Defence Aerospace Industrial Strategy

Andrew Percy Excerpts

Thursday 16th November 2017 Commons Chamber

[Ruth Smeeth]

I agree with the right hon. Gentleman, who has raised that point repeatedly in recent months. We have to decide what reserves we need, but that is no replacement for the development of our future capabilities.

First, on our economy, our defence aerospace sector makes an enormous contribution. It is the core of our wider defence industry, which directly employs more than 142,000 people, with a further 116,000 indirectly employed in the supply chain. In 2016, BAE Systems alone contributed £11.1 billion of gross value added to the UK—equivalent to 0.6% of our entire economic output—but there is further additional value to ensuring that those defence jobs stay in the UK. The Royal United Services Institute has calculated that for every pound the Government spend on a defence contract when the good or service is generated in the UK, the Treasury receives 37p back in revenue, as well as the new platform or system we have procured.

It is self-evident that a strong defence industry is a major contributor to a strong national economy, and our defence aerospace industry supports thousands of well-paid and highly skilled jobs, the majority of which are outside the south-east, as well as boosting our economy through exports of world-class products. Our defence aerospace sector accounts for 88% of all defence exports —an incredibly important aspect of our economy, especially as we look to leave the EU, not least for the impact on our future balance of payments.

But there are challenges in the sector that fundamentally relate to two factors. One is that export sales typically depend on the use of future platforms by our own RAF—the British brand and RAF stamp of approval mean a huge amount for other state actors. When buying British is key for the global success of the sector, we need to pay attention.

The second significant challenge is the extended lead-in times and development processes that characterise the defence aerospace industry. That requires a long-term strategy, not a short-term fix, to ensure a steady drumbeat of orders and constant research and development to maintain confidence within the industry and to protect jobs and our domestic skills base.

We have seen recently what happens when that certainty is missing from the market, with BAE announcing up to 2,000 redundancies owing to a gap in its order book. Those job losses are not just a blow for those workers and their families, but could result in a loss of skill and expertise that could set us back a generation. I believe that those jobs could be protected in the short term if the Government committed to bringing forward the order for the new Hawk aircraft for the Red Arrows and to securing the next wave of export contracts for that aircraft.

[Andrew Percy (Brigg and Goole) (Con)]

The Hawk aircraft is incredibly important to my constituents, many of whom work at BAE Systems in Brough. As well the work the Government are rightly doing to support the Hawk overseas, bringing forward the Red Arrows replacement aircraft would fill part of the gap in the order book, as the hon. Lady has outlined. Could that not also be done in such a way as to support the development of new orders so that what is built now does not necessarily have to be part of the replacement fleet, but can be used as a stopgap?

[Ruth Smeeth]

I completely agree. Let us be clear: this is a brand-new aircraft, and our Red Arrows, with their skills set, should be selling it to the world.

--- Later in debate ---

[Ruth Smeeth]

Perish the thought that the Red Arrows should fly anything other than British-built planes. Let us be clear: 2030 was not a date anyone recognised until recent weeks for the renewal of the Hawks. I say this as a young Member of this House, obviously—[Hon. Members: “Hear, hear.”]—but the newest Hawk aircraft used by the Red Arrows is six months older than me, so this is not showing off the best and brightest of our potential capability.

[Andrew Percy]

Will the hon. Lady give way?

[Ruth Smeeth]

I will, so long as the hon. Gentleman says how young I am.

[Andrew Percy]

We are both very young Members. [Interruption.] Well, it appears there is not so much agreement about that in my case.

On the age of the aircraft, have there not been some really troubling reports about just how few of our current Red Arrows aircraft are actually able to fly at any one time? That is why the 2030 date seems somewhat strange to many of the people who are intimately involved in the group.

[Ruth Smeeth]

I had the privilege of sitting in Red 1 last year, so I absolutely agree. The Red Arrows are our showcase for the RAF, and for us not to be investing at the time of the 100th anniversary of the RAF seems to me somewhat short-sighted.

I am not in favour of having a new aircraft just for the sake of it, but this is our most impressive and important defence engagement tool, and one of the priorities of the RAF. The Red Arrows can show off the best of our new technologies on a global stage, and we should encourage them to do so. However, I acknowledge that this would be a sticking plaster, and the long-term security of these and other sites can be guaranteed only by the development of a clear, genuine industrial strategy for the future of UK defence aerospace.