UK Helicopter Industry

Greg Mulholland Excerpts

Tuesday 24th January 2017 Westminster Hall

[Marcus Fysh]

I absolutely agree with that sentiment. It is essential that we build on the highly skilled workforces in the UK. There is one in Yeovil, and I know that there are others within the industry in other parts of the UK. We have a great opportunity to construct a proper modern industrial strategy for turbo-charging skills development and apprenticeships.

[Greg Mulholland (Leeds North West) (LD)]

The hon. Gentleman mentions the industrial strategy, but it makes no direct mention of this hugely important industry and the need for a stand-alone industry that produces helicopters. Will he call for a commitment—it would be great to hear one from the Minister—to a direct reference to that in the refreshed defence industrial strategy when it is announced? Will he also commit to working with everyone in Yeovil and nationally—this is a national issue as well—including Lord Ashdown, who retains a big interest in it?

[Marcus Fysh]

Yes, absolutely. It is an important national industry, and I want to see it mentioned specifically within the industrial strategy. I have been working hard—I thank the Minister for her engagement with me over many months, since she was appointed, as well as the former Minister—on how we can make the industry a part of the industrial strategy. I welcome the support of everybody across the political spectrum to help the industry go from strength to strength.

The issue is about how we go forward. We have a strong local cluster in the Yeovil area, which at the moment can produce helicopters end to end, making all parts. I would like that to continue. There is a live issue involving the Wildcat airframe jigs, as anyone who has been following it will know. It is a relatively small issue within the overall scheme of the industry, but it is an important signal that we want to be able to manufacture helicopters end to end in the Yeovil area. It would give the community a lot of confidence that we mean business about ensuring that the industry is as strong as possible for the future. The question is how to preserve the industry and take it to the next level.

I believe that joined-up thinking and a clear plan for infrastructure and skills development is essential and should be promoted through the industrial strategy. It is about raising the competitiveness of the whole industry environment in the Yeovil area, and indeed in the south-west. The thing about competitiveness is that it is both an internal and an external matter. From an internal point of view, our local industries should focus, as they are doing, on continuously improving their competitiveness, but it also helps to have external players involved. Yeovil made a fundamental mistake some years ago by not inviting Ford to come and manufacture cars in the town. That would have been good to have as a discipline.

The issue is also about promoting innovation within the industrial strategy. I welcome the Government’s strategic partnering arrangement with Leonardo to consider developing its existing platforms as well as how we can make the products of the future, such as unmanned aerial vehicles, and all their potential technology spin-offs, including battery development and so on.

It is also very important to promote inward investment, and since I was elected I have tried to create a step change in the way the town thinks about such investment, and to get it to grab opportunities to diversify its industries. That is because Yeovil very much grew up as a company town. There was a time some years ago when out of 30,000 residents 10,000 were employed at the Westland site. That number has come down over the years to about 3,000 now, but Westland remains a very important player locally. Nevertheless, the more that we can try to diversify, the better health the industry will be in.

The UK helicopter industry has very serious competitive strengths, in design and engineering, and in specialties such as the manufacture of blades and gearboxes. In addition, Yeovil works closely with the Ministry of Defence client, and skills behind that work in areas such as certification, software design, materials and acoustic treatments, are available in the local supply chain and are second to none in the world.

There is a strategic imperative for an independent design and production capability to exist in the UK, and that inevitably entails some level of Government involvement as well as early, clear and efficient procurement that will take the whole business ecosystem into account. I welcome the focus on value for money within the MOD, but we also need to think quite holistically about the impact of different procurement decisions.

It is also very important within this context that we attempt to develop indigenous intellectual property. It is much better to develop our own products, because that is how the industry captures higher margins and secures higher living standards for the workforce and the population. Building to print, using other people’s designs and simply assembling products, is just not as good a business to be in. Indeed, it is almost a distraction from what the core endeavour of design and engineering should be, which is to create product opportunities and export opportunities. So, we must have early engagement with Her Majesty’s armed forces, to ensure that we are developing the capability that they want and need, while also making the platforms flexible for volume production at different levels of capability.

As I said before, there are opportunities to deepen relationships with Italy and the EU, and with US firms. There is a huge opportunity at the moment, for example, in service and support. There is the potential for Leonardo to work closely with Boeing, which I encourage and I would like the Government to try to encourage it too, because that could be a very good foundation for new product development to emerge from the excellent cash-flow opportunities.

There is a role for Government. We have seen some part of that in the strategic partnering arrangement and I would now like to see more joined-up thinking by the MOD, including in procurement, in addition to the support that can be given by both the Department for Business, Energy and Industrial Strategy, and the Department for International Trade. At times civil servants in different areas have not always known what other parts of the Government are doing.