Aerospace Industry

Debate between Gerald Howarth and Mark Tami

Tuesday 2nd September 2014 Westminster Hall

[Mark Tami (Alyn and Deeside) (Lab)]

It is a pleasure to serve under your chairmanship today, Mr Hollobone.

Manufacturing and aerospace are clearly vital to the economy of north-east Wales and the north-west of England. At the heart of that, as has been mentioned, is Airbus at Broughton, where there are more than 6,000 jobs at one plant. Importantly, there are thousands more in the supply chain. We do not talk enough about the supply chain, although I am pleased that other hon. Members have done so today—without it, the primes would not be able to produce the goods. We should give it more support and discussion.

Airbus alone supports more than 100,000 jobs in the supply chain, and if we included the other aerospace primes the number would be very high. That area of activity is high quality and export-driven; it raises billions of pounds for the UK every year, and the jobs are of high quality as well.

If such a level of employment is to be maintained, and if there is to be expansion and growth, we need to improve our skills base. Even during the economic downturn, companies told me that they found it difficult to find skills at the level they need. Apprenticeships are important in that context; in the past three years in the UK, Airbus alone has enrolled 4,000 apprentices. It is telling that 70% of its senior managers were apprentices at one time. We need to send a message—I am pleased that other hon. Members have mentioned this—that apprenticeships are not something for kids who do not get to university because they are not bright enough. They are very important. We need to adopt more of a German model, where it is not a case of university for some and apprenticeships for others. We need a programme where it is more possible for people to transfer between the two. Most employers would probably say that the ideal person has a university qualification but has worked or done some training in the workplace—not someone who has been nowhere but the classroom, but someone who has skills they can use and the benefit of a university education.

We have a long way to go to catch up. For every pound that the UK spends on research and development, France spends £10 and Germany spends £15. Many hon. Members have mentioned the Aerospace Growth Partnership, which is doing a good job. It needs more, and we should help it more, but the key, as has been mentioned, is the fact that it has cross-party support.

A problem in the past has been that whoever came into government chucked things out and brought other things in, which led to uncertainty. Big employers—even small employers—do not know whether to invest in the relevant area, and whether the Government will still support them. A classic example of what I mean is the area of composites. The UK failed to invest in the coming material for aircraft. I was pleased that Lord Mandelson grasped that and realised that we should provide support. If we had not done that—we were well behind the Spanish and Germans, and I think we still are; we need to do much more work—we would have been in a difficult position.

The importance of the A400M, which has already been mentioned, was civil as well as military, because it demonstrated that we could do the relevant work with composites. The A350 extra-wide body will be 53% composite. Our colleagues in Europe—our partners in Airbus—would love to get their hands on that work. The Spanish and Germans have made no pretence about it. We are fortunate to have it, but I do not think that, just because we have built the wings for years, we can assume that we will always get them in years to come. We are only as good as our last aircraft, or our potential to produce the next one. Clearly the next big challenge for Airbus will be the replacement for the A320, which is the workhorse of so many airlines. If we were not to get that work, the longer-term future for Airbus in the UK would be bleak.

[Sir Gerald Howarth]

I am glad that the hon. Gentleman mentioned the Airbus A320. I happened to fly in one of the test models. It was, of course, a good example of Government and industry working together; the Thatcher Government put £250 million into the programme. Margaret Thatcher took a lot of persuading, but eventually even she agreed that Government intervention on that was a good idea.

[Mark Tami]

I totally agree. Going even further back, I remember when an Industry Secretary had the choice whether to keep the Airbus share or go for Concorde. He went for Concorde, which, in hindsight, was probably not the best choice. There will be crucial choices for the UK about Airbus in the coming years; the new A320 is almost certain to be a wholly composite aircraft, with structures different from those we are used to.

There is a big challenge for us out there, but there are also other threats to Airbus. The hon. Member for Mid Worcestershire (Sir Peter Luff) mentioned unfair competition. There is nothing wrong with competition, which is good in many ways, but unfair competition is bad and threatens the future of an important industry. For years, the US dominated both the civil and military aircraft markets and I suppose it thought that no one would ever challenge it. Airbus did, however, and it now accounts for a large share. New players such as China, Canada, Russia and Brazil are all looking for a segment of the market, so we cannot assume that the big players will remain unchallenged.

We need only to look at the 747, which was funded by the American Government as a military transport aircraft. Boeing actually received all the funding and had many of its costs paid and then—surprise, surprise—somebody decided that people could also be put on it and that it could be used as a civil airliner. Airbus and Boeing have both been to the World Trade Organisation. Such processes are always long and drawn out, but the WTO found in 2012 that many of the US subsidies were not allowable under WTO rules. Back in 2011, the WTO found that repayable launch investment was, but there was some issue with the interest rates.

The EU has sought to address some issues, but, as the hon. Gentleman made clear, the Americans have done the exact opposite and decided to give the biggest ever single tax break of $9 billion to Washington state, which will then hand it on to Boeing to pay for the development costs of the 777X, which is exactly what was done with the 747. That is happening at a time when America is looking to Europe for an agreement about more competition and more open markets.

To be honest, the problem is that the US wants to compete freely in our markets, but it does not think that we should be able to compete in theirs. We have seen that before, such as when BAE Systems tried to break into the American defence market. Probably the worst example was the air tanker competition in the US, which was won convincingly by Airbus, but Boeing then went crying to the US Government, who then stopped the competition and changed the rules so that Boeing could be the only winner. Surprise, surprise, the contract went to Boeing.

I certainly do not want us to return to a system of closed markets because that would not be good for Airbus or our industry, but we need a level playing field. We cannot have a system in which we are expected to play by the rules when others are not; many jobs will be lost, plants will close and we will return to Boeing, or whatever company, ruling the roost once more. We want open markets for our companies to compete in and can expect that America does as well, but the situation cannot be unfair. I hope that our Government will be far more forthright with Europe and will work with it to ensure that we stand up and make our case, because it is vital to the future of the industry.

I want to refer to another threat—the hon. Member for Mid Worcestershire may disagree with me on this: our future in Europe. I am particularly worried because Airbus is an example of the perfect way in which Europe can work together. Were we outside the EU, I have serious doubts that we would have the same level of investment. I am not saying that the plants at Filton or Broughton would close tomorrow or that we would lose existing orders, but we would jeopardise future investment as the Germans, the French and the Spanish would make a strong case for investment to be made within the European Union and not in an outside country. Those who are calling for our exit need to consider the implications for jobs.

Shrewsbury 24 (Release of Papers)

Debate between Gerald Howarth and Mark Tami

Thursday 23rd January 2014 Commons Chamber

[Sir Gerald Howarth]

I told the hon. Member for Poplar and Limehouse (Jim Fitzpatrick), who is a friend, that I would address that point, and that I would do so in my own time, not in his. The Liberals, typically, are sitting on the fence. I forgive my hon. Friend the Member for Colchester (Sir Bob Russell). It is absolutely right and proper, and important—[Interruption.] I know that we are in coalition with the Liberal Democrats, but there we go.

Britain was the sick man of Europe in the 1970s. One reason for that was the kind of trade union activities that were going on. The hon. Member for Blaydon has given his romanticised version of what went on, and I am absolutely determined to put an alternative case, and I hope that I am in order to do so, Madam Deputy Speaker. That alternative case will not be uttered by any Opposition Members. I suspect that the only other person to do so will be my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski), who of course has a vested interest in his constituency. [Interruption.] I thank the hon. Member for Blaydon, and I will indeed continue.

I have set out the pattern of industrial action that was destroying Britain, and of which the country was absolutely fed up. An opinion poll in The Times in January 1980 said that 71% of the people surveyed about the kind of measures that the Thatcher Government were introducing —to restrain secondary picketing and intimidation—wanted those measures to be taken, as, interestingly, did 62% of trade unionists. One of the successes of the Thatcher period was to restore trade unions back to their members, taking them out of the hands of their politically motivated leaders. We were acting very much in line with the spirit of the British people.

[Mark Tami (Alyn and Deeside) (Lab)]

This history lesson is very interesting from the hon. Gentleman’s point of view, but for the third time, will he give us a straightforward answer: does he believe that the papers should be published—yes or no?

[Sir Gerald Howarth]

The hon. Gentleman, who is also a friend, will have to be patient. I will deal with that point in my own time. [Hon. Members: “When?”] In my own time.

Secondary picketing was eventually outlawed in 1984, during the Parliament in which I first served in this House. Much has been said about the cases of Warren and Tomlinson, but it is very important to put some of the facts on the record. To quote from my letter in The Times of 14 January 1975:

“It is worth reminding them”—

those who took the same line as the hon. Member for Blaydon—

“of the words of Mr Justice Mais, the trial judge, in passing sentence on December 20, 1973. Of one of those jailed, he said: ‘You took part in violence and encouraged violence… You are prepared to impose your views on others by violence if need be.’”—