Radar Industry

Andrew Turner Excerpts

Tuesday 13th September 2011 Westminster Hall

[Mr Andrew Turner (Isle of Wight) (Con)]

Before I begin, I thank you for calling me to speak, Mr Dobbin. I also thank my hon. Friend the Minister for coming to discuss the future of radar. I have asked for the debate because my attention has been brought to a situation in my constituency involving BAE Systems and the procurement of radar systems by the Ministry of Defence.

Since 1940, Britain has been at the forefront of international research and development when it comes to radar. That heritage, along with our experience, knowledge and unsurpassed expertise, is routinely admired by militaries and Governments across the world. BAE Systems has been in the vanguard of the highly specialised radar industry for more than half a century. As the most significant UK company in the field, it is almost singlehandedly responsible for having put us in our current enviable position. At the same time, it has worked tirelessly with the Government, and particularly the MOD, to ensure that the nation is secure from airborne and seaborne threats. Additionally, it has provided skilled employment to a multitude of people and an unsurpassed graduate scheme, and it has generated huge sums for the taxpayer. It is also one of the largest private employers on the Isle of Wight.

Globally, the market for radar technology is £5 billion a year, with 20% coming from the US, and the majority of the balance coming from other markets. As a result of our highly regarded skill in the sector, UK radar products are now installed in approximately 100 countries, and the majority of those products are believed still to be in active service. BAE is the primary UK supplier of radar technology to global customers, but international competition is strong from the likes of Lockheed Martin, SELEX, Thales and Raytheon. If developed correctly, the UK has obvious political and economic advantages, which will allow BAE to remain a market leader.

On the island, BAE employs 290 people. In its radar business, it employs 510 people across the UK, and it has additional sites in Chelmsford, Portsmouth and Dunfermline. In 2009, an Oxford Economics report on BAE assessed its financial contribution to the UK as being more than £78,000 per full-time employee, which is 85% higher than the national average and 34% higher than in manufacturing in general. In the same year, it was estimated that BAE spent £4.1 billion paying for equipment, components, raw materials, rent, energy and other services from UK suppliers. That meant that for every 10 BAE jobs in the UK, another 12 were created in the supply chain. One example is a company called Pascall Electronics, which is also on the Isle of Wight, and that is just one of many local Isle of Wight suppliers in BAE’s supply chain.

Those figures cannot be ignored. The economy and defence of the UK, and the population of the Isle of Wight, simply cannot afford to lose the radar industry. Recently, however, events have conspired to threaten the current situation, and this incredibly specialised and niche manufacturing industry is in danger of being lost. The first reason for that is that a number of large long-running programmes have finally been finished. They have been delivered to the MOD after years of extensive planning, research, development, trials and testing. The most notable are Sampson, which is in the Type 45 destroyers, and the forthcoming Artisan RT997, which will be in the Type 23 frigates. Sampson has been universally recognised as a world leader, and Artisan has benefited greatly from the reuse of parts of the same technology. Consequently, it, too, has been designed to be extremely competitive in the global market. That has particular significance because both systems are designed and constructed on the Isle of Wight.

As those contracts with the MOD come to an end, BAE’s work load in the UK has decreased. There is simply not enough work to sustain such high employment and the range of specialist skills required for further development. BAE therefore recognises that it must focus on its international markets to avoid redundancies. Additionally, the MOD has chosen to take delivery of an off-the-shelf system from the US company Lockheed Martin rather than a BAE system to cope with the modern problem of offshore wind farms. That was done instead of working with BAE to mature a wind farm solution that could have been made available through its existing radars.

Having made that observation, let me quickly stress that the company appreciates the MOD’s logic in making that particular decision at that particular time, but the side effect has been to create genuine concern. If the MOD is planning further purchases of off-the-shelf products from the US or any other foreign supplier, and BAE so much as appears to fall out of favour with the MOD, its opportunities for export business will be adversely hit. The reason for that is that when potential clients abroad look at BAE products, they judge their worth by the standards of the UK. Has the MOD bought these products? Does it endorse them? Should the MOD cease to work in partnership with BAE, it will indirectly, and probably irreparably, damage the company’s credibility in foreign markets.

Should global sales in BAE start to diminish, it is likely to do what companies do when sales decrease—make employees redundant. Should it then go as far as deciding to cease work on radar, the MOD will simply lose the only technical experts in the field of radar in the UK. The inevitable outcome will be a huge increase in the costs of through-life care for the MOD’s current radar fleet, because it will have to pay a foreign company to keep it running.

The possibility that a company might lose international credibility and have to lay off staff is not a reason in itself for the MOD to purchase equipment from any defence company, let alone BAE. Indeed, BAE is not asking for handouts, subsidies or guarantees of sales at some point in the future—far from it. It recognises that having just come to the end of some very long-term programmes, the MOD has no need to buy further equipment. It accepts that there will be a competition for the replacement of the rest of the air defence system in 2017, and it is confident that its entry in Project Vigilance will be of the highest standard. However, it feels a firm appreciation of the relevant issues by the MOD is vital for the protection of the UK radar industry’s future. The most cost-effective method of developing the next generation of radar defence for the UK is by defining a cohesive and credible long-term partnership with the MOD. That was demonstrated successfully with the last projects, and those before them, including the multi-function electronically scanned adaptive radar and advanced radar technology integrated system testbed programmes. I also fervently hope to protect the employment of my constituents, and those constituents of my colleagues who are also affected by the issue.

I want to make a final point. Radar has defended our country definitively at least once, in 1940. It is likely that it has done so on many other occasions that are not in the public domain and it is more than likely that it will do so again. I pose this question: is it not essential that the radar technology our military are asked to use should be of British origin, in research, design and manufacture? It makes perfect sense to me that the company that we use to develop such sensitive technology should be British-based, like most of its employees. What would happen if there were to be an incursion into our airspace by a foreign power and the UK Government did not have the control and flexibility that we enjoy today, because the designs were not British? Many might scoff at that suggestion, and say that surely it makes no difference which of our allies makes our radar. It probably does not at the moment, when our airspace is not being challenged on a daily basis, but none of us knows what will happen in the future. Why should we take the chance when there is a world-class company specialising in the area in question, native to our country? Why would we even think about taking the risk? That would not only be imprudent, but would smack of recklessness.

No one is asking the Government to help one company over another, to provide subsidy or even to point fingers and lay blame about previous decisions that have affected a company’s reputation. By continuing to ignore those companies in the UK that add genuine value to the economy, are recognised world-class providers of technological solutions, carry the British brand globally, employ large numbers of people and, in the case of BAE Systems, are integral to the very defence of the United Kingdom, we will end up cutting off our nose to spite our face.