BAE Systems

Jack Lopresti Excerpts

Thursday 24th November 2011 Commons Chamber

[Peter Luff]

I am aware of the issue, but the evidence suggests that that concern, although I understand it, is probably not well founded. I believe I am right in saying that today—

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

rose—

[Peter Luff]

I give way to my hon. Friend, who might have more details than I do.

[Jack Lopresti]

I was concerned about the potential impact of the closure of Filton airfield on local jobs and industry, so the first thing I did was speak to local companies such as Airbus, Rolls-Royce and GKN, which all assured me that the existence of the airfield was not in any way consistent with their increased orders or viability in the long term—on the contrary.

[Peter Luff]

I am grateful to my hon. Friend. My understanding is that the Secretary of State for Business, Innovation and Skills is in the Bristol area today announcing additional jobs for Airbus. Although I genuinely respect the concern expressed by the hon. Member for Bristol East (Kerry McCarthy), I have heard other assurances similar to those given to my hon. Friend. However, I promise that I will keep my eye on the situation as best I can, as a Defence Minister, and I am sure that the Department for Business, Innovation and Skills will do exactly the same thing.

The defence sector and, in particular, BAE Systems have a significant role in rebalancing the economy by offering the taxpayer better value for money; and by offering the world the products, innovation and services required to compete on the global stage. However, BAE Systems must also be prepared to take responsibility for its decisions and to understand the debt that it owes to the country and the taxpayer.

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

This is an important debate, not only for the workers affected in Brough, Warton and Samlesbury, and for their families and their wider community, but for the wider UK defence industry, UK manufacturing, and all the businesses and their employees in the supply chain.

The case for this debate has been set out in stark terms by the right hon. Member for Haltemprice and Howden (Mr Davis) and my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson). Their comments, though, have to be set against the bigger picture. We have an economy that is flatlining, with the lowest growth of any country in the G7 bar Japan—which, of course, suffered an earthquake and a nuclear disaster—and the lowest growth of any EU country bar Greece, Portugal and Cyprus, yet we have a Government Department that repeatedly states that the decisions on where redundancies fall are nothing to do with it. I have to ask the Minister whether that is also the view of his colleagues in the Department for Business, Innovation and Skills, the Department for Communities and Local Government, and the Department for Work and Pensions, who have to pick up the pieces and the costs of these significant job losses.

We are talking about very skilled workers, whether in the north-west or Humberside, who have so much to offer to the company and to UK plc, and yet face a hugely uncertain future. It is far from clear whether the processes have been properly managed. It is also unclear whether the 90-day consultation process has been genuine or whether the company has been paying lip service to this requirement. I can well understand why right hon. and hon. Members and the trade unions that represent those affected speak inside and outside this place with such frustration and anger at how this is being handled by BAE as it downsizes and rationalises its footprint in the light of changing global demands. The leak in advance of its announcement is clearly unacceptable. We must understand just how much that affects the work force’s perception of the management and what had until now, as my right hon. Friend the Member for Kingston upon Hull West and Hessle said, been a very good working relationship. It is unclear what efforts have been made to relocate any of the work force and to consider alternative proposals from inside the company. My right hon. Friend, who has vast experience in these matters, posed a whole series of questions that the company needs to answer and in which the Government should take a close interest.

I know that the Minister cannot answer questions today, but I hope he will none the less give serious thought to this. I was reassured to hear him say on several occasions that he would take away issues that were raised across the Chamber. That is not least because we saw in the 1980s the loss of large defence and industrial employers and the devastating effects that that had on communities. Those effects outlast generations, as we saw in my own constituency of Plymouth—and, indeed, in Barrow, in Woolwich, and in other places.

This is a test of the Government’s willingness and ability to support British manufacturing, British defence industries and skilled British jobs, and not merely to talk of an export-led recovery. I do not mean to stray into territory that I am sure will be covered at length in the following debate, but the issues raised at Brough speak to the wider question of how the Government are failing to support British business and get the economy growing again.

[Jack Lopresti]

Will the hon. Lady give way?

[Alison Seabeck]

Forgive me, but I will not, because a lot of Back-Bench Members want to speak. The Minister gave way a lot, and we need to move on.

A key part of the very significant contribution that the defence industries, and indeed BAE, make to our economy is the need for a strong defence industrial strategy —one that meets our overall defence needs and protects our sovereign capability. We need a coherent plan of investment—for example, in unmanned aerial vehicle technologies—that will help to sustain the whole-aircraft skills on which this industry has traditionally been based. Labour Members have already commissioned our own review of defence procurement, and it will be interesting to see whether, in the long promised White Paper, the Government pick up on any of the themes we have suggested, which deserve further consideration. Crucial too, and touched on in our document, is the economic case for a strong defence sector able to export goods and grow its markets rather than, as we are seeing now, having to scale back its work, shrink its work force and leave the taxpayer covering the cost of unemployment.

The relationship that BAE Systems has with the UK Government, and therefore within the defence industrial base, is significant because of its substantial reach. It is a company of global significance with some 38,000 employees in the UK, one of the largest cohorts of apprentices, 10%-plus of all defence industrial jobs, and over a third of its sales market in this country. In fairness to the company, it does understand the need to protect the skills base. BAE also has some 9,000 UK suppliers, with tens of thousands, if not hundreds of thousands, of supply chain jobs therefore partly dependent on it.

We are working in a market environment in difficult financial times, and it is therefore important to understand from the Government what discussions they had with BAE prior to this announcement. The Minister touched on that. Was the prospect of offsetting potential job losses from the slowing of programmes at BAE against the mooted development by Siemens in Hull ever discussed? Siemens, of course, was in line to pick up the work that Bombardier failed to get. There is some uncertainty all around this. We should be a little clearer about which branches of Government are looking to ensure that there is sustained, ongoing skilled employment in the Humber area.

We have to have concerns when organisations such as ADS, the trade organisation advancing the UK aerospace, defence, security and space sectors, express the view that the current cuts to BAE are the tip of the iceberg. We need to be convinced that the Government are using all their tools—I realise that that is not solely the responsibility of the Minister who is present—to help those successful industries to be more productive. When the Government are the client, they must still ensure that the taxpayer gets value for money. The Government must decide whether they want to act to support sovereign capability with skilled jobs based in this country. If they do, they need to act now.

We have to look at the potential problems facing the Typhoon programme. Italy and Spain are having difficulty paying their way. I heard the Minister’s positive comments about the Typhoon programme, but we need reassurance that the Government are doing everything they can to keep it on track. We need to be sure that, along with the Department for Business, Innovation and Skills, the Department is looking at the impact of the loss of intellectual property rights, such as those associated with the Harrier and the Hawk, which were mentioned by the right hon. Member for Haltemprice and Howden. Those are transferable, and in theory that allows build programmes to happen outside the UK. Will Hawk production be shifted entirely to India? Is that an entirely desirable endgame for the British Government? I suggest that it is not.

I hope that the Minister will listen, as I shall, to right hon. and hon. Members in this important Back-Bench debate as they flag up what is wrong with the way BAE is responding to the current downturn, and highlight the ways in which the Government are not supporting British industry in this sector as Members feel they should. The Minister should not only take a direct interest in the current situation, as he has made clear that he does, but pay heed to the critical reports of the Public Accounts Committee and the National Audit Office, including any future investigations that they might undertake as a direct result of today’s debate, particularly into the yellow book. In the forthcoming White Paper, the Government should indicate clearly a positive way forward, because BAE, irrespective of the issues raised in the House today, is a significant player in the Government’s defence strategy and wider industrial strategy, particularly for fixed-wing aircraft and unmanned aerial vehicles, so it needs to be able to plan with some certainty within its own domestic market, as do all its competitors. In turn, it will be able to secure high-skilled jobs such as those at Brough into the future. We must avoid further job losses, any further loss of expertise and, of course, the poor use of taxpayers’ money.