HC Deb 15 February 2001 vol 363 cc448-9
7. Mr. Gordon Prentice (Pendle)

What steps he is taking to safeguard employment in the aerospace industry. [149007]

The Secretary of State for Trade and Industry (Mr. Stephen Byers)

We have taken a number of steps, for example launch investment in BAE Systems to develop the wings for the A380 aircraft. On Tuesday, I announced launch investment in Rolls-Royce for further development of the Trent aero-engine. As a result of the action taken by the Government, employment in the aerospace industry has increased since 1997, with the latest figures showing more than 15,000 more people being employed in the sector.

Mr. Prentice

I extend my hearty congratulations to my right hon. Friend on his wisdom, perspicacity and foresight—you do nit often hear that, Mr. Speaker, so savour it—for putting £250 million in launch aid into Rolls-Royce, which is an important company in my constituency and that of my next-door neighbour and hon. Friend the Member for Burnley (Mr. Pike).

This week, Rolls-Royce said that the £250 million grant will sustain 7,000 jobs in the company and the supply chain. I am worried that some of those jobs in the supply chain may be overseas. What conditions were attached to the grant to Rolls-Royce to ensure that as many jobs as possible stay in the United Kingdom, and do not go to other places such as Canada and eastern Europe?

Mr. Byers

I understand my hon. Friend's concern. The 7,000 jobs which have been safeguarded are in Rolls-Royce and the supply chain here in the United Kingdom, hopefully bringing benefit to my hon. Friend's constituents and people in neighbouring constituencies in Lancashire.

I also understand my hon. Friend's concern about the restructuring on which Rolls-Royce has embarked, especially its intentions on its research and development work. We need to do all that we can to encourage Rolls-Royce to regard the United Kingdom as a good place to continue its research and development. Even at this late stage, I hope that Rolls-Royce will think again, consider that item for a few more weeks, and perhaps see what the Chancellor may announce in the Budget. We know from the pm-Budget report that my right hon. Friend is looking at the whole area of research and development support for large businesses as well as small and medium-sized enterprises.

Miss Anne McIntosh (Vale of York)

Will the right hon. Gentleman join me in congratulating Boeing on the inward investment that it has announced in Yorkshire and the Humber—the homeland of my right hon. Friend the Leader of the Opposition—as recently as last week? Will the Secretary of State be particularly robust in standing up against any aggressive or protectionist standards from the United States authorities, especially in any contest between Boeing and Airbus Industrie over the future of aerospace in this country?

Mr. Byers

The hon. Lady touches on an important point—how we can make sure that the trade disputes that have blown up between the European Union and the United States over the last few years do not occur under the new US Administration. We have already made very good contacts with the new US trade representative, and I know that he is acutely conscious of the need to ensure that we have mechanisms in place thac will ensure that we can move in quickly and stop those disputes developing into the sort of problems to which the hon. Lady referred.

Boeing's decision to invest, with the university sector, in state-of-the-art facilities in Yorkshire, is a good demonstration of how universities and businesses can work together. The fact that world-class companies such as Boeing are coming to Yorkshire is a demonstration that, under this Government, Britain is a good place to do business and research. As a result, we are creating British jobs.

Mr. David Borrow (South Ribble)

May I tell my right hon. Friend that many of my constituents working for BAE Systems have welcomed the launch aid and the various military orders that the Government have announced in the past few years? Despite that, they have seen round after round of redundancies in Lancashire and the threat of further redundancies in the months ahead. As for BAE Systems, the company seems to have no clear strategy for the future. In discussions with the company in the weeks ahead, will my right hon. Friend make clear to it the concerns of Lancashire MPs and their constituents about the future of BAE Systems and its commitment to the UK aerospace industry?

Mr. Byers

My hon. Friend has been a powerful advocate for the interests of BAE Systems workers in Lancashire. I understand the concerns that he has expressed and I shall certainly raise them with the company's management. Global competition means that BAE Systems is going through a period of restructuring. It is not the job of the Government to try to stand in the way of that, as the company must make commercial decisions in its interests to ensure employment opportunities. Our task must be to help individuals through this period of change. One of the things that we are trying to do with BAE Systems is to ensure that it can secure more contracts in export markets. I hope that there will be some good news in the near future on the securing of major contracts by the company.