Typhoon Aircraft (Exports)

Mark Menzies Excerpts

Wednesday 7th March 2012 Westminster Hall

[Jim Dobbin (in the Chair)]

I give warning that I will call the Minister in this debate no later than 20 past 4. We have had a couple of problems in previous debates.

[Mark Menzies (Fylde) (Con)]

I am delighted to have secured this debate on support for export sales of Typhoon aircraft. It also gives me great pleasure to serve under your chairmanship, Mr Dobbin. I am pleased that the Under-Secretary of State for Defence, my hon. Friend the hon. Member for Aldershot (Mr Howarth), is responding. That is appropriate considering all that he has done on recent visits, on behalf of the Government, to India.

It is always a pleasure to speak on behalf of my hard-working constituents in Fylde, many of whom are employed in the aerospace industry. In my constituency, BAE Systems’ Warton site employs 6,272 people, with a further 4,000 employed in neighbouring Samlesbury. Indeed, BAE Systems provides one in four of all local manufacturing jobs in Fylde. Typhoon is the world-class platform on which the long-term success of UK military aerospace is predicated. That is why I called for today’s debate.

Those jobs are vital in our mission to rebalance the British economy, by returning manufacturing to its core. The military aerospace sector represents 70% of all UK defence exports, which are worth £4.5 billion a year to the British economy. Typhoon alone directly supports 10,000 jobs in the UK, and more than double that indirectly. At a time when all parties are rightly worried about youth unemployment, it is important to appreciate BAE Systems’ commitment to training and developing people, with 1,000 apprentices and 500 graduate trainees at any one time. It also sustains a supply chain made up of many small and medium-sized enterprises, including 1,200 suppliers in the north-west alone.

[Brandon Lewis (Great Yarmouth) (Con)]

I congratulate my hon. Friend on securing the debate. Companies such as C-MAC and Norfolk Capacitors in Great Yarmouth are also part of the supply chain to MOD projects and other organisations’ projects. Does he agree that the issue affects SMEs across the country, including in places such as Great Yarmouth?

[Mark Menzies]

Absolutely. BAE Systems is always the company one thinks about in relation to Typhoon, but my hon. Friend has rightly pointed out that component suppliers—large and small—are located in every corner of the country. I know he has spoken up on behalf of his constituents on the matter.

As well as benefiting the economy as a whole, supporting the Typhoon programme has direct advantages to taxpayers by reducing the Ministry of Defence’s unit costs. Savings are generated through increased production runs and a global network of operators, as well as through the pooling of spares and other support-related activities. Exports level out the peaks and troughs of domestic demand and give the MOD more programme flexibility. They also underpin some of our most important strategic relationships.

BAE Systems’ highly skilled work force have extensive expertise and experience over many decades of working in-country with global partners to deliver platforms that best fit their unique operational requirements, such as the Hawk trainer in India and the Tornado in Saudi Arabia. I have no doubt that the same work force are more than capable of continuing to deliver that level of service with Typhoon.

In all defence exports, the importing Government are the customer, and their relationship with the exporting Government is vital. That is why our support is so vital: customer Governments need to know that a Typhoon acquisition will enable interoperability, and facilitate a close and enduring relationship between the air forces of the two countries, with opportunities to train together, share assets and doctrine, and determine ways to enhance capability and reduce the cost of operation. Here the support of the MOD, in particular, is crucial. It is important that we continue to give our partners that confidence.

I believe the Government understand that. That is why, while respecting Germany’s role as consortium leader, the British Government have given such strong backing to the sale of Typhoons to India.

[Graham Jones (Hyndburn) (Lab)]

I congratulate the hon. Gentleman on securing the debate because the Eurofighter and BAE Systems are critical to his area. He talks about the Government’s relationship with BAE Systems. One anonymous industry source was reported in the newspaper as saying about the Typhoon Indian contract:

“Our defence industry is not working in tandem with the Government as much as the French worked with Dassault.”

What would the hon. Gentleman say in response to that?

[Mark Menzies]

The hon. Gentleman summed it up: it was an anonymous source. My experience is that the British Government and BAE Systems have no criticism of each other in the way they have been working to try to achieve the best for the work force in Warton. The Prime Minister himself took a leading role in the UK’s largest trade mission to India in living memory. I was encouraged.

[Andrew Percy (Brigg and Goole) (Con)]

I also congratulate my hon. Friend on securing the debate. As he knows, BAE Systems at Brough is just outside my constituency. We have a few choice things to say about BAE, but that is for another time. In relation to the Typhoon contract, which was another blow for the whole of BAE, including in Brough, does my hon. Friend agree that it is quite bizarre, given how much foreign aid we give to India—I think four times more than the French—that we are not in the running? There is still an opportunity for the Government to get their full weight behind the contract and to say to the Indians, “We expect something in return for what we give in aid.”

[Mark Menzies]

My hon. Friend has put that in words that I possibly could not. I will come later to some of the things that I think the British Government could do.

It is important to clarify the importance that the British Government place on this. I was encouraged, not just by the Prime Minister’s visit to India, leading the delegation, but by his proactive approach and extensive knowledge of the topic at a recent meeting that hon. Members held with him at No. 10 to discuss this important matter. I also thank the Minister for his two ministerial visits to India within the last year; he need take lessons from no one when it comes to upholding the interests of the UK defence sector abroad. None the less, I would encourage him, in his ongoing discussions with his Indian counterparts, to urge them genuinely to review, even at this late stage, the details of this contract, in particular, to note the advantages that working with BAE Systems on Hawk has brought the Indian air force. It should not be forgotten that both the Royal Air Force and the royal Saudi air force use the Hawk as the trainer aircraft for Typhoon. Together, those aircraft mark a perfect partnership in Anglo-Indian co-operation.

India has always been a proud nation; now it has truly come of age. India’s new role is not just regional but international. Britain has consistently supported United Nations Security Council reform to recognise that reality. However, if India is to play its full part on the world stage, it needs the very best military equipment. Typhoon, I believe, is the best fighter jet currently on the market. Diplomatically, India’s international position would also be enhanced by stronger relations with the UK and other partner nations—Germany, Italy and Spain.

It is important to remember that the consortium is made up of private sector companies that need to take primary responsibility for any commercial deal. They must continue to work together to provide a united front for potential customers. They must be proactive in seeking deals on behalf of their shareholders. Perhaps most importantly, they must be competitive on price. However, Government can play a supporting role, as the example of Nissan proved so successfully yesterday. To that end, I ask the Ministry of Defence to give a long-term commitment to enhance Typhoon with operational capabilities that are essential to both the RAF and export customers, such as e-scan radar, and the integration of new weapon systems.

[Graham Jones]

The hon. Gentleman is making a good point. He is passionate about BAE Systems. That passion is there for all to see and has been ever since he was elected. The Government’s White Paper, “National Security Through Technology”, suggests that British companies no longer have priority when it comes to MOD contracts. What does that say to foreign Governments, if the UK Government are unsure about whether they are going to buy their own products?

[Mark Menzies]

The hon. Gentleman raises an important point, which, were it to be taken literally, as he just said it, would be a cause of concern. However, the White Paper states the UK Government’s commitment to research and development very clearly, and that is an area on which we lead the world. The Government, through the White Paper, are determined to continue to lead the world in those strategic sectors.

Typhoon exports are not just a matter for the Ministry of Defence. I appreciate that the Under-Secretary of State for Defence is responding to the debate. However, Typhoon exports are inherently cross-departmental. It is vital for the Department for Business, Innovation and Skills, from the Secretary of State down, to engage fully with its German and Indian counterparts. I also urge all relevant Departments to ask their Indian counterparts whether they are looking at this contract beyond price, as this product offers world-leading capabilities.

The India deal is by no means done, but we would clearly not be here today if it had gone perfectly thus far. We must never allow ourselves to be in this situation of uncertainty. The good news is that the upcoming bids will be led by Britain. The British-led consortium is well placed to take advantage of our historical ties with Oman, the United Arab Emirates, Malaysia, Qatar and, crucially, the Kingdom of Saudi Arabia. The Foreign Secretary’s leadership in reinvigorating our vital Commonwealth bonds should also stand Typhoon in good stead. While the Minister can only respond on his Department’s behalf, in his response, will he please give an indication of the level of Government support for engagement with those countries? In particular, can he reassure me that the Ministry of Defence has played its full part in enhancing relations with Oman, the United Arab Emirates, Malaysia, Qatar and Saudi Arabia, and will continue to do so in the coming months? I also ask him to encourage other relevant Departments to be as proactive as he has been.

We should never be shy about supporting British defence exports—other countries are not. We must not allow ourselves to be caught queuing, while others are elbowing their way to the front. Let us never forget that the Typhoon is an exceptional aircraft, built by the finest work force in the world, and that it showcases the very best of British engineering on a global stage.