Defence Industry (Lancashire)

– in Westminster Hall at 11:00 am on 16 March 2010.

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Photo of David Borrow David Borrow Labour, South Ribble 11:00, 16 March 2010

I am grateful to have the opportunity to raise issues relating to the defence industry in Lancashire. Lancashire is probably at the heart of the UK's defence industry, although when I first moved to Preston in 1975, I did not realise how important the industry there was.

At the time, British Aerospace, as it then was, ran three major aerospace factories in the Preston area. One was at Warton, to the west of Preston, one was Salmesbury, to the east of Preston, and one was at the old Strand Road site, right in the centre of the city. Strand Road had a long history of aerospace production, going back generations and through the second world war. We have a long tradition of producing a variety of aircraft, from the Hampden, the Canberra and the Lightning right up to the Tornado and the Typhoon in the present day.

Lancashire's defence industry at the time was based around those three major factories, together with two Royal Ordnance factories-one in Blackburn and one between Chorley and Leyland. What always interested me about the Royal Ordnance factory at Chorley was that the Ordnance Survey map would show nothing at the site apart from trees and a bit of green. However, anyone who went on the railway line would stop at a special station, which allowed thousands of ROF workers to get off the train to go to work in the huge factories spread over hundreds of acres between Leyland and Chorley. A third of the site is now in my constituency and two thirds is in the Chorley constituency. The ROF has now virtually gone, and there is a new village called Buckshaw. The railway station will shortly come back into use as a commuter station, and thousands of houses and factories are being built on the site. The old ROF site at Blackburn also closed many years ago. None the less, the defence industry remains crucial to Lancashire. It is based around the Salmesbury and Warton plants, but there are also a large number of small supply companies.

In the early '90s, when the Tornado was in full production, I attended an unveiling ceremony in Warton for what was probably not quite a prototype-it would be a bit grand to talk about it as such-but a model for what became the Eurofighter Typhoon. Many years later, the Typhoon is coming off the production line. I was pleased when my hon. Friend the Minister signed the contract for tranche 3A of the Typhoon, which has secured many jobs in my area. There are 112 aircraft in tranche 3A, and we need to see whether we can get tranche 3B. Those of us in the area are still working on that.

The Tornado was probably the last major fighter to be a UK-only plane. The Typhoon was a joint production with Germany, Spain and Italy and it has been very successful.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

The hon. Gentleman might like to correct himself. The Tornado was a joint effort involving the same partners-Britain, Germany and Italy. It was not just the Typhoon that was built in that way; it built on the Tornado experience.

Photo of David Borrow David Borrow Labour, South Ribble

I am grateful to the hon. Gentleman. He and I have a long history of dealing with aerospace issues in this place, being officers of the all-party group on aerospace. I know of his interest in the issues, given that he represents Farnborough, which is the headquarters of BAE Systems. On many issues, we have fought on the same side in the interests of the aerospace and defence industries.

I first became involved in defence and aerospace as a young councillor in Preston in the early '90s, when Strand Road was closed and we faced large-scale redundancies. I became involved in the situation as an economist and as someone who was concerned about economic development and who wanted to see what would happen. Preston city council got involved with a number of local authorities in establishing the airline network, to see what we could do to speak up for the defence and aerospace industry.

At about the same time, Lancashire county council, British Aerospace and a number of smaller companies established a network to focus on the industry. A gentleman called Dennis Mendoras, who runs a company in Pendle, was a leading figure in the organisation, which eventually became the North West Aerospace Alliance. For a number of years, Dennis was a member of the Northwest Regional Development Agency, a role that he used to speak up for the aerospace industry.

It is interesting that the NWDA has been crucial in supporting the aerospace and defence industries in the north-west in recent years. Let me give two examples. First, there is the aerospace supply chain excellence programme. Its first scheme started in 2006 and received £8 million in funding from the European regional development fund. As a result, four companies from across Lancashire-well, one is slightly outside Lancashire, although it is perhaps in historic Lancashire-secured a £250 million order as part of the new F35 joint strike fighter programme. The companies involved are Hyde Aero Products in Dukinfield, the RLC Group at Altham, near Burnley, John Huddleston Engineering at Blackpool and ThyssenKrupp at Bamber Bridge, just south of Preston. The other programme, called ASCE 2, which receives funding of £3.6 million from the NWDA and £3.5 million from the European regional development fund, started towards the end of last year.

Both programmes demonstrate the importance of the NWDA, so I am concerned about proposals to get rid of it. It is important to have a regional perspective for industry. It has been suggested that if the NWDA were scrapped, the funding would go to local authorities or straight to the Government office for the north-west, or that it would be disbursed by officials down here in London. If the money goes to local authorities, there is unlikely to be a regional perspective in any investment or decisions. If it is disbursed by the Government office for the north-west, it will be difficult to have any accountability. If decisions are made by a civil servant down here in London, that will further reduce the regional aspect of any decisions.

At the moment, decisions are made by people who live and work in the north-west; indeed, the NWDA's chief executive is a constituent. It makes a difference when we are able to speak to the people who make the decisions because they live and work in our region. The aerospace and defence industry in the north-west has a regional perspective, and the ability to fund developments in the area through a regional body is crucial.

The key part of the industry probably lies with the Eurofighter Typhoon programme at BAE Systems. Shortly, however, the F35 joint strike fighter programme will come on stream. It is a Lockheed Martin programme, with BAE Systems as the main partner because it has certain technical skills that are needed as part of the programme.

Many of us who have been involved for many years in the development of the programme will know how important it has been to acquire the ability to transfer intellectual property from the US to the UK, to ensure that we shall in future be able to develop and use any aircraft we purchase as we want to, rather than relying on the United States model. There have been complex and difficult negotiations over the years to ensure that BAE Systems has had access to intellectual property from Lockheed Martin. I have been pleased at the way the Government have engaged in those negotiations, and even though the deal in question is company to company, given that we plan to purchase 140 aircraft it is crucial to ensure that we have control over their use and can modify and develop them during their lifetime.

Currently, £800 million is being invested in the new Samlesbury plant. I think it is spread over 10 years. I was there a few weeks ago and the construction is magnificent. It is a huge investment in manufacturing in the north-west, of which we should be proud. It will secure many jobs not just now but in the future, as the production there will be for part of every aircraft that is produced across the world. That is thousands of aircraft, even though we are looking to purchase about 140.

That is where we are now, but perhaps we can think about where we could be in future. I have visited the Warton site many times, and several times have visited its unmanned aerial vehicle centre, which has been doing considerable research and development on UAVs for several years. There are at the moment two UAVs that are key to the future. One is Taranis, which was launched in 2006; it is a joint Ministry of Defence and industry project, led by BAE Systems, to test the viability of UAVs. The first prototype, with a unique stealthy flying wing, is currently being built. It has not yet flown, but that will happen in the not-too-distant future. The second aircraft, the Mantis, has already flown. It was produced within 19 months of the first consideration of the concept, and flew towards the end of last year. The target was for it to be able to fly for 36 hours without landing.

That area of development is crucial for the employment prospects of people in the defence industry in Lancashire. If we look beyond the F-35 and the Eurofighter Typhoon it is difficult to envisage future generations of fast jets that will create jobs in their current numbers. The current thrust for military aircraft is towards UAVs. It is important that we should be at the forefront of that development. We need to ensure that future investment will continue and that the defence and aerospace skills that exist in Lancashire will go on. Such skills have been in the area for generations. When I visit schools there, it is interesting that many children have parents who work in the defence and aerospace industry, and grandfathers and great-grandfathers who worked in it too.

The technology and engineering side of things is important in Lancashire. I visited a technology competition on Friday. It was run by the local Rotary clubs and sponsored by BAE Systems. It was fascinating to see the involvement of groups from a host of schools in my constituency, including groups of girls-it is good that more women engineers are coming forward. We need to take the Lancashire tradition of work in defence and aerospace into the future. I worry that when the existing programmes come to an end there will be nothing afterwards. If UAVs are what will be needed at that time, their development needs to be thought through.

Moving on, perhaps I may make my remarks a little more political. I am conscious of the importance of the F-35 joint strike fighter, but I have been concerned about the fact that although the Government have been positive in supporting it-they have been active in the negotiations to ensure that intellectual property can be transferred, and have made the decision to go ahead with the carriers from which many of the aircraft will fly-that is not necessarily true of all parties in the House. I was interested to read the comments of my hon. Friend Mr. Davidson in a debate on 1 March.

My hon. Friend talked about shipyard conveners visiting Opposition parties. They came away reasonably happy from a meeting with the Liberal Democrats:

"However, the convenors were greatly depressed when they went to meet Dr. Fox, who, speaking on behalf of the official Opposition, made it clear that the action that a Conservative Government would take on day one would be to examine the break clauses in the contract. Had he said to them, 'I'm afraid I can't tell you anything because it will take us six months to set up a review, and then a year to have the review, and then maybe a couple of weeks at the end of that to decide on it, so it will be 18 months or so before we can come a decision', they would not have been happy with that, but they could have understood it, because that had been a relatively consistent position; indeed, it was the Liberals' position until they accepted the strength of the convenors' arguments. But no, the Conservatives said that on day one they would examine the break clauses-no one examines the break clauses on day one unless the intention might be to apply them on day two."

That set alarm bells ringing for my constituents, who wonder what a Conservative Government would mean. If there is no commitment to the two aircraft carriers, there is no commitment to go ahead with the order for the F-35 joint strike fighter. In that same debate, Mr. Howarth quoted from a leaflet distributed by the Labour party in my constituency, and referred to it as "scurrilous". The part he quoted said that

"it is a bit worrying that the Conservatives, should they get elected, are looking to scrap a number of Defence Projects."-[Hansard, 1 March 2010; Vol. 506, c. 703-09.]

He did not quote the editorial in the Lancashire Evening Post of 17 September 2009 that said:

"David Cameron has fuelled fears that a Conservative government will ditch crucial defence contracts at the cost of thousands of Lancashire jobs.

The Tory leader threw his support behind Shadow Chancellor George Osborne, who sparked outcry from the defence industry when he pinpointed the £20bn Eurofighter Typhoon project as a potential scheme to cut."

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

The hon. Gentleman is clearly anticipating much of what I shall say, but I want to put him out of his misery-or rather to disrupt his joy at spreading false rumours. He has picked up a quotation from the Lancashire Evening Post. I have a copy of his leaflet. As I made clear in a letter that I sent to the leaders of the defence industry, there was no such imputation to be made in relation to the remarks of the shadow Chancellor. He did not list any programmes that were scheduled to be axed. He was asked a question in another context. In my letter I made it clear that we shall have a defence review and I shall set those things out later. I hope the hon. Gentleman will address the headline in his leaflet, of which I have a copy. It says, "Vote Conservative and destroy the defence industry". Will he explain, and apologise for that?

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

Order. Interventions should be short.

Photo of David Borrow David Borrow Labour, South Ribble

I was somewhat puzzled that the hon. Gentleman mentioned the leaflet, because Aldershot is obviously a long way from South Ribble. However, when he cited the fulsome praise of the Conservative candidate who is to be my opponent in the general election, I twigged that she comes from the same part of the world as him and that the leaflet was probably passed to him on a weekend trip to the south.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

The leaflet was not passed on in that fashion. It was posted to me. Lorraine Fullbrook, who is the hon. Gentleman's doughty and feisty opponent-she has every prospect of succeeding him in this place-has, as he well knows, been resident in the area for five years. As the hon. Gentleman said, when he went to Lancashire in 1975 he did not know that it had an important aerospace industry. Lorraine Fullbrook knew even before she clapped eyes on Lancashire.

Photo of David Borrow David Borrow Labour, South Ribble

I have some sympathy for the hon. Gentleman, because I know that he is a strong supporter of the aerospace and defence industries. However, having read his speech of 1 March and having seen various Conservative party statements, I see that the party has a formula should it come to office; it will carry out a strategic defence review. However, until that is done, it is unable to make any commitments. I am sure that the hon. Gentleman would like to be able to reassure my constituents that, should there be a change of Government, the programmes for the Typhoon and the F-35 would be safe, but he is unable to do so.

It was significant that the hon. Gentleman should comment on a leaflet circulated by the Labour party in my constituency, as I have seen a leaflet circulated by the Conservative party that makes the identical point-that the Conservatives would carry out a strategic defence review and then decide which programmes were to go ahead. That is the Conservative position. I am sure the hon. Gentleman wishes he could do more.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

The hon. Gentleman knows perfectly well that our position is precisely the same as the Labour party's.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

The Minister, who is shortly to leave Parliament, says not at all. It is a fact, and I can confirm it. Both parties will undertake a defence review. That review will consider all the options and force structures. That is what the nation requires. That is what the armed forces require.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

Order. Interventions are far too long.

Photo of David Borrow David Borrow Labour, South Ribble

I shall move on. It has been interesting to watch the debate about procurement and other such matters over the last few months. The Government have signed contracts for the carriers and work is going ahead with them. The shadow Defence Minister made it clear to conveners from the defence industry that the break clause would be considered on day one, which questions the Tory commitment to the carriers. If the Conservatives have no commitment to the carriers, it is difficult to see how they can be committed to the F-35.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

The hon. Gentleman continues to make such observations. In a written answer, the Secretary of State for Defence said:

"We have been very clear since the publication of the Defence Green Paper that everything other than Trident is included in the Strategic Defence Review."-[Hansard, 8 March 2010; Vol. 507, c. 20W.]

If there were to be another Labour Government, they would review all programmes except the Trident successor, just as the Conservatives would do. Our positions are identical. I hope the hon. Gentleman will explain that fact to his constituents.

Photo of David Borrow David Borrow Labour, South Ribble

I recall that just before Christmas, at a meeting of the Select Committee on Defence, I asked my hon. Friend the Minister about the Government's commitment to the F-35 joint strike fighter. My hon. Friend told the Committee that the Government would purchase 140 aircraft.

Photo of Quentin Davies Quentin Davies Parliamentary Under-Secretary, Ministry of Defence, Parliamentary Under-Secretary (Ministry of Defence) (Defence Equipment and Support)

Everything else that my hon. Friend has said is absolutely correct, but I did not say that there would be 140. I said there would be up to 150. In practice, 140 is pretty close but the formulation is important.

Photo of David Borrow David Borrow Labour, South Ribble

Indeed, and we have already signed a contract for three aircraft in order to do evaluation trials.

I asked a similar question of my right hon. Friend the Secretary of State. He made it clear that he saw the Typhoon and the F-35 as the two fast jets at the core of our military capability, and that he was not looking to get rid of them or to buy anyone else's aircraft. I am disappointed that the Opposition have not been more specific in their commitment. Their lack of commitment to the aircraft carriers undermines their commitment to fast jets.

If I was an employee of BAE Systems in Lancashire, I would be concerned about my job. I would be inclined to stick with a party that has shown a commitment to the industry by signing contracts for the Typhoon before Christmas, by starting work on the carriers and working hard to ensure that the F-35 programme goes ahead, rather than turning to a party that can give no such commitment.

Photo of Mark Hunter Mark Hunter Shadow Transport Minister; Parliamentary Private Secretary to the Leader, Shadow Minister (Transport) 11:26, 16 March 2010

May I say what a pleasure it is to have the opportunity to contribute to this timely debate under your chairmanship, Mr. Streeter? I congratulate Mr. Borrow on securing the debate. I pass on the apologies of my hon. Friends the Members for North Devon (Nick Harvey) and for Dunfermline and West Fife (Willie Rennie), both of whom are unable to be here today.

As will become obvious, I do not share the analysis proposed by the hon. Member for South Ribble. However, both of us hold firm on the importance of Lancashire and the north-west of England as a prime region for defence. Many thousands of families across the region have given unstintingly of their efforts, being involved in iconic defence industry products such as aircraft, which are of particular interest to him and me, and others. It will a sad day if the historic importance of Lancashire and the wider north-west is forgotten. I hope that that never happens under any Government.

I shall not indulge in internecine warfare about who said what in which leaflet. I am at a disadvantage in that I do not have copies of the said periodicals with me. That may be some relief to you, Mr. Streeter. However, I shall speak on the subject of the debate and put a number of questions to the Minister.

I was asked to speak for my party today as a Member whose constituency is in Cheshire-it is just over the border from Lancashire-and who represents the many hundreds of highly trained skilled engineers and technicians who work at the BAE Systems Woodford site and who live in my constituency. As the hon. Member for South Ribble said, like many other sites, Woodford has a proud history, involving the RAF and the very best of British engineering skills.

Those skills go back for many generations, to the Lancaster bomber of the second world war, the Vulcan from the cold war, the first Nimrod, the MR2 and the MRA4 programme. I have been fortunate enough to visit that site on many occasions and am well aware of the fantastic job done by the whole team, both management and unions. The expertise of our defence sectors workers is world-renowned, and it is on their behalf, as well as on behalf of my party, that I speak today.

Today's debate is of interest to not just those fortunate enough to live in Lancashire, but the general public as a whole. The Defence Analytical Services Agency puts total nationwide employment in the industry at around 300,000. Direct employment stands at 155,000, with a further 145,000 jobs in the supply chain. In total, the defence industry accounts for 10 per cent. of manufacturing jobs in the UK. For every job created in the defence industry, about 1.6 jobs are created elsewhere in the economy. It is estimated that £100 million investment in the defence industry would create 1,885 jobs throughout the UK economy, 726 of which would be in the defence industry. For that very reason, there are more small and medium-sized enterprises in the UK defence industry than in the French, German, Italian and Spanish industries combined. As things stand, more than 65,000 jobs in the UK are currently supported by defence exports.

I was delighted to read recently that the Minister, who is in his usual place today, lavished praise on the defence industry in Lancashire, and he was right to do so. I am sure that every Member present today will testify that Lancashire has a world-scale, world-class defence industry. The combined turnover of the north-west aerospace companies is some £7 billion a year, one third of the UK's total aerospace sector, which itself is the second largest in the world. The MOD's own statistics puts defence spending-dependent employment in the north-west at 14,000 people, which seems a little on the conservative side. An article in the Financial Times last year reported that some 1,000 companies employ 60,000 people in the north-west. Perhaps in his response, the Minister might like to address that particular issue and clear up the confusion regarding the figures.

Photo of David Borrow David Borrow Labour, South Ribble

It is my understanding that BAE Systems employs 12,000 people in the north-west and has a supply chain of 1,000 companies in the region, which supply it with services and products.

Photo of Mark Hunter Mark Hunter Shadow Transport Minister; Parliamentary Private Secretary to the Leader, Shadow Minister (Transport)

I thank the hon. Gentleman for his intervention, but what I said was that the Financial Times had reported that some 1,000 companies are employing 60,000 people in the north-west, so there is no dispute between what he and I believe to be the case.

The Northwest Regional Development Agency has consistently talked about boosting the aerospace industry. However, despite its excellence and expertise, there is no doubt-the hon. Gentleman has made the case very eloquently-that Lancashire is suffering from a downturn in fortunes. Last November, BAE announced plans to cut a further 640 jobs, citing a reduction in military spending on both sides of the Atlantic. Such cuts will take the total number of redundancies at the defence contractor this year to about 2,300. In Lancashire alone, 205 jobs will be lost at Samlesbury, 170 jobs at Warton and a further 57 jobs will be lost in the Military Air Solutions operations based in Chadderton. Not even the Government's misguided investment in the multi-billion pound nuclear submarine programme has been enough to save cuts of 5 per cent. in the 4,500-strong work force at BAE Systems' naval base in neighbouring Barrow-in-Furness in Cumbria.

Let me reinforce the point of difference that we have heard expressed from the two Front Benches today. It is certainly our contention that it is quite erroneous for the Government not to have included the future of the Trident nuclear submarine programme in their strategic defence review. It seems wholly ridiculous that such a review, which is looking at all aspects of defence spending-it is doing that because of the state of the economy and because no party can afford to do everything that it would like to do-is not considering that single biggest issue.

Let me say a few words about the Woodford plan, because not only is it a region that I represent, but its problems epitomise the very issues that the hon. Gentleman referred to from his constituency's perspective. Last September, BAE confirmed that it would close the site in Woodford in 2012 with the loss of the remaining jobs-well under 1,000-as a result of the conclusion of the Nimrod project. To be fair to the Minister, he visited the plant just before the announcement. He had a look around and talked to the people directly involved. He made it clear that the option to convert three further development aircraft to production standard would not be taken forward. Whichever way one tries to wrap up that decision, it was a body blow to the hundreds of workers still employed at Woodford. The decision was all the more remarkable given the fact that the RAF had stated that it had an operational requirement for a further three aircraft. Given that the Government have now effectively chosen to buy three American Rivet Joint aircraft instead of Nimrods, will the Minister use this opportunity to explain how such a decision sits with the Prime Minister's declaration of British jobs for British workers, which now sounds rather hollow in Woodford?

Any decision to contract the planes out to the US results in not only skilled workers losing their jobs earlier than necessary, but the UK defence industry losing the military aviation expertise that has been built up over many years and that is such vital a part of the north-west economy. There are many questions about exporting jobs and military aviation expertise, not least of which is that-I have put this point directly to the Minister before-if we are going to use American aircraft for intelligence and reconnaissance jobs, which is what such planes are for, who has first claim on the intelligence? I understand that we have a close working relationship with our American allies, but surely only one party has first claim on that intelligence. The Government will also lose the expertise developed in Woodford and various other locations that would help future possible productivity, leaving the UK with no option but to return to the US time and again for upgrades and maintenance.

Let me make one thing clear, and this echoes points that were made earlier. The argument is not one of protectionism. Our priorities must be to give our armed forces the best equipment, to get value for the taxpayer and to support a strong defence industry-in that order. However, the decision is about short-term savings overriding long-term defence interests and financial common sense, which is why it would be economically advantageous in the long term to have stayed with the Nimrod programme.

Let me turn now to the Eurofighter, which is where I differ from the hon. Gentleman and possibly Mr. Howarth. It is our contention that the project represents very little financial sense. I realise that such a remark will cause a great deal of consternation, not least to the hon. Member for South Ribble. It is accurate and fair to say that the programme has been beset by cost overruns, delays, technical problems and it is now an expensive and, as some might say, an unnecessary and inappropriate capability. The Eurofighter is considered by many people to be a damning indictment of this and previous Governments' military priorities, and is viewed as an anachronistic piece of cold war kit that serves no purpose in the modern world. Instead of fighting the wars of the past, the Government should be looking to utilise the skills base of those employed in the Eurofighter project to invest in technology such as UAVs, to which the hon. Gentleman referred, that could help save lives in Afghanistan, where we have troops on the front line, putting their lives at risk every day of the week right now.

Air Vice-Marshal Martin Routledge, the outgoing chief of staff for strategy, policy and plans at RAF HQ Air Command, has been vocal in his belief that the MOD and the RAF have not invested enough in this so-called agile technology. UAVS, such as the Reaper, can be used to monitor routes commonly used by troops to see if improvised explosive devices or mines are being planted by insurgents. I am sure that the Minister will confirm that some drones are already being used for that purpose, but the simple fact remains that there are not enough UAVs to handle all the operational demands. It is our view that the Government should embrace that technology, and when they finally do so, I am convinced that Lancashire and the wider north-west region have the workers with the necessary expertise and determination to get it to the front line.

Members will be all too well aware today that the defence industry faces a great deal of pain as the economic downturn makes its inevitable impact on defence spending. However, Members should also remember that the MOD had saddled itself with massive debt even before the current downturn had begun to take shape. Bernard Grey's report last October described the MOD's procurement policies as "incompetent" and revealed a disparity of about £35 billion between our commitments and the resources that are available to fulfil them.

We know that about £2.5 billion is wasted every year on equipment projects. That is Labour's legacy-a budget that is out of control and a programme that is years late. It is also a legacy that has caused a great deal of uncertainty among the thousands of people working in the defence industry in Lancashire and elsewhere.

Given the tight financial shackles that the MOD will inevitably be operating under in the foreseeable future, it is vital that the Government learn the lessons from past procurement blunders. We have a situation now where some aircraft, such as the Eurofighter, are built with parts that are made all over Europe and then shipped somewhere else to be put together, purely as a result of political deals. A company such as BAE Systems, which still employs thousands of people in the north-west region, would do better in a more commercial atmosphere that had less political horse-trading. Therefore, I hope that the Minister will at least agree with my final point, which is that British industry has nothing to fear from a more business-led approach to military procurement.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence) 11:41, 16 March 2010

It is customary on these occasions to congratulate the hon. Member who secured the debate, and I warmly congratulate Mr. Borrow on having done so. It is somewhat disappointing that so few Members from the north-west were able to join us on this occasion to celebrate a British success story, because there is no doubt that Lancashire and the aerospace industry are a continuing success story of which the whole nation should be proud.

However, I fear that the hon. Gentleman had another motive in securing this debate. Indeed, he alluded to it, and I intervened on him to ensure that those who read reports of these proceedings understand precisely where he is coming from. It was unfortunate that he was not able to take part in the debate on defence in the main Chamber on 1 March, although I see that he has assiduously studied the remarks made in that debate by my hon. Friend Dr. Fox, the shadow Secretary of State for Defence, and by me. I gather that the hon. Member for South Ribble was also unable to take part in the debate on defence in the main Chamber yesterday, so I suspect that the principal purpose of this debate is to allow him to put something on the record, which he can then distribute around his constituency, as something of a panic measure, before the general election, in which, according to the opinion polls, he is likely to lose his seat.

I will perhaps return to the polemics of the issue in a moment, but I think that there are a number of things on which the hon. Gentleman and I agree. He was right to mention that we are both officers of the all-party aerospace group, which is promoted by the Air League, an excellent organisation promoting air-mindedness throughout the kingdom; it has just celebrated its centenary. Britain has excelled in probably the most important industry of the 20th century-an industry in which we continue to be world leaders.

I share with the hon. Gentleman a concern about the implications of the joint strike fighter in respect of the exchange of intellectual property with the United States. It is absolutely imperative that the United States understands that if we do not have operational sovereignty over that aircraft, the project clearly must be reviewed. We, as a sovereign state, cannot find ourselves in a situation where we cannot operate that aircraft in a sovereign fashion. So I make wholly common cause with him on that issue.

The hon. Gentleman may remember that a few years ago, in about 2006, I addressed a conference in Washington, where I spelled out in words of one syllable how we in the United Kingdom, having contributed so much in support of the United States, expect some reciprocity from the US. Before I went to that conference, I had a briefing with Lord Drayson, a man for whom the industry has a high regard, as do I. Lord Drayson and I discussed the matter, and again we were completely ad idem-that means "of the same mind", for those who have perhaps forgotten their Latin-on it. So I am happy to make common cause with the hon. Gentleman.

Photo of David Borrow David Borrow Labour, South Ribble

On that point, does the hon. Gentleman agree that a lot of progress has been made on the transfer of intellectual property, and that it is important that the UK continues to deliver its side of the bargain and does nothing that could allow Members of Congress to seek to reopen the deal and start putting obstructions in the way of the transfer of intellectual property in the future? I say that because the project is going ahead in stages. Until now, agreement has been reached stage by stage; the intellectual property that has been needed has been transferred, and things have gone smoothly. The hon. Gentleman will recall that we had a number of arguments, and discussions with various politicians, in Washington to get the process started. A large number of British MPs have visited Washington over a long period and have engaged in discussions, which were successful. If we are not careful, however, there is a risk that the process could unravel.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

I accept what the hon. Gentleman says, but the United Kingdom needs to take a very robust stand with the United States. The relationship between the United States and the United Kingdom is in need of a bit of tender loving care. There have been a number of issues on both sides of the Atlantic that have been unhelpful to our relationship, not least the recent withdrawal by EADS of its tanker proposal for the United States air force, in the light of its belief that the entire programme has been re-jigged to fit the Boeing tender.

I do not believe that the United States understands anything other than the most robust language. Our constituents across this realm believe that we in Parliament have done our bit in supporting the United States; indeed, some of our constituents believe that we have gone too far in supporting the United States, particularly over the Iraq war. The United States must understand that if our relationship with it means anything, it has to ensure that we are able to reassure ourselves, and those whom we represent, that we remain a sovereign nation, capable of operating equipment made jointly by ourselves and the United States in a sovereign fashion.

One should not go into the negotiations with the United States in a frame of mind that is anything other than robust. If anybody is any doubt of the merit of our having that frame of mind, I remind them of the exchange between our former Prime Minister, Baroness Thatcher, and the then US President, Ronald Reagan, when he invaded Grenada, a member of the Commonwealth, without first consulting the United Kingdom. She unleashed a salvo of weaponry, the like of which had not been heard in the Oval Office for many a long year. The result was not that we impaired our position with the United States; instead, we deservedly won its respect for that approach. Such an approach may be required again. So I make common cause with the hon. Member for South Ribble on the issue of relations with the United States.

Obviously, I also praise the role of BAE Systems, which is one of the principal employers in Lancashire, as the hon. Gentleman said, with 12,000 employees there-7,000 at Warton and 5,000 at Samlesbury. Those employees have some of the most high-tech jobs in the land, involving the highest modern skills, in an area where Britain leads the world.

When I visited one BAE Systems site recently, it was interesting to see the degree to which industry has become much more agile in responding to the needs of the defence world, including, obviously, the needs of Her Majesty's Government. The hon. Gentleman singled out the unmanned aerial vehicles that are being developed by BAE. There is no doubt that the Mantis is an example of the agility of which I have spoken. From inception to first flight, the project took less than 18 months. That is the way that the industry needs to go. One aim of the defence review will be to ensure that we create systems to allow within Government the same agility that the industry is beginning to show.

I share an anxiety with the hon. Gentleman: I am nervous about the extent to which we in this country accept that we will not again build a manned aircraft. Mark Hunter was critical of the Typhoon, as I prefer to call it; it seems a better name than the one that he used. The Typhoon is a state-of-the-art air superiority fighter. Anyone who thinks that this country can do without an air superiority fighter has no understanding of modern warfare. It just so happens that we have not faced an air threat in recent conflicts. I remind those who do not think that air power is important of Simon Weston. The entire nation has in its mind the visage of that heroic Welsh Guardsman, who survived an attack on the Sir Galahad in Bluff Cove during the Falklands campaign. That attack was perpetrated by an insignificant, but on this occasion highly effective, Argentine aeroplane. Those who do not have command of the skies put their land forces at risk of annihilation. That is why air power is vital.

It is important that this nation should understand that the Typhoon is not a cold war relic or, as the hon. Member for Cheadle described it, an anachronistic piece of kit that serves no useful purpose. That is a fundamental misunderstanding. If that is Liberal policy, the nation needs to know about it. The Typhoon is a superb aeroplane, acknowledged by the Americans as a class act, in terms of air superiority. We must have it. It is not one that I would delete from my armoury.

Photo of David Borrow David Borrow Labour, South Ribble

Does the hon. Gentleman agree that there are legitimate concerns that the strategic defence review might end up listening to those who have learned their lessons from the conflicts of only the past 10 years, which might result in us drawing up a military system based on the needs of those past 10 years, rather than on what could be needed in the next 20 or 30 years? Fast jets, aircraft carriers and other big bits of kit that have not been needed much in the past 10 years may well be needed in the uncertain future that we face.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

The hon. Gentleman is right. That is the predicament facing whoever forms the next Government; obviously, I hope that it will be the Conservative party. I have no doubt that we will face immense challenges in determining the force structures that are required to meet not only today's immediate threats but the potential threats of the future.

We politicians must not concentrate simply on the here and now. Although we may accept the importance of winning in Afghanistan, it is not the be-all and end-all. It is our duty as politicians to look to the future, to protect the people whom we represent and to protect this nation and its interests around the world. I see no scenario in which air power can be confined simply to unmanned aerial vehicles loitering somewhere in the stratosphere.

Photo of Mark Hunter Mark Hunter Shadow Transport Minister; Parliamentary Private Secretary to the Leader, Shadow Minister (Transport)

The hon. Gentleman drew attention to some of my earlier remarks. I was not making a point about defence aviation generally; I was talking specifically about the Eurofighter, as the record will show. However, I certainly stand by my remarks.

The hon. Gentleman says that politicians must look beyond the here and now, but does he not accept that all politicians have a duty to provide leadership in the debate about reductions in public spending? Defence is a major spending area. I understand that he and his colleagues have ruled out Trident from the strategic defence review, as have the Government. What potential savings does he think we ought to be considering? Nobody is suggesting that we need to scrap the whole of military aviation-I was talking specifically about the Eurofighter-but at least I have offered specific suggestions on how money can be saved. He and his party have offered nothing but vagueness on the matter.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

If the hon. Gentleman thinks that he can save money by scrapping the Typhoon, he has failed completely to understand the argument I was deploying a few minutes ago: we require an air superiority fighter, which is precisely what the Typhoon is. It is also a top-class aircraft. It is not an also-ran in the international stakes of air superiority fighters. I will address the hon. Gentleman's point about the economy later, because it is a good one.

The hon. Member for South Ribble spoke exclusively about his constituency, but the hon. Member for Cheadle widened the debate to Lancashire, albeit from a vantage point in Cheshire. I hope in passing that he will notice my lapel badge. It is a Woodford badge, for it is a Vulcan bomber. I am a trustee of the only flying Vulcan bomber in the world, XH558, and I am pleased to say that we have just raised £1 million to ensure that we can display it on the air show circuit this summer, subject to a modification being made. Woodford has played a noble part in the history of Britain's aerospace industry, not least with the phenomenal Lancaster bomber and the Avro Vulcan, both designed by Roy Chadwick. As Members will know, only 12 years separated the first flights of those two aircraft.

More generally, the hon. Member for Cheadle mentioned some points about employment. Defence Analytical Services and Advice, known in the trade as DASA, estimates UK regional direct employment in the north-west dependent on Ministry of Defence spending to be about 14,000. I suspect that he is right and that it is an underestimate. Virtually all the 12,000 jobs at BAE in Warton are aerospace-related, so I imagine that taking the supply chain into account, there are substantially more than 14,000.

Indeed, I understand that 19,000 people are directly employed in the region. The local industry represents the largest single concentration of aerospace employment and production in the UK and has long been recognised as a global centre of excellence. Aerospace accounts for 89 per cent. of all local high-tech jobs in the north-west sub-region and as the hon. Member for Cheadle said, it contributes no less than £7 billion a year to the local economy. We should not forget Rolls-Royce at Barnoldswick. Rolls-Royce, the world's premier aero-engine company, is at the leading edge of technology and contributes to that important industry in Lancashire.

More than 800 aerospace companies are represented by the North West Aerospace Alliance, the flagship organisation representing companies and others involved in the north-west aerospace cluster. It is one of eight such alliances around the country. As the hon. Member for South Ribble said, my constituency includes Farnborough, where the Farnborough Aerospace Consortium is based. I met the consortium the other day, and we discussed how successful such alliances are proving in promoting some of the most highly skilled technology jobs in the United Kingdom. That is where I hope a large part of our future prosperity will lie now that the bubble of the financial services business has well and truly burst.