Draft Abro Trading Fund Order 2002

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Michael Fabricant: Of course I accept the Minister's answer and his arguments. He mentioned that if the worst came to the worst, there would be a wastage—natural or otherwise—of 700 personnel. Would he plan, whatever happened, to maintain a core staff of 2,000 as a contingency reserve, even if things went really badly and there was not enough work to justify that number, in case one of the surges that my hon. Friend the Member for North Wiltshire is so keen on should occur?

Mr. Ingram: None of us wants the surges, or even the hot flushes, but it depends what happens under the smart acquisition programme. The hon. Gentleman

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asked whether the programme is smart. It is a lot smarter, a lot more specific and a lot better focused than that which went before. It goes for whole-life solutions and ensures that everything is included in the price so that we are not hit later with additional bills on any contract.

Such matters are impossible to predict with certainty; the nature of the work stream is changing. We are trying to ensure that ABRO works alongside the original equipment manufacturers, so it depends how successfully relationships are developed. I cited two examples, Vickers and Alvis, in which close discussions are taking place. That is very encouraging; such work is a large part of the current work stream as those companies move towards new production lines . It is important for the future to develop those relationships.

We are taking a demanding approach; it is not an easy option for either management or staff. There might be headaches ahead. There are headaches now in simply making the decision, trying to define it and saying that there will be a reduction in the work force. We must ask what such decisions will mean for our support capability if, at any point, all the scenarios that we hope will develop do not do so. That judgment is for the future. It is wrong to predict whether we shall need 2,000 staff or 1,500 or more. The private sector might walk away, and more work might come back in-house or be dealt with differently. We are dealing with a full range of unknowns and imponderables in the

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future marketplace. However, we are developing a clear view and being open with the work force about the likely outcome.

The hon. Member for Lichfield also asked whether there was a business plan. The answer is yes. That plan is reviewed not by the company that he feared but by PricewaterhouseCoopers. That report was approved by the ministerial advisory board, which I chair, and was then sent to the Treasury.

I have tried to answer a wide range of questions. I hope that I have been able to set hon. Members' minds at rest. The fact that my hon. Friends did not raise any questions must mean that their minds were already at rest. However, that may be because those of whom we are not allowed to speak had conditioned their minds wonderfully well and encouraged them to be co-operative on this occasion.

We have had a useful exchange. If some issues have not been fully explained, or if any hon. Members still have doubts, those matters can be raised either by tabling parliamentary questions or by writing to me. We want the fund to be a success. Its success depends not only on those who are employed at ABRO, but on the delivery of some important capabilities for our armed forces, whether in peacetime or at times of crisis.

Question put and agreed to.


    That the Committee has considered the draft ABRO Trading Fund Order 2002.

        Committee rose at twenty minutes to Six o'clock.

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The following Members attended the Committee:
Butterfill, Mr. John (Chairman)
Caton, Mr.
Davey, Mr. Edward
Fabricant, Michael
Goodman, Mr.
Gray, Mr.
Heyes, Mr.
Ingram, Mr.

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Joyce, Mr.
Ladyman, Dr.
McKechin, Ann
Norris, Dan
Savidge, Mr.
Smith, Llew
Swayne, Mr.

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Prepared 26 February 2002