Helicopters: UK Design and Manufacture

Lord Stevenson of Balmacara Excerpts

Tuesday 10th July 2018 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I thank the noble Lord, Lord Ashdown, for securing this debate this afternoon. He clearly has a personal stake in this narrative, and we salute his service. I also pay tribute to the RAF on its centenary.

Others who have spoken have covered much of the ground at the centre of this debate. I come to it relatively unformed, because it is not an area of expertise for me. I spoke on bees last week; I am much happier on that aerial form, and able to contribute. I am prepared to indulge the House and go into more detail, if noble Lords would like, because it seemed to go down quite well at the time—but perhaps not. However, I would like to claim that I went to the trouble of visiting Yeovil and the area that we have been talking about to prepare for this debate, but it was because I managed to take a wrong turning last week and ended up on the M5 when I should have been on the M4. I happened to end up at a rather splendid helicopter museum, which actually was extremely useful for this debate—and I actually talked to some local people about some of the issues. So I have a little vestigial information to back up my rather narrow approach to the issue.

I have listened to what has been said, which makes a case that I want to move on to later, which will be mainly about where the industrial strategy might come to meet some of the issues that have been raised today. The noble Baroness, Lady Smith, mentioned a similar debate on this issue that was held in the other place and led by Marcus Fysh, the MP for the area. It was actually the defence spokesman who responded in that case, but today we are graced by the presence of a Minister from BEIS. That helps my argument, because I think that it will be possible therefore to pass on questions about the industrial strategy, and I hope that he will be able to bring us up to date with where we are going on that.

I suppose it was inevitable, given the former connections that have been mentioned in this debate, that it will be centred around Yeovil and the company Leonardo. However, it should not be forgotten that there are other manufacturers of helicopters in the UK; I think that all noble Lords have received a briefing from Airbus about its work. It wanted to draw attention to its design and maintenance facility in Oxford, where more than 30 design engineers are based; to work that it has been doing in RAF Shawbury; and to the £500 million a year which it invests—

[Lord Ashdown of Norton-sub-Hamdon]

I am grateful for the noble Lord’s helpful contribution, but I want to make it clear that Airbus maintains, changes and alters helicopters; it does not build them. That is a significant difference.

[Lord Stevenson of Balmacara]

I am grateful to the noble Lord for his intervention. I was going to come on to that. My first point is that we have a strong existing helicopter industry which, in part, is led by strong innovation and design. The stress is placed on trying to make sure that innovation comes on the basis of the excellence of the work that has been produced, which is something on which we should build. We need to bear in mind that, without our own helicopters, and other defence aerospace products, we will have to be in the market for others’ designs and projects. Will the industrial strategy work for this sector now and in the future? How will it actually work in relation to helicopters? Reading the industrial strategy in detail, as we have had to do for other debates, we see that there is no mention of helicopters as a particular product, or of the aerospace industry as a key area, although it is mentioned in a number of places. Yet it fits many of the main challenges, including one which is a good strand of the industrial strategy—trying to build on strong, local clusters. As we have heard today, the Yeovil area is very much a place where that is happening.

With a strong existing centre of research, innovation and excellence, what could the country do to try and make something of this for our own consumption and for exports? It is quite clear from the people I spoke to on my visit—and it has been mentioned again today—that the area itself has no problems with the activity going on there. The place obviously has a good sensibility for that, but it will not work if there is no local support. It is quite clear that the area takes great pride in the firms that work there. Everybody around there probably has friends who work in the factory or have had some experience with it. So there is more here than just helicopters. It is about what happens in an area which has a single employer, or a restricted number of them, and there are threats to that.

I will pause at this point to say that it is a little ironic that we are talking about a firm that is owned by an Italian Government-controlled firm; the Government of a fellow EU member have a controlling interest in this operation. I gathered, from talking to people, that there is a sensibility around that the company is prepared to put in more investment here and would be more prepared to do so if it was being matched by the UK Government. Again, we have a problem with what our Government often do. They try to exhort others to take up the load in terms of investment and everything else but do not seem able to do so themselves.

How do we make progress if the industrial strategy is saying that we are looking for locally based, well-constructed, good contributors to our overall economic activity, yet we are not prepared to invest directly? There are obviously other things that Governments can do. The issue, to which I hope the Minister will respond, is that there needs to be some joined-up thinking, and a clear plan for infrastructure and skills development, if we are going to get this area up to the level we want. It is about raising the competitiveness of the whole industrial environment in the south-west. It is not just about helicopters. How best do we promote innovation and train and educate in technical and other skills? How do we have a strategy that plays back to the needs of local people as well as to the economy?

We have had mention of, and I am sure the Minister will also highlight, the Government’s strategic partnering arrangement with Leonardo, which will clearly make a huge difference to how the firm 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. However, there is also the question of how the Government can work with the company and others to stimulate a broader range of inward investment. The irony here is that the area around the factory is very much supported by it; it is very much a single-company town. It is clearly necessary to diversify, but how will that happen? Again, what is the role for Government? Strategic partnering is a major achievement, but it needs to be built on. However, it needs sustained wider government involvement as well as early, clear and efficient procurement decisions that will allow the company to plan properly. Without that, nothing will be successful.

The support here has to come not just from the Ministry of Defence but from BEIS and the Department for International Trade. There is a nascent iAero hub, led by the county council and the local enterprise partnership. Can the Minister indicate what level of support will be available for this from his department, and what can the Department for International Trade do? Does it have any specialists in this area that will be able to support the company as it seeks export markets?

We are all pulling together on the question of productivity—the problem that has bedevilled the UK’s industrial progress over the last 20 or 30 years. It obviously depends heavily on initial skills and on upskilling during a person’s career. There have been calls for the Government to support Yeovil as a centre of excellence area for technological skills, with an institute of technology as a first step in the provision of offers. Can the Minister confirm that this could also be considered?