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Mr. Howarth: Is this Liberal policy coming up?
Mr. Breed: I concur with all that the hon. Gentleman said about the development of precision-guided weapons. Has he read a recent press report about the potential for manufacturing low-intensity nuclear weapons, which might even enhance such developments? Would he like such technology to be pursued?
Dr. Julian Lewis: That sounds like, "Liberals for the neutron bomb."
Mr. Howarth: Indeed. However, I am not aware of that report and cannot ask "my staff" to look it up
because they are not yet my staff. In due course, after the next election, things might be different. I shall certainly do the hon. Member for South-East Cornwall (Mr. Breed) the courtesy of reading the article; if he has it to hand, perhaps he could let me have a look at it.Unless we as a nation are prepared to invest more in defence-related research, our technology lead—in those areas in which we do lead—will disappear. The Government have placed all their faith in the privatisation of the Defence Evaluation and Research Agency, which is now known as Qinetiq and controlled by the US Carlyle Group. However, as Qinetiq has pointed out to me, it cannot raise funds here and has to tap the US market. What will the consequence of that be? If US taxpayers or US investors provide the funds, they will own the resulting technology and the United States will control the release of that technology to us. Very serious consequences will flow from that Government decision, which was not popular on either side of the House. The Government owe it to us to develop their strategy more clearly to ensure the maintenance of our technology base, so much of which has been derived from Government expenditure.
Conveniently, that point brings me to our relationship with the United States, which is dragging its feet on approving the technical access agreements on the joint strike fighter—a point to which my right hon. Friend the Member for Fylde alluded. The UK does not have design and support authority for the UK-produced joint strike fighters. We failed to secure that with the Apache attack helicopter. We failed to secure it on the Hercules C-130J, although on the much older C-130K, we do have design authority, which has proved by comparison more beneficial to us, especially to the hon. Member for Cambridge (Mrs. Campbell)—who is not in her place—and to Marshall Aerospace in her constituency, which does a marvellous job. That is not an acceptable state of affairs. Will the Minister advise the House on the actions that the Government are taking to secure agreement on those issues? Can he confirm that, without having design and support authority on our own joint strike fighters, we could end up being dependent on the US, which could then exercise a power of veto over our operation of that aircraft?
Mark Tami: The hon. Gentleman mentioned the dangers of handing over such matters to the US. He also mentioned not taking the A400M and choosing the C-17 instead. Does he accept that that would hand over another matter to the US?
Mr. Howarth: No, because I seek to strike a balance. The Minister pointed out the danger of being xenophobic and saying, "Buy British on every occasion", because we are attacking elements in the US for advancing a "Buy American" policy. I believe in a two-way street, as I shall demonstrate shortly.
I hope that the Minister will tell the House how well the joint strike fighter project is progressing, because it is currently overweight and somewhat over-budget. What assessment have the Government made of the project proceeding to the next phase of its development?
Our difficulties with the US do not end with the joint strike fighter. The Government have made representations to the US Administration about securing a waiver for the UK from the effects of the international traffic in arms regulations, and I pay tribute to Lord Bach for the vigour with which he is pursuing that matter in Washington. I wish the Minister of State every good fortune when he goes to beat the drum over there next week.
I understand that one of the issues standing in the way of progress on the ITAR waiver is the failure of the Department of Trade and Industry to lay the necessary orders under export control legislation to make it an offence for a British subject or UK businesses to trade on, disclose abroad or export information that they may receive under the waiver. Can the Minister tell us the score on that? Will the DTI move those orders and would that be of assistance in unlocking the impasse with the US?
Reference has been made to the "Buy American" proposal of Congressman Duncan Hunter, which, if successful, would be extremely damaging to British industry. The good news is that it is supported neither by leading US defence contractors nor by the Administration. I emphasise that there is a unanimous view on those matters across the Floor of the House. The Minister will know that the Defence Committee, on its visit to Washington last month, made very strong representations both to the Senate armed services committee and to members of the Administration, including Defence Secretary Donald Rumsfeld and his deputy Paul Wolfowitz. It would be nice if the Minister could acknowledge that it is not only the Government who are batting on this, but that we have formed a united front. We cannot afford to relent on the campaign.
Mr. Kevan Jones: I hear what the hon. Gentleman says about the change in position of the US Administration, but is he aware that as early as last week Paul Wolfowitz was trying to negotiate with Mr. Hunter about his Bill, not to veto it—as we were told in Washington—but to water it down? It would still have grave implications for the UK defence industry.
Mr. Howarth: The hon. Gentleman, who is a distinguished member of the Defence Committee, is right. Whatever protestations the US Administration may make about sharing our view, the fact is that the Hunter Bill is an amendment to a wider appropriations Bill, and it would require the President to veto it. A huge amount is at stake and it is not only the Minister's efforts that need to be harnessed in support of the campaign. The Prime Minister himself needs to be involved.
Mr. Howarth: I am sure that he has, but we need to fight those guys hard. When the Americans defend their commercial interests, they fight tooth and nail: let us fight tooth and nail as well. UK-US defence trade is running 2:1 in favour of the US. If those repeated standing ovations in Washington in July, and the repeated and undoubtedly heartfelt tributes to our Prime Minister for Britain's support for the US over
Iraq mean anything, the US has to give the UK a fairer deal than is currently on the table. Compromises that result in the UK paying the price are not acceptable.The defence industry is at a crossroads. If the US does not accord the UK the treatment that we deserve, with access to its market and shared technology, it will risk leaving us with little option other than to throw in our lot with our continental partners. But that would not resolve our problems.
I do not wish to sound unduly negative about European procurement collaboration, but it has proved costly and inefficient, driven more by political than by military considerations. Collaboration with our allies is probably essential in developing our capabilities, but however we select our collaboration partners—whether we choose to go it alone or choose an off-the-shelf solution—our decision must be based on what will best fulfil the requirements of our armed forces in the best possible time and at an acceptable price.
The House of Lords European Union Committee warned that the proposed European armaments and capabilities agency could become
- "a tool of protectionism or constraining the ability of member states to order armaments independently".
- "to the creation of a closed European market".
What effects will the proposals in the Commission's paper entitled "European Defence—Industrial and Market Issues—Towards an EU Defence Equipment Policy", which was agreed by the General Affairs and External Relations Council in May this year, have on the existing Organisation for Joint Armament Co-operation arrangements? That is another example of unnecessary duplication of existing processes by the EU that the Government are blindly going along with.
How does the NATO Prague capabilities commitment differ from the European capabilities action plan? This is riveting stuff. What progress has been made in achieving our commitments required by the PCC and the ECAP? How do the processes to achieve the requirement of those commitments differ? It is yet another example of unnecessary duplication by the EU in European defence. We support increasing European capabilities and much more needs to be done to close the capabilities gap with the United States, but those aims are best achieved through NATO and with European countries pulling their weight in defence expenditure.
The harmonisation of European research and development is seen as a quick fix to make up for the shortfalls in the UK research budget. Rather than assessing the risks posed to our procurement process
and research agenda by such harmonisation at a European level, the Government see it as an easy way to make up for the cuts that they have inflicted upon our research budget. The harmonisation of European rules on procurement and the development of an EU armaments agency would force the UK into a political straitjacket, reducing our ability to make procurement decisions based on British interests. It represents the intention of some in Europe to create a fortress Europe in defence markets and plays into the hands of those in the US who wish to create a fortress US, with the "Buy American" proposals that are making their way through the US Congress. That stand-off in defence markets will result in increased costs and a reduction in competition on both sides of the Atlantic. The biggest loser in any such stand-off will be the United Kingdom, which at the moment enjoys good relations with both the United States and our European partners.All our experience on collaborative European projects such as the Eurofighter, Horizon frigates, the multi-role armoured vehicle—MRAV—and the A400M demonstrates the difficulties in harmonising different requirements that all too often result in a compromise system that fails to meet the full specification that we need. There is a real risk that the EU armaments agency would lock us into projects that might not meet our requirements. The Government pulled out of both the Horizon frigate and MRAV projects in favour of a UK national solution. The hon. Member for The Wrekin (Peter Bradley) knows that only too well. Would that have been possible if we had been locked into such a project through a common European armaments agency?
The defence industrial policy enunciated a year ago by the Secretary of State has been welcomed by many, although it seems to me little more than a statement of what has effectively been the practice for many years—competition, but with exceptions. The Government are under fire from BAE Systems and others who believe that at least the lion's share of taxpayer-funded defence procurement expenditure should come their way. The chaotic saga of the Hawk advanced jet trainer was a poor reflection of the much-vaunted defence industrial policy. Making the decision just hours before 500 people were to be served with redundancy notices hardly reflected a considered judgment, right though the decision was in the end. The highly publicised uncertainty on the part of the British Government nearly scuppered the aircraft's prospects in export markets; the Minister of State mentioned India.
The Government must develop a clearer sense of purpose in dealing with British industry. Of course, there must be competition, but only from those who open up their markets to us. I shall quote from the excellent Defence Committee report what Sir Richard Evans told us on behalf of the Defence Industries Council. He said:
- "I am not saying that we should necessarily change the policy that we have but we should be doing a hell of a lot more to force the others to actually come in line with us . . . I do not think protectionism is the answer to this . . . The answer to this is not to shut the door, it is to exercise quite cautiously the degree to which we allow the door to be opened whilst at the same time exerting the maximum amount of political and industrial pressure on those other markets that are benefiting from entry to the UK to do the same for us."
In conclusion, this debate comes at a crucial time with a number of procurement projects falling behind. Of the 20 projects in the 2002 major projects report that had reached main gate or the equivalent point, eight have slipped and overrun their time of approval. The Defence Committee's ninth report found that there remains a question about the agility of the Ministry's procurement systems. The Government failed adequately to address that in their response to the report published earlier this week. Evidence of the lack of agility in the smart acquisition process comes from the number of times that that process has been refined and, indeed, renamed. The claim of the chief of defence procurement, Sir Peter Spencer, about the need to "periodically refresh smart procurement" causes one to speculate about the agility of the process.
There is much to be done on procurement. We welcome concepts such as the capabilities-based approach, but as my hon. Friend the Member for North Essex told the House last Thursday, those concepts, such as effects-based warfare and talk of flexibility, must not merely become smart euphemisms for cuts as is increasingly the case in what we hear from Ministers.
I do not underestimate the scale of the task. The Government face difficult decisions in configuring our armed forces into the shape, size and capabilities needed for the post-11 September strategic environment. My hon. Friend the Member for New Forest, East (Dr. Lewis) will refer in more detail to some of those key capabilities, but it is a challenge to provide a continuing ultimate deterrent, develop a modern network-centric capability, maintain conventional forces and provide highly professional and motivated infantry to hold ground and engage in peacekeeping operations.
The Government's own chosen programme entails a great deal of expenditure. I hope that Ministers can convince the Chancellor to pay for the equipment that our armed forces deserve and need if they are to fulfil the tasks that we ask of them. They are the best and they deserve the best.
I said at the outset that this Government have sent Britain's armed forces into battle on at least five occasions since they took office in 1997. Only the United States has been involved in comparable operations. Put bluntly, we buy weapons systems that are used in anger. Too often, compromises on systems have been made for political, and not strategic, military reasons. We therefore need to ensure that our forces have the best and most effective equipment and that our procurement policy breathes life into Britain's domestic defence industry, which employs so many of our constituents.
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