HL Deb 16 May 2000 vol 613 cc188-200

3.41 p.m.

The Minister of State, Ministry of Defence (Baroness Symons of Vernham Dean)

My Lords, with the leave of the House, I should like to repeat a Statement on defence procurement that has been made in another place by my right honourable friend the Secretary of State for Defence. The Statement is as follows:

"With permission, Madam Speaker, I would like to make a Statement on two significant defence procurement decisions. I would like to announce our decision on a new beyond visual range air-to-air missile to arm the Eurofighter, and on delivering, the major enhancements to our strategic airlift capability promised in the Strategic Defence Review

"This Government are committed to the modernisation of our Armed Forces. We are determined to deliver improvements in defence capability, to underpin long-term security and to ensure that Britain can act as a real force for good in the world. Our Armed Forces deserve the best equipment. We are committed to ensuring that they have the best equipment. But we are also committed to doing this in a way which is cost-effective and the best value for taxpayers' money. Smart procurement means making every pound count.

"We are also aware of the wider context. The procurement package we have selected is clear evidence for our partners on both sides of the Atlantic of our strong commitment to enhance European defence capabilities. NATO's effectiveness depends on continuing technological improvement and on equitable burden sharing. The European Defence Initiative lies at the heart of this, for the good of Europe, the transatlantic alliance and the international community as a whole.

"The beyond visual range air-to-air missile is a vital component of the Eurofighter's ability to dominate the skies. It promises to be a highly accurate, highly manoeuvrable missile that will significantly improve Eurofighter's 'no-escape' zone, and hence will ensure that this world-class aircraft can combat all projected air threats. It will make a major contribution to the air superiority requirements of the United Kingdom and coalition partners, including NATO operations. Our priority is to sustain Eurofighter's superior capability as far as possible into its service life, which will extend well towards the middle of the century. We have to secure the highest performance, at best overall value for the taxpayer

"We have had the advantage of a strong competition with high-quality bids from Matra BAe Dynamics and Raytheon Systems Limited. The competition has been keenly fought, and many honourable Members have written to me and to other Ministers.

"After a thorough, indeed exhaustive, process we have concluded that the Meteor missile offered by Matra BAe Dynamics and its consortium is likely to best meet our needs over the life of the Eurofighter aircraft. The overall performance promised by Meteor will ensure that Eurofighter is equipped with the best weapon possible and will deliver the air superiority that is central to success in military operations.

"Meteor is a collaborative venture with Germany, Italy, Spain—our Eurofighter partners—France and, we hope, Sweden. We now plan to conclude a memorandum of understanding with those European partners by the end of the year, formally committing us all to this programme. Subject also to agreement of satisfactory terms and conditions with Matra BAE Dynamics, we will award a contract as soon as possible.

"This will be a Smart contract. Tightly defined breakpoints in the contract will be linked to flight tests and other demonstrable achievements. These will focus on, first, the ram-jet motor, then guidance systems, and finally data-links and electronic counter-measures. Specific dates will be attached to each.

"These breakpoints will be auditable and capable of external independent evaluation. If these are not delivered, the contract will be terminated by the partner nations which will recover all development costs from the contractor.

"Meteor is expected to enter service with the RAF in the latter half of this decade. Meanwhile, we intend to buy more of the currently highly capable advanced medium-range air-to-air missile, produced by Raytheon, to equip Eurofighter when it first comes into service.

"Our decision will give the RAF the most advanced air-to-air missile in the world. It will be welcome to our European partners. It will also be welcomed by our US allies as a clear indication of our commitment to a strong defence capability, available for all operations in which the United Kingdom might be involved.

"Industry in the United Kingdom will also welcome this decision. Matra BAe estimates that it will create or sustain some 1,200 jobs in the UK, including at Stevenage, Bristol and Stanmore. Many of these will be high-quality jobs in new technology, and in system and software design. The United Kingdom will lead this major project.

"I turn now to our strategic airlift requirements. Improving the mobility and deployability of our forces was a key theme of the Strategic Defence Review. Events in the Balkans and, more recently, Mozambique and Sierra Leone, have underlined the high priority of increasing our strategic airlift capability. Both NATO's Defence Capabilities Initiative, and the Headline Goal adopted at the Helsinki European Council, identify this capability as one in which Europeans need to make particular improvements.

"We have explored a number of possible avenues to meet our immediate needs as well as the longer-term requirement. After careful consideration, we have determined that the best short to medium-term solution is a lease of four C-17 Globemaster aircraft from the Boeing company. They will begin the first of several years of service with the RAF from the middle of next year. These flexible, capable aircraft will deliver vital, early support to our new Joint Rapid Reaction Forces. They will also make a crucial contribution to improving the aircraft capabilities available for NATO and European operations and to inter-operability with the United States.

"Beyond this short-term lease, we have now decided that our heavy lift needs from the latter part of this decade onwards would be best met by the A400M aircraft from Airbus Military Company.

"This promises to be a superb aircraft—a new design that is specifically tailored to meet our military requirement. Moreover, the A400M should offer an extremely flexible capability, covering both the tactical and strategic roles. It offers scope for a multi-national support package and substantial through-life cost savings.

"At this point, our commitment to A400M is necessarily conditional, in that it is based on assumptions that are dependent both on our potential partners and on Airbus—on their commitments to sufficient numbers of aircraft at launch and the establishment of a viable programme.

"We hope that we can sign a contract for the A400M urgently but this must be based on realistic figures for purchase. All countries must balance the size of firm commitments against other priorities for defence equipment. The United Kingdom will order 25 aircraft in the A400M initial launch. This is sufficient to build a viable programme, while safeguarding our industrial interests. We look forward to other partners following our lead so together we may confirm the launch order as soon as possible.

"But affordability will also rest on confirmation of unit prices at the level offered by Airbus, commitment to the in-service date we require and satisfactory negotiation of commercial terms and conditions. Programme launch and contract placement must also be achieved within a reasonable timeframe.

"This is a Smart process too. We shall hold European industry to its promises.

"If Airbus cannot offer us and our partners an affordable and manageable programme on this basis, we shall he able to meet our military requirement and protect the taxpayers' interests by purchasing a fleet of Boeing C-17 aircraft as an alternative.

"But we do look forward to success in this exciting and innovative programme.

"A400M will offer great benefits to the United Kingdom. BAe Systems expects the programme to create directly 3,400 long-term, high-skill, high-wage jobs—in particular at its sites at Filton, Broughton and Prestwick—with indirect employment taking this figure to over 10,000.

"Our industry will be at the forefront of developments in the aircraft's new technology, including a carbon composite and metallic hybrid wing and a new propulsion system. The project will strengthen the European aerospace industry and will complement the world-leading wing capabilities of British industry that we support through the major investment we have recently announced for the development of the A3XX.

"A vital and technologically innovative element of the A400M will be its engines. Airbus Military as prime contractor will be responsible for selecting the best power plant so that the aircraft will meet its commitments to the partner nations on performance and price. However, we shall make sure that in its decision Airbus Military takes full account of the merits of the likely proposal from Rolls-Royce and the undeniable quality of its products.

"These procurement decisions are of great importance to our Armed Forces and our defence capability for several decades to come. They deliver on our promises in the Strategic Defence Review; they make a significant contribution to Europe's defence capabilities; and they are good news for British industry and jobs.

"I commend them to the House".

My Lords, that concludes the Statement.

3.53 p.m.

Lord Burnham

My Lords, I thank the noble Baroness most warmly for repeating the Statement by her right honourable friend, which will be very much welcomed by your Lordships. I only hope that by now her right honourable friend has released the journalists who have been locked in an office unable, without their telephones, to ring their bookmakers since 2.45.

We must give our warmest congratulations to British Aerospace on the decision that has been made. It is, however, necessary to ask the Government what took them so long. This suggests a degree of in-fighting among various departments. The decision will be welcomed universally by those parts of the Armed Forces which will operate the equipment. But I hope that today's decision does not turn into tomorrow's problem. Meteor is in the design stage and is st:ill concept that has not been tested or proved. That is recognised by the short-term approval of the Raytheon BVRAAM. Is the Secretary of State buying an unproven missile at twice the cost for good European reasons? Unlike the American missile, this is untried technology.

I should be grateful if the Minister could put on record the cost and in-service date of the Meteor missile. What considerations other than cost were taken into consideration in the decision? What guarantees are there that other European countries will commit themselves? If they do not back it, or the project is unsustainable for any reason, will the United Kingdom be left without a beyond visual range missile for the Eurofighter? What is the fallback situation? If the in-service date is unsatisfactory what will the Government do? Having said that, we welcome the decision.

With regard to heavy lift capability, will the Government put on record the number of C-17s that they intend eventually to lease, and the cost? Is there an option to buy these aircraft? Most important of all, what is the effect of the decision to lease the C-17s on the production of the A400M? Surely, when crews become used to C-17s they will be reluctant to change even to a more advanced aircraft. It may be a wrong decision to have three different heavy lift aircraft in commission, or will the C-130Js be retired early? With three systems, one needs back-up, spares and everything else, which inevitably lead to an increase m the cost and complication of the whole exercise. What is the future of the A400M? It cannot be good; it looks like another Rover, ro-ro ferry or Ford.

How committed are other countries to heavy lift aircraft, and what is the critical mass in terms of numbers? The possible plan that has been quoted involves 195. However, that puts the United Kingdom's requirement at 45. The Secretary of State has announced today the figure of 25. Is 195 an accurate figure? What is the breakeven point for the A400M? Even on the basis of 195, there appears to be a reduction in the number of orders from Germany and Italy in particular. Do we have assurances from those countries and others that they wish to proceed with the A400M? The United States is to replace the C-130Js at the end of this decade. Should not European and American strategic transport requirements be harmonised to allow large production runs, which appear to have a major advantage?

Finally, I should like to raise one matter which is separate from the subject that we are considering. What are the implications of this decision for future tanker aircraft which must have an involvement? Having said that, we very much welcome the Statement and the decision.

3.58 p.m.

Lord Redesdale

My Lords, we on these Benches support the Meteor programme and the development of the A400M with the short-term use of the C-17. However, I should like to ask a number of questions. First, as the Meteor system is at the moment only at the development stage it may experience the problems that other weapons system commissioned by the armed services have suffered in the past. I hope that the Minister will report to the House, not necessarily in the form of a Statement, on how those tests are developing over the coming few years.

Although we support the use of the C-17 as a short-term interim measure, our concern is that those aircraft will be on lease. How will that affect their operating capabilities in war zones? Shall we be able to use the C-17 in areas of conflict? Will the Government also make the C-17 and the A400M, when it comes online, available to the United Nations? During debate on the Statement yesterday, we on these Benches raised the issue that some UN forces were unable to reach Sierra Leone with their equipment because they lacked the heavy-lift capability and that it was not being supplied by other members of the United Nations. I hope that the Government will indicate that the aircraft will be available for UN operations.

Finally, according to the Statement, the development of the A400M is seen to be complementary to the development of the A3XX and the dependent large number of jobs. If, due to the cost constraints which may arise from the full price of the development of the aircraft, the A400M is cancelled, what effect will that have on the development of the A3XX?

4 p.m.

Baroness Symons of Vernham Dean

My Lords, I thank both noble Lords for what I believe on this occasion has been a genuinely warm welcome of my right honourable friend's Statement. I agree with the noble Lord, Lord Burnham, that your Lordships' House in general will welcome the Statement, in particular as regards heavy airlift. Seven noble colleagues raised that issue in the debate on defence last Friday. I hope that they, too, will be happy with the outcome.

There was no infighting between government departments on these decisions. They were closely fought competitions. They are complex projects. We are talking about three projects. Whereas the Meteor project—the beyond visual range missile project—stands on its own, the strategic airlift project was divided into a short-term need and a longer-term need. Identifying the C-17 as covering the short-term need and the A400M as the longer-term need was always a possibility.

Yes, the noble Lords, Lord Burnham and Lord Redesdale, are right: Meteor is at the design stage. But Her Majesty's Government believe that Meteor is the best of the tenders put forward in terms of the overall lifetime of the Eurofighter. It will arm the RAF with a missile which will make a major contribution to the air superiority requirements of the United Kingdom and our coalition partners.

I was asked about the cost. I cannot give detailed costings because of the commercial in-confidence rules. But I can tell your Lordships that the overall costs of the Meteor project are approximately £1 billion. Some noble Lords have expressed recently some worries in your Lordships' House about the MoD always going for the cheapest option. It is worth saying that we have looked carefully at capability, not cost. Value for money is not synonymous with accepting the cheapest tender. I think that your Lordships will see this decision as very strong evidence of that aim at work. As I said when making the Statement, there will be break points in this contract. I stress to your Lordships that the break points will be capable of audit and external independent evaluation. That is an important point. We focused in particular on the ram-jet motor on the guidance systems and on the datalinks electronic counter measures. So we have a checking mechanism in place which I hope meets the natural concerns that there are bound to be about the project still being at a developmental stage.

I stress to your Lordships that if the missiles are not developed, the partner nations will cover all development costs from the contractor. I hope that noble Lords will see that as a significant advance in the Smart contracts we are now seeking to develop on these issues.

The noble Lord, Lord Burnham, asked what would happen if there were a failure in the project. We would go back to the market to secure the missile system that we need.

The noble Lord then turned his attention to the C-17. There will be four of those aircraft leased over a seven-year period. The total cost over that period will be in the region of £0.5 billion for that element. I do not believe that the RAF will be reluctant to make the change to this aircraft. I believe that the RAF is full of extraordinarily skilled pilots who will relish the opportunity to fly what we believe will be an extraordinarily capable aircraft. I stress to the noble Lord that we shall not have three aircraft in operation together for very long because we shall be finishing the seven-year lease on the C-17s as we bring in the A400Ms. We shall have the C-130Js which, as the noble Lord knows, have been brought into service as part of our longer-term strategic airlift requirement. At present, noble Lords will know that we have 51 C-130s. Twenty-five or 26 C-130Js are coming in. There will then be 25 A400Ms which have one and a half times the capacity of the C-130 Hercules aircraft.

As regards the A400Ms, the partner countries are Germany, France, Italy, Spain, Turkey and Belgium. We have identified 25 aircraft as our need. We believe that it is time for complete straightforwardness over this and that partner nations should not be willing to deal in the realms of speculation about what they might do. Without being too conceited, I hope I can say that the United Kingdom has given a lead on this. We hope that the partner nations will now also take the plunge and say what number of these aircraft they require.

The noble Lord asked what number we need. I have heard various figures quoted. I have heard various figures quoted by Airbus Military itself. They vary from 150 to 270 or 280. I suspect that there is a good deal of flexibility in that number as we shall see when our partners start to declare.

The noble Lord also asked about harmonisation. There will be considerable harmonisation if all partner nations take up the challenge and go for the A400M. On the tanker aircraft, it is a somewhat different decision. It is a PH project and we ye still trying to formulate the way in which we shall run that competition.

In answering the questions addressed to me by the noble Lord, Lord Burnham, I hope that I have covered the points made by the noble Lord, Lord Redesdale. The C-17s are on lease. The test was real value for money. It was a leasing decision. It may sound an unusual decision, but noble Lords should recognise that leasing is what occurs in the civil world. There are considerable advantages to leasing aircraft. We are not in the position of having to go to a spot market to try to hire the capability we need because we shall be able to take these aircraft where we want them. They will be ours for the using. We shall not have to try to extract them from wherever they may be with the painful business of explaining why we want them and so on. They will be ours to use. They will be available to the United Nations if appropriate. Indeed, as I believe the Statement implied, had we had them, we would have used them in Mozambique and Sierra Leone. However, we shall have them soon.

4.10 p.m.

Lord Monro of Langholm

My Lords, with regard to the Royal Air Force I believe that the noble Baroness has made the right decision in moving from the Hercules to the Boeing A400. As she said, I am sure that from an operational point of view there will be no problems for the Royal Air Force. First, in relation to heavy-lift, can she give even an approximate figure of how many additional jobs there might be at Prestwick? Secondly, every pilot to whom I have spoken who has had the privilege of flying the Eurofighter says that it is an exceptional aircraft. Does the Minister really mean that it will not be in service until approximately 2008 or 2009, and is that with or without Meteor? Virtually 10 years is a long time to wait until it is put into squadron service, and I am sure that the Royal Air Force would like to have it quicker than that.

Baroness Symons of Vernham Dean

No, my Lords. We are expecting to take delivery of the first Eurofighters in the year 2002. The delivery period will take place between 2002 and 2014. In the initial stages it will be armed with the AMRAAM missile. However, during the latter stages of taking delivery of the Eurofighter we shall arm it with the superior capability offered by the Meteor missile system. We hope that that will be towards the end of the decade. The supply of Eurofighters will be built up over that period, reaching a peak after about 2005, when we hope to take delivery of approximately 20 or so a year.

I thank the noble Lord for his support on heavy-lift. He asked specifically about jobs. I have a full breakdown on a number of different job issues. I believe that it may be helpful if I write to the noble Lord with that breakdown. I believe that it is rather invidious to go into detail on where the jobs will be concentrated. However, in relation to heavy airlift, the concentration of jobs is likely to be in the north-west of England and, of course, in Broughton. Therefore, approximately 3,500 jobs in Broughton will be sustained directly by the decision on the A400M. We hope that that will build to approximately 10,000 jobs in the supporting industries which we believe, and which the company tell us, will flourish as a result.

Lord Hardy of Wath

My Lords, perhaps I may congratulate my noble friend for four reasons: first, on ensuring that the Royal Air Force will have adequate transport aircraft, and particularly the heavy-lift which has long been needed and was certainly needed before the last election. I also thank her for ensuring that the Eurofighter will be a highly competitive aircraft. Even though we are talking of enormous cost, will it not also be a great deal cheaper than the F22, its possible competitor? Thirdly, I thank my noble friend for ensuring that Britain retains the highest level of technological capacity in this field. Fourthly, and not least important, does my noble friend accept that the Government deserve congratulation on their approach to procurement? If they had not adopted that approach, the British taxpayer would be paying a great deal more.

Baroness Symons of Vernham Dean

My Lords, I am delighted to accept all those splendid bouquets from my noble friend. It is a personal delight to me that we have managed to make these decisions. As your Lordships know, as the Minister for Defence Procurement this issue has been placed particularly on my desk and, before me, that of my noble friend Lord Gilbert, who, of course, contributed very heavily to these decisions.

I agree with my noble friend about the heavy-lift requirements. We have scarcely undertaken an operation in which one or other of your Lordships has not had occasion to remind us that we should make progress on this matter; and quite right, too.

With regard to the Eurofighter, the comparison figures that I have show that it will cost some 60 million dollars per aircraft—that is, approximately £40.9 million—and the F22, some 120 million dollars. I shall have to leave noble Lords to their excellent arithmetic to work out the equivalent in pounds. However, even I can see that the Eurofighter is half the cost of the F22, a point about which we might remind the noble Lord, Lord Pearson of Rannoch. I know that he has concerns on that front.

The procurement decision is enormously important in terms of technical capability and jobs, about which noble Lords opposite were asking. I refer not only to the number of jobs but to their quality and calibre. They are highly technical and well paid jobs, and they should be a source of considerable prosperity to the regions where they will be concentrated.

Lord Taylor of Gryfe

My Lords, the Minister has produced a considerable shopping list. Some of the figures that she mentioned give us an indication of what we are about to spend. Having made the calculations, inexact as they must be, perhaps I may ask whether she assumes that the overall defence budget of this country and of the Government will be substantially increased as a result of the shopping list that has now been produced. If so, would that have implications for other spending departments of the United Kingdom Government?

Baroness Symons of Vernham Dean

No, my Lords. I do not believe that there are any implications for other spending departments in what my noble friend has quite rightly described as a considerable shopping list. Of course, I fully appreciate that in absolute terms the list is expensive. The Meteor comes in at approximately £1 billion over its lifetime; the A400M at £3.5 billion; and the C-17 at £0.5 billion over the seven-year period. That has been well understood.

As I am sure noble Lords will appreciate, the figures have been worked through by those who have responsibility for these matters within the Ministry of Defence. Your Lordships will not be surprised to know that a great deal of interest in them has also been shown throughout Whitehall. Of course it has. It is quite right that the figures are crawled over. They are within the MoD's budget.

Despite one or two noble Lords having expressed doubts last week about our willingness within the MoD to put the needs for these capabilities before everything else, I hope that today's decisions have made it clear to all your Lordships that we have, indeed, put the capability of our Armed Forces first.

Lord Hoyle

My Lords, will my noble friend take note that, unlike in some quarters in this House, what she has said today is welcomed by the Labour Benches? The decision to order Meteor, the A400M and, of course, to recommend Rolls-Royce as the power unit is good news. It keeps us in the forefront of technology and creates many jobs in this country. Therefore, will she please accept our congratulations and pass them on to her right honourable friend the Secretary of State for Defence? She also knows of my interest in the heavy-lift programme. Perhaps I may ask her whether the A400M is a preferred supply.

Baroness Symons of Vernham Dean

My Lords, I thank my noble friend for raising those points and, of course, I shall convey his thanks to my right honourable friend. I agree with everything that he said about ensuring that we remain in the forefront of technology. I agree also with his point with regard to jobs. In making these decisions it is important that we look at the competitive edge. We should always try to ensure that we have viable competition for the future. That consideration may not always be terribly clear when one is looking from the outside of a project.

I shall take advice on the specific question that my noble friend asked me. If he will bear with me, I shall write to him on the point that he raised about the preferred supplier and place a copy of my letter in the Library of the House.

Lord Craig of Radley

My Lords, with, I am sure, all Members of the House I welcome the content of the Statement, particularly the decision to go ahead with the C-17. The fact that that proposal was trailed in the SDR two years ago and that it has taken so long to reach it is obviously a great shame. Nevertheless, we are there and I am delighted to hear it.

I hope that the Minister will bear in mind that 20 years ago the Royal Air Force had great difficulty with a large number of different types of aircraft in its inventory which, inevitably, had a roll-on cost effect on training and spare supply. I hope that in doing the sums for our future transport requirements the fact that there may be more than one, two or even three types of aircraft in that inventory will be looked into very carefully.

Baroness Symons of Vernham Dean

My Lords, I do assure the noble and gallant Lord, Lord Craig, that that point has been taken into consideration. The fact is that a period of overlap exists between releasing the leased C-17s and the incoming A400Ms. I do not believe that it will be very long. I would not expect it to be longer than a year or two. Of course there will be the C130Js, so the lease period is for about seven years. We expect them to see the A440Ms coming into service. The overlap which the noble Lord draws to our attention is something about which we should be very careful, and one would expect his former colleagues in the Ministry of Defence to be very vigilant on this issue. I assure him that they have been, and I am sure that they will continue to be.

As to the length of time it has taken on the C-17s, I stress that although the decisions over the short-term issue over the lease are completely separate, in one sense, to the longer-term issue, they are inevitably linked. It was very important when making these decisions to make sure that the decision was going to be properly cost effective, that we were not going to have decisions that looked as if they were not going to be meshed together, that they were cost-cutting or that there was some other financial deficit in what we were considering. I am sorry that this has taken a longer period than originally expected, but I am delighted that we have made the decision now.

Viscount Waverley

My Lords, I also express relief on the Meteor decision well made. Would the Minister agree with me that the timing of this announcement could not be better, given the Minister's visit to Athens to secure, we hope, the first Eurofighter export order?

Baroness Symons of Vernham Dean

I have to tell the noble Viscount that that is completely fortuitous. I would not like any of your Lordships to believe that this decision was taken on the basis of where the next visit of the Minister of Defence Procurement was likely to take place. The noble Viscount is quite right. Not only is this good news in relation to that particular visit, but it is very good news in relation to other countries to which we may wish to sell the aircraft. I hope that by displaying our confidence we will show other countries, by what we do as well as what we say, that we do mean business.

Baroness Park of Monmouth

My Lords, I, too, share the great pleasure and satisfaction with this news on procurement. I hope the Minister agrees with me and accepts that the many other concerns being voiced last week, not least by me, were about spending on people, spending on housing, spending on training, exercises and so forth. That is what we were very concerned about as well as the other issue. But this is splendid and I look forward to the Minister doing something about those concerns.

Baroness Symons of Vernham Dean

My Lords, I thank the noble Baroness for reminding us of the importance of spending on people as well as on equipment. I should say to the noble Baroness that it is very important, when we are trying to bring young people into the Armed Forces and trying to persuade those who have already joined to stay, that we do indicate how much we value our Armed Forces by equipping them properly. It is a vital component in ensurng that the Armed Forces, not only are properly valued but feel properly valued. Everything I have heard today from our friends in the Royal Air Force indicates that they are delighted with these decisions and that they—and. I hope others—will take heart that the Government are doing what they can to equip our Armed Forces properly.

Lord Paul

My Lords, I congratulate the Minister and the Ministry of Defence on keeping British jobs in mind by making this decision.

Baroness Symons of Vernham Dean

My Lords, I thank my noble friend for making that point. I think it is very good, particularly at this time, that we have been able to take a decision which is such good news for British jobs. I stress to my noble friend and to others in your Lordships' House, lest there be any misunderstanding, that we have taken these decisions principally for two reasons. One is that they offer a superb capability to our Armed Forces and the second is that they offer very good value for money to the British taxpayer. I am delighted that they have the additional benefit to which my noble friend also referred.

The Earl of Mar and Kellie

My Lords, are the C-17s new aircraft, or have they been used elsewhere? Following on from that, when will they be received into service?

Baroness Symons of Vernham Dean

My Lords, I believe they are new aircraft. I think we would have something to say about it if they were not. I do not know the particular history of the aircraft we are going to take into the RAF. I am pretty sure that they are going to be brand new aircraft. If there is any adjustment I have to make to that I will write to the noble Earl.

We are expecting to take delivery of two of these aircraft next year and two the year after that.