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The future aircraft carrier programme is in the assessment phase. To ensure that we provide the best long-term value for money and deliver the carriers to time and cost, work continues to mature our cost, schedule, risk and design information in preparation for the main investment decision.
Following the 100-day review of the carrier programme, which I believe is due to conclude this Friday, can the Minister confirm that cost, size and in-time date have not changed? Can he also confirm that the plans for the two 50,000-tonne carriers due to be delivered in 2012 and 2015 have not changed, and that the carriers will not be behind time, above budget and built in French dockyards?
The hon. Gentleman has demonstrated his knowledge up to a point. A review is under way, and is due to report soon—possibly by the end of the week. The purpose of the 100-day action or assessment plan was to consider a range of issues such as size, shape, design, cost and timing, and their implications. I suggest that the hon. Gentleman should wait for the report, which has been subject to intensive discussions/negotiations with the companies involved.
I hope that, new Member as he is, the hon. Gentleman will also recognise that we must learn the lessons of past Tory Administrations, under which many projects were over cost and over time. We have introduced new measures to try to ensure maximum efficiency, and to de-risk the early stages of any procurement stream.
Can my right hon. Friend assure me that newspaper reports that French shipyards could play a part in building our new aircraft carriers are misleading? Will he fiercely resist any such schemes by ensuring that he is as much inclined towards British defence manufacturing as the French are towards theirs?
My hon. Friend has knowledge of this matter from his membership of the previous Defence Select Committee and from his own constituency interests. I am sure that he recognises the advantages of sharing benefits with one of our allies, in terms of their needs as well as ours. There might well be opportunities for increased build at British shipyards. It is right that we continue to discuss this with our French allies. They have a need, and we have a need, so let us see if there can be some mutual benefit in this.
Bearing in mind that the Ministry of Defence incurred a cost overrun of £127 million on a contract of £148 million with Swan Hunter for the construction of two vessels—a cost overrun that the Ministry initially denied—that Swan Hunter was the largest single donor to the yes campaign for a north-east assembly, and that the only fixed star in this muddled contract seems to be that the carriers must be assembled in Rosyth, will the Minister give the House an undertaking that the carrier contract will be conducted in a manner that represents the best interests of the armed forces and the taxpayer, and not used as a job creation scheme for Labour constituencies?
Given that the hon. Gentleman has been campaigning for the closure of Swan Hunter, I do not think that he has the interests of the shipbuilding industry at heart. We have a major commitment to shipbuilding in this country, in regard not only to the aircraft carriers but to the Type 45s and the Astute programme, which will ensure thousands of jobs. I suggest that the hon. Gentleman look at the history of previous Conservative Governments and the way in which they treated our shipbuilding industry.
Will my right hon. Friend take a hard look at why the Conservatives are running a hate campaign against the shipbuilding industry on Tyneside? Will he also confirm that it is not the Government's intention to see a further loss of shipbuilding capacity in this country and then to cite loss of capacity as a reason for shipbuilding work for the Royal Navy being placed abroad?
My right hon. Friend knows that we are closely engaged with all the players to try to determine the best configuration of our needs, relative to the demands involved. These are not easy equations, and there are only so many procurement streams in shipbuilding at any given time, even though they may span a number of years. We have to talk to the industry to determine what it is seeking to do, and how it can give the best support to the country. Those discussions will continue until we reach the best conclusion not only for the shipbuilding industry but for the Royal Navy and the British taxpayer.
There will be great alarm across the Royal Navy today when it hears that this essential project is continuing to be subject to such uncertainty. The assessment phase into which the carriers project has been placed has had a longer gestation period even than that of an elephant. Will the Minister confirm that the Ministry now accepts that the cost of the carriers will be £3.5 billion, not £2.9 billion? Given the reports of an £18 billion shortfall in funding for the procurement programme over the next 10 years, will he tell us where the axe is going to fall? Is it going to fall on these carriers? Will they be reduced in size? Will it fall on the joint combat aircraft, or on the future rapid effect system? The truth is that the right hon. Gentleman who speaks with the same accent as the Secretary of State has had to inherit the shambles created by his predecessor.
We are seeking to invest £68 billion in procurement over the next 10 years. How the hon. Gentleman can diminish that and say that the situation is a shambles and that we have no interest in a defence sector in this country is beyond me. This major procurement relates not only to the surface fleet but to the Royal Air Force and to our support for the British Army. It cannot all happen in year one, however; it has to be planned and funded. I would say that £68 billion is a considerable investment by the Government. It represents increased defence expenditure and the largest sustained increase for 20 years. We should recognise what the Government are doing to ensure that the British armed forces are given the essential equipment that they need to face the threats ahead.
If the speculation is correct, and one of those ships is built in France, it would be a disgrace, and would have major implications for shipyards such as Swan Hunter's in the north-east. Will the Minister deny those rumours, about which there is great speculation in the press, and confirm that British ships built with taxpayers' money will be built by British workers in British shipyards?
I have tried to express the point that this will give us greater opportunity—[Interruption.] We are seeking to build two carriers, the French look as though they want to build one, which means that there are three orders, which could mean increased opportunities for British shipyards because of greater availability of work. It is therefore right that we continue to discuss the matter and examine what is the best fit for our two nations. I will not chase every comment and every lurid newspaper headline that suggest that these aircraft carriers will be built in France, as the opposite might be the case—we might have increased opportunities.
The Minister of State knows that aircraft carriers can only be deployed into harm's way with a full escort to protect them against torpedoes, mines and so on. While he is havering about the design, time scale and everything else for our two aircraft carriers, can he tell us whether he really believes that we will have enough frigates, minesweepers and other ancillary vessels left to mount two taskforces?
The answer to that is yes. Those implications have been taken into account in the strategic decisions. The reduction in the surface fleet, of course, is based on other considerations: the reduced submarine threat, as military experts examine it; the introduction of Type 45s with all the new equipment on board; and all the other capabilities available to give support to any embarked fleet, probably working with other nations. We would not put any of our aircraft carriers or other ships in a deployed fleet at risk.