Typhoon Aircraft (Exports)

Gerald Howarth Excerpts

Wednesday 7th March 2012 Westminster Hall

[The Parliamentary Under-Secretary of State for Defence (Mr Gerald Howarth)]

This is rather earlier than I had anticipated. It is an enormous pleasure to serve under your chairmanship, Mr Dobbin, as you and I share a number of matters in common.

I am delighted to respond to the debate. I congratulate my hon. Friend the Member for Fylde (Mark Menzies) on securing it and on having brought with him reinforcements from both sides of the House in support of his case. It is good to see the hon. Member for Hyndburn (Graham Jones) and my hon. Friends the Members for Brigg and Goole (Andrew Percy), for Great Yarmouth (Brandon Lewis) and for Wyre and Preston North (Mr Wallace), who has just made an outstanding speech in the House in tribute to Her Majesty, as befits a former Army officer; he did so with great aplomb.

Since my hon. Friend the Member for Fylde first arrived in the House, he has been extraordinarily assiduous in making the case not only for his constituency, but for the wider aerospace industry. In that, he is following in the footsteps of his predecessor, Michael Jack, who was always a doughty champion, too. As my hon. Friend made clear in his speech, the aerospace industry is vital to the economic life of the north-west.

The Government attach great importance to the role of exports in restoring the country’s economic health, following the catastrophic destruction of the public finances by the previous Prime Minister. In line with the Government’s commitment to promote responsible exports, as set out in the coalition agreement, we have been especially active in supporting and promoting defence exports to overseas customers. We have intensified our support for bilateral engagement by directing that every Minister travelling overseas will promote the best that Britain has to offer, including its defence exports. I hope my hon. Friend will take reassurance from that.

Let me stress that such activism by the Government is founded on responsible exports, taking full account of UK legislation on licensing and our international treaty obligations. Our keenness to support UK industry does not translate into a cavalier policy to sell anything to anyone. As I shall say later, defence exports play a critical role in enhancing our international relationships, to which my hon. Friend referred.

Although this is an effort right across the Government and the lead for trade promotion rests with the Department for Business, Innovation and Skills, the Ministry of Defence has been doing much of the heavy lifting to bring practical effect to this Government policy. In that endeavour, we enjoy massive support from the Defence and Security Organisation element of UK Trade & Investment, led by Richard Paniguian, whose team do an outstanding job for us and for Britain’s defence industry.

With regard to Typhoon, the cross-Whitehall effort is brought together at the very top, as my hon. Friend acknowledged. Must of that is down to the personal leadership of my right hon. Friend the Prime Minister himself. Ministers and senior officials meet continually with a view to ensuring that industry has the appropriate Government support to help further its various campaigns across the globe. I pay a particular tribute to our ambassadors, high commissioners and defence attachés around the world for their contribution to that team effort. It is, astonishingly, quite a joined up exercise. It is more joined up, particularly between the Foreign and Commonwealth Office and the MOD, than I ever anticipated when I was in opposition.

In my role as Minister for International Security Strategy, I have already visited 15 countries so far, including Chile, Brazil, United Arab Emirates, the Kingdom of Saudi Arabia, Malaysia and Indonesia, pressing the case for Typhoon or promoting the Type 26 global combat ship, and, always, championing the depth and breadth of British industry’s capability in the defence and security sectors—businesses large and small.

[Graham Jones]

I have a concern about some of the export orders. Some of them involve new build at the factory sites of Samlesbury and Warton, but some involve displacements from the RAF. When the Minister is seeking new orders, is he seeking new build orders, or is he seeking to displace some of the Typhoons that were destined for the RAF?

[Mr Howarth]

As I think my hon. Friend the Member for Fylde made clear in his speech, the customers are overseas Governments. We do whatever we can, within reasonable limits and within the constraints that apply to us in providing the equipment that our own armed forces require, to provide what the customer is looking for. Clearly, new build is preferable because we understand that it generates jobs in the United Kingdom. However, other countries are increasingly looking for technology transfer and partnership. Trying to deal with that issue is challenging.

I recently returned from a successful trade mission to India, as my hon. Friend the Member for Fylde mentioned, where I led a delegation of 25 British defence companies, large and small, to promote the very best that Britain has to offer. That kind of initiative is designed to demonstrate to our friends in India our serious intent to build lasting partnerships with them. I am due to return to India for its defence exposition later this month, so I will see the Indian Minister again. I will mention India specifically in a moment.

Typhoon has already secured a number of export contracts beyond the four partner nations, including the Kingdom of Saudi Arabia, which has ordered 72 to date, and Austria, which has ordered 15. The MOD is actively supporting DSO and working with Eurofighter Typhoon’s three other partner nations on a number of other campaigns, which are at an advanced stage, including in Oman, Malaysia, the UAE and a further tranche for the Kingdom of Saudi Arabia. The UK is in the lead in responding to the requirements of Oman, Malaysia and the UAE, and Her Majesty’s Government and BAE Systems, as UK prime contractor, are also fully involved in those campaigns, led by our partners.

The MOD’s support activity has included deployments of aircraft to the Dubai and Malaysian air shows. The latter engagement also took in valuable participation in a multinational exercise within the five powers defensive arrangement. The RAF has also made platforms available to carry out impressive flight evaluation trials here in the UK, so that the overseas customer can witness Typhoon’s superb performance at close quarters. That is pretty impressive stuff by any measure, but all the more so when viewed against the backdrop of recent operations.

Earlier this month, a delegation from Malaysia visited the UK to undertake such a flight evaluation trial. RAF Coningsby hosted the Royal Malaysian air force, and a demanding schedule of sorties covering a wide range of mission scenarios was carried out, supported by maintenance demonstrations by teams on the ground.

We were very pleased to receive Oman’s request of 21 January for a proposal from BAE Systems for the supply and support of Typhoon aircraft. That represents an important step towards the contract and is a further sign of the strong and enduring relationship between our two countries. My noble Friend Lord Astor and my right hon. Friend the Member for Rutland and Melton (Mr Duncan) are well connected in the two countries I have just mentioned and have performed a huge service in adding to the strength of the British engagement.

As I mentioned, the Kingdom of Saudi Arabia signed an agreement to purchase 72 Typhoon aircraft, under the former Government. That is welcome, and together with initial logistics and training packages, it is worth several billion pounds to the UK and our European partners. We hope to provide a further tranche in future.

In the UAE, following representations from my right hon. Friend the Prime Minister, Eurofighter Typhoon was invited in November to submit a bid for 60 aircraft, when it had been thought a deal with another contractor was about to be signed. We are all working hard to prepare an attractive, competitive bid to one of Britain’s oldest allies. Indeed, my right hon. Friend the Secretary of State for Defence is due to visit the UAE shortly. This morning, I talked to Alan Garwood from BAE Systems, who returned this morning from the UAE. I assure all hon. Members in this Chamber that that is indicative of the effort that has been put into this campaign across the Government and industry.

Of course, we are disappointed about the decisions made in Japan and India, but of course we fully respect their decisions. The Indian Government have chosen not to take Typhoon into the detailed negotiations phase of their medium multi-role combat aircraft competition, but the Eurofighter Typhoon consortium and the partner nations stand ready to enter into further discussions with the Indian Government, should that be their wish.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

I congratulate the hon. Member for Fylde on securing the debate, which is important for his constituency. I have a genuine question for the Minister, relating to how optimistic we should be about the prospect of the Indians changing their minds. Will he tell hon. Members how many contracts the British Government have got to that stage that have then been subject to such a change of mind, because that is not common, is it?

[Mr Howarth]

I am grateful to the hon. Lady for raising an important point. India had to select from two bids on the basis of price, price, price—nothing else. We understand that that is the procedure in India and that, unless and until negotiations with L1—the lowest bidder—have been exhausted and do not lead to a contract, at that point and only that point the Indian Government will be able to enter into negotiations with the other bidder. I assure the hon. Lady that we are maintaining a close interest, but we have to respect the Indian Government’s decision. Beating them about the head and saying, “You made the wrong choice,” is not the best way to win friends and influence people, least of all to encourage a customer to turn to a company.

We stand ready. I have to say that, in this case, the UK is not and never has been in the lead. The campaign in India has been led from the outset by Germany and EADS Cassidian, not by the UK and BAE Systems.

A great strength of Typhoon is that it is proven on combat operations, as we found out in Libya. I thought that it might help if I put on the record some of those achievements. Typhoon’s performance stood out from its coalition contemporaries. Fully loaded with up to six air-to-air missiles, four 1,000 lb bombs, a targeting pod and two under-wing fuel tanks, it was able to cruise at more than 500 knots and at heights in excess of 40,000 feet, taking it well clear of rough weather.

The combination of Typhoon’s long-range radar and data-link integration gave its pilots exceptional situational awareness, which enabled them to control and co-ordinate less well-equipped coalition assets. In six months of deployed operations, the Typhoon force flew more than 600 sorties for a total of just over 3,000 flying hours, without any requirement for an engine change, and delivered more than 200 precision weapons. The aircraft’s excellent reliability resulted in no sorties lost owing to serviceability issues. That is a pretty outstanding record.

Defence exports generally make an important contribution to sustaining our defence industry, as my hon. Friend mentioned. Some 300,000 people are employed in the defence and aerospace industries, which provide tens of thousands of highly skilled jobs. In 2010, defence exports amounted to approximately £6 billion and made a significant contribution to the balance of payments. Figures from UK Trade & Investment show that in the first decade of this century the UK was, on average, the second most successful exporter of legitimate defence equipment in the world, not least in my hon. Friend’s and my constituencies.

It is not simply about money and getting cash in. As my hon. Friend implied, helping our friends to build up their own defence and security capabilities contributes to regional security and helps tackle threats to UK national security closer to their source. No other industry in this country can leverage influence so much as defence, which is why we are giving it such a high priority.

I pay tribute to the UK companies, large and small, throughout the supply chain that are participating in this export drive, including Rolls Royce, SELEX, Martin-Baker, MBDA and Ultra. That reminds us that the Typhoon is not just a BAE product, but encapsulates a range of outstanding British and European technologies. Having paid such a tribute, I extend it to my hon. Friend and highlight the contribution of companies in Lancashire, because in calling this debate he pays tribute to the company and its employees for bringing so much back into the constituency of Fylde and the north-west more generally. I shall, of course, forbear from saying too much about the north-west, as I represent the Farnborough Aerospace Consortium in my neck of the woods, but we are complementary.

I reassure my hon. Friend that Her Majesty’s Government, led by my right hon. Friend the Prime Minister, are working to support Typhoon exports and British industry more widely, but in these straitened times others are doing much the same and we should not expect an easy ride. The UK enjoys historic ties with a wide range of countries, often dating back centuries, greater than any other nation can claim. Our strategy is to revitalise those ties, both in the interests of our mutual defence and regional stability and to the benefit of our outstanding aerospace industry, of which this country can be truly proud.