§ 3.0 p.m.
§ Lord WINTERBOTTOMMy Lords, with the permission of the House, I will make a Statement on guided weapons for the Services.
The Government have now decided the next steps to be taken on the procurement of major guided weapons systems for the British Forces. Full development, by the British Aircraft Corporation, of the helicopter anti-ship missile Sea Skua is to proceed. Negotiations will be opened with France and Germany for the procurement, if the terms are right, of their medium range anti-tank missile Milan, mainly by manufacture under licence in Britain; and with the United States for the procurement, if the terms are right, of McDonnell Douglas's submarine-launched anti-ship missile Sub-Harpoon. The British Aircraft Corporation's helicopter-borne anti-tank missile Hawk swing and Hawker Siddeley Dynamics' submarine launched anti-ship missile Sub-Martel are to be cancelled.
170 The need to provide British Forces with first-class weapons has been the dominant consideration, but in addition the Government have had to take into account the limitations on defence funds following the Defence Review; the United Kingdom balance of payments; and, of course, both the immediate employment and other consequences of these decisions for British industry and the effects on its future capability to develop guided weapons, bearing in mind the substantial contribution that British industry makes to the equipment of our forces and those of other countries. Full account has been taken of the representations made in the process of consultation with both sides of industry and other interests, and an overall assessment of the situation shows that there should be no unacceptable consequences in the loss of job opportunities.
The ending of Hawk swing will mean some re-deployment of design staff at the British Aircraft Corporation (Guided Weapons) but the development of Sea Skua should help to mitigate this problem. Subject to the satisfactory outcome of negotiations with France and the Federal Republic of Germany the manufacture of Milan in this country should provide a substantial increment to the production loading of the company. The winding-up of the work on Sub-Martel at Hawker Siddeley Dynamics will, however, inevitably give rise to problems. Other projects which the company have in hand are unlikely to absorb all the design staff who will become available. Some loss of jobs is, therefore, likely to be unavoidable. The Ministry of Defence, however, recognises the extent to which its ability to meet its future needs is dependent on the strength of Hawker Siddeley Dynamics' design capability.
The Ministry of Defence is therefore proposing to the company immediate talks to settle the details of a Ministry of Defence-funded programme of research and exploratory development relevant to likely future military needs and the corresponding growth of Hawker Siddeley Dynamics' knowledge and expertise. In the same manner an appropriate programme is being put to Marconi Space and Defence Systems Limited, the other company which will be affected by the decision on the underwater-to-surface guided weapon, designed to maintain their 171 lead in the field of active radar homing heads.
Sea Skua, the anti-ship missile for mounting in helicopters, will now go into full development by the British Aircraft Corporation. This weapon will provide our destroyers and frigates with a strike capability stretching far beyond the horizon. It is the only weapon of its kind in the world, and it has aroused keen interest in a number of foreign navies. Milan is the only anti-tank guided weapon that meets our requirements for a man-portable system for the infantry. It is already in service with the French and German armies. In negotiations for its procurement our aims will include the establishment of a full-scale production line in Britain and agreed arrangements for European collaboration on weapons of this kind in the future. We shall also be aiming for a fair share of overseas sales of Milan. The Government's final decision on Milan will, naturally, be subject to the achievement of satisfactory terms.
Financial pressures have made it necessary to defer the introduction of a new type of anti-tank guided weapon for helicopters. Accordingly the British Aircraft Corporation development of Hawkswing will be terminated. The SS11 system will remain in service for the time being, and the question of an eventual replacement will be kept under review. The Government give high priority to arming of nuclear powered fleet (hunter/killer) sub-marines with air flight underwater-to-surface guided weapons which are fired from torpedo tubes and will greatly increase their capability for swift, long-range attack on surface ships. For the past three years we have kept open the option of developing Hawker Siddeley Dynamics' system Sub-Martel (based on the Anglo-French Martel air-launched anti-ship missile) and we have investigated the possibility of collaboration with the French extending into this new field.
However, it was recognised from the beginning that the costs of developing Sub-Martel would be very high and that if McDonnell Douglas's development of their underwater-to-surface guided weapon Harpoon was successful (as it has been) that system was likely to be the more attractive proposition. This has been a particularly difficult issue to decide but the Government have now 172 reached the conclusion that the right course is to terminate the development of Sub-Martel and open negotiations for Sub-Harpoon. The final decision will, of course, be determined by the terms that can be secured. We are making arrangements with the United States Government and McDonnell Douglas for a substantial level of offset to help with the dollar expenditure on Sub-Harpoon and to provide work in the United Kingdom.
§ Lord CARRINGTONMy Lords, the whole House will be grateful to the noble Lord, Lord Winterbottom, for having volunteered this Statement rather than allowing it to be prodded out of him; we are most grateful. I think, generally speaking, the criterion by which this kind of Statement should be judged is whether or not the result will be to provide the Forces with the best weapons, and it is certainly true in the case of Milan; we must accept that it is true in the case of the others, because these are technical matters which no layman can judge. But, certainly, in one respect it is unsatisfactory; the abandonment of Hawkswing will leave the Services with only the SS11, an obsolete weapon, and this because of the defence cuts which the Government have announced over the last 18 months. Would the noble Lord be prepared to tell the House how long it is intended that the Services should have to make do with the SS11?
There are, however, other criteria by which this should be judged. It is important that in this country we should have a guided weapons industry which is capable, if it ever should become necessary, of adopting and adapting the techniques of guided weapons. In the Statement the noble Lord talks of possible work to be done with Hawker Siddeley. Would the noble Lord tell your Lordships whether it is still the intention of the Government to keep two guided weapons companies going in this country, whether he thinks there is enough work for both, and whether or not it is true that over three years ago it was proposed that they should be amalgamated.
Another criterion by which the Statement should be judged is whether or not there is enough offset. The Statement makes some reference to offset, but would the noble Lord give an assurance that the purchase of Milan and Harpoon will not go forward unless there is sufficient 173 offset either in terms of home production or in terms of purchase of British weapons to enable a fair exchange to be made?
Lastly, would not the noble Lord agree that these decisions are the consequence of NATO and Government—including my own—failure over 25years to standardise weapons in the European area? It is a sorry state of affairs when we have to buy a Franco-German weapon, an American weapon, a British weapon, when there is not a NATO weapon available, and it would be very much better if in the future we concentrated in the Euro-Group and the United States on trying to get some kind of sense into the development of future weapons, when the kind of decision which the Government have had to take in this last month will be avoided.
§ Lord BYERS. My Lords, I should like to endorse what the noble Lord, Lord Carrington, has said. What concerns us on these Benches is that it looks very much as though this is a direct result of the unbalanced defence cuts, which again have resulted in running down our own industry to the point where its reduced production capacity has resulted in higher unit costs than those of our competitors, thus pushing us out of the market. Can the noble Lord say what the Government intend to do to secure for us a proper share of the international market in this field? Should not this matter be tied, as the noble Lord, Lord Carrington, said, to the development of policies for standardisation? Should we not in fact be geared to producing in this country a fair share not only of our requirements but of the requirements of the West as a whole?
§ 3.11 p.m.
§ Lord WINTERBOTTOMMy Lords, may I first reply to the point made by the noble Lord, Lord Carrington, and picked up by the noble Lord, Lord Byers, which is fundamental to the whole question. The noble Lord, Lord Carrington, said that the fact that we bought a Franco-German weapon was part of a sorry state of affairs. I should have thought that this is a move towards the creation of a European industry, something for which we all wish. I have stood at this Box on a number of occasions and have had this point drummed into me. I should stress—and this is important 174 —that the negotiations are only just starting, and we shall not enter into an agreement for the purchase of this particular missile unless the terms are satisfactory. The terms include a substantial manufacturing operation in this country, a direct involvement in the half-life improvement of the missile, and research and development into the next generation of this type of missile. Therefore, surely this purchase of a Franco-German weapon, which will become an Anglo-French-German weapon, is a step towards the type of basic industry that we want to see created within the European defence community. I myself, and I am certain all fair-thinking men, welcome this because this is the third step towards the commonality which we all agree is a necessary condition.
The noble Lord, Lord Byers, talked about a proper share of the market. The noble Lord, Lord Carrington, asked whether the offset was sufficient. Negotiations are just starting, but it is quite clear to me and, I am certain, clear to the House, that with our present economic problems we must, in the course of the negotiations, obtain a proper settlement before we buy these weapons. In the American situation we are buying comparatively few of these underwater-to-surface missiles, and therefore where you have a higher research and development and low production ratio—that is to say, you spend a lot of money on research and development and produce few weapons—it is prudent and sensible to go to a source where large numbers of the weapons are being produced and are capable of being adapted to our own purposes.
I should like to draw the attention of the House to the Sea Skua, which is a unique weapon and is designed primarily to arm the Lynx, which is an Anglo-French helicopter. It is, I understand, an extremely fine machine, having been purchased by five navies in the world. Therefore, I think that we can assume that a unique weapon adapted to a Franco-English helicopter of outstanding performance should be a good seller, and should be, among a number of weapons, our contribution to the guided missile capability of the NATO alliance.
To turn to the other points made by the noble Lord, Lord Carrington, I cannot speak on the two companies; all I 175 am dealing with is the situation as it now exists. I stated what we were doing to buffer the result of the decisions on BAC, who do not suffer much from it, but rather gain from it, and what we are doing to buffer the results on Hawker Siddeley. Your Lordships might wish to hear something on this. If we had all the money in the world I know what we would do; but we have not got all the money in the world and therefore we must make choices. Within a limited budget, we must make choices.
In order to maintain the capacity of Hawker Siddeley we are providing them with a research programme of very great interest. It is long term, but it is of interest. The intention is to discuss with Hawker Siddeley Dynamics a replacement for the cancellation of Sub-Martel, which at the end of the day will affect only 200 to 300 people, and in an industry of this size that is not very much. We are proposing with them an extension and expansion of the technology demonstrator programme on which they are currently engaged and which is at present primarily concerned with proving a novel control concept for air-to-air missiles. The expanded programme could have application to a number of future missile requirements. Hawker Siddeley are not going to suffer a savage cut and be left with nothing in place.
§ Lord CARRINGTONMy Lords, is there enough work for two companies?
§ Lord WINTERBOTTOMMy Lords, that is a totally different question. There is work within the timescale of the matter we are discussing at the moment. There will not he a sudden hiatus and stoppage. I am talking about a long-term change in programme, the result of which will appear about 1980. This is not going to cause a sudden shudder to run through the guided missile industry, whatever its future.
§ Lord SHINWELLMy Lords, if, as my noble friend seemed to imply, the decision when it is finally reached makes a contribution to standardisation and European defence—though I am bound to say that that was not very clear to me—then may I ask whether the expenditure involved is to be borne exclusively by the United Kingdom? If it is a contribution to European defence, obviously 176 NATO must be included when we are considering the burden of costs. However desirable the weapon may be in advancement of our security, when we are concerned about standardisation, as my noble friend rightly emphasised, why should the burden be imposed exclusively on the United Kingdom? We have referred to the need for standardisation in every defence debate of recent years, and if this is a contribution, and NATO is drawn into it and gains an advantage in the sphere of defence from the decision, then obviously the total expense should not be borne exclusively by the United Kingdom but should be shared by the NATO countries. Is that not so?
§ Lord WINTERBOTTOMMy Lords, I am in complete sympathy with what my noble friend has said, but we are not bearing the total burden of the cost. Assuming that negotiations go the way we hope they will, we are about to receive a very substantial manufacturing contract. We shall not be buying these missiles from Europe but will be manufacturing them ourselves. We shall be starting a collaborative programme with the Franco-Germany company for what is called the half-life improvement of the weapon, and working with them in the future on the next generations of weapons of this type. This is the major contract.
So far as Sea Skua is concerned, this is a totally British project, and one presumes that if other navies buy it in conjunction with the Lynx then that would be of total benefit to this country. The Harpoon, which is American based but within NATO, will be available at a lower price, with a better performance, and at an earlier date. As I said at the beginning of my Statement, since the interests of the Armed Forces are of paramount importance, I am certain that after what I have said my noble friend will now support me because the total cost is not being borne by this country.
§ Lord DUNCAN-SANDYSMy Lords, continuing the question of standardisation, can the noble Lord say whether the choice of these weapons was made after full consultation with our NATO allies? Can he also, in addition to the one instance that he gave, tell us to what extent other NATO countries are purchasing the same weapons?
§ Lord WINTERBOTTOMMy Lords, I can only speak for Milan. Milan is now standard equipment in the French and German armies. Sea Skua and Harpoon are some way ahead. As I said, I believe that Sea Skua, when its development period is over, will sell as the Lynx Helicopter is selling. Harpoon is an American weapon, but its main use is in the nuclear hunter killer field and only the Americans and ourselves in Europe have this type of submarine. Therefore at this moment its market is limited to the Americans and ourselves.
§ Lord WIGGMy Lords, would the Minister agree that it would have been preferable if he had started his Statement with the words, "Tell me that old old story"? I say this because I have heard this story repeatedly over the last 30 years, and he must have heard it many times, starting of course with the cancellation of the EM2 rifle and the standard round and proceeding in due course to cancel Corporal, Blue water, Blue streak and so on and so forth. Would he not agree that the background, the real scenario, against which you make this judgment is that since the end of the war this country has spent something in excess of £40,000 million on defence, of which not less than £6,000 million has gone on research and development? Time and time again all this produces is research and development, followed by cancellation and a Minister coming to the House and saying, "Of course, this will do something far better than we have done before. It is the best weapon we have ever had and is one in which foreign countries are interested. We are going to save money", and so on. This is child's play.
The simple fact is (is it not?), does the Minister not agree, that in many fields we are still lacking effective weapons; that the British Army still has no atomic tactical weapon which is modern. Starting with that we go over step by step and all we are left with at the end of the day is a Defence bill which does not even produce an adequate balance of manpower and which does not enable us to equip our forces effectively.
§ Lord WINTERBOTTOMMy Lords, the noble Lord asked me if I agreed. I do not. He chooses to forget the British successes such as Rapier, Martell 178 and many other weapons which are selling extensively overseas. We are not producing a continued series of scrap and unsuccessful weapons. We have a large number of successes to our credit. Unfortunately—or perhaps fortunately—not every time that a gleam comes in the scientist's eye is a super weapon born. Rand D is a very uncertain process. I would beg the noble Lord, if he wishes to support British industry, not to denigrate it in the sweeping terms he does at the moment.
§ Lord WIGGMy Lords, would the noble Lord agree that the simple way to establish the facts is to ask his right honourable friend to publish a White Paper? If you like publish all failures published in the Report that was prepared by Mr. Jenkins when he was Minister of Aviation and at the same time publish a White Paper of the successes. The only thing is, of course, that if be publishes the successes it will almost be a piece of white paper.
§ Lord BALNIELMy Lords, bearing in mind that of the defence cuts already announced, 70 per cent. is borne by the Equipment Budget and this has already had a very serious effect on the research and design capabilities of the guided weapons industry, does not this announcement to-day have very serious implications particularly for Hawker Siddeley Dynamics and indeed bring into question, as my noble friend has already said, whether two companies can continue in the field of guided weapons? The noble Lord's answer on that would be welcome.
As this is a very large order going overseas, surely as a precondition one could lay down that there should be an offset arrangement whereby as a quid pro quo America, Germany and France should buy research and design work in this country. Finally, may I ask the noble Lord to answer the question posed by my noble friend: how long is the SS11 going to continue in service? It is already obsolescent.
§ Lord WINTERBOTTOMMy Lords, as regards the offset agreement with the Americans for Harpoon, that is a matter that in principle is agreed. As I said, we are right at the beginning of negotiations and I cannot state what the measure of offset would be and in what form it would 179 come. It would depend in many ways on what we had to offer.
As regards Milan, I cannot feel that we are hardly done by, because we are going to have a major manufacturing project in this country under our own control; we are going to get involved in future R and D with our European partners, and we shall be involved in the next generation of weapons—again if negotiations are satisfactory.
As regards damage to the guided weapons industry of this country, well it has its successes. BAC are starting on a major project of great promise in the Sea Skua and Hawker Siddeley are being offered alternative work for something they have started in the area of technology demonstrator programme. So we are not killing the guided weapons industry. In one area new work and large contracts are being provided; in the other, a stop-gap arrangement is being made to keep the team together.
Finally, how long will the SS 11 continue? The replyis—and I am certain this will please everyone—that the problem is under continuous consideration. I would agree that there is a gap, but that gap can be filled. It is a question at the moment of when the finances are available for something which is perhaps not as important as the weapons we have been discussing today. The really important weapon, as I understand it, is Milan. The Army want this weapon. As a result of their experience in the Yom Kippur war, this weapon is entirely essential and the one weapon which is here with the optimum performance is Milan.
§ The Earl of KIMBERLEYMy Lords, could the Minister tell us whether the Harpoon has a nuclear warhead and also roughly what the range is expected to be?
§ Lord WINTERBOTTOMMy Lords, I never said what warhead it has. It is an underwater-to-ship guided missile. I think this might be a steam hammer cracking a nut if we started throwing tactical nuclear weapons at merchant ships. I am not talking about how the weapon is designed, I am merely talking about the type of weapon.
§ Lord WIGGMy Lords, the Minister has told us that the matter is under 180 consideration. Would he give us an assurance that no stone will be left unturned and no avenues unexplored?
§ Lord CARRINGTONMy Lords, I hesitate to intervene; we have been going a long time. Are the Government really satisfied with a situation in which they admit that the Services are equipped with an obsolescent weapon which they are not prepared to replace?
§ Lord WINTERBOTTOMMy Lords, I did not say that we were not prepared to replace it. I said that we were making major decisions in other areas and in the area which we are discussing the need for decision is not so great.
§ The Earl of ONSLOWMy Lords, does the answer to the question of the noble Earl, Lord Kimberley, assume—perhaps it is unwise not to assume—that it does have nuclear capabilities? If this weapon has nuclear capabilities, will it mean that we shall have to design our own nuclear warhead and so test the nuclear warhead itself?
§ Lord WINTERBOTTOMMy Lords, that is another question.