Military Aircraft Manufacturing

Wednesday 8th May 2019 Westminster Hall

10:59

[Mark Menzies (Fylde) (Con)]

I beg to move,

That this House has considered the future of military aircraft manufacturing in the UK.

It is a great privilege to serve under your chairmanship, Mr Rosindell. To avoid any doubt, if during the course of the debate I refer to the Eurofighter, I am referring to an aircraft and not to Euro-fighters such as yourself—a Euro-fighter in a very different context.

The aerospace sector in general is a key driver of the UK manufacturing economy. In 2017 the industry contributed £6.6 billion to the UK economy, amounting to about 4% of total manufacturing output. Across the length and breadth of our nation, 900 businesses were involved, employing in excess of 90,000 people. I want to focus on the defence and military section within that.

The aerospace sector has accounted for 87% of defence exports over the past 10 years. The UK combat air sector has an annual turnover of over £6 billion, supporting 18,000 jobs. In the supply chain on programmes such as Typhoon, more than 10,000 full-time equivalents have been employed over the past 10 years, with 40,000 people involved at the peak of the programme. There are over 1,000 companies nationwide, in defence, aerospace and associated industries.

My constituency of Fylde is home to the Warton and Samlesbury business units. In Warton, BAE Systems employs 6,200 staff, who focus on Typhoon, Hawk and the future air platforms currently being worked on by the Government. At the Samlesbury business unit, the F-35 programme is being generated. Between those two sites, over 10,000 people are employed. I am very proud that my part of Lancashire plays an integral part in the UK’s defence manufacturing sector.

The purpose of this debate is not to criticise the Government’s work, because the Government have been very committed. I commend the current Minister and his predecessors, as well as the Prime Minister, for the focus that has been given to military aircraft strategy. It is important that the Government recognise the importance of retaining sovereign defence capability. Any fool can go out and buy aircraft that are manufactured overseas, but it takes something quite remarkable to invest in this country’s sovereign capability.

It is very important that we do not lose sight of the fact that we retain such a significant work share in the F-35 programme because of the capability that the United Kingdom was able to put on the table. That capability had been generated over decades from programmes as far back as Harrier, as well as the Typhoon programme. Without investing in sovereign capability in design, build and development, if we seek a place at the table on another country’s defence aircraft platform, we might get the crumbs rather than the lion’s share.

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

I congratulate my hon. Friend on securing the debate. He is making an interesting and excellent speech. The economic benefits are obvious to see, as are the benefits of having those capabilities for domestic defence. Does he agree that having those world-leading sovereign capabilities also allows us to influence strategic decision-making processes on an international basis?

[Mark Menzies]

My hon. Friend is very modest. He also represents a constituency with a substantial defence footprint, and he has dedicated much of his career in this place to fighting for the workforce and the interests of the companies he represents. His point is solid. Across the whole range of skills and technologies that building a modern, sophisticated aircraft platform gives us—whether in avionics, engine design, low radar signature and so on—it is critical that having that sovereign capability not only allows us to influence the manufacturing programmes that we may become part of, but is an incredible part of the UK’s strategic relationship with our key allies. That is something we must never lose sight of.

The combat air strategy, which the Government outlined in Farnborough in 2018, sets out the ambition for a new combat aircraft, expected to come into force in the 2030s. Government and industry have pledged over £2 billion over the next decade to the future combat air systems technology initiative. Team Tempest has also been created. That is welcome, but it is not likely to remain sovereign, due to cost; the reality is that we will need international partners, as we have done with Typhoon and Tornado, and with programmes as far back as Jaguar. It is incredibly important that the United Kingdom plays a significant role in shaping Typhoon, so that we do not lose any of that ability, which we hold so dear.

When it comes to sovereign capability, we are reaching a point where our workforce, which holds the skills required in the sector, may run out of work, and redundancies will follow. That is why it is crucial that the Government continue their support for the Typhoon export programme. The work currently taking place at Warton is for our export partners, which, in the case of Typhoon in Warton, is Qatar. If the supply chain is allowed to grind to a halt due to lack of export orders, we will lose not only the people and skills, but the ability and cash needed to innovate and invest.

Therefore, it is important that those who lament or complain about the United Kingdom’s defence export strategy do not lose sight of the tens of thousands of men and women—and apprentices—whose jobs depend on that carefully controlled export strategy. I urge the Government to work closely with our partners in Germany, to ensure that their decision to block export licences to some of our key export partners does not have a catastrophic impact on the UK’s defence manufacturing system.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Gentleman on securing the debate. Everyone here will be aware of the work of the armed forces parliamentary scheme, including the dinners that it hosts here, and those who sponsor those events. At those events we gather knowledge and we get a sense of the importance of those companies to all the regions of the United Kingdom. There is a labour skills base in Northern Ireland, Scotland and Wales, which we need to utilise to its full capability. Does he agree that, when it comes to the advantages of military aircraft manufacture in the UK, every region has a part to play?

[Mark Menzies]

The hon. Gentleman makes a very valid point.

I will now focus on the national value framework aspect of the combat air strategy, which states that the UK must consider a number of items. For example, it is important to maintain military capabilities and our ability to respond quickly and effectively to threats. We must maintain choice in our future combat air capability and acquisition. We must sustain investment in highly skilled jobs throughout the supply chain, the contribution to the UK’s science, technology, engineering and maths skills base, the development of high-end technologies, and the influence on international and trade relationships.

Above all, we need to ensure that we protect the UK’s operational, technological and economic advantage, and the ability, when required, to act independently, freely and at will. As part of any future strategy, we must also ensure that the needs and future requirements of the RAF are central and critical.

[Mr Philip Dunne (Ludlow) (Con)]

I congratulate my hon. Friend on securing the debate. He is making a powerful speech and I agree with everything he has said thus far. Does he agree that to sustain the supply chain, which is an important focus of the national value proposition that he has just made and of his earlier remarks, it is important that the Government’s combat air strategy is backed up by contracts? That will allow the primes involved in Team Tempest and the supply chain that will support them to start investing to ensure that we maintain the design and engineering skills at the highest level for such a strategy to have an effect.

[Mark Menzies]

It comes as no surprise that my right hon. Friend’s intervention is full of facts and knowledge, because he speaks as a former Minister for Defence Procurement. He is right that the people involved in the early stage of the development of platforms such as Team Tempest need that assurance and they need contracts to come through. It is important that the money that the Government have already committed at Farnborough, which I understand is part of the overall £2 billion envelope, begins to feed through into live programmes and work, and not just at large organisations such as BAE Systems, but at many of the smaller organisations within the supply chain. An aircraft supply chain is not a light that can be switched on and off; we have to maintain the drumbeat and ensure that programmes have work coming through and that innovation has a purpose.

On Team Tempest, is it possible for the Minister to update us today on where we are at with regard to building partnerships with other partner nations? What does that international collaborative effort look like? Where does he think we can go in terms of not only building a platform that is flexible in meeting the needs of the RAF, but ensuring that the platform is highly exportable and can take on the likes of France and the United States, which have several aircraft platforms that will fulfil a number of key segments of the export market? If we do not have an exportable aircraft as part of our future programme, and we rely solely on RAF orders or orders placed by partner nations, the programme will not be able to sustain the UK manufacturing sector in future.

I thank the Minister for the work that he and his predecessors have done to drive innovation within the manufacturing sector, but I urge him to look at programmes such as Hawk. Although it is not as shiny or exciting as future programmes such as Tempest, it is the solid trainer aircraft that we have depended on for the past 30-plus years, and it is fair to say that it is the only military aircraft that the United Kingdom manufactures throughout.

I pay tribute to the trade unions representatives, particularly from Brough, who come down, speak to members and get their points across. I urge the Minister to continue to work with the trade union movement in the military aircraft sector to ensure that we have a united team building a platform for the future and ensuring the UK’s manufacturing base. With that, I will conclude and give him time to respond.

11:15

[The Parliamentary Under-Secretary of State for Defence (Stuart Andrew)]

It is a pleasure to serve under your chairmanship for the first time, Mr Rosindell. I congratulate my hon. Friend the Member for Fylde (Mark Menzies) on securing the debate and on his work for many of his constituents. He often grabs me in the corridor to raise issues that are of concern to him and them. As he rightly said, his constituency has a proud tradition in military aviation. Over recent years, BAE Systems Military Air & Information at Warton has been the central assembly facility for the Eurofighter Typhoon. That was one of the first visits I made when I was appointed to this job, and the passion that goes through that company was clear, from the management to the workforce. We should be proud of what it has done.

The area has a strong heritage. Warton was originally the base of English Electric and the testing ground for the legendary Lightning fighter—the supersonic interceptor of the 1960s and 1970s, rather than today’s world-beating F-35 Lightning II stealth jet. It is doubly appropriate, therefore, that the debate has highlighted the proud history of the UK in the field.

Let us make no mistake that the UK remains a global leader in military aerospace for three reasons. The first reason, which my hon. Friend touched on, is innovation. We have a long heritage of leading the world in aerospace thinking—in taking cutting-edge industrial, technical and scientific know-how from the drawing board to cutting-edge military capability. The first purpose-built air-to-air combat fighter was designed and built in Britain, as was the first vertical take-off and landing aircraft. That heritage remains undiminished.

The second reason is our history of successful international collaboration in producing some of the best military aircraft in the world, such as Jaguar, Tornado and Typhoon, with our partners on the continent, and now the F-35 with the United States, as my hon. Friend pointed out. The third reason is the strength of our domestic combat air sector, which has created skilled jobs and prosperity not just in his constituency, but across the nation.

It is worth mentioning the recent successes for the UK industry in the sector. Programmes such as the F-35 are creating considerable industrial benefit, with 15% of the value of more than 3,000 airframes being built by British industry. The Government are also delighted with the UK’s recent success in securing another batch of F-35 avionic and aircraft component repair work, which will bring an additional £500 million of work to north Wales and secure hundreds of skilled jobs. Overall, the combat air sector has an annual turnover of more than £6 billion. It directly supports more than 18,000 skilled jobs across the UK and many more in the wider supply chain, which are equally important.

To maintain and strengthen the sector’s competitive international position, the Government established the £2 billion future combat air system technology initiative following the “Strategic Defence and Security Review 2015”. That initiative sustains investment in the sector to ensure that the UK remains at the forefront of developing the next generation of technological capability.

Last year, the Government further demonstrated their commitment to the sector by launching the combat air strategy at the Farnborough international airshow, as my hon. Friend said. The strategy defined a clear vision for the sector that preserves our long-standing national advantages in the field and our freedom of action in deciding how our combat air capability is delivered. All future combat air decisions will be based on a national value framework that takes full account of our armed forces’ requirements, the contribution to the nation’s industrial capacity and prosperity, and the significant benefits that military aviation provides to our international influence.

[Dr Julian Lewis (New Forest East) (Con)]

As the Minister knows, the Defence Committee is quite worried that not enough is being done to protect the defence industrial base. In advance of his appearance before us on 21 May, when we will look into some of these subjects, can he tell us how much consideration is given to the knock-on benefits of investing in production in the UK rather than buying off the shelf, given that the money spent is then channelled back into the British economy?

[Stuart Andrew]

I am grateful to my right hon. Friend for his intervention, and I say with some trepidation that I am looking forward to appearing before his Committee in a couple of weeks’ time. He is absolutely right to raise that important issue. We are doing a tremendous amount of work across the Department, and a lot of it is of course the focus of the fantastic report by our right hon. Friend the Member for Ludlow (Mr Dunne) on the important prosperity that the defence industry can bring. We are also engaging a lot with small and medium-sized enterprises around the country to encourage more of them to take part in many of the competitions, and to ensure that they do more business with defence. Wherever we build new platforms, we are encouraging wider prosperity among those in the supply chain in the United Kingdom.

I know there has been some controversy about some of the platforms we are buying from overseas, but we are working with these industries to ensure that they work closely with the UK supply chain, so that we can increase the prosperity that comes about because of the platforms we are buying. For example, Boeing recently took a lot of SMEs over to the United States to talk through how they can bid for business from that company. Of course, Boeing has made investments in this country, but we want to see even more of that happening, and I will be happy to develop a bit more of that when I come before the Committee chaired by the Member for New Forest East (Dr. Lewis) my right hon. Friend.

[Robert Courts (Witney) (Con)]

I am grateful to the Minister for taking an intervention on that point. I apologise to him for having been delayed in a Select Committee, and I refer to my entry in the Register of Members’ Financial Interests.

I was very interested in the answer the Minister gave to my right hon. Friend the Member for New Forest East (Dr Lewis) vis-à-vis investing in the defence base of this country, and, of course, I agree 100% with that. However, with regard to the combat air sector, I was encouraged by the Minister’s comments about Team Tempest. Could he update the House as to whether there has been any further discussion as regards international partners in that programme going forward?

[Stuart Andrew]

I will come on to those points in a minute. A number of points were raised in the debate that I will happily respond to when I have finished these remarks.

As part of the wider strategy programme, my Department has now launched its next-generation combat air acquisition programme. This will develop the capabilities that the RAF will need to replace Typhoon when it goes out of service in 2040. The programme’s two-year concept phase has now begun, following my approval of the strategic outline case.

Furthermore, new forums have now been established to explore the possibilities for collaboration with other military aerospace partners. Early discussions have gone well, and my Department will provide more detailed updates in the summer. However, I can assure my hon. Friend the Member for Witney (Robert Courts) that we are having very detailed conversations with a number of our partners around the world because we recognise that, for this process to be effective and, importantly, affordable when we deliver it, and, probably even more crucially, because of the importance of interoperability, it is vital that we have partner nations on board. However, as I say, those discussions are still ongoing. I hope I will be able to update the House on them later this year.

[Wayne David (Caerphilly) (Lab)]

Will the Minister acknowledge that, although the commitment the Government have shown towards the Tempest programme is to be welcomed, if the project is to come to fruition, that will require much more investment by the Government than they are presently committed to?

[Stuart Andrew]

We are in the early stages at the moment, and I will shortly talk about some of our engagement with industry, to respond to his point a bit further.

The other thing that is really important, and it is in parallel to this work, is that fact that my Department is actively identifying and monitoring the health of the sector’s skill base, which my hon. Friend the Member for Fylde mentioned. When I visited Samlesbury, I was very impressed by the BAE Systems training centre next door. That centre is helping not only the sector but a lot of businesses around the Lancashire area, and it really is a model that we should see from other businesses in the defence sector. The aim of our work is to inform crucial decisions on future skills investment in a fast-moving international environment, where technological practice changes continually.

I will just come on to some of the points that were raised in the debate. The first was the issue of exports. My hon. Friend the Member for Fylde was absolutely right to say that this is an incredibly important part of the work that we do. Personally, I have tried to invest a significant amount of my time in support of some of the export campaigns. We are working with Finland at the moment to see whether we can be successful in their competition, which is worth in the region of €6 billion to €10 billion. Finland has launched a competition for the acquisition of 64 fighter aircraft to replace its ageing fleet. That competition is a closely fought one, but I can assure my hon. Friend that we will do everything we can.

As for Saudi Arabia, we continue to make progress on the Typhoon batch 2 negotiations. The latest offer is a very strong package, and it would provide enduring industrial capability in the Kingdom of Saudi Arabia, which would also establish many of the industrial components needed to realise that country’s vision of 2030.

My hon. Friend was right to mention the export issues and the licensing issues, and we are working closely with the German Government to ensure that those are resolved. Equally, we are working together with Airbus on the campaign to supply Canada with a replacement for its F-18—it is currently running a competition to find that replacement.

Other points were raised in the debate. There was the issue that my hon. Friend mentioned to my right hon. Friend the Member for Ludlow and the prosperity agenda. We are working closely with four main businesses at the moment: BAE Systems, Rolls-Royce, Leonardo and MBDA. Recently, I was pleased to attend a Team Tempest industry day, which over 150 companies attended so that they could get the briefs they needed and the capabilities and skills that will be required to facilitate the next generation. The Tempest partners are now very actively engaged with about a hundred of those companies. So that engagement is happening and, as I have said, I hope we will be able to make more announcements in the coming weeks.

I have talked about the partner nations. The innovation side is obviously incredibly important. The innovation fund is helpful, and the whole aspect of this future combat air strategy will be incredibly important for that.

My hon. Friend also mentioned Hawk, which I know has been a challenging issue. I have visited Kuwait on two occasions now, trying to personally support the very active campaign that BAE Systems and the Government have pursued there. I pay tribute to the trade unions; they are very active in making their case. I also pay tribute to BAE Systems, which is trying to keep things going at Brough while we see whether we can make any announcements.

I hope I have demonstrated in this debate, which I again congratulate my hon. Friend the Member for Fylde on securing, that we are doing everything we can to maintain the necessary skills and knowledge, as well as to retain our ability to have the combat air sector that we really need. I assure the House that the Government will continue to work in full partnership with our world-leading military aviation sector, maintaining its position at the cutting edge of technological development, and supporting the jobs and prosperity that it brings right across the UK.

Question put and agreed to.

Resolved,

That this House has considered the future of military aircraft manufacturing in the UK.

11:29

Sitting suspended.