 45 can be invited to call in to the port of Larne. Can the Secretary of State tell us whether the radical modular construction technique will extend competition so far as to enable Harland and Wolff to compete, and perhaps even provide an opportunity for Short Brothers?

Mr. Hoon

As I made clear in my statement, and in answer to a number of members of the shipbuilding trade union in the House, it is important that the approach is seen as an opportunity not just for a single successful shipyard, or two successful shipyards, but for all those engaged in shipbuilding, and certainly those in Northern Ireland, to participate in a highly competitive process. The challenge is there for British shipbuilding. If there are British shipbuilders that are competitive and capable of offering bids that win the day, there is work available, and we will be delighted to receive the orders from Northern Ireland, just as much as from any other part of the United Kingdom.

Dr. David Clark (South Shields)

I very much welcome this afternoon's announcement, which is the first of the largest warship orders for many decades. It is good news for Scotland and the south coast of England. My right hon. Friend placed great emphasis on the need to maintain a strong shipbuilding capability. Does he know that only three years ago, 14,000 people worked in river-related jobs on the River Tyne, but that fewer than 1,000 people now work in such jobs? In view of my right hon. Friend's emphasis on commercialisation, will he explain the way in which a shipbuilding company such as Swan Hunter can participate in the order when it is up against its prime competitors, BAE and Vosper Thornycroft?

Mr. Hoon

The way in which the competition is organised is specifically designed to allow not only for competition between the two companies that I have mentioned, but to ensure that those companies make sure that others have the opportunity of participating, especially in the construction of the modules. Many hon. Members know far more about the history of British shipbuilding than I. However, specific shipyards have depended too often on particular orders for their survival. Indicating that the first three ships are part of a planned class of 12 provides an opportunity for some yards to plan for the future. The benefit of such planning for the taxpayer and the Government is that we anticipate that it will reduce the yards' costs, and thus the cost to the British taxpayer. It will also allow the yards to plan ahead, and not be dependent on the single order approach that has done so much damage to British shipbuilding in the past.

Mr. Alasdair Morgan (Galloway and Upper Nithsdale)

I welcome the announcement, and pass over the remarks of the hon. Member for Glasgow, Kelvin (Mr. Galloway)—which owed more to the state of mind of the Scottish Labour party than to the order.

The first and third warships will be assembled by BAE Systems. The Secretary of State said that the first warship would be launched at Yarrow. Where will the third vessel be launched? On modular construction, will the Secretary of State outline a typical percentage that may be contracted out from the launching yard under the arrangement?

Mr. Hoon

I am grateful for the hon. Gentleman's welcome. However, my hon. Friend the Member for Glasgow, Kelvin (Mr. Galloway) had a point when he contrasted the policy, which I assume that the hon. Member for Galloway and Upper Nithsdale (Mr. Morgan) supports, of taking Scotland out of the United Kingdom, with applauding an order placed on behalf of the United Kingdom Government. The hon. Gentleman is being a little uncharitable to my hon. Friend, who used his powerful and logical mind to expose the dishonesty that the hon. Gentleman appears to want to avoid mentioning. However, in view of the hon. Gentleman's generosity, I shall not make too much of that.

If the third ship is to be assembled on the Clyde, it follows that it will be launched from there.

Mr. Tony Worthington (Clydebank and Milngavie)

The news that my right hon. Friend the Secretary of State has announced today is welcome to my constituents who work in Govan and Yarrow. He will know BAE Systems' view that, were it to obtain the order for ro-ro ferries, the preparatory work would reduce the price of the ships that we are discussing. Would that not be smart procurement?

Mr. Hoon

My hon. Friend is tempting me to put together two different orders for which there are different sets of criteria. The previous Government approached the matter in a similar way. Ro-ro ferries have a commercial requirement, which contrasts with the military requirement for the warships. I have made the Government's position on ro-ro ferries clear. I shall try to make an early announcement.

Madam Speaker

I call Mr. Quentin Davies. [Interruption.] Mr. Davies?

Mr. Quentin Davies (Grantham and Stamford)

Will the Secretary of State finally come clean on the question that he has studiously avoided until now—the Merlin? It is not a future weapons system; it is coming into service now. Contrary to expectation, the platform on the type 45s does not specify taking the Merlin. Why not?

Mr. Hoon

I am sorry that hon. Member for Grantham and Stamford (Mr. Davies) had to be disturbed.

I have already said that the platform will be capable of taking the Merlin. Judgments will be made nearer the in-service date about the equipment that will be required on the platform to take the Merlin. It is sensible to approach such matters in that way, rather than to design a ship today, knowing that the in-service date is 2007 and that the technology is likely to change. We are preserving flexibility in the design and the equipment that will be available—precisely to avoid the problems that we and the previous Government faced because ships were designed knowing that the technology would be significantly different when they came into service.