Arms Manufacturers: Future (Hansard, 25 March 1991)

§ The Parliamentary Under-Secretary of State, Ministry of Defence (The Earl of Arran)
My Lords, no. It indicated the Government's belief that decisions about the way companies conduct their business are best left to the commercial judgment of the individual companies concerned.

§ Lord Jenkins of Putney
My Lords, I thank the Minister for that Answer. Is he aware that this is no time for ideological economics? The reiterations on the positions of Thatcherism will not convince anyone that the Government have left that position behind. Does the Minister agree that a number of companies are having difficulty in making the transition, and that unless the Government are prepared not merely to reiterate their theoretical position but also to give help, many of those companies will go under?

§ The Earl of Arran
My Lords, this is not an ideological situation, as the noble Lord tries to suggest. We are suggesting, as we always have, that this is a practical way forward. We accept the need to keep industry closely informed of our requirements. However, decisions on the forward equipment programme must be a matter for the department.

§ Lord Hailsham of Saint Marylebone
My Lords, is it not rather a paradox that the noble Lord, Lord Jenkins of Putney, whose hostility towards arms manufacture is well known, should be asking the Government to subsidise those who in the past have indulged in it?

§ The Earl of Arran
My Lords, my noble and learned friend makes a good point.

§ Lord Mayhew
My Lords, does the Minister agree that while in the present situation there are bound to be substantial cuts in defence orders, it is the Government's duty to give the longest possible notice to the defence industry of changes? In that respect, why has a decision not yet been taken on the order from Vickers for new Challengers? The decision could have been taken by the end of last year. Is the Minister aware that as a result of being strung along in this way Vickers are experiencing great difficulties?

§ The Earl of Arran
My Lords, the noble Lord, Lord Mayhew, is undoubtedly aware that we have just returned from victorious conflict in the Gulf. Following the document Options for Change, it is extremely important to absorb and learn from lessons in the Gulf before any final decisions are taken.

§ Lord Molloy
My Lords, is the Minister aware that, while his comment was accurate, during the cold war period there were many arms manufacturers and skilled craftsmen whom we should thank for their efficiency? Inevitably, they will now find themselves in difficulties. Should we not remember what they did during the cold war and help them as much as we can now that the thawing period is about to set in?

§ The Earl of Arran
My Lords, we are always mindful of the service that our suppliers have performed on our behalf. The Government fully consult and inform our suppliers at all times in order that they know our thinking.

§ Lord Williams of Elvel
My Lords, does the Minister agree that at present there are five naval shipyards which are employing 21,000 people, and that in five years' time there will be two naval shipyards employing only 8,000 people? All those people are part of a skilled workforce. Is it not possible for Members of the Government to sit down and plan the run-down of this major industry; or must we have the same old comments about market forces ruling? The Government have tried to junk most of Thatcherism, so when are they going to junk this aspect?

§ The Earl of Arran
My Lords, the noble Lord, Lord Williams, is a master of speculation and hypothesis. I am not sure from where he obtained the figures for the years that lie ahead; but he knows very well that under Options for Change much must be learnt, and great attention must be paid to the situation in the Soviet Union and to the evidence of arms control and its workings.

§ Lord Chalfont
My Lords, I must first declare an interest as chairman of a defence contractor employing between 15,000 and 20,000 people. Does the Minister agree that, in view of recent events in the Gulf and the continuing uncertainty in the Soviet Union, it is a little premature to talk of converting our defence industry for peaceful purposes? Will he assure the House that, if such a dismantling of the defence industry takes place, the Government will collaborate with industry in solving the problems of redundancy which will inevitably follow?

§ The Earl of Arran
My Lords, the Government are aware at all times of the need for industry to know of changes as far ahead as possible.

§ Lord Kennet
My Lords, have the Government received any approaches from the industry about possible government help for the industry in that conversion?

§ The Earl of Arran
My Lords, I do not know whether approaches have been made by the industry.
839 However, there is no reason why that should not take place, although it is up to the Government to take the initiative.

§ Baroness Strange
My Lords, does my noble friend agree that it is very difficult and expensive to convert swords into ploughshares?

§ The Earl of Arran
My Lords, that does have its problems.

§ Lord Williams of Elvel
My Lords, we agree, as the noble Earl said, that it is for the Government to take the initiative. Will he accept from me that the source of the figures which I gave him is no less than the chief executive of VSEL, a firm of which no doubt the Minister has heard? Is it not time that the Government took the initiative in contacting that chief executive about the run-down of VSEL in Barrow so as to give him some help?

§ The Earl of Arran
My Lords, as the noble Lord, Lord Williams, is probably aware, my honourable friend in another place is about to go to Barrow on behalf of the Department of Trade and Industry in order to consult with that company.

§ Lord Hatch of Lusby
My Lords, despite the difficulties of converting swords into ploughshares, will the noble Earl express on behalf of the Government his hope and intention that that process will take place over the years? If that is the case, would it not be in the immediate interests of the workers in those factories, like British Aerospace, if the Government took the same attitude towards those industries as they have taken towards the agricultural industry through the CAP and the Rover car manufacture and assist, although not necessarily financially, in the transformation from wartime to peace-time manufacture?

§ The Earl of Arran
My Lords, whatever transformation may take place in the future, the noble Lord will agree that the quality of arms which our British forces require for the defence of the country is of prime importance.

§ Lord Brougham and Vaux
My Lords, can my noble friend tell me the timescale regarding the new Challenger tank?

§ The Earl of Arran
My Lords, I cannot tell my noble friend about that; but as soon as there is any information, an announcement will be made.

§ Lord Dean of Beswick
My Lords, were not some of the present difficulties which are worrying employees in the private sector of the arms industry brought about by the Government's programme of privatising large sections of the arms industry which were formerly under public control?

§ The Earl of Arran
My Lords, I am not quite sure what is the point which the noble Lord makes. As I have indicated, there is much to do under Options for Change from the point of view of the quality and equipment of our armed forces.

§ Lord Jenkins of Putney
My Lords, if there was an indication of flexibility in the Minister's replies to this Question, many of us will welcome that. On the point made by the noble and learned Lord, Lord Hailsham, perhaps he will agree also that it is entirely logical for someone opposed to arms manufacture in principle to welcome and urge the Government to help those firms which wish to change from the production of arms to civil manufacture?

§ The Earl of Arran
My Lords, the way forward for manufacturing arms companies is best left to its management, directors and shareholders.