Mark Prisk
Main Page: Mark Prisk (Conservative - Hertford and Stortford)BAE Systems (Lancashire)
Mark Prisk Excerpts
Mark Hendrick
I am well aware of the synergies, the skills that are employed in the submarine and shipbuilding industries and the implications for aircraft carriers. They are connected, and everyone who works in the defence industry throughout the country is worried.
If the Government made more finance available, BAE could ramp down production of Typhoons more gradually, instead of the step-down transition. That would enable the company to mitigate the impact of job losses by steadily reducing its work force as workers now in their early 50s approach retirement. That would coincide with the conclusion of tranche 3A production in 2015. The unions at BAE are in favour of that approach—a gradual ramping down while meeting the country’s defence needs, instead of a drop from 61 aircraft to 36 a year from January next year—but that is not happening. As in so many other areas, the Government’s strategic defence review was rushed and ill thought through. Labour Members recognise that some savings must be made, but they should be part of a carefully constructed industrial strategy, not a rushed and ideologically driven SDSR.
The decision to cut production has wreaked havoc with BAE’s medium-term and long-term plans and produced a great deal of uncertainty. A highly skilled work force will be lost forever. Thousands of years of accumulated experience and skills will be thrown aside, and although orders may arrive in future from India or, possibly, Japan, the loss of these workers will be tragic. Many will go to work in other parts of the country and take up new positions; many will take early retirement and be lost to the industry for ever.
Simply put, this Conservative-led Government do not understand the consequences that their policies have on workers, on businesses or on the manufacturing economy as a whole. Typhoon could be made more competitive and attractive for export by improvements to its radar capabilities. Will the Government fund the development of the E-Scan radar system? If so, will the Minister update the House on whether funding has been allocated for that development and whether the finance has been sent to SELEX or to BAE Systems? I invite the Minister to intervene to deal with that point.
The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
As the hon. Gentleman knows, the assessment is under way between the Government and industry, and it would be a mistake to pre-judge its outcome. We are funding and engaged in that assessment programme and we are hopeful that it will be advantageous. It is important to bear in mind that this will be at the forefront of European technology; it is an important long-term investment.
Mark Hendrick
I am not sure whether that was a yes or a no on whether the funding was made available. When trade unions met the Under-Secretary of State for Defence, the hon. Member for Aldershot (Mr Howarth), at the Conservative party conference—the Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford, was also present at the meeting, but arrived late—they were assured that the money had been allocated for E-Scan radar, but Ian King from BAE Systems has said that no money has been allocated or transferred to the company, and SELEX says the same, despite the fact that the Defence Minister gave assurances that that money was going to the E-Scan programme.
It is imperative that the Government provide a coherent plan of action to help Britain’s defence industry and the wider manufacturing sector as a whole. The longer BAE is able to keep workers, the better prepared it will be to meet demand should other countries order Typhoon jets. Will the Minister tell the House what steps his Government are taking, not only at ministerial level but through UK Trade & Investment, to secure defence contracts from India and Japan, both of which have been linked to the Typhoon project?
In his first major speech after the general election, the Prime Minister pledged to make the next decade
“the most entrepreneurial and dynamic in our history”
and said that he wanted to
“give manufacturing another chance in this country.”
Speaking of his desire to rebalance the economy, he said that Britain had become
“heavily reliant on just a few industries and in just a few regions—particularly London and the South East.”
The actions of his Government in the past year have demonstrated that those were empty words.
BAE is a world-leading manufacturer that contributed £4.9 billion to UK exports in 2009—about 2.1% of Britain’s total goods. Half its UK employees are based in the north, and it is being forced to cut jobs. The manufacturing industry base of this country is in crisis and the Government have no clear plan of action—indeed, by squeezing the life out of the economy, they are significantly contributing to the problem.
The Prime Minister and the Chancellor claimed at the Budget to have a plan for growth. Is it not the case that the cuts will not help growth in this country, but will achieve the opposite by reducing production and GDP to make the economy worse off, not better? Time and again, this Conservative Government have shown a complete lack of support for the manufacturing sector in this country. We saw it with Bombardier, we saw it with Sheffield Forgemasters, and now we are seeing it with BAE Systems. I promise you, Mr Deputy Speaker, that Britain will not recover from the global economic crisis without a strong manufacturing base.
We know that the cuts are going too far and too fast. We know that there are problems in the eurozone that Governments are grappling with. Those problems will make us much more likely to go into recession. The measures that the Government are taking in cutting the defence budget are also causing problems in keeping the economy moving. When are the Government going to realise that and start providing the support that the manufacturing industry in this country is crying out for?
The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
I congratulate the hon. Member for Preston (Mark Hendrick) on securing this debate on an important issue that affects his constituents and those of other Members who are in their places, both in Lancashire and across the border at Brough. Of course, it also affects your constituency, Mr Deputy Speaker.
Alan Johnson (Kingston upon Hull West and Hessle) (Lab)
Will the Minister give way?
Alan Johnson
I appreciate that. The Minister will be aware that some of the work going to Samlesbury and Warton is going from the East Riding. Is he also aware that the view of workers at Warton and Samlesbury is that they do not have the capability or capacity to deal with the Hawk? There is suspicion that the Hawk will eventually be built abroad. He will know that I, the right hon. Member for Haltemprice and Howden (Mr Davis) and all other local MPs are determined to stop the closure of a plant that has manufactured aerospace equipment for 100 years. Will he agree to consider imaginative proposals, which may include the civil aerospace industry, to keep that manufacturing plant open?
Mr Prisk
I do not want to get ahead of myself on the broader issues, and I will come in a moment to the fact that we are in a 90-day consultation process and the company has to demonstrate a business case. The right hon. Gentleman and my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) have made it very clear—rightly so, in my view—that the company has to make that case. I have said that to the work force, and I say it to Members throughout the House. Members, particularly those with the experience that the right hon. Gentleman has, are well placed to challenge that business case. The Government need to ensure that we strike a balance so that we are ready to act if, at the end of the 90 days, it turns out that we have the problems that he has described. I will not get drawn into the pros and cons now, because I will want to see the business case, as will the Secretary of State.
Before I was interrupted on that important point, I was about to put on record the fact that I want to extend my sympathy to all those affected by the announcement. The Government recognise, and I recognise, the human cost involved in such cuts, and how they affect individuals, families and communities. I fully recognise that BAE Systems is, as the hon. Member for Preston pointed out, one of the largest employers in Lancashire. I am acutely aware of the depth of the local impact that will affect many people.
I wish to address a number of issues that have been raised. First, the hon. Gentleman referred in his opening remarks to a letter that he had written to the Secretary of State. I have asked my officials to check, and we have no record of receiving such a letter on BAE. We have a record of a letter about supermarkets dated 4 October, but I assume that is not the one. Perhaps at the end of the debate he could give me a copy of the letter so that I can ensure that it goes to the Secretary of State.
There was quite a lot of party political discussion from the hon. Gentleman, implying that the Government have no interest in the manufacturing industry. I strongly refute that. He did not mention the changes to the tax law to ensure capital allowances, the improved investment in the manufacturing advisory service or the changes that we are making through the advanced manufacturing technology and innovation centre, alongside the other work we are doing on aerospace. I hope that we can get the party political banter out of the way and focus on the issue that affects his constituents, but I think he will understand that I am not prepared to ignore remarks suggesting that the Government do not take manufacturing seriously. We do, and I do.
I now turn to the causes of the problem, and some of the things that the Government intend to do and are already acting on. The company has advised us that the problem was caused principally by changes in key international programmes and the need to remain globally competitive at a time when defence spending in many nations is under huge pressure. We are all well aware that public finances are tight, and defence budgets are not immune. I think even the Opposition Front Benchers understand that. Although a decision of this nature is a commercial issue for the company, it is therefore absolutely right that the Government should do all they can to help those affected.
I have talked in the past few weeks to Members—including you, Mr Deputy Speaker, in your role representing your constituents—and they have all understood those concerns. I also had the opportunity to meet workers while I was in Manchester. I re-emphasise that I understand that during the 90-day consultation process, Members and workers will wish to challenge the business case, and rightly so. We will see what the outcome of that is. However, we must ensure that the Government have a plan in place if those redundancies are made, and I should like to set out the practical help available to hon. Members’ constituents.
The first step is to ensure that the Jobcentre Plus rapid response service is available. It has already offered access to Next Step one-to-one careers advice, which complements the support available from the company. I know from dealing with previous cases how valuable that practical help can be to individuals.
Secondly, and more broadly—this important question was raised by the hon. Member for Preston and my hon. Friend the Member for Fylde (Mark Menzies)—how do we ensure that our country does not lose those skills for good? That consideration is why, back in January, the Secretary of State and I established the talent retention team. The intention is that Government and industry ensure that we do not lose those key specialisms, whether in BAE or elsewhere. The team matches the skilled employees who are facing redundancy to vacancies in other companies. I can tell the House that so far, 200 UK companies have registered. Those who have signed up and are recruiting include Rolls-Royce, Siemens, Nissan and Airbus. I understand that several thousand jobs will be listed in the next month.
Although I appreciate that taking one of those jobs is not a straightforward decision—it might involve commuting or relocation—that system is important, because it will help us to avoid losing those key design, engineering and manufacturing jobs, which are important whether they are in Kingston upon Hull West and Hessle or in Lancashire, which is the subject of this debate.
The third question, which is just as important, is how we help local economies. On this subject, the Chancellor listened carefully, in particular to my hon. Friend the Member for Fylde, who argued that there needed to be a kick-start for the locality in addition to help for individuals. That is why last month the Government responded positively by inviting both the Lancashire and the Humber local enterprise partnerships to submit proposals for two new enterprise zones. They are important, because they provide real advantages for areas such as Warton and Salmesbury—and Brough, if I may stretch the geography of Lancashire temporarily.
Mr Prisk
I will get to E-Scan in a moment.
The business rate discount, the retention of the money for a 25-year period, the radical simplification of the planning system and the support to ensure superfast broadband are crucial to enterprise zones, but there are a couple of aspects of LEPs that I often feel are lost in some of the coverage—the use of tax increment finance to ensure the long-term viability of the zone, and the UKTI support for inward investment and trade opportunities. Given the civil and military nature of aerospace, we are looking to talk to both the Lancashire LEP and the Humber and Hull LEP about those two enhancement aspects, to see whether they can be a core part of the offer.
One hon. Member asked a question on Typhoon. The four Typhoon partner nations have decided to extend the programme, so that both domestic and export orders can be dealt with in a way that means we can sustain capacity. That means that the programme’s production has slowed; it has not been stopped. Clearly, we must agree that with all partner nations, because it is a partnership project.
On E-Scan radar, the point is that the Ministry of Defence and the industry are working on an assessment programme. Electronically scanned radar is on-the-edge technology. If we get this right, it will be Europe’s first and only second generation scanned radar. Therefore, we need to think about how it works. The reason why we are not committing on long-term development is that we need to see whether the assessment works in the first place. In my book, that is a sensible pattern to follow. Clearly, we would not have taken that first step had we not seen the opportunity. That is an important leap in capability for the Typhoon, and it could well mean that although there will be tighter pressure on the domestic Typhoon programme, there will be opportunities for better exports in the long term.
Let me now bring my remarks to a close. I want to assure Members and their constituents that the Government are determined to take all the necessary action both to support individuals and to ensure that the UK’s defence and manufacturing base can prosper over the long term.
Question put and agreed to.