§ 5. Mr. Laurence Robertson(Con) (Tewkesbury)If he will make a statement on the future strategic tanker aircraft project. [150157]
§ The Secretary of State for Defence (Mr. Geoffrey Hoon)I was pleased to announce to the House this morning that we have decided that the bid from Air Tanker for Airbus A330 aircraft offers the best prospect of providing a value for money PFI service. That decision represents a key milestone in the future strategic tanker aircraft programme. We now need to undertake complex negotiations with Air Tanker before final decisions are taken.
§ Mr. RobertsonI thank the Minister for that response, but the news that he announced this morning will have come as a great disappointment to Smiths Aerospace in my constituency, which would have liked to add the UK tanker programme to the technology already selected for the United States, Italy and Japan. Where does the news leave British industry's confidence in the much-vaunted MOD defence industrial policy, and what reciprocal arrangements does the right hon. Gentleman have with the French as a result of his strengthening the position of EADS and Thales in the UK?
§ Mr. HoonThe hon. Gentleman will be well aware that both bids contain significant benefits for UK industry. There are winners and losers in any competition, but our decision has been based on the bid that we judge offers the best potential solution for the armed forces, for the taxpayer and for UK industry.
§ David Cairns(Lab) (Greenock and Inverclyde)I warmly welcome my right hon. Friend's announcement this morning. One of the potential partners for Airbus is IBM, which will produce some of the software for the project based in Greenock in my constituency. Does that not demonstrate that throughout Britain we have the technological capacity to fulfil very high-spec orders? If he could see his way clear to giving us a little of the aircraft carrier orders as well, we would be very happy indeed.
§ Mr. HoonSome people are never satisfied, but I am grateful to my hon. Friend for his observations on the high-tech aspect of the bid. As I said in response to the hon. Member for Tewkesbury (Mr. Robertson), the project offers significant opportunities for British and British-based industries and for the development of technology in this country.
§ Mr. Gerald Howarth(Con) (Aldershot)We welcome the decision to replace the ageing VC10s and Tristars, which have done stalwart service for the Royal Air Force, but the Minister's statement today leaves several questions open. What are the outstanding issues referred to in his statement? What assessment has he made of the export potential of the A330 tankers, given that other air forces have bought 767 tankers? Why has he not yet decided to go down the private finance initiative route? Given the last-minute switch last summer of the Hawk 128 order from a PFI to a straight purchase, and last week's disastrous National Audit Office report that the procurement budget was £3,000 million overspent last year, the Government's smart acquisition programme is looking more foolish than smart.
§ Mr. HoonThe hon. Gentleman, as ever, spoiled quite a good first point with a rambling observation in the second part—an observation that he knows is inaccurate. Eighty-seven per cent. of the criticisms of major projects concerned four projects that were begun under a Conservative Government—four projects that were begun without the benefit of smart procurement. If the hon. Gentleman had read the report instead of making slogans, he would have seen that the smart procurement aspect was welcomed by the NAO. It is the difficulty with the four projects started under a 10 Conservative Government that has caused the major backlog. I am in no way complacent about those projects—we have to get them right. However, perhaps he did not read too carefully the statement I made this morning about the future strategic tanker aircraft, in which I indicated that it was a PFI project. The negotiations that we are now taking forward with Air Tanker are to establish the precise details of the PFI aspect.
§ Mr. Tom Watson(Lab) (West Bromwich, East)Is my hon. Friend aware that although some will be disappointed by the Air Tanker decision, the west midlands manufacturing supply chain will not be? In the past three years, many of the companies in question have diversified out of the automotive sector and into aerospace. The announcement is good news not only for north Wales and Scotland, but for the west midlands. Will he get his Department to highlight some of the initiatives for British manufacturing that are giving the west midlands a chance?
§ Mr. HoonI am grateful to my hon. Friend. Often, shipbuilding is associated with Scotland and the north-east, and aircraft manufacturing with north Wales and the north-west, but in reality the benefits of such major contracts spread throughout the UK's manufacturing base. I am especially pleased that the west midlands will reap some of those benefits.