---

Defence Industry (Lancashire)

I am grateful to the hon. Gentleman. He and I have a long history of dealing with aerospace issues in this place, being officers of the all-party group on aerospace. I know of his interest in the issues, given that he represents Farnborough, which is the headquarters of BAE Systems. On many issues, we have fought on the same side in the interests of the aerospace and defence industries. I first became involved in defence and aerospace as a young councillor in Preston in the early '90s, when Strand Road was closed and we faced large-scale redundancies. I became involved in the situation as an economist and as someone who was concerned about economic development and who wanted to see what would happen. Preston city council got involved with a number of local authorities in establishing the airline network, to see what we could do to speak up for the defence and aerospace industry. At about the same time, Lancashire county council, British Aerospace and a number of smaller companies established a network to focus on the industry. A gentleman called Dennis Mendoras, who runs a company in Pendle, was a leading figure in the organisation, which eventually became the North West Aerospace Alliance. For a number of years, Dennis was a member of the Northwest Regional Development Agency, a role that he used to speak up for the aerospace industry. It is interesting that the NWDA has been crucial in supporting the aerospace and defence industries in the north-west in recent years. Let me give two examples. First, there is the aerospace supply chain excellence programme. Its first scheme started in 2006 and received £8 million in funding from the European regional development fund. As a result, four companies from across Lancashire—well, one is slightly outside Lancashire, although it is perhaps in historic Lancashire—secured a £250 million order as part of the new F35 joint strike fighter programme. The companies involved are Hyde Aero Products in Dukinfield, the RLC Group at Altham, near Burnley, John Huddleston Engineering at Blackpool and ThyssenKrupp at Bamber Bridge, just south of Preston. The other programme, called ASCE 2, which receives funding of £3.6 million from the NWDA and £3.5 million from the European regional development fund, started towards the end of last year. Both programmes demonstrate the importance of the NWDA, so I am concerned about proposals to get rid of it. It is important to have a regional perspective for industry. It has been suggested that if the NWDA were scrapped, the funding would go to local authorities or straight to the Government office for the north-west, or that it would be disbursed by officials down here in London. If the money goes to local authorities, there is unlikely to be a regional perspective in any investment or decisions. If it is disbursed by the Government office for the north-west, it will be difficult to have any accountability. If decisions are made by a civil servant down here in London, that will further reduce the regional aspect of any decisions. At the moment, decisions are made by people who live and work in the north-west; indeed, the NWDA's chief executive is a constituent. It makes a difference when we are able to speak to the people who make the decisions because they live and work in our region. The aerospace and defence industry in the north-west has a regional perspective, and the ability to fund developments in the area through a regional body is crucial. The key part of the industry probably lies with the Eurofighter Typhoon programme at BAE Systems. Shortly, however, the F35 joint strike fighter programme will come on stream. It is a Lockheed Martin programme, with BAE Systems as the main partner because it has certain technical skills that are needed as part of the programme. Many of us who have been involved for many years in the development of the programme will know how important it has been to acquire the ability to transfer intellectual property from the US to the UK, to ensure that we shall in future be able to develop and use any aircraft we purchase as we want to, rather than relying on the United States model. There have been complex and difficult negotiations over the years to ensure that BAE Systems has had access to intellectual property from Lockheed Martin. I have been pleased at the way the Government have engaged in those negotiations, and even though the deal in question is company to company, given that we plan to purchase 140 aircraft it is crucial to ensure that we have control over their use and can modify and develop them during their lifetime. Currently, £800 million is being invested in the new Samlesbury plant. I think it is spread over 10 years. I was there a few weeks ago and the construction is magnificent. It is a huge investment in manufacturing in the north-west, of which we should be proud. It will secure many jobs not just now but in the future, as the production there will be for part of every aircraft that is produced across the world. That is thousands of aircraft, even though we are looking to purchase about 140. That is where we are now, but perhaps we can think about where we could be in future. I have visited the Warton site many times, and several times have visited its unmanned aerial vehicle centre, which has been doing considerable research and development on UAVs for several years. There are at the moment two UAVs that are key to the future. One is Taranis, which was launched in 2006; it is a joint Ministry of Defence and industry project, led by BAE Systems, to test the viability of UAVs. The first prototype, with a unique stealthy flying wing, is currently being built. It has not yet flown, but that will happen in the not-too-distant future. The second aircraft, the Mantis, has already flown. It was produced within 19 months of the first consideration of the concept, and flew towards the end of last year. The target was for it to be able to fly for 36 hours without landing. That area of development is crucial for the employment prospects of people in the defence industry in Lancashire. If we look beyond the F-35 and the Eurofighter Typhoon it is difficult to envisage future generations of fast jets that will create jobs in their current numbers. The current thrust for military aircraft is towards UAVs. It is important that we should be at the forefront of that development. We need to ensure that future investment will continue and that the defence and aerospace skills that exist in Lancashire will go on. Such skills have been in the area for generations. When I visit schools there, it is interesting that many children have parents who work in the defence and aerospace industry, and grandfathers and great-grandfathers who worked in it too. The technology and engineering side of things is important in Lancashire. I visited a technology competition on Friday. It was run by the local Rotary clubs and sponsored by BAE Systems. It was fascinating to see the involvement of groups from a host of schools in my constituency, including groups of girls—it is good that more women engineers are coming forward. We need to take the Lancashire tradition of work in defence and aerospace into the future. I worry that when the existing programmes come to an end there will be nothing afterwards. If UAVs are what will be needed at that time, their development needs to be thought through. Moving on, perhaps I may make my remarks a little more political. I am conscious of the importance of the F-35 joint strike fighter, but I have been concerned about the fact that although the Government have been positive in supporting it—they have been active in the negotiations to ensure that intellectual property can be transferred, and have made the decision to go ahead with the carriers from which many of the aircraft will fly—that is not necessarily true of all parties in the House. I was interested to read the comments of my hon. Friend the Member for Glasgow, South-West (Mr. Davidson) in a debate on 1 March. My hon. Friend talked about shipyard conveners visiting Opposition parties. They came away reasonably happy from a meeting with the Liberal Democrats:""However, the convenors were greatly depressed when they went to meet the hon. Member for Woodspring (Dr. Fox), who, speaking on behalf of the official Opposition, made it clear that the action that a Conservative Government would take on day one would be to examine the break clauses in the contract. Had he said to them, 'I'm afraid I can't tell you anything because it will take us six months to set up a review, and then a year to have the review, and then maybe a couple of weeks at the end of that to decide on it, so it will be 18 months or so before we can come a decision', they would not have been happy with that, but they could have understood it, because that had been a relatively consistent position; indeed, it was the Liberals' position until they accepted the strength of the convenors' arguments. But no, the Conservatives said that on day one they would examine the break clauses—no one examines the break clauses on day one unless the intention might be to apply them on day two."" That set alarm bells ringing for my constituents, who wonder what a Conservative Government would mean. If there is no commitment to the two aircraft carriers, there is no commitment to go ahead with the order for the F-35 joint strike fighter. In that same debate, the hon. Member for Aldershot (Mr. Howarth) quoted from a leaflet distributed by the Labour party in my constituency, and referred to it as "scurrilous". The part he quoted said that""it is a bit worrying that the Conservatives, should they get elected, are looking to scrap a number of Defence Projects."—[Official Report, 1 March 2010; Vol. 506, c. 703-09.]" He did not quote the editorial in the Lancashire Evening Post of 17 September 2009 that said:""David Cameron has fuelled fears that a Conservative government will ditch crucial defence contracts at the cost of thousands of Lancashire jobs.""The Tory leader threw his support behind Shadow Chancellor George Osborne, who sparked outcry from the defence industry when he pinpointed the £20bn Eurofighter Typhoon project as a potential scheme to cut.""