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9.52 am

Mr. Alan Clark (Kensington and Chelsea): A rumour is going around that the defence review will be shelved or diluted out of sight. I very much hope that the Minister can deny that. I welcome the projected defence review for several reasons--partly because it was long needed, and partly because the Secretary of State said that it would be policy-driven, not Treasury-driven. It is high time that proper consideration of policy in its widest sense governed our defence spending and deployment.

Defence policy is made up of three components: an evaluation of our national security, a projection of our foreign policy direction over the next 20 years, and an anticipation of the industrial and economic consequences of weapons procurement. All three headings have their lobbies.

The services are always keen to lobby for items of equipment, and in this instance the Royal Air Force undoubtedly believes its entire career structure to depend on the Eurofighter aircraft. Indeed, some argue that its survival as a service depends on it, because there is an argument--which has much to be said for it--that the Royal Air Force should be dispensed with, and that an Army air corps should support the Army, the Fleet Air Arm should support the Navy, and there should be a transport command to arrange back-up services. I am not arguing that, but the RAF is well aware of that argument, so its advocacy of EFA has an edge to it.

The Foreign Office wants EFA mainly because of its collaborative aspects, because it regards it as a major purchasing contract that will provide cement for our relations in Europe. Then there are the arguments of the industrial lobbies, whose validity I do not doubt. I congratulate the hon. Member for Chorley (Mr. Hoyle) on the way in which he advanced those arguments. However, he would probably be outnumbered by Labour colleagues who say that the whole sum should be spent on hospitals, schools, kidney machines and so on.

First I shall discuss the issue of national security evaluation. EFA is not an effective weapon system. It is a short-range interceptor fighter, conceived at the height of the cold war, the need for which has been overtaken by events. It has a very short loiter time, and must operate from sophisticated and hardened airfields. It does not have buddy refuelling, which means that it cannot be refuelled from tanker aircraft of identical type, but must wait and locate a slow and vulnerable dedicated tanker if it needs to take on more fuel. It has doubtful software in its targeting and direction-finding equipment, and it has as yet unsolved deficiencies in the fly-by-wire system.

It is likely that the article in Der Spiegel exaggerated those failings, but the statement by the hon. Member for Chorley that the EFA has flown for 340 hours without problems can only be based on a press release from British Aerospace or another source; it does not relate to the facts.

I shall now discuss the Foreign Office implications. The Foreign Office is probably in favour of the EFA because of the collaborative aspect. If the Foreign Office did its job properly, and if its staff applied their minds to the commitments that we are likely to have to undertake

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during the next 20 years, they would see that what is required is an aircraft with very long range, which can operate off rough local airfields, and which has a relatively low-tech requirement in terms of spares and logistics--something that does not have practically every component in its structure to be new and prototypical.

I shall now discuss the industrial and economic consequences, under three headings. The first consideration is the possibility of exporting or selling the EFA, which I believe to be nil. As the EFA does not meet our national security requirements, it is hardly likely to meet those of potential customer countries, who will undoubtedly buy something that suits their requirements better.

Secondly, under the industrial heading, we must consider the consequences that relate directly to employment and to profits in the aerospace industry. Although the hon. Member for Chorley argued in terms of employment, he is well aware that those who are giving him his briefings are probably very profit-oriented also. The Minister will have very much in mind the fact that among the problems of United Kingdom defence procurement is the almost unbreakable interdependence between British Aerospace and his Department's procurement desk.

Surely, now that the cold war has abated, we could look more widely--not necessarily to the United States--to meet some of our requirements in this area. In any case, if EFA is to be presented as a job creation scheme--I always have some sympathy with the Keynesian ethic--we must find a less extravagant way of paying people to make buckets with holes in them.

The real problem is that a great deal of investment--prestige, money and service commitment--is going into a project that is essentially flawed and out of date. I agree with the hon. Member for Chorley that we must not abandon leading edge technologies. To do so would be extremely dangerous; it would mean finally forfeiting our independence as producers.

What we have to do--it is the hardest thing of all to get past the Treasury--is maintain the research and development on the aircraft and fly prototypes, defective and dangerous though they may often be, so as to maintain our capability. At the same time, we must get out of the commitment to going into production of a large number of these aircraft. We do not need them, and they are already obsolete. They lack variable nozzle technology and other details with which I will not weary the House this morning.

Mr. John Wilkinson (Ruislip-Northwood): Will my right hon. Friend give way?

Mr. Clark: Not at the moment. Everyone knows that EFA's life expectancy, even if it has a dominant capability, is only four or five years; and the likelihood of our involvement in the kind of conflict where it would be needed is probably more than four or five years distant.

I am not arguing for the elimination of the whole project. I am saying that producing these aircraft and buying them at colossal individual cost in numbers far greater than we need would be wrong. We do not want to stock up with obsolete weaponry at this stage. On the

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other hand, the need to maintain our R and D capability and fly prototypes is clear. So the Minister and the Department must find a way of getting out of the production contract while maintaining the capability. It will be hard; the Treasury will never fund R and D if it possibly can. There is no end product--or if there is, it will be of a type which the Treasury believes will ultimately commit it to greater expenditure: best, therefore, to throttle it at birth.

I have described what the Minister must do; it is never too late to do it. The aircraft is not yet in production. The cost overruns are stupendous. Many sectors within its specification are defective and will need huge expenditure to put right. This is the time to close down any idea of producing the aircraft, but to maintain the research and development.

Mr. Wilkinson: I am grateful to my right hon. Friend for giving way--

Mr. Clark: I have finished my speech.

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. It is clear that the right hon. Gentleman has sat down.

10.2 am

Mr. Lawrence Cunliffe (Leigh): I congratulate my hon. Friend the Member for Chorley (Mr. Hoyle) on his lucid presentation. For a new Member, he has an effective insight into the problem--[Hon. Members: "Of jobs"] It is my hon. Friend's privilege to concentrate on jobs. It enables him to get some experience in the Chamber, and I commend his speech this morning.

I applaud the fact that we are having this debate. It is entirely understandable that hon. Members whose constituents work in the defence industries should be concerned about jobs for their people. The right hon. Member for Kensington and Chelsea (Mr. Clark) seems to think it wrong to battle too hard for Britain because, in an age of new technologies, things move too fast for us to keep up.

I am a long-standing member of the aerospace and technology committee of the Western European Union, where we have been battling away with the Germans and French over the airbus for some time. Not long ago, we unfortunately lost out in the helicopter argument. Our cardinal objective in all these arguments is to present a good economic case for the viability of British aerospace productive capacity, especially when it comes to making specialist aircraft of this type.

Rev. Martin Smyth (Belfast, South): Does the hon. Gentleman agree that it is important to maintain our manufacturing capacity, and that relying on service industries alone would impoverish us all? Does he agree that the Treasury has a case to answer over research and development? As I understand it, it has not matched British aerospace's R and D investment pound for pound, as it should have done.

Mr. Cunliffe: I agree. It is imperative to keep up the progress in this area, because it will affect the whole future of British aerospace technology. Treasury mandarins have always been the same. Some present in

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the Chamber today who have had ministerial experience can, I am sure, quote chapter and verse to show how the Treasury cuts off or isolates funding.

We have been discussing these matters in the WEU aerospace committee. Next week, I shall have talks with Karl Lenzer, the acting chairman of our committee, who will be in America for discussions. Understandably, German politicians, just like their British counterparts, want value for money. We are all in the same game; no one wants to be frivolous about public money. We are talking about 16,000 German and 10,000 British jobs.

The right hon. Member for Kensington and Chelsea questioned the performance of the aircraft. We take pride in British quality--indeed, we claim to be the best in the world--but we need to be competitive as well as technologically sound. We have always proceeded on the basis of open competition.

We are assured by Labour Ministers now that the Eurofighter is not to be considered under the defence review. I call that backing Britain with confidence--

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