§ The Secretary of State for Defence (Mr. Malcolm Rifkind)
§ Madam Speaker
Will the Secretary of State wait until hon. Members have left? I hope that they will do so quickly and quietly. This is an important statement for which the House has been waiting for some time.
§ Mr. Rifkind
With permission, Madam Speaker, I should like to make a statement about support helicopters.
Following a detailed assessment, the Government have concluded that a high priority should be placed on enhancing the tactical mobility and flexibility of our forces in the changed strategic environment. The Army has an operational need for additional support helicopters to enable it to meet its current and its prospective tasks.
Our evaluation of the operational requirement has concluded that only the Westland utility EH101 and Boeing Chinook are capable of meeting our particular needs for a medium support helicopter. As a result, in December 1993 I authorised the start of parallel negotiations with the two manufacturers. Our evaluation of the respective offers from the two companies is now complete.
We have concluded that, bearing in mind the increasing importance of retaining flexible forces, there would be advantage in operating a mixed fleet of utility EH101 and Chinook support helicopters. Following the parallel negotiations, we have therefore decided to procure 22 utility EH101 support helicopters and a further eight Chinook HC mark II aircraft. The costs of introducing an additional helicopter type into service and creating a mixed fleet are inevitably higher than those of an all-Chinook fleet, and this means that a direction is required to the accounting officer that the Government have taken into account wider implications in reaching their decision. The accounting officer has advised that, if the Government conclude that the overall benefits outweigh the costs, it is possible to choose the mixed fleet with propriety. That is the Government's conclusion.
The EH101 is a modern design and offers advantages of operational flexibility. Those include commonality with the Royal Navy's Merlin helicopter, which will be of particular significance in land and sea-based operations. The EH101 will also provide a middle lift option between the Chinook and the Lynx light support helicopter, which will remove the need to replace Wessex with a new helicopter. The additional Chinooks are required because some large loads can be carried only by that aircraft, which is a reliable and capacious helicopter, proven in Royal Air Foice service. In addition, we are procuring a further six replacement Chinooks to maintain the current fleet, taking into account expected attrition losses. Those orders are subject to satisfactory completion of contracts.
In reaching this decision, the Government have also taken full account of the wider implications for the aircraft industry. They have invested some £1.5 billion in the development of the EH101 family, which is central to Westland's comprehensive design and manufacturing capability. The EH101 has excellent export potential in both its military and its civil variants, from which the 462 Government will derive substantial financial benefit through the levy on sales. Our decision demonstrates the confidence that we have in that new British aircraft.
I am sure that the House will wish to join me in welcoming this decision, which will increase our existing medium support helicopter capacity by 70 per cent. At the same time, it will help to secure the future of the United Kingdom helicopter design and manufacturing capability and so strengthen the United Kingdom's aerospace industry, which provides important opportunities for United Kingdom suppliers as well as technology skills, both within and outside the aerospace industry. This decision will bring a substantial increase in capability for our armed forces as well as industrial and employment benefits. I commend it to the House.
§ Dr. David Clark (South Shields)
I thank the Secretary of State for coming to the House because, as you so wisely reminded us, Madam Speaker, we have waited a long time for this statement—eight years to he precise.
We welcome the announcement because the Labour party has always championed the Westland EH101. We think that today's news is important for not only the armed forces but the United Kingdom defence industry. It is important because it means that we have increased our helicopter capability for lift and—this is vital—we have maintained a helicopter building capability here in the United Kingdom. I know that the House will welcome that.
We welcome the Secretary of State's conversion to the idea that competition is not the sole criterion for purchasing equipment such as this. We commend him for the way in which he has decided to take into account the future of the United Kingdom defence industry. That is wise and the Opposition support him in that.
Will the Secretary of State confirm that this helicopter order is the one that was originally announced to the House on 9 April 1987—eight years ago? Can he explain why we have had to wait eight years for the announcement? Can he also explain why we have lost jobs and export orders because of the Government's indecision about placing the order and their failure to gain the endorsement of the helicopter by our armed forces?
Will the Secretary of State tell us what offset arrangements he has with Boeing? We understand that he has placed an order for eight new helicopters and six further replacements. Does that mean that we get 100 per cent. offset costs, or is it a higher level because there is a larger order? If there are offset arrangements, will he give the House the categorical assurance that those arrangements are not merely in the form of what I might call metal-bashing, but also involve United Kingdom high-tech industry? We think that this is a good announcement. It has been a long time in coming, but we are glad that it has finally come.
§ Mr. Rifkind
I thank the hon. Gentleman for his general welcome, but I found some of his later remarks confusing and confused to say the least. He suggested that I am moving away from the principle of competition. He seems to be unaware that in evidence to the Select Committee about a year ago I said that we had a preference for a mixed fleet and that, assuming that the mixed fleet would meet our requirements, that was what we would wish to go for. That is the basis of the approach. 463 Part of the reason for the time that has elapsed was to ensure that we could extract from both companies the best price available.
On offset, yes, there will be proper offset arrangements on the Boeing aircraft. The hon. Gentleman asked why we have had to wait since 1987. For an Opposition defence spokesman to be unaware of what has changed since 1987 shows a lamentable grasp of the international situation. It is not only the Labour party that has changed since 1987. We have seen the end of the cold war, the collapse of the Soviet Union and the disappearance of the Warsaw pact. [Interruption.] Yes, perhaps they are of the same order as the changes in the Labour party and with the same consequences.
The House would have expected us to have a full strategic consideration of the continuing need for support helicopters and that is what we have done. I believe that it is right and proper to go forward with a major order of this sort so as to maximise the flexibility and deployability of our armed forces to meet the new strategic requirements.
§ Mr. Tom King (Bridgwater)
Does my right hon. and learned Friend accept that, as I announced the purchase of the 44 Merlin EH101 helicopters, I especially welcome this announcement because it is a vote of confidence in the further development of the EH101? Will he ensure that the Ministry of Defence gives every encouragement not least to our Italian partners in this venture to take part in the programme and start the export development of this valuable new piece of equipment which, I believe, has considerable potential around the world?
§ Mr. Rifkind
I pay tribute to my right hon. Friend for his contribution to the development of the programme. He is right to emphasise the fact that it is a joint British-Italian programme. The Italian Government expect to purchase the aircraft, which will be welcome for Westland and in terms of the export potential of this very impressive aircraft
§ Mr. Paddy Ashdown (Yeovil)
I am tempted to say, "At last," but, as I do not wish to sound too curmudgeonly, I shall say that this order, although late and less than was originally promised, is nevertheless very welcome. It is especially welcome for the reasons outlined by the Secretary of State. It is a vote of confidence not only in the quality of the aircraft but in the quality of the work force and management that produced it.
Is the Secretary of State aware that it will open possibilities for sales and strengthen Westland's position? There is an especially interesting competition going on for the Westland Merlin in terms of the US navy's helicopter requirement, and I should be grateful if he will confirm that the Government will give their full support as they have in the past. Will he confirm that the decision also opens up the possibility of much wider use of the EH101 throughout our armed forces and in NATO where, if properly supported, it has the possibility of becoming a NATO standard?
§ Mr. Rifkind
There are important economic and employment implications associated with the decision. For example, including the EH101 sales that are likely to take place overseas, it will provide on average more than 1,100 jobs a year for the next 30 years. In addition to Westland in Yeovil, companies such as Rolls-Royce at Bristol, Smiths Industries in Cheltenham, GEC Marconi 464 in Basildon, Martin Baker in Uxbridge, Racal Electronics in Slough, Lucas in Birmingham and a number of other important companies in various parts of the country will benefit from the work involved in this project.
§ Sir Jim Spicer (Dorset, West)
Does my right hon. and learned Friend accept that this is welcome news not only for my constituents but for many people in the west country? Will he accept on behalf of all of us—Conservative and Labour Members—who fought so hard to get this order, congratulations on the way in which his present ministerial team and the previous one fought our corner and fought not only the internal battle within the MOD, about which we should perhaps not say too much, but a little battle, or skirmish, with the Treasury?
§ Mr. Rifkind
I thank my hon. Friend. The important point to emphasise is that the decision is extremely welcome from the point of view of the armed forces as well as from the point of view of industry. Not only are we announcing a 70 per cent. increase in the lift capability of our armed forces, but we shall be doubling the number of support helicopters available on the front line. That is why the armed forces have today signalled their very warm welcome for the decision.
§ Mr. Peter Hardy (Wentworth)
The Secretary of State asked what had happened since 1987. Does he agree that since then the Wessex, which entered squadron service in 1964, has been subject to heavy use and that it is a rather expensive helicopter to run? I welcome the statement, but does he accept that there will still be some residual doubt about the heavy lift capacity that may be relevant in the fulfilment of future international commitments and in the use and deployment of the air mobile brigade?
§ Mr. Rifkind
Today's announcement will remove the need to replace the Wessex with a completely new helicopter because the EH101 is of a category that will enable us to meet that need.
As for the total lift capability, of course, if one had an all-Chinook fleet, because of the larger size of the Chinook and its greater lift capability, the total increase in lift capability would have been even more than the 70 per cent. to which I referred. One has to balance that against the flexibility available through the mixed fleet decision. As the EH101 is a smaller and more agile aircraft, it can use landing spots that the Chinook would find more difficult and it is more suitable for land and sea operations, especially working with the Merlin, of which it is a variant. So there are operational benefits to take into account as well.
§ Mr. Barry Field (Isle of Wight)
Does my right hon. and learned Friend appreciate that Westland Isle of Wight is the second largest plant in the United Kingdom? According to its managing director, Chris Gustar, this order means that the company and the Isle of Wight's economy—it is such an enormous part of our economy on the island—have really turned the corner. In view of that excellent order, will my right hon. and learned Friend see what we can do to get the helicopter into the coastguard service as well as the military?
§ Mr. Rifkind
I thank my hon. Friend and confirm that this is very good news for the Isle of Wight. We shall be interested in supporting the helicopter's use in other areas, if it proves suitable, and in doing all that we can to assist Westland to increase its export potential because the 465 overall impact will have a continuing profound effect on employment and industry for a generation to come, and we can work with the company to help to encourage that.
§ Mr. Mark Robinson (Somerton and Frome)
My right hon. and learned Friend's decision will also be warmly welcomed in my constituency, where many Westland workers and senior management live. It is a timely decision, given the forthcoming IDEX exhibition, which is to take place in the middle east in the middle of March, where there will be all sorts of opportunities for us to promote the aircraft in export markets. I hope that my right hon. and learned Friend and his colleagues will give all support to the marketing of the excellent civilian version of the EH101, which is also on offer.
§ Mr. Rifkind
Yes, there are three variants—the utility, the maritime Merlin and the civil variant—and it is important to try to maximise the export opportunities for all those forms of helicopter. The Ministry of Defence is especially interested in two of the three categories, but the order announced today will undoubtedly have benefits across the spectrum of equipment that Westland has on offer.
§ Sir Peter Emery (Honiton)
Does my right hon. and learned Friend realise that congratulations are due to him on the announcement of the order? Many of us have constituents who work in the plant and without the order the British helicopter industry would have been severely in doubt. It is, therefore, immensely important. When does he expect the first batch of helicopters to be delivered to the RAF and over what period will deliveries be extended?
§ Mr. Rifkind
My right hon. Friend is right to emphasise the importance that the Ministry of Defence and the Government attach to the helicopter industry continuing in the United Kingdom and to the need to sustain that support with the sort of order that we announced today. I understand that the first deliveries of the EH101 are likely to be in 1999 and that they will continue thereafter.
§ Mr. Peter Griffiths (Portsmouth, North)
Does my right hon. and learned Friend accept that, in addition to the list of large companies that he said would benefit from the order, many small specialist companies, such as Fireproof Tanks of Portsmouth, which are competing in the international market, will be given greater prestige because they are associated with the decision?
§ Mr. Rifkind
Indeed, Portsmouth will benefit. Fireproof Tanks is one of the companies that will be participating in the production of the helicopter as a result of today's decision.
§ Mr. James Couchman (Gillingham)
My right hon. and learned Friend will he aware how important the decision is, not only to Westland but to the aviation industry, including the avionics industry, which is a large employer in my constituency. He will shortly have to make a decision about the attack helicopter for the Army. Without pre-empting his decision in any way, will he assure the House that he will be just as mindful of the need to support and promote the British high-technology aviation industry, including avionics?
§ Mr. Rifkind
The attack helicopter is a separate issue and will be considered on its merits. A number of serious bids have been put forward to the Ministry of Defence and are being evaluated. I hope that we will reach a conclusion before the House rises for the summer recess, but it is a complex and difficult matter. We will certainly share our decision with the House as soon as we have been able to reach it.
§ Mr. David Nicholson (Taunton)
My right hon. and learned Friend will be aware that this announcement will safeguard jobs in my constituency and elsewhere throughout Somerset, and will also be a major fillip to the defence and manufacturing industries in the south-west. Can he confirm to the House that, in addition to the UK industrial and export factors that rightly weighed with him, there is a strong defence factor in choosing the EH101 in such numbers to take account of the changed nature of potential warfare?
§ Mr. Rifkind
My main responsibility has to be to consider, in the broadest sense, the defence requirements of the United Kingdom. That required me to take into account, not only the need to sustain a military helicopter manufacturing capability, but the benefits that flow from the mixed fleet because of the versatility that that provides for our armed forces.
§ Mr. Dennis Skinner (Bolsover)
If it has taken eight years for the Minister to make that statement, when is the date of the next general election?
§ Mr. Alan Howarth (Stratford-on-Avon)
May I put a question to my right hon. and learned Friend in his capacity as a member of a Cabinet that proceeds on the principle of collective responsibility? I ask him, even now, to reconsider the balance of the country's interests as between investment in helicopters and investment in literacy. Is he really content that more than £1 billion should be spent on a helicopter order while £30 million is denied for central Government support for the generalisation of the reading recovery programme? In Warwickshire, we have a clear and urgent preference to be allowed to have the resources to pay for the educational basics.
§ Mr. Rifkind
I understand my hon. Friend's anxiety to ensure that that aspect of his interest is properly safeguarded. I hope that he will also understand that it is not only desirable in general policy terms to ensure that our armed forces are equipped with the most suitable equipment to carry out their tasks, but that it could mean the difference between life and death for those whom we send to carry out those tasks on our behalf.
§ Mr. Keith Mans (Wyre)
My right hon. and learned Friend will be aware that the decision to buy a mixed fleet of helicopters will be very much welcomed by many of us who have for long felt that that was the best way to meet the future needs of our armed forces' vertical lift capability. Will he ensure that those helicopters are delivered to the Royal Air Force on time and on cost, and that any suggested modifications by the Ministry of Defence are considered closely, to ensure that they are 467 necessary, and that the aircraft reaches RAF service on time, instead of reaching it delayed and at an increased cost?
§ Mr. Rifkind
It goes without saying that the armed forces have an important and urgent requirement for those aircraft. We expect both the Westland EH1O1s and the Boeing Chinooks to be delivered on the basis of contractual arrangements that we shall enter into, and we intend to ensure that both companies meet that requirement in the months and years to come.
§ Lady Olga Maitland (Sutton and Cheam)
I warmly welcome the commitment made in ordering the helicopters, but will my right hon. and learned Friend expand on his plans for helping export sales? Which countries does he expect to take the initial interest, and how exactly does he intend to go about it?
§ Mr. Rifkind
We have a Defence Export Sales Organisation, which works closely with industry. My hon. Friend will appreciate that it would not be wise for me to speculate on individual countries at this stage. I can say that a number of NATO and non-NATO countries have expressed serious interest in the EH101, and we and the company will continue to liaise with them to discover whether that interest can be translated into firm orders.
§ Mr. Ian Bruce (South Dorset)
Will my right hon. and learned Friend confirm certain quality aspects of the EH101? I heard this morning, on radio, the hon. Member for South Shields (Dr. Clark) suggesting that the only reason why the Canadians did not buy that helicopter was that we would not give confidence by making an order ourselves. In fact, Westland won the order completely on its own merits, and the Liberal Government coming into power in Canada cancelled the order. Will he further confirm that—[Interruption.] Indeed, the right hon. 468 Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) congratulated them on doing it within a week of their coming to office.
Can my right hon. and learned Friend confirm that the Defence Research Agency has done studies about the vibration and the fatigue that Chinook pilots experience because of the old technology, and that the EH101, which suppresses that vibration, overcomes the problem so that pilots can fly longer?
§ Mr. Rifkind
My hon. Friend is right on both accounts. The Chinook is older—some 30 years old—whereas the EH101 is a state-of-the-art aircraft and therefore much more impressive. My hon. Friend's earlier point is correct. Once again, he shows the superiority of his knowledge compared with that of the Opposition spokesman. The previous Canadian Government had ordered the EH101, but the Canadian Liberal party chose to campaign on a pledge that it would cancel the order if it won the election. It did win the election and, notwithstanding the interest of the Canadian armed forces, the order was cancelled. I see that the right hon. Member for Tweeddale, Ettrick and Lauderdale is desperate to comment on that.
§ Sir David Steel (Tweeddale, Ettrick and Lauderdale)
I well understand the concern of the hon. Member for South Dorset (Mr. Bruce) about the Canadian effect on Conservative politics, but I shall not comment on that.
On the more serious helicopter issue, will the Secretary of State acknowledge that the Canadian Government are actively considering ordering EHIO1s for their search and rescue service?
§ Mr. Rifkind
Naturally, if they are prepared to reconsider the decision, we shall be delighted. They are currently subject to certain legal claims from Westland because of the cancellation of the contract. If that leads to reconsideration, we shall all be delighted.