HC Deb 09 December 2002 vol 396 cc4-6
2. Mr. Gordon Marsden (Blackpool, South)

What discussions his Department has had with BAE Systems about the maintenance of (a) aerostructure and (b) other manufacturing business in the UK. [83925]

The Parliamentary Under-Secretary of State for Defence (Dr. Lewis Moonie)

BAE Systems is the Ministry of Defence's single largest supplier. Both the MOD and the Department of Trade and Industry have frequent dialogue with the company concerning existing and future programmes as well as the company's strategic plans.

Mr. Marsden

I thank my hon. Friend for that answer. Does he understand the concern of my constituents and others who work for BAE Systems in the north-west that its proposed sell-off of the aerostructures division will mean the loss of a pool of some 400 skilled workers, who are potentially key to the defence business in terms of flexibility and extra capacity? Does he recognise that a company that has benefited from some hundreds of millions of pounds of taxpayers' money for orders needs to have a clearer focus on what its future core structure of business will be and what its strategy is? Many of us believe that it is becoming rather woolly.

Dr. Moonie

I am well aware of the change in the company's strategy. Its aerostructures business is successful and viable; it has a substantial order book. To divest the aerostructures business was a commercial decision for the company to make, and it has said that there are no current plans to fragment the business. Any discussions with interested parties will consider the business as a whole. I assure my hon. Friend that we will be keeping a very close eye on what is happening.

Mr. Michael Jack (Fylde)

In the light of the current uncertainties in BAE, the biggest employer in my constituency, can the Minister confirm that, notwithstanding the sad loss of DA6, one of the pre-production prototypes of Eurofighter, the Government remain utterly, totally and completely committed to what is a vital source of manufacturing work, and that they will buy all 232 of those aircraft? What work is he doing to ensure that BAE benefits from further export orders for the Hawk aircraft?

Dr. Moonie

On the latter point, I can assure the right hon. Gentleman that, we are working hard, as we have done continuously, to try to help the company to secure orders for Hawk abroad. We are also working with it on the development of a new variant of the aircraft, potentially for our own future training requirement. With regard to Typhoon, I repeat the assurances that have been repeatedly given in the House. The order currently stands at the number that the right hon. Gentleman has quoted and will remain so. The crash of the prototype was most unfortunate, but the aircraft remains on course to come into service when we expect it to.

Mr. Lindsay Hoyle (Chorley)

The Minister is rightly spelling out commitments to BAE Systems and to the north-west. Within that, can we ensure that the advanced jet trainer will come on stream and that that contract will be let to BAE Systems? Obviously, the aerostructures business is very important. Will the hon. Gentleman ensure that he continues the dialogue to ensure that those jobs remain in the north-west and are not transferred?

Dr. Moonie

I can assure my hon. Friend that we are continuing to discuss our future training requirements closely with British Aerospace. The contract will have to be competed for but we hope that the company will carry on doing sterling work for us. Again, we will be keeping a very close eye on what is going on in the business to ensure that our interests in the north-west are not adversely affected.

Mr. John Wilkinson (Ruislip-Northwood)

Can the Minister tell the House whether he has had a discussion with British Aerospace, as a partner in the Airbus consortium, on the effect of the German Government's announcement that they are to reduce their intended order from 73 airframes to 60? Will that significantly increase the price to the Royal Air Force, which Her Majesty's Government have decided should order some 25 airframes?

Dr. Moonie

We are continuing to discuss the implications of the German decision on the contract, but our current expectation is that there will be no major changes in the unit price for us.

Mr. Kevin McNamara (Hull, North)

My hon. Friend mentioned the new arrangements for the Hawk, which his Department and BAE Systems are discussing. There will be 450 redundancies on the north and south banks of the Humber as a result of dithering in the swapping of information, either by his Department or by BAE Systems management. Can he tell the House when he hopes those discussions will conclude; whether he will maintain the Government's intention to purchase this aircraft, and in the numbers that he said; and what steps he and his Department will take to try to alleviate the Christmas misery of 450 families on Humberside?

Dr. Moonie

I have to say to my hon. Friend that it is for BAE Systems to determine its staffing levels. The job losses that he describes result from its failure to secure a number of orders—not just from the MOD—in what is a highly competitive market. I know that the claim has been made that the MOD is taking too long to reach a decision on the Hawk 128. Choosing an advanced jet training aircraft that will probably remain in service for at least 25 years is not a simple matter. The decision will be made at the earliest practicable moment, but it should not—and will not—be taken lightly. We need to be sure that the aircraft that we choose is the best available platform on which to train the pilots of a highly sophisticated new generation of combat aircraft that has yet to come into service.