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8.10 pm

Mark Tami (Alyn and Deeside): I would like to begin by joining other hon. Members in warmly welcoming the extra money for defence pledged by the Chancellor in the

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latest round of the comprehensive spending review. I am sure that Conservative Members will get tired of hearing that it is the Labour Government who have provided the largest increase in defence spending for more than 20 years, with resources growing by more than 1.2 per cent. a year in real terms to 2005–06. We should also remember that the Conservatives cut defence spending by a third in their last 10 years in government.

Mr. Gerald Howarth: As the hon. Gentleman is clearly critical of the last Conservative Government and the extent to which they cut defence spending, will he tell us by how much we should have cut it and how much more money we should have spent on defence than we did?

Mark Tami: I am not going to enter into a debate about how much the Conservatives should have cut. They talk a good fight on defence, but it is the Labour Government who are putting the investment in, when and where it is actually needed.

Jim Knight: We should talk about real spending.

Mark Tami: That is right. The Labour Government, in marked contrast to the Conservatives, have put the finances of this country on a sound footing and delivered a stable economy, low interest rates, low inflation and low business taxes, and that has enabled us to invest in the security that the people of the nation deserve.

The cold war is now something that is taught in history lessons at school, rather like the second world war was in my time at school. We now see more of the cold war in James Bond films than anywhere else in the media, and many teenagers have probably never heard of the Soviet Union. The world is vastly different from when the Berlin wall came down. The old days, when we planned for nuclear and conventional conflict in mainland Europe, with tanks rolling across the plains, have gone from our thinking.

The world is different now; it is far more complex and unpredictable and, therefore, potentially more insecure. In the United Kingdom, we are right to recognise, especially through NATO, that these new insecurities bring new responsibilities and a new role. Rapid reaction, conflict resolution, and maintaining a strong deterrent are the order of the day. Our commitments are as many as they are diverse. The Government were, therefore, right to recognise that our defence policy had to be brought up to date by the strategic defence review, on both procurement and equipment issues.

Nothing should compromise this country's ability to honour its international commitments and maintain its national security. That is why we must have value for money and, equally, a framework that can deliver what we really need. Value for money alone can never be a sufficient criterion. When we look at procurement policy, we should look at the whole picture. We should consider not only the purchasing of the equipment, but the way in which we maintain it once it is in service.

There is a growing trend in linking maintenance with a supplier as part of the purchase arrangements. In some cases, that clearly makes sense, but we must also consider

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the effect of such a policy on our in-house capability at the Ministry of Defence, and in particular, at the Defence Aviation Repair Agency—DARA. In my constituency, DARA, at RAF Sealand, provides vital support to our armed services. It has dramatically improved its efficiency and flexibility and is now gaining new contracts through greater commercial freedom.

We should not, however, lose sight of the principal role of the agency, which is to keep our defence forces in prime operating condition. This vital role was perfectly illustrated during the recent conflicts in Bosnia and, before that, in the Gulf, when the agency worked flat out to keep our front-line services at full fighting strength. If we had not had that capability, or that flexibility, I doubt that we would have achieved the success that we did. I certainly question whether normal contract arrangements would have delivered the level of support that was needed, or that was achieved. We cannot simply contract everything out. It is vital, now more than ever, that we maintain and expand this viable in-house capability.

No one would have predicted the events of 11 September or the international war on terrorism that has followed. But no one predicted the conflicts in the Falklands, in the Gulf or in Bosnia. We are not able to predict, but we must always do our level best to prepare and to plan for future challenges and changes in our global environment. We need to be smart in our buying, but also smart in our planning. That is why we need to place a strong emphasis on supporting British manufacturing.

If I may, I would like to pay tribute to those in the trade union movement, including those in my own union, Amicus, who have done so much to support British manufacturing and the immense contribution that it makes to the prosperity and success of our whole economy. Britain has long been one of the world's leading defence manufacturers, employing well over 100,000 people in good quality jobs. While we have a highly successful export market, the industry clearly also relies on domestic orders. Whenever it is possible and viable to do so, the MOD should look to British manufacturers—and certainly British-based manufacturers—when it is making its purchases.

I welcome and fully support the MOD's decision to purchase 25 A400M transport aircraft. I think that it should have bought more, but that is a start, and I hope, along with our European partners, that the project will be allowed to go ahead. The A400M demonstrates the difficulties often faced by British and European manufacturers in competing with America. The amount of research and development expenditure available in the US often results in American companies being in a better position to bring a finished product to the table.

Opting for American companies will often deliver jobs to this country. Indeed, Raytheon has brought many jobs to my own constituency through the Astor project, and they are certainly welcome. However, if we had opted for the C-17 transport aircraft, or an uprated Hercules, we would have had none of the associated intellectual property rights. So, while that would have created jobs in this country, we would not have been in a position to grow those jobs. The A400M, on the other hand, has great export potential, and we should be able to expect an expansion of jobs as orders for it increase. Intellectual property is therefore the key, and we must take that fully into account in our procurement policy.

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Although we have, I hope, decided on a transport aircraft for the future, we have yet to decide on a replacement for our ageing air tanker fleet. The options are either to convert second-hand Boeing aircraft or to opt for the Airbus air tanker. As the wings for the Airbus would be built in Broughton in my constituency, I could be accused of being somewhat biased in relation to that choice. I would contend that the Airbus is a far better long-term choice and offers a good possibility of further export orders. It is therefore the smart choice.

We have a major job to do in promoting our own industry. The French Ministry of Defence rightly comes down on the side of the French defence industry. The French equivalent of the Department of Trade Industry believes that its role is to champion French industry, and our Government, Ministers and Whitehall officials must follow their example. We must support British manufacturing, the British defence industry and British jobs.

The strength of competition from the United States defence industry makes it vital that British companies continue to play a leading role in defence manufacturing exports. In particular, they must play the leading role in making essential projects a reality through European partnership. We must also ensure that this country's skills and intellectual property are valued and invested in. Our defence industries are often the most highly skilled and high-tech in the whole of manufacturing industry. The skills, knowledge and intellectual property that we have built into our defence and aerospace industries have proven time and again to benefit our entire manufacturing base.

In defence, we must not try to prop up lame ducks, but actively to support and encourage what are world-beating industries. Let us support smart procurement, but let us ensure also that we make the smart choice by supporting British manufacturers.

8.21 pm

Mr. Desmond Swayne (New Forest, West): It is a great pleasure to follow the hon. Member for Alyn and Deeside (Mark Tami). I cannot claim that I agreed with everything that he said, but I agreed with the greater part of it. He argued his case very cogently, and his defence of his constituency interests was a model for us all. I should at this point draw the House's attention to my entry in the Register of Members' Interests.

The sixth report of the Public Accounts Committee, which was published last November, recognised the impressive achievements of our armed forces. However, it also observed that:

our armed forces are

The report continued by expressing the hope that the equipment capability customer organisation—which is responsible for deciding what is required, and for controlling the funding to deliver that capability—will offer a potentially significant step forward in providing the armed forces with the equipment that they need at the time that they need it.

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However, the conclusion to the report observes that there was considerable confusion

I wonder whether the Minister can say in his winding-up speech what progress has been made in implementing that recommendation for much better communication between the capability customer and the Defence Procurement Agency. If he is unable to do so, perhaps he might write to me on the matter.

The report also states that, in the evidence presented to the Committee in compiling the report:

by achieving a rather better price on the prime contract. That seems to imply that the sonar would not have been acquired, had such headroom not appeared in the main contract. I find that rather odd, and it stretches credulity somewhat.

The Department has not always undertaken the right analyses at the right time. For example, it is generally agreed that the study on anti-armour weapons should have been carried out before committing the medium-range Trigat project to production, rather than after the project was withdrawn. In future, we would expect the equipment capability customer organisation to specify at the outset of such projects precisely when such studies should be undertaken.

The Department's strategy for meeting anti-armour weapons requirements seems to have evolved over time with a general lack of coherence, and as a result a certain cost penalty has been incurred. For example, in the second order to upgrade additional BL755 cluster bombs for the Kosovo campaign, the unit costs were almost double that of the first order. Also, although the order for Brimstone missiles was reduced, that reduction failed to secure a commensurate reduction in the total spend. Additional Maverick missiles were purchased, at a significantly greater cost. I would expect the equipment capability customer organisation to provide a more timely forecast of the mix of weapons required, so that such cost penalties can be avoided.

I have what the Minister might consider a dumb question about Eurofighter. It is perhaps dumb simply because I have no experience in these matters, but someone who lacks expertise in aviation matters should have such a question—which concerns the decision to remove the gun from Eurofighter, at a saving of £32 million—answered for him. I am sure that a plausible scenario exists as to why we do not need that capability, but it gives rise to the question of why our partners in the Eurofighter project are persisting with arming the aircraft with that weapon. It also gives rise to the further question of why other countries continue to arm their aircraft with such weapons. In order to allay the fear that this is simply a cost-cutting exercise, it would be interesting to hear the Minister rehearse precisely why we have decided to do without that capability, given that other countries have decided to persist with it.

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I was always a fan of the SA80 weapon and a supporter of that project. As far as I was concerned, the greatest disappointment arising from it was the failure to deliver the weapon anywhere near the 1980 deadline that gave rise to its name. I have always regarded it as a sophisticated weapon and an amazing piece of engineering which, had we got it right at the start—it is interesting to note that much of the recent upgrade consists merely of the production of the original parts using better materials—would have sold in large numbers throughout the world.

I am concerned about the study that has just concluded of failures in Afghanistan. The Minister said that although the study has been concluded, he is awaiting the report. If the commercial organisation for which I worked before becoming a Member of Parliament had had a problem and dispatched a team to look into it, and if that team had returned and had a board meeting coming up, we would not have sat back twiddling our thumbs and waiting for the team to digest its findings and write its report; we would have ensured that we had a swift briefing, even if the report had yet to be written. The defence procurement debate is being held today and it would have been interesting to hear Ministers' comments about the problems in Afghanistan on the basis of their initial briefing on the issue.

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