BAE Systems

Part of Backbench Business — [Un-allotted Day] – in the House of Commons at 2:34 pm on 24th November 2011.

Alert me about debates like this

Photo of Tobias Ellwood Tobias Ellwood Conservative, Bournemouth East 2:34 pm, 24th November 2011

It is pleasure to be the final contributor to this important debate, and I begin, as others have done, by congratulating Alan Johnson and my right hon. Friend Mr Davis on securing it. Some interesting messages have emerged from it, both for the Government and for BAE Systems.

My right hon. Friend began by highlighting the importance of these decisions and the impact they will have on families where redundancies are involved, not only in his constituency—in Brough, which I know well, as I was married just up the road in Kilnwick—but across the country, as 3,000 jobs are going. The defence manufacturing industry can be a ruthless and competitive business, and we must bear in mind the impact on individuals, families and communities. He also mentioned that Britain no longer makes jets. That is true, but we do make an awful lot of parts. We are part of various consortiums, and that is the way forward, as it is in the car manufacturing industry. It is difficult to think of aircraft that do not utilise engines from Rolls-Royce, wings from Airbus and so on. That is the way of the world and we can at least be proud of the extent to which we are part of the great defence consortiums.

The Minister was right to remind the House that this country still has the second largest defence industry in the world, and our share of exports has indeed increased in the past year. My right hon. Friend the Member for Haltemprice and Howden also mentioned the concern that jobs involved in putting together these products, particularly the Hawk, are going to India. He countered my intervention by saying that I was absolutely right and that although we do export the M-777 and the empennage—the rear end—of the F-35, perhaps BAE Systems could look more wisely at things, particularly future upstream developments such as the Mantis, the Taranis, the Type 26 and other intelligence, surveillance, target acquisition and reconnaissance—ISTAR—assets which could be built in the UK rather than elsewhere. He also made an important point about executive pay, and restraint could be shown there.

We are being affected by an economic slowdown and that does cause a review of budgets, not least in the United States. That is why we are affected by what is happening with the F-35B, because it is American orders that are having an impact on us. That is not a decision made by our Government. However, this Government have had to make some very difficult decisions. Along with other Departments, the MOD received a cut of 7.5%. In addition, as confirmed by the Audit Commission’s report in 2009, there was a £38 billion overspend on procurement projects that had to be contained.

That raises the question about the involvement of the Government: how far do any Government get involved in the decision-making process of the defence industry, particularly in securing orders? As has been mentioned, there is a decision to be made about whether to buy off-the-shelf or have procurement processes. The first step is to have a strategic defence policy and a review to make sure that there is clarity about where we want to go. Let us consider what happened in Afghanistan. The replacement of the Snatch Land Rover took some time, and the Cougar, Vector, Jackal, Mastiff and Ridgback were procured off the shelf and then, in one way or another, got rid of. At the same time, BAE Systems made the RG31, a mine protected vehicle used in South Africa, and the MRAP—mine resistant ambush protected—vehicles, which were used by the Americans, but both those were ignored.

Mention has been made of the Nimrod, but that is a very sad tale indeed. The first contract was signed in 1996 for delivery in 2003, but by 2010, when the coalition Government were formed, not a single aircraft had been delivered. The cost of each aircraft had also jumped from £133 million to £455 million, which is a huge increase. This aircraft was of course based on the Comet design—it was a 1960s design. That was an appalling procurement project and eventually it had to come to an end.

I shall end my contribution by saying that I am very pleased that we are having this debate, as there are huge lessons to be learned in the procurement process. I am pleased that we have come forward with a defence industrial strategy. Redundancies are always regrettable and I hope that BAE Systems and the Government will take heed of the various messages that have come from hon. Members on both sides of the House in this debate.

Question put and agreed to.

Resolved,

That this House urges BAE Systems to act to preserve the UK’s defence production skills base and, as a recipient of enormous resources over many years from the UK taxpayer, to deploy those resources in such a way as to protect the nation’s manufacturing capability.