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House of Lords

Tuesday, 4th April 2000.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers--Read by the Lord Bishop of Salisbury.

Eurofighter

Viscount Waverley asked Her Majesty's Government:

    What progress in development and sales is being made with the Eurofighter.

The Minister of State, Ministry of Defence (Baroness Symons of Vernham Dean): My Lords, seven Eurofighter development aircraft have now completed more than 1,200 sorties, achieving some 1,000 flying hours. A number of notable milestones have been achieved, including supersonic flight, care-free handling, air-to-air refuelling and missile firings. Delivery of the first production aircraft for the United Kingdom is planned for mid-2002. Eurofighter export prospects are excellent. Greece has recently announced plans to purchase up to 90 aircraft. A number of other countries are showing significant interest.

Viscount Waverley: My Lords, the omens certainly appear encouraging. However, can the Minister tell the House what recommendation the MoD has made for the long-range weapons system? Speed of announcement is essential. On the sales front, do the Government support the industrial participation package being offered to Norway? Further, have the Greek Opposition endorsed the intention to buy the Eurofighter, given the upcoming general election in that country? Indeed, does the Minister intend to visit Athens to secure this order and to address other pressing issues?

Baroness Symons of Vernham Dean: My Lords, the noble Viscount has most skilfully managed to ask quite a few supplementary questions. Of course, I agree with him that this is a very encouraging picture. The noble Viscount asked about the future of the beyond-visual range air-to-air missile. This programme is still in a pre-contract competition phase. We are in the final stages of assessing bids from two companies; namely, Matra BAe Dynamics (offering a new missile called Meteor), and Raytheon Systems Limited (offering a future medium-range air-to-air missile and an extended range air-to-air missile). These are very hard-fought competitions and many factors have to be borne in mind. Obviously, we are assessing not only the capability but also the cost, the value for money and the risks involved, as well as the industrial advantages and disadvantages, in both bids.

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The noble Viscount also asked about Norway. I can tell him that Norway is currently deciding what to do. As the noble Viscount implied, there are a number of different issues surrounding the package that Norway is considering. As regards Greece, there is, of course, a forthcoming general election. We have no reason to believe that an incoming Greek government will feel any differently from their predecessors. I very much hope to be visiting Greece in the near future.

Lord Pearson of Rannoch: My Lords, can the Minister confirm that this country has so far spent £16,000 million on this project? Can she also confirm that each unproven, comparatively untested Eurofighter costs about £60 million compared to an F16 which costs £15 million, and that, therefore, you get four F16s--proven and tested aircraft--for each unproven Eurofighter? In view of that and the Government's well-known commitment to NATO, as evidenced through the European defence initiative, why do we not simply buy F16s?

Baroness Symons of Vernham Dean: My Lords, I should point out to the noble Lord that that question would have been better put to his own Front Bench colleagues when they sat on the Government Benches, because those decisions were taken when the noble Lord's party was in a position to make such decisions. The noble Lord is quite right to say that the costs of this sort of project are very considerable--some £16.1 billion at 1999 prices. However, the noble Lord is a little off the mark as regards his assessment of the individual cost of these aircraft. They currently cost £40.9 million at 1999 prices. If the noble Lord is in any doubt about the efficacy of this aircraft, I suggest that he visits Farnborough to see it. Indeed, I suggest that all noble Lords come and see the aircraft in action at Farnborough. We would all then be able to see what a splendid aircraft it is and how much pride this country can take in it.

Lord Jenkins of Putney: My Lords, does my noble friend the Minister agree that the arms trade is inherently undesirable from another point of view? For example, is not much of our trade already too reliant on arms?

Baroness Symons of Vernham Dean: No, my Lords; I cannot agree with my noble friend on that point. Of course, the arms trade must be regulated. This Government have made it clear that we will not export arms when we believe that there is a realistic probability that the countries to which we are exporting arms will use those arms for internal repression or external aggression. My noble friend must remember how important defence exports are to this country. Currently some 355,000 jobs in the UK are dependent on the defence industry, and about 130,000 of those jobs are actually dependent on exports. My noble friend should look at this in the round and not just pick on individual aspects of the argument.

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Lord Wallace of Saltaire: My Lords, can the Minister say whether the partners have yet agreed on the form of controls for arms sales outside the NATO area? If I understand the noble Baroness correctly, it is intended to pursue arms sales outside the NATO area fairly actively. In that case, some of us will have reservations about further arms sales to the Middle East and south-east Asia. Therefore, can the noble Baroness say whether there will at least be some agreed form of control among all the partners on how such decisions are taken?

Baroness Symons of Vernham Dean: My Lords, as the noble Lord will know, the four partner countries--namely, the United Kingdom, Germany, Italy and Spain--are party to the EU code, which this Government encouraged our partners to sign up to. I am happy to tell the House that they did so and that they are, therefore, parties to the same sort of code that we operate in this country when it comes to arms exports.

Lord Rotherwick: My Lords, are we not discussing a most outstanding plane about which the RAF is extremely pleased? Indeed, it should be compared with the F22 and not the F16, which is nearly five times more expensive?

Baroness Symons of Vernham Dean: My Lords, the Eurofighter is an aircraft which not only this Government support, but, as I reminded the noble Lord's noble friend, his own party also supported when in office. It is the aircraft that best meets the United Kingdom's needs both in terms of cost and operational effectiveness. It will be the backbone of the RAF's fast jet combat fleet for many years to come. We believe that it will offer a flexible capability necessary to meet the kind of uncertain environment in which the RAF is asked to operate these days.

Lord Burnham: My Lords, what progress is being made with the development of the Eurofighter for use at sea, bearing in mind that when the aircraft carriers come into service in 2012 it is likely that the Eurofighter with its strength and main frame will be required for those ships?

Baroness Symons of Vernham Dean: My Lords, the Eurofighter is still undergoing part of its developmental stage. These issues are, of course, still a matter for the integrated project team which operates out of Abbey Wood and which I had the great pleasure of meeting a couple of weeks ago. The flexibility in the development stage is likely to continue into the year 2002. All these issues are, therefore, very much at the front of the integrated project team's development analysis.

Lord Merlyn-Rees: My Lords, does the Eurofighter meet the operational requirements of the RAF in the light of the war in Kosovo?

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Baroness Symons of Vernham Dean: My Lords, I believe that had we had the Eurofighter at that time--this is, of course, a speculative statement--we would have found that it met those operational needs. We must bear in mind the importance of developing this aeroplane in a way that allows for real operational flexibility into the future. At the time that it was originally conceived (when the party opposite was in power), the threats were, of course, very different from those of today. However, I am happy to say that the flexibility that is built into the developmental stages of this aircraft will allow us to have an exceptional aircraft for use into the future.

Euro Cash: Use in the UK

2.44 p.m.

Lord Lea of Crondall asked Her Majesty's Government:

    Whether, given the publication on 9th March of the second Outline National Changeover Plan, they visualise use of euro notes and coins in the United Kingdom becoming increasingly common practice from 1st January 2002.

Lord McIntosh of Haringey: My Lords, unless the UK joins the single currency, sterling notes and coins will remain the legal tender of the United Kingdom. The introduction of euro cash in the euro zone will not affect this. Businesses and individuals will not need to accept euros, but some might decide to do so for commercial reasons, just as they now accept currencies such as the dollar or the deutschmark.


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