§ Motion made, and Question proposed, That this House do now adjourn.—Mr. Neubert.]12.37 am
§ Mr. Keith Best (Ynys Môn)
The whole House will acknowledge that this is a most important debate, in that it affects a vital area of our defence—the training of Royal Air Force pilots. It is a real and personal pleasure for me to see my hon. Friend the Parliamentary Under-Secretary of State for Defence Procurement on the Front Bench to reply. I can only apologise for having commanded his presence at such a late hour. I anticipate that he will tell me that his remarks must be limited as the decision on the new RAF basic trainer is, in effect, sub judice. Let me assure him that the object of this debate is not to try to tease out of him statements in favour of any particular aircraft design but to set the record straight and assuage some fears. It is also my purpose to set out my reasons for believing that, this time, it would be in the best interests of the United Kingdom and the RAF to purchase the Firecracker aircraft.
Invitations to tender were issued on 18 June and it is the Government's intention that tenders should be returned by about the middle of September. There are really four contenders which comply with air staff target 412. Three are foreign and one is British. The foreign competitors in this contract have found British partners to build in part their aircraft in the United Kingdom, but it is interesting to note in respect of all the foreign designs that none came from countries which are members of the EEC and NATO, organisations that we in Britain must support. Moreover, all competitor aircraft have been ordered by, or are in service with, their own Governments; and none of those countries invited Britain to tender for their new basic trainer requirements. I stress to my hon. Friend that I do not intend in any way that my speech should be a jingoistic appeal to the Government to buy British regardless of other factors but merely to point out that in Britain we have an aircraft in the Firecracker which meets the RAF's essential technical requirements, is cheaper than the foreign competition and can demonstrate substantial exports with the result of jobs for Britain. With all these factors in favour of Firecracker, I do not think that it is wrong, in addition, to be patriotic.
In a written answer on 30 April 1984 my hon. Friend indicated that manufacturers of foreign aircraft would be asked to show the content of British equipment in their aircraft and to demonstrate any potential offset arrangements. Indeed, I understand that the tender documents ask for an offset to be demonstrated from foreign aircraft companies. As far as the content of British equipment is concerned, I regret that an answer in the other place by my noble Friend Lord Trefgarne may, unwittingly, have conveyed a misleading impression. On 13 June it was put to him that the Firecracker is the only all-British design company which is capable of producing an all-British aircraft other than the engine. My noble Friend replied that, although the engines of all the four contenders for the contract are in fact of non-British design, in regard to the Firecracker no less than 90 per cent. of the equipment in terms of cost was of non-United Kingdom origin. That is not accurate.
437 It is true to say that the turbo Firecracker built as a civil trainer was, necessarily, to the United Kingdom certificate of airworthiness requirements and there was a large input of foreign equipment because either British equipment was not available or was too expensive to meet such requirements. The design that has been put forward for the RAF basic trainer is not the same thing at all. In his reply, I hope that my hon. Friend will remedy this unfortunate misunderstanding. In any event, there is about a 50 per cent., not 90 per cent. foreign content in the existing two Firecracker aircraft which fly under CAA rules.
The Swiss Pilatus PC9 has not yet been certificated by the Swiss authorities. This will take place at the end of 1985. It has a more powerful engine than the Firecracker and better performance figures but it is way in excess of RAF requirements. The penalty for this extra performance is a vastly increased cost of purchase. I can well understand why the RAF itself might favour such an aircraft, but can the Government, acting with financial prudence in the interests of the whole defence budget, afford this extra luxury? There is a fifty-fifty work sharing agreement with British Aerospace and it is understood that this company will manage the project and do the final assembly in the United Kingdom.
I should point out, however, that even British Aerospace is not confident of Switzerland buying Hawk aircraft if we were to purchase the PC9 trainer. So what is the advantage of buying a Swiss aircraft which is known to be more expensive? An authoritative view is that it could take 10 years for sales of the Hawk to Switzerland. May I remind my hon. Friend that of the past 350 aircraft sold to Switzerland 75 per cent. were made under licence in Switzerland and the other 25 per cent. were fitted out there. Even the latest Rapier contract will be built in Switzerland under licence. So where are the British jobs? Many hon. Members will be watching closely this aspect. My hon. Friend will know that a promise of future sales is not the same as a firm offset agreement.
The Brazilian aircraft, the Tucano, is built by Embraer which has signed an agreement with Short Brothers which provides for 100 per cent. manufacture of the Tucano in Belfast except for the first 25 aircraft which would be built in Brazil. It is a good aircraft but more expensive than the Firecracker and the co-operative agreement with Shorts for joint projects seems to favour only the Brazilians. One has to question Shorts' ability to build this aircraft in view of its other commitments. My hon. Friend will not need to be reminded that Brazil has the third largest world balance of payments deficit and, in such circumstances, it is difficult to know how we might have a viable offset which, indirectly, would be paid for by Brazil's international creditors including the United Kingdom. It is fair to say, also, that Brazil is in a politically sensitive part of the world and any purchase from Brazil could create considerable political difficulties for us here.
The Wamira AAC-A20 from Australia is a paper aircraft, as it is not due to be ready until 1986. It cannot be a serious contender even though it is tied up with Westlands which wants to sell helicopters to Australia. We would be unlikely to see even a prototype to meet in-service dates of new aircraft from 1986 to 1989 and, in any event, why should we fund the development of an Australian aircraft when we rejected a proposal by British Aerospace to fund its own project?
What, then, can Firecracker offer to Britain other than being the only British designed and built contender? First, 438 current figures show that the aircraft will be between 15 and 20 per cent. cheaper than the competition, a major consideration in our present economic situation and demands on our defence budget. Secondly, and very importantly, all jobs in the building of the Firecracker aircraft for the RAF would be British jobs and not just ones provided for the final assembly after the aircraft had been built abroad. In addition, further jobs will be created in order to build aircraft for the export orders that will result from RAF endorsement of the Firecracker. It is likely that those jobs would be in development areas of Britain where skilled aerospace personnel are available such as Cardiff, Deeside, Humberside or Prestwick.
Exports are a crucial factor in the award of the RAF contract. The defence sales organisation believes that there is a world market of about 1,200 turbo prop training aircraft in the next 10 to 15 years. A large number of those aircraft would be for countries which look to Britain and the RAF for their export lead. Based on sales figures of previous training aircraft, it is not unreasonable to assume that exports of 400 aircraft could follow from RAF procurement of a new turbo prop trainer. Those export sales would not go to Britain if a foreign design were selected and it would, instead, merely enhance some other country's export market at the expense of British jobs and British exports. It is true that foreign manufacturers claim that they would permit some aircraft to be built in the United Kingdom for export, but they would never allow Britain to supply the proposed markets in total, and., no doubt, they would seek to satisfy those export markets principally with their own produced aircraft. Only the selection of a British aircraft would ensure that Britain's traditional markets are not lost irrevocably.
I know that in his reply my hon. Friend will want to mention that Firecracker Aircraft Ltd is restructuring the company to allow a controlling interest to be taken by a very large group of companies and a merchant bank. That will give Firecracker the industrial base about which so much concern has been expressed on behalf of the Ministry of Defence. The combination in this new company of project management, industrial capability, financial stability and product support must put at rest the Ministry's fears. My hon. Friend will be aware that the group produced the last three basic training aircraft — the Prentice, the Piston Provost and the current Jet Provost.
My hon. Friend and I share a common pride in our country and its products. Neither of us wants to see foreign competitors laughing at us. That is why it is particularly noteworthy that in volume 5/1984 of the English edition of "Interavia", a Swiss magazine, there was an article entitled "Firecracker: Looking for a Home Market". The article begins:It is typically British to set up a competition for a new basic trainer for the Royal Air Force in which manufacturers are invited to compete with an excellent home produced aircraft. Other potential customers must wonder what can be wrong with Firecracker.The article ends:Final impressions: a real aeroplane, superbly responsive. No ordinary aeroplane can match Firecracker… Firecracker should make tigers, not just aeroplane drivers like those spineless small jets.Apart from Firecracker being technically superior, cheaper and all British, it would benefit both present and future jobs in export orders rather than enhancing the prestige of a foreign competitor. There are also excellent philosophical reasons why Firecracker should be 439 preferred, as will be appreciated only too well by my hon. Friend. Not only is it the only British-designed and built turbo prop military training aircraft currently flying and in production, but it was also built by private initiative and private investment at no cost to the taxpayer.
The cost of purchasing 130 Firecracker aircraft as the new basic trainer is approximately the same cost as refurbishing the 25-year-old Jet Provost. Firecracker is being designed with rugged yet simple systems which require little maintenance and as a lead-in trainer to the British Aerospace Hawk. It can be used for weapons training or delivery and can be exported in this role in addition to the training one. Large export orders have resulted from RAF endorsement in the past and this potential would be destroyed if a foreign aircraft were selected.
Firecracker is in the direct tradition of private initiative in British aviation. If British initiative and skill is not encouraged in this vital area, who will ever again risk private investment in Britain's defence industry?
The importance of the aerospace industry to the British economy cannot be over-estimated. Indeed, if we had to produce an ideal example of an industry with high value added export products, we need look no further than aerospace.Those are not my words, but those of my right hon. Friend the Prime Minister, speaking in September 1980. Although the foreign competitors have arrangements with British companies, both Westlands and Short Brothers have indicated that, if Firecracker were selected by the RAF, they would be prepared to participate in production of the aircraft.
This Government and the Prime Minister have set out to encourage private enterprise. It has been their stated requirement to buy British when products can create jobs, demonstrate an export market and be of the right quality and price. Firecracker has invested private money to meet a specific gap in the market that will create jobs at home and sales abroad, at a competitive price. Firecracker is also in the direct tradition of private initiative in British aviation.
We have in Britain a company which has designed and built an aircraft with private money, which meets the RAF's essential specification. It is cheaper than the foreign competition and can demonstrate the creation of jobs and a large potential export market. It has firm industrial backing and expertise to support the RAF for a 25-year in-service period. Surely the Government must support an aircraft and an organisation which have fulfilled the very industrial guidelines that the Government have laid down.
Although my hon. Friend may not be able to do more at this stage than acknowledge these comments, I have every confidence that he will take on board the points that I have made and that the Government will come to the inevitable conclusion that they should select Firecracker as the RAF's new basic trainer.
§ The Parliamentary Under-Secretary of State for Defence Procurement (Mr. John Lee)
I am grateful to my hon. Friend the Member for Ynys M ôn (Mr. Best) for raising this subject, and I congratulate him on obtaining the debate.
The RAF's quest for a solution to its basic training requirement in the 1990s and into the next century has 440 aroused a good deal of interest, and now that tenders have been invited for the four short-listed designs for a possible successor to the Jet Provost, this is a useful opportunity to take stock of where we are. While Firecracker supporters will applaud my hon. Friend's speech, others no doubt will not be best pleased.
To set the scene, I should like first to say something about the general nature of the requirement. The RAF currently has a total inventory of around 160 Mk 3 and Mk 5 Jet Provost aircraft for basic pilot training. This training is built on the assumption that the student has in fact already gained some initial flying experience either before joining the RAF or immediately afterwards. It lays the foundation for the advanced training, where the student specialises on a type of aircraft relevant to his expected future employment; thus, for example, someone destined to fly fast jet combat aircraft progresses from the Jet Provost to the Hawk.
The Jet Provost has been in service since 1960. It is outmoded and suffers from shortcomings which detract from its training effectiveness. These included outdated avionics, high fuel consumption, side-by-side seating and a poor ratio of support man-hours to flying utilisation.
The aircraft has already undergone a number of life extension and update programmes to prolong its employment at an affordable cost. Without a major refurbishment programme, it would be impossible to meet the envisaged pilot training task beyond 1987–88. The alternative is to look for a replacement aircraft.
Refurbishment would, among other things, entail the replacement of wings and the centre section of the fuselage, together in many cases with new fins and strengthening of the rear fuselage. This would enable us to keep the Jet Provost in service until the mid-1990s, after which its replacement by a new aircraft would become inevitable.
We have not yet finally decided which course —refurbishment or immediate replacement—to adopt, but we have on the evidence so far available made a provisional judgment that replacement makes better economic sense, and we are progressively exploring the replacement option with industry.
Our discussions with industry were formalised last September, when we issued air staff target 412, together with a questionnaire asking for technical and cost information. To take full advantage of the large number of trainer aircraft in this sector of the market, we gave the staff target and the questionnaire wide circulation among both national and foreign firms. We had received information on 23 candidate designs from 17 companies by the November deadline.
Some of the information supplied was not sufficiently detailed to facilitate proper analysis, but 18 were subjected to a technical and budgetary cost examination, on the strength of which they were reduced to a short list of four, the names of which we announced in a written answer on 16 March. The four are the Australian Aircraft Consortium A20, Firecracker NDN-One T, Pilatus PC9 and the Shorts-Embraer "Tucano".
We compared the costs of the designs submitted in response to AST 412 not only with each other but also with projections of the cost of refurbishing and running on the Jet Provost. The conclusion we reached was that refurbishment looked increasingly unattractive, and this was referred to during the RAF debate on 2 February. It will be appreciated that I must still exercise a certain 441 amount of caution on this point, in advance of having firm and detailed cost proposals for possible replacement designs, and we shall, of course, be looking to such proposals to confirm the provisional judgment.
I wish to draw attention to two features of the staff target, the seating requirement and the type of engine. The Jet Provost has side-by-side seating, but it is the RAF's policy to rely in future on tandem seating in training aircraft—the Hawk has this—because students will be more quickly acclimatised to the cockpit environment of combat aircraft. As for the engine, AST 412 invited both turbo-fan and turbo-prop designs. The Jet Provost is, of course, powered by a pure jet, but turbo-prop design has in recent years reached the stage where such engines are well matched to the training requirement and offer a credible alternative to the turbo-fan, with the advantage of significantly cheaper running costs.
Our approach to AST 412 was, however, to judge the various designs entirely on their merits, and I emphasise that the absence of turbo-fan solutions from the short list implies no operational objections to such an engine in a trainer. The adoption of a turbo-prop design would be an important innovation, and I would not wish to minimise that. One consequence would be that the syllabus could include a higher proportion of solo flying; various features of the Jet Provost demanding close supervision have meant that only 27 per cent. of basic flying training was done solo, and experience shows that it is solo flying which develops the confidence essential to a ready transition to high performance aircraft.
On the other side of the balance sheet, a turbo-prop design would necessitate an additional 15 hours in the advanced Hawk training for each fast jet student, because even the best available turbo-prop designs fall about 50 knots short of the 300 knots required for low-level navigation training and general aircraft handling exercises. Needless to say we have allowed for this in our calculations, and the overall costs associated with the turbo-prop designs would still almost certainly be appreciably lower.
Following the announcement of the short list, work proceeded on the drafting of a detailed specification for the Jet Provost replacement, and this was issued on 18 June, together with the formal invitations to tender. The documents were sent to the four principal firms and, in parallel, to the four manufacturers in the United Kingdom with which production agreements had been reached.
In addition to the well-known link-up between Shorts and Embraer, the Australian Aircraft Consortium has reached agreement with Westlands; Firecracker Aircraft Ltd. with, I understand, Huntings; and Pilatus with British Aerospace. The tenders which are due to be returned in September, will be examined along lines similar to those governing our examination of replies to the questionnaire last autumn, but the financial part of this analysis will be extended to include a definitive comparison with refurbishment of the Jet Provost, by means of an investment appraisal. I hope that the analysis will be completed by November and expect to have reached a final decision towards the end of the year.
The invitations to tender specify a numerical requirement of 130 aircraft with an option to build another 15. This is of course less than the Jet Provost fleet and reflects the expected improvement in the replacement aircraft's efficiency. The House may like to know that in parallel with the tendering process we are affording 442 facilities for handling and engineering evaluations by the Aircraft and Armament Experimental Establishment at Boscombe Down. We have invited Firecracker Aircraft, Pilatus and Shorts/Embraer to make their aircraft available at different times during the summer for this purpose. The Australian A20 cannot be included in this exercise, however, since it has not yet flown.
In connection with the replacement competition I should like to mention two factors which will play an important part in our deliberations and on which my hon. Friend rightly laid stress. The first is the question of the work content for firms in this country and the second that of exports.
I note my hon. Friend's remarks about what was said on the subject of Firecracker in another place by my noble Friend the Parliamentary Under-Secretary for the Armed Forces, who observed that 90 per cent. of its equipment in terms of cost is of non-United Kingdom origin. This referred only to the systems fitted into the aircraft, not the total aircraft including the airframe. I am pleased to have this opportunity to clear up any misunderstanding that there may have been that my noble Friend was referring to the aircraft as a whole.
I should also like to take this opportunity to emphasise that the figure given was derived from the information given to us by Firecracker Aircraft Ltd. in answering the questionnaire we sent out with the air staff target last September. To some extent this is now history since things have moved on and we have now issued invitations to four short-listed firms to put in formal tenders. Clearly it is impossible for me to anticipate now what changes may be made to these aircraft in response to that invitation. Only when the tenders have been returned and evaluated will we know the true balance between United Kingdom and non-United Kingdom equipment in each case. Naturally this is something we shall be looking at closely.
I think that it is now well understood that the Government are anxious to encourage our own industry to become an effective force in meeting the requirements of the armed services to the fullest possible extent. It has become standard practice to take into account the opportunities for British firms in all defence procurement, and the replacement of the Jet Provost will be no exception. Where foreign manufacturers are concerned, they know that we shall seek a clear indication of the extent to which firms in this country would be allowed to participate in production. As the House was told during the RAF debate, I would hope that any new training aircraft would at least be built in the United Kingdom. Obviously we shall not lose sight of the primary objective, which is to secure for the RAF the most cost-effective trainer to meet its needs over the next two or three decades, but within that framework we shall of course be looking very hard at all the industrial implications.
Having said that, I would add one note of caution: the industrial interfaces in the production of defence equipment are nowadays highly sophisticated, and initial impressions about the national content of a complicated product like an aircraft can be rather unreliable. Thus, for example, all four of the shortlisted designs to AST 412 would use variants of the PTO engine made by Pratt and Whitney of Canada, and all would embody British and foreign components.
§ Mr. Lee
I am sorry, no. I have an extremely tight schedule.
Where export opportunities are concerned, we are aware that the prospective world market for basic trainers is fairly large.
The RAF's requirement for a future basic trainer is unusual in the scope it has presented for consideration of a very wide range of possible new designs. Inevitably, the sifting of these designs has involved disappointment for some contenders, and the process has been complicated by the need to weigh the possible replacement aircraft against the alternative of refurbishing the Jet Provost. We have, however, to ensure a solution which is both cost effective and operationally effective, and I make no apology for the length of time that that is taking. The House will understand that there is little more that I can say now that formal tenders have been invited. I am, however, confident that at the end of the day the RAF will be well satisfied with its ability to meet the training commitment, and that, moreover, we shall achieve this objective in a 444 way which exploits to the full the competitive potential in this crowded market place, whilst nevertheless providing the maximum reasonable opportunity for our own industry.
§ Mr. Best
I am grateful to my hon. Friend for answering my questions at such length. I appreciate that he has gone as far as he can in the circumstances. As I said at the beginning of the debate, I appreciate that the issue is very much sub judice. My hon. Friend expressed the hope that a foreign aircraft would be produced in Britain. I hope that the Government will make it a requirement that any foreign aircraft, if it is to be considered, will have to be built in Britain. However, I hope also that the Government will be choosing the Firecracker in due course. I am most grateful to my hon. Friend for his comments tonight.
§ Question put and agreed to.
§ Adjourned accordingly at three minutes past One o' clock.