HL Deb 07 July 1988 vol 499 cc390-1

3.11 p.m.

The Viscount of Oxfuird asked Her Majesty's Government:

What will be the consequences for employment in the United Kingdom through participation in the European fighter aircraft programme.

The Minister of State for Defence Procurement (Lord Trefgarne)

My Lords, we estimate that the decision to embark on full development of the European fighter aircraft will give direct long-term employment to between 3,000 and 4,000 people in the United Kingdom. In the event of a decision in favour of subsequent production, 20,000 jobs in this country could be involved.

The Viscount of Oxfuird

My Lords, I thank my noble friend the Minister for a reply which must be encouraging. Can he confirm that the European fighter aircraft has export potential, and if so, will this affect the employment figures in an upward direction?

Lord Trefgarne

My Lords, if the Tornado is anything to go by, the new European fighter will certainly have a considerable export potential. As regards the number of jobs that that might create, I think it is perhaps fair to say that the production of any export version of the European fighter aircraft is likely to follow the national production. Therefore it follows that the jobs created by the original decision will be sustained rather than that new ones will be generated.

Lord Irving of Dartford

My Lords, is the noble Lord aware that we welcome the information he has given about additional jobs, especially in view of the report published last year by the city analysts, Scrimgeour Vickers, which said that in the next three years there would be 100,000 jobs lost in the defence industry because of cuts in expenditure? The UK share of the cost of this is something like £7,000 million. Can the noble Lord say where the money is in the defence expenditure for this long-term expenditure or what part of the present budget will have to be omitted? Can he also say what provision he has made for costs rising and re-runs?

Lord Trefgarne

My Lords, I am not sure that I recognise the figure referred to by the noble Lord. What we have agreed to so far is the development phase of this programme. The United Kingdom share will be of the order of £1.7 billion or £1.8 billion. The noble Lord will be reassured to know that there is a ceiling price agreed on the cost of the development programme.