HL Deb 19 February 1992 vol 535 cc1298-305

5.29 p.m.

Earl Howe

My Lords, with the leave of the House, I shall now repeat a Statement made in another place this afternoon by my right honourable friend the Minister of State for Defence Procurement. The Statement is as follows: "With permission Mr. Speaker, I wish to make a Statement on a number of new equipment projects for the Armed Forces. The House will recall that in my Statement last week on amphibious forces I said that a corner-stone of our policy in developing `smaller but better' armed forces is the enhancement of flexibility and mobility.

"For the Royal Air Force, one of the proven methods of achieving this, demonstrated both during the Falklands conflict and more recently in the liberation of Kuwait, is air-to-air refuelling. It became clear after the Falklands conflict that an increase in the RAF's tanker assets was vital and a programme was set in train to augment and eventually replace the Victor tanker fleet. So far nine VC 10s and six Tristars have been added to the RAF tanker fleet and a further 13 VC10 conversions are now in progress.

"I am now pleased to announce that we have decided to award a contract to British Aerospace to give the remaining five VC10 transport aircraft a tanker capability. The work is expected to be done at BAe's Filton site with significant elements sub-contracted to Flight Refuelling at Hurn.

"The existing programme already provided the RAF with a capability in this area greater than that of any of our European allies. These additional aircraft will give the RAF the reach and flexibility it needs to meet the challenges and uncertainties of the future.

"The effectiveness of air power is determined not only by the performance of the aircraft but also by their ability to defend themselves and suppress enemy air defences in a hostile environment. To these ends, we have decided to order a new defensive aids system for the Tornado F3 air defence variant, combining chaff and flares. Contract negotiations are under way with British Aerospace which, as prime contractor, will be responsible for system integration. The flare dispensers and system control equipment have been designed, and will be supplied, by Vinten Military Systems Ltd. of Bury St. Edmunds.

"Additionally, we intend to order from British Aerospace, subject to the agreement of satisfactory contract terms, a further batch of ALARM missiles to replenish stocks expended during the Gulf War. Among the sub-contractors who will benefit from this order are Marconi Defence Systems, Portsmouth; Lucas Aerospace, Bradford; Irving of Letchworth; and Thorn EMI of Hayes.

"The Gulf war also re-emphasised how essential good communications are to the success of military operations. We have decided to extend the successful Skynet 4 satellite communications programme. The three satellites currently in operation are expected to approach the end of their orbit life by 1997 and a further batch of new satellites will be ordered for launch in that year. This will extend the life of our current communications satellite system into the next century.

"A firm price project definition phase for Skynet 4, Stage 2, will be conducted by the team responsible for the Stage 1 satellites; namely, British Aerospace Space Systems at Stevenage as prime contractor, with Matra Marconi Space at Portsmouth as the major sub-contractor.

"I turn now to helicopters. We intend, subject to the agreement of acceptable contractual terms, to place a contract with Westland to convert the Royal Navy's Lynx Mark 3 helicopter to the more capable Mark 8 standard.

"The core of the Lynx Mark 8 update will be a central tactical system which has been developed by Racal Avionics in Raynes Park. The contract will provide for the conversion of seven airframes to the Mark 8 standard, and the supply of tooling and modification kits to enable conversions of further aircraft to be undertaken by the Royal Navy.

"The House will recall that we have been considering the purchase of additional Sea Kings for the SAR role. I am pleased to announce that we intend to order a further six Sea King helicopters and a Sea King simulator for the Royal Air Force. This will enable us to replace the ageing United Kingdom based Wessex in the search and rescue role with this longer range and generally more capable helicopter. In line with our policy of moving to tauter contractual conditions for non-competitive procurement, the contract with Westland for the helicopters will be subject to prior agreement of an acceptable firm price. Competitive tenders will be invited for the simulator.

"Finally, I can confirm to the House our plans for further trainer aircraft for our successful Harrier force. Subject to the agreement of satisfactory contractual terms with British Aerospace, we intend to purchase 13 new Harrier T10 two-seat trainers for the RAF and to convert five Harrier T4 aircraft to the more capable T8 standard for the Royal Navy.

"The total value of these orders for the Royal Air Force and the Royal Navy will be some £500 million. These proposals are within our existing defence expenditure plans and provide yet further demonstration of the Government's firm commitment to ensuring that the Armed Forces, although smaller in overall numbers, will be better equipped than ever before".

My Lords, that completes the Statement.

Lord Williams of Elvel

My Lords, the House will be grateful to the noble Earl for repeating the Statement made in another place. It will certainly come as a relief to British Aerospace, which has been going through troubled times recently. In general, we welcome the Statement.

However, I note the sentence in the Statement that the RAF will be given, the reach and flexibility it needs to meet the challenges and uncertainties of the future". What is the Government's assessment of the challenges and uncertainties of the future? It is no good saying that the RAF will have that capability without knowing the Government's view on what those challenges and uncertainties are.

Then we are told: The effectiveness of air power is determined not only by the performance of the aircraft but also by their ability to defend themselves and suppress enemy air defences in a hostile environment". Which enemy do the Government have in mind? On what basis are those calculations made? Has there been a thorough defence review? If there has not been a thorough defence review should there not be one? We do not believe that Options for Change, which has led to all this, was a thorough defence review.

Secondly, are Her Majesty's Government placing an order for new helicopters or simply making a statement of intent? I should be grateful if the noble Earl would answer that question.

Thirdly, when will Her Majesty's Government order the advanced short-range air-to-air missile? That is a project which will occupy and affect thousands of jobs in both Stevenage and Bristol.

Next, I should like to ask the Minister whether he will elaborate on the satellite programme. Can he confirm whether or not Her Majesty's Government are prepared to allow our military satellites to be launched by the country which submits the lowest tender for launching? If not, who will launch the satellites and under what programme? Can he also confirm that the satellites which are proposed will be independent of the US satellite network? We all know that in both the Falklands and Operation Granby we were heavily dependent on US satellite and AWACS equipment. How far in general will we be dependent on the US? How far does the noble Earl think that this country can launch any operation of a Falklands nature now without the active military rather than merely political support of the US?

Even if there is a defence review—and we do not know what the Government's assessment of the probabilities, uncertainties and future enemies might be—in the noble Earl's mind is there any possibility that we could act independently of the US? If that is not the case—and we must accept the fact that we are not a world power or a world policeman—and we rely on the US, should we not tailor our expenditure to that fact?

Finally I should like to ask the noble Earl a question about the last sentence in the Statement: These proposals are within our existing defence expenditure plans". We have had many debates in your Lordships' House about whether it is proper that the Government should tailor their defence expenditure to the requirements of the Treasury or whether they should tailor their requirements to the defence of the United Kingdom. We are in no doubt that the latter alternative is the right one, but in the many debates we have had we have not been satisfied that that condition has been met.

I should be most grateful if the noble Earl would respond to my questions. In the meantime, I thank him for repeating the Statement. I very much hope that he will not engage in the sort of party political knockabout which took place in another place when the Statement was made.

Lord Mayhew

My Lords, the proposals appear to arise directly from experience in the Gulf War and the Falklands War. That is good and we welcome it.

I do not feel much happiness about the extension of refuelling capability. The noble Lord, Lord Williams, asked the Government what it is for; but it is all too plain. Even as things are now, we have a more powerful refuelling capability than any of our NATO allies. The reason that the Government propose to extend it further is in order to cater for Britain's out-of-area unilateral commitments. If I feel uneasy about that, it is perhaps partly because I have flown in a Buccaneer being refuelled in the air. It was a most unnerving experience.

But mainly my worry is that the Government are settling down to a permanent acceptance of our out-of-area unilateral commitments. On these Benches we believe that that is a wrong policy. We feel that the Foreign Office ought to do far more than it does now to ensure that those commitments are either shared with our allies or negotiated away. In my view, that should be the attitude of the Government.

I shall ask the noble Earl a single question. We are told that the £500 million can be found within the existing budget. What does that mean? Does it mean that the budget with which we were presented in Options for Change was inflated, or have economies been made? What are those economies? I should be grateful if the noble Earl would answer that point.

Earl Howe

My Lords, I thank the noble Lords, Lord Williams and Lord Mayhew, for welcoming the Statement.

The noble Lord, Lord Williams, asked me for the Government's assessment of the challenges and uncertainties that face us over the next few years. That is rather like asking me to be certain about uncertainties. The answer is that we have seen over the past few months the demise of the Warsaw Pact, but we do not know what future developments will take place within the old Soviet Union. We must also be mindful of the potential for instability outside Europe. After all, not so long ago we fought an unexpected war in the Gulf. We must be ready for any eventuality that we and our allies may face across the globe.

Lord Williams of Elvel

My Lords, I am grateful to the noble Earl. There is one point on which I should like clarification. I did not ask him what the uncertainties were; I asked him what was the Government's assessment of the uncertainties.

Earl Howe

My Lords, I confess that I am baffled by the distinction which the noble Lord has drawn. I apologise for being obtuse. As he well knows—if his party is in office in a few months' time it will have to take the same view as we do constantly—there is a constant reassessment of our capabilities and the situation around the world which our Armed Forces may be called upon to address. We need to be sure that our Armed Forces have the equipment that they need in any area of the world in which they find themselves.

The noble Lord asked me about the helicopters and whether we would be placing an order. We are in the process of negotiating the contracts with Westland with a view to placing the orders. The value of those contracts has not yet been precisely costed but is in the region of £20 million. The Wessex helicopters that are being replaced by Sea Kings will come into service over the next three to four years. We expect the first aircraft to be delivered in 1995. Again, however, those orders are subject to contract.

The noble Lord asked me about short-range air-to-air missiles, which in fact I did not mention in the Statement. An announcement about those missiles will be made in due course. He then went on to ask me about the launch of the satellites and who will launch them. Once the launch date approaches there will be a competition for the contractor. Obviously I cannot comment on the result of that exercise in advance of the competition.

The noble Lord asked me whether our satellites would be independent of the US network. It is fair to say that, when we deploy satellites of that kind, we do so in consultation with our allies. We are often given access to the satellites of our allies. It is a collaborative effort.

The expenditure figures that I have given are within the plans that we had before us last autumn, as foreshadowed in the Autumn Statement of my right honourable friend the Chancellor of the Exchequer. The noble Lord, Lord Mayhew, asked specifically about those budgets. That expenditure will fall within the defence budget over the next two to three years between now and the mid-1990s. We have allowed for capital expenditure of that order in our budgeting. Now that we are firming up those plans, we can come to the House and say what we intend to do.

If I have failed to cover any particular points, I shall write to noble Lords. I hope that I have at least covered the main points that were raised.

5.47 p.m.

Lord Boyd-Carpenter

My Lords, I am grateful to my noble friend for repeating the Statement. I am particularly glad that it has been repeated, unlike the one on naval developments which, unhappily, last week for some reason was not repeated in this House.

I am sure that my noble friend appreciates from the questions that have already been put to him the interest that your Lordships' House has in this important matter. It is right that the Statement should be repeated in this Chamber. Perhaps I may also say how much I disagree with the noble Lord, Lord Mayhew, when he criticised the improvements in the refuelling facilities for the RAF. We live in an immensely uncertain world and one in which trouble may blow up in many places. It is no use shutting our eyes to trouble because it arises some distance away. The Government are doing the proper thing; namely, increasing the refuelling facilities of the RAF so that it can be an effective instrument in the case of trouble which arises at a considerable distance. Most of us will find it encouraging that the Government have emphasised that point with these improvements.

Is my noble friend aware that we are very much encouraged by the care which is now being taken to improve the Royal Air Force and naval aircraft provision? We are hopeful that it is an indication that the Government will not be lulled by people who try to convince themselves that we live in a safe or easy world.

Earl Howe

My Lords, I am most grateful to my noble friend and agree wholeheartedly with his comments. I need hardly say that the qualities that we all look for in our Armed Forces are flexibility and the capacity to react quickly as well as with professionalism. The refuelling capacity for our aircraft is a key ingredient. There is an uncertain situation around the world. We need to be ready to respond to any emergency which may arise.

Lord Judd

My Lords, the noble Lord emphasised the importance of flexibility which lies behind these orders, but I understand that one of the other principles on which our defence policy is based is the closest possible integration with our allies. If that is to be effective, both operationally and in terms of economic management of the resources available to the alliance in total, it is important that significant renewals of equipment are the best and most sensible renewals for the alliance as a whole. Can the noble Lord assure us that there have been full consultations with our allies and that this very significant new order makes rational sense in terms of the alliance as a whole as well as in terms of our narrower national interest?

Earl Howe

My Lords, yes. I am happy to give the noble Lord those assurances.

Lord Renton

My Lords, I too welcome the Statement. Perhaps I may ask my noble friend two questions. First, to what extent will the cost involved benefit British firms; and to what extent will it be money spent overseas? Secondly, will the further equipment that the armed forces will receive, as he has announced, involve any variation in the manpower proposals in Options for Change? Earl Howe: My Lords, in terms of who will receive those orders, the benefit will fall almost entirely on the UK industry. There are one or two overseas subcontractors, but by and large it is the UK industry which will benefit.

The announcements that I have made have no implications for manpower.

Lord Bruce of Donington

My Lords, will the noble Earl assure the House that the capital amount of the expenditure involved will be borne out of the public sector borrowing requirement, or is it the Government's intention that it should be borne out of general receipts into revenue?

Earl Howe

My Lords, any element of government expenditure is allowed for out of the receipts that they may have over a period of years, whether they be borrowings or receipts from the general fund. It is part of the defence budget. I can go no further.

The Earl of Selkirk

My Lords, what the noble Earl has said will be received with great satisfaction by a large number of people. The point made by the noble Lord, Lord Williams, is out of date now. We are living in a world of astonishing uncertainty. There is almost no part of the world with any immediate, clear picture of the future. We do not know which way people will move. Some people wish to divide their countries into a lot of little bits; some want to join huge countries together. No one knows how to do it. That is the position that we are in.

I am glad that money should be spent on aviation. Every war has required new types of aeroplanes. The use of the latest type of aeroplane has in many cases been decisive. Those who do not have such aeroplanes lose their way. It is astonishing to me that the noble Lord, Lord Williams, considers that we have to rely on the United States of America. Do we have to give up our arms and let them provide our defence? That is unlikely to be a sound proposition. The United States will support those who help themselves. If we do not help ourselves, the United States will not consider us for one moment.

The noble Earl's Statement has given great satisfaction to this country. I am delighted to have heard it.

Earl Howe

My Lords, I am most grateful to my noble friend.

Lord Mayhew

My Lords, is the noble Earl aware that no one has challenged the view—

Lord Harmar-Nicholls

My Lords, we had criticisms earlier———

Noble Lords


Lord Harmar-Nicholls

My Lords, having rectified my seating position on the Benches, I wish to raise a point of order. The rules that we agreed were that during questions on the Statement one intervention should be allowed. If we are worried about the time spent in this regard we ought to adhere to our own rules.

Lord Mayhew

My Lords, I take the point that is now made from a proper place in the Chamber. However, I understand that it is possible to ask for elucidation of an answer that the Minister has given. I am glad to have the assent evidently of the Leader of the House.

Lord Waddington

My Lords, that is correct. One can rise on a point of elucidation.

Lord Mayhew

My Lords, perhaps I may ask the noble Earl to explain his reply to me about refuelling. Is he aware that no one has suggested that while we hold unilateral out-of-area commitments refuelling extra capacity is necessary? Are the Government now seeking either to share with our allies or to renegotiate those out-of-area commitments, or do they intend to keep them indefinitely? That appears to be the view of the noble Earl's supporters.

Earl Howe

My Lords, that question deserves a considered reply. I do not have the answer at my fingertips. If the noble Lord will allow me to write to him, I shall certainly do so.