Military Aviation Industry

Andrew Stephenson Excerpts

Wednesday 15th September 2010 Commons Chamber

[Andrew Stephenson (Pendle) (Con)]

I congratulate my hon. Friend the Member for Fylde (Mark Menzies) on securing this important debate. I agree with everything he said; I know he has worked tirelessly on this issue for many months. I am also pleased that the hon. Member for Barrow and Furness (John Woodcock) struck a slightly more positive note. I do not think that all is doom and gloom; we should celebrate the success stories as well, so I am grateful that some Members have reflected that.

I shall start by focusing on some of the positives in the north-west of England. The aerospace sector there has long been recognised as one of Europe’s leading industrial clusters and as a model for development within the aerospace and other industries. In my Pendle constituency, a number of significant firms are dependent on the aviation industry and on military contracts in particular.

As recently as Defence questions on Monday this week, I raised the importance of military aviation. I was reassured by what the Minister had to say. I pointed out to him that on the previous Saturday I had visited Euravia, a company that repairs and overhauls aircraft engines located in Kelbrook in my constituency. I was there to attend the event at which the company was presented with the Queen’s award for enterprise in the international trade category. Despite the recession, that firm had seen a growth in orders and was significantly increasing its overseas trade, starting to explore new and exciting opportunities. I believe that such businesses are leading the way in showing how other firms in the aerospace sector should behave—developing the skills of their workers, attaining an international reputation for high standards and good customer service, and always looking for new contracts abroad in case contracts in the UK dry up.

In underlining the importance of the aviation industry to my constituency, I point out that Rolls-Royce is the largest employer, with more than 1,000 workers in Barnoldswick producing engine fan blades. I was particularly delighted to have been able to take my right hon. Friend the Chancellor of the Exchequer to visit Rolls-Royce prior to the election; I know that he is acutely aware of the importance of the aviation industry in Lancashire. I find it encouraging that in recent months Rolls-Royce has announced a string of deals, including one worth £1.1 billion at the Farnborough airshow. In July, the company unveiled detailed plans for a new £30 million aerodrome at its site in my constituency. This extension of the current site is where it will build fan blades for the F-35 joint strike fighter, which colleagues mentioned earlier in the debate. The extension will create about 100 new jobs in my constituency, although that will depend on approval from the President of the United States, Barack Obama, for the Rolls-Royce F-35 engine.

I know that the Government have already been working closely with Rolls-Royce to help it to secure more business. I was particularly pleased to see bosses from Rolls-Royce and BAE Systems accompanying the Prime Minister on his recent visit to India. I really do see aviation exports as key, and I am therefore delighted that unlike Ministers in the last Government, Ministers in the present Government are proactively helping our businesses to win contracts abroad.

[Graham Jones]

I question that last point. All the previous tranches, up to 3A, went through under a Labour Government, but tranche 3B, on which many Members are now focusing, is in doubt under the coalition Government. How can the hon. Gentleman justify his comment, given that all the previous contracts were honoured by the Labour Government, whereas the new Government are considering reviewing and perhaps cutting a future contract, 3B?

[Andrew Stephenson]

I am happy to justify my comment by asking how the hon. Gentleman justifies the Labour Government’s huge overspends, and the massive deficit that they built up when their expenditure was out of control. Clearly they should have got spending under control, and should have conducted a strategic defence review instead of delaying the pain until now.

The importance of big aerospace contractors such as Rolls-Royce and BAE Systems to Pendle, Lancashire and the United Kingdom economy should not be underestimated. As my hon. Friend the Member for Fylde pointed out, there is a significant number of subcontractors and support companies. The average job in aerospace contributes £75,000 gross value added to the economy, and the figure rises to £115,000 at BAE Systems, compared to only about £15,000 gross value added per job in other sectors in Lancashire. I have noticed when I have spoken to business men in my constituency how many of them started off as apprentices at either BAE Systems or Rolls-Royce.

Many Opposition Members have expressed concern about the potential impact of the strategic defence and security review on the military aviation industry. We have already had a debate today about who has been fuelling scare stories in the press. I believe that hon. Members have a responsibility not to fuel scare stories: I do not think that they do anything for workers’ morale. I suggest, however, that the biggest risk to our military aviation is not the strategic defence and security review, but the muddled and incoherent programme left by the last Government.

Before Opposition Members lecture the coalition Government on the financial implications of reviewing certain defence contracts, they should remember that with a defence budget of some £35 billion a year, they left behind an overspend in the equipment programme that will amount to £38 billion by 2020. That is what we must deal with now, and that is why we are carrying out a full review of all the current contracts.

I used my maiden speech to explain the need for us to build a high-skilled economy, and I specifically mentioned the importance of the aviation industry. So far I have been very encouraged by the measures that Ministers have taken to support military aviation, but I urge them to do even more to support that vital sector.