§ The Secretary of State for Defence (Mr. Geoffrey Hoon)
With permission, Madam Speaker, I should like to make a statement on two significant defence procurement decisions.
I should like to announce our decisions on a new beyond-visual-range air-to-air missile to arm the Eurofighter, and on delivering the major enhancements to our strategic airlift capability promised in the strategic defence review.
The Government are committed to the modernisation of our armed forces. We are determined to deliver improvements in defence capability, to underpin long-term security and to ensure that Britain can act as a real force for good in the world. Our armed forces deserve the best equipment. We are committed to ensuring that they have the best equipment. However, we are also committed to doing that in a cost-effective way that offers the best value for taxpayers' money. Smart procurement means making every pound count.
We are also aware of the wider context. The procurement package we have selected is clear evidence for our partners on both sides of the Atlantic of our strong commitment to enhance European defence capabilities. NATO's effectiveness depends on continuing technological improvement and on equitable burden sharing. The European defence initiative lies at the heart of that—for the good of Europe, the transatlantic alliance and the international community as a whole.
The BVRAAM is a vital component of the Eurofighter's ability to dominate the skies. It promises to be a highly accurate, highly manoeuvrable missile that will significantly improve Eurofighter's "no escape" zone, and will thus ensure that this world-class aircraft can combat all projected air threats. It will make a major contribution to the air superiority requirements of UK and coalition operations—including NATO operations. Our priority is to sustain Eurofighter's superior capability as far as possible into its service life, which will extend well towards the middle of the century. We need to secure the highest performance, at the best overall value for the taxpayer.
We have had the advantage of a strong competition with high-quality bids from Matra BAE Dynamics and Raytheon Systems Ltd. The competition has been keenly fought, and many right hon. and hon. Members have written to me and to other Ministers.
After a thorough—indeed exhaustive—process, we have concluded that the Meteor missile offered by Matra BAE Dynamics and its consortium is likely best to meet our needs over the life of the Eurofighter aircraft. The overall performance promised by Meteor will ensure that Eurofighter is equipped with the best weapon possible and will deliver the air superiority that is central to success in military operations.
Meteor is a collaborative venture with Germany, Italy and Spain—our Eurofighter partners—France and, we hope, Sweden. We plan to conclude a memorandum of understanding with those European partners by the end of the year, formally committing us all to the programme. Subject also to agreement of satisfactory terms and conditions with Matra BAE Dynamics, we will award a contract as soon as possible.
150 It will be a smart contract. Tightly defined breakpoints in the contract will be linked to flight tests and other demonstrable achievements. Those will focus on, first, the ram-jet motor; then guidance systems and, finally, data links and electronic counter-measures. Specific dates will be attached to each.
Those breakpoints will be auditable and capable of external independent evaluation. If they are not delivered, the contract will be terminated by the partner nations, which will recover all development costs from the contractor.
Meteor is expected to enter service with the RAF in the latter half of this decade. Meanwhile, we intend to buy more of the currently highly capable advanced-medium-range air-to-air missile, produced by Raytheon, to equip Eurofighter when it first comes into service.
Our decision will give the Royal Air Force the most advanced air-to-air missile in the world. It will be welcome to our European partners, and it will also be welcomed by our US allies as a clear indication of our commitment to a strong defence capability, available for all operations in which the United Kingdom might be involved.
Industry in the United Kingdom will also welcome the decision. Matra BAE estimates that it will create or sustain some 1,200 jobs in the UK, including at Stevenage, Bristol and Stanmore. Many of those will be high-quality jobs in new technology, and in system and software design. The United Kingdom will lead this major project.
I turn now to our strategic airlift requirements. Improving the mobility and deployability of our forces was a key theme of the strategic defence review. Events in the Balkans and, more recently, in Mozambique and Sierra Leone have underlined the high priority of increasing our strategic airlift capability. Both NATO's defence capabilities initiative and the headline goal adopted at the Helsinki European Council identify this capability as one in which Europeans need to make particular improvements.
We have explored a number of possible avenues to meet our immediate needs as well as the longer-term requirements. After careful consideration, we have determined that the best short to medium-term solution is a lease of four C17 Globemaster aircraft from the Boeing company. They will begin the first of several years of service with the RAF from the middle of next year. These flexible, capable aircraft will deliver vital, early support to our new joint rapid reaction forces. They will also make a crucial contribution to improving the airlift capabilities available for NATO and European operations and to interoperability with the United States.
Beyond that short-term lease, we have now decided that our heavy-lift needs, from the latter part of this decade onwards, would be best met by the A400M aircraft from Airbus Military company. This promises to be a superb aircraft—a new design that is specifically tailored to meet our military requirement. Moreover, the A400M will offer an extremely flexible capability, covering both the tactical and strategic roles. It offers scope for a multinational support package and substantial through-life cost savings.
At this point, our commitment to A400M is necessarily conditional, in that it is based on assumptions that are dependent both on our potential partners and on Airbus—on their commitments to sufficient numbers of aircraft at launch and the establishment of a viable programme. 151 We hope that we can sign a contract for the A400M urgently, but this must be based on realistic figures for purchase. All countries must balance the size of firm commitments against other priorities for defence equipment. The United Kingdom will order 25 aircraft in the A400M initial launch. That is sufficient to build a viable programme while safeguarding our industrial interests. We look forward to other partners following our lead, so that together we may confirm the launch order as soon as possible.
However, affordability will also rest on confirmation of unit prices at the level offered by Airbus, commitment of the in-service date that we require and satisfactory negotiation of commercial terms and conditions. Programme launch and contract placement must also be achieved within a reasonable time frame.
This will also be a smart process. We will hold European industry to its promises. If Airbus cannot offer us and our partners an affordable and manageable programme on that basis, we will be able to meet our military requirement and protect taxpayers' interests by purchasing a fleet of Boeing C17 aircraft as an alternative. However, we look forward to success in this exciting and innovative programme.
A400M will offer great benefits for the United Kingdom. BAE Systems expects the programme to create directly 3,400 long-term, high-skill, high-wage jobs—in particular at its sites at Filton, Broughton and Prestwick—with indirect employment taking the figure to more than 10,000.
Our industry will be at the forefront of developments in the aircraft's new technology, including a carbon composite and metallic hybrid wing and a new propulsion system. The project will strengthen the European aerospace industry, and will complement the world-leading wing capabilities of British industry, which we are supporting through the major investment that we have recently announced for the development of the A3XX.
A vital and technologically innovative element of the A400M will be its engines. Airbus Military, as prime contractor, will be responsible for selecting the best power plant so that the aircraft will meet its commitments to the partner nations on performance and price. However, we will make sure that, in its decision, Airbus Military takes full account of the merits of the likely proposal from Rolls-Royce and the undeniable quality of its products.
These procurement decisions are of great importance for our armed forces and for our defence capability for several decades to come. They deliver on our promises in the strategic defence review. They make a significant contribution to Europe's defence capabilities and they are good news for British industry and for British jobs. I commend them to the House.
§ Mr. Iain Duncan Smith (Chingford and Woodford Green)
I thank the Secretary of State for his announcement and for giving me an early copy of his statement. Today's announcement has at last begun to clarify the important procurement decisions in, for example, the strategic defence review, on which so much of our armed forces future capability rests. Giving Typhoon a proper air-to-air missile to keep it a potent 152 weapon system and providing heavy lift to allow our troops to be properly deployed were critical elements of the strategic defence review, as the Secretary of State will recall.
Before putting questions to the Secretary of State, I should like to make a general point. Surely, the decisions could, and should, have been made earlier. Is it not a fact that too many Ministries have a finger in the pie, especially the Treasury? As a result, the decisions have been delayed, perhaps unnecessarily. The Government committing themselves to early decisions while insisting that industry produces on time and within budget is a feature of smart procurement. If, as seems to be the case here, the Government fall at the first significant hurdle, what hope is there for future smart procurement programmes?
The Government made two significant announcements today. Their decision to go ahead with the purchase of Meteor as a solution to their BVRAAM requirement will be widely welcomed. I therefore congratulate Matra BAE Dynamics on its successful bid, which, it believes, will secure high-quality technology-related jobs for some time. However, questions need to be asked. Given the doubts that the Secretary of State expressed about Sweden in his statement, has he received cast-iron assurances from all the other partners who are likely—or whom he believes are likely—to order the missile?
The Meteor contract is to produce equipment at the cutting edge of technology. The Secretary of State accepts that and has made it clear that that entails some risks. He outlined his concerns about those risks today, saying that he has set specific dates by which the progress of the programme can be audited. Critically, he has said that the programme will be terminated if those are not met.
Is the Secretary of State prepared to tell us what those dates are so that we can judge whether the programme is proceeding in accordance with the plans? He spoke about how compliance with that programme was going to be audited. Given the changes that he has announced to the Defence Evaluation and Research Agency, who does he expect to carry out the independent audit, which, in the past, DERA might well have carried out?
Bearing in mind the fact that the United Kingdom is bearing the largest share of the costs, what will happen if a British Government wish to terminate a programme which they consider is not being met, but which others do not? How can we make a such a decision without incurring penalties? How will we recoup costs in that eventuality and what plans has the Secretary of State made for that?
The Secretary of State was rather vague about the in-service date. Will he clarify that detail by putting it on record when he returns to the Dispatch Box? He said that much had been said about US embargoes on future export orders. No doubt, that is one reason why we chose Meteor in the circumstances. What consideration has been given to the possibility of partners in the consortium embargoing others wishing to sell the missile on? The Secretary of State said that the USA would welcome the order. However, given that the President has lobbied the Prime Minister over the past few months, to what extent is this another case of the Foreign Office giving the Secretary of State a load of bad advice?
On the heavy lift contract, we welcome the Secretary of State's announcement on leasing four C17s while placing an order for 25 A400M aircraft. Once again, 153 however, serious questions need to be answered. On the A400M, how confident is the Secretary of State that the other nations will order, either at all or in sufficient numbers to make the project viable? I note, for example, that the Italians have not only dropped the initial number that they were planning to order, but seem recently to have indicated doubts about ordering any at all. The Germans have been blowing colder and colder on the project as the weeks have gone by.
Is not the announcement of an order of 25 a significant reduction from the UK's anticipated commitment of 45? Will not that, coupled with the lease of four C17s, send a message to nations that are in doubt about their orders that the UK Government are not as committed as they at first appeared? For example, what has the Secretary of State been told about the critical number that needs to be ordered before the contract is viable? How long is the lease for the C17s?
The Secretary of State seems slightly less than positive in his announcement on the A400M, hedging it with many caveats and conditions. Will not that, together with his announcement that he will purchase C17s if he cannot reach an agreement on the A400M, also send a mixed signal to our European partners? Is not his announcement in some senses likely to pose serious logistical questions to the RAF? Surely the prospect of the RAF having to find spares, relevant infrastructure and training for three different air frames raises questions about costs beyond purchase costs. How will the C17s be supported? Will there be a support facility in the UK, or is he anticipating that that task will be done from the USA?
In congratulating BAE Systems on securing the order, the Secretary of State must agree that such questions will need to be answered if BAE is to feel confident in committing the investment and capital that the project requires without raising serious concerns about future decisions and doubts about its viability.
Although manufacturing production and development skills rest hugely on the success of the two orders, it is most critical that the armed forces, as I am sure the Secretary of State will acknowledge, get the equipment that they need to fulfil their operational requirements. That, we believe, is the most important point.
§ Mr. Hoon
I am grateful to the hon. Gentleman for his initial observations and, indeed, for his general support for the decisions that the Government have taken. I shall endeavour to deal with as many of the more detailed points that he raised as possible, but in the event of my failing to do so, I shall certainly write to him with more specific detail.
In response to the many observations that the hon. Gentleman made about both projects, let me say that it is clearly necessary to be conditional in our approach to such multinational operations because they depend on decisions by our partners. The alternative, for any Government, is simply to go into the market and purchase equipment off the shelf. We could do that, but we are choosing to try to buy the best, most technologically sophisticated equipment. That depends very much on working with partner nations. That is the way in which we are approaching these decisions.
The hon. Gentleman mentioned doubts about Sweden. There are no doubts about Sweden; we are simply trying to attract it to the project in order that the missile may be 154 available to its aircraft. The memorandum of understanding still has to be agreed with our partner nations; that is necessarily so, as I have said, in any multinational project.
I can certainly publish details of the breakpoints and determination of when those assessments will be made once the memorandum of understanding is established. The breakpoints will be a certain period after that date. We shall retain the elements of DERA that give Government advice about the nature of contracts. That was part of the understanding that we set out.
On the in-service date, we anticipate the missile being available towards the end of the decade. On the US attitude, the package will provide significant job opportunities in the United States as well as in Europe. It is in the nature of modern defence industries that they operate around the globe—certainly across the Atlantic. I do not anticipate any difficulty in announcing orders that will create jobs to supply AMRAAM as well as the C17 heavy lift aircraft.
We are confident about the A400M. We are leading the way: we shall be the first country to have officially announced our order for A400M, and we believe that will provide a strong signal for our partners to do the same. Twenty-five is a realistic estimate of the number of aircraft that we require: 26 Hercules aircraft are to replaced by 25 A400Ms, but the A400M will have a capacity that is one and a half times greater than that of the Hercules; therefore, we are investing in significantly enhanced capability for the RAF. The RAF will not be required to maintain or train crew for three air frames. The idea behind leasing the Cl7s is that, once the A400M comes into service, it will replace the C17; then, we shall be dependent on a mixed fleet of two aircraft.
§ Mr. Barry Jones (Alyn and Deeside)
My right hon. Friend's excellent statement presages many new manufacturing jobs for Britain, as well as an enhanced defence capability. Will he tell the House when the production of the A400M will begin and the locations at which it will be built? He will not be surprised if I volunteer the services of 4,200 Airbus workers in my constituency to make the wings, because we have a centre of excellence and world-class capability. Will he give further details of the reasons behind the size of the order? We had hoped that 35 would be ordered, and we should like to know why it is to be 25. None the less, the statement is a good one and my right hon. Friend should be thanked.
§ Mr. Hoon
I am grateful to my right hon. Friend. As he rose, I wondered what question he might ask. He has asked me about the projects on many previous occasions and I am delighted to be able to give him today, at long last, a straight and detailed answer. I am also grateful to him for volunteering his constituency: I am confident that it will be one of the places in which a significant number of additional British jobs are created as a result of the decisions announced today.
I made clear our determination to place a firm order for 25 aircraft, but I am confident that the aircraft will be a success around the world. Airbus Military is confident, not only that it will be able to supply aircraft to our partner nations, but that there is significant potential for exports to other countries not yet involved in the project. 155 Therefore, 25 is an initial order, but we are confident that it will lead to further orders and that the aircraft will be a success.
§ Mr. Menzies Campbell (North-East Fife)
In order not to blight the Secretary of State's career, I shall not offer him over-enthusiastic congratulations on having beaten off the Treasury. I hope it will be sufficient for me to say that he has managed to square a rather difficult circle.
The announcements are welcome because they strengthen the European security and defence identity, of which common procurement is an important component, and they underpin the expeditionary strategy set out in the strategic defence review. May I express the hope that the Secretary of State will show similar ingenuity in placing the orders for the roll on/roll off ferries, which I hope will follow hard on the heels of today's announcements?
On the question of Meteor, the Secretary of State was diplomatic about exports being thwarted by the United States Congress. However, it must be a matter of some if not satisfaction, at least relief that there can be no question of exports of the Eurofighter being inhibited because Congress might decide that permission should not be given for an American missile for the aircraft.
On the question of the heavy-lift aircraft, it is right to provide the Royal Air Force with the heavy-lift capability which is clearly necessary and which would have been of great advantage, for example, in Mozambique and perhaps in current operations in Sierra Leone. Is it not true that, by demonstrating confidence in BAE Systems from a military standpoint, the announcement will ensure that the company remains at the forefront of civilian aircraft technology as well?
§ Mr. Hoon
I am grateful to the right hon. and learned Gentleman. I congratulate him on his determined efforts in pursuing these matters over many months; he has been assiduous in ensuring that they have remained at the forefront of the House's attention. I am grateful to him for his support on previous occasions and today.
These are the collective decisions of Government, and all parts of Government are equally enthusiastic about the position reached and announced today, as I am confident the United States will be. As I mentioned earlier, it provides significant opportunities for US industry, as well as European industry.
I congratulate the right hon. and learned Gentleman also on his sophistication in emphasising the importance of co-operation and collaboration in these projects. Europe is not in a position to invest country by country in the latest technology, particularly for such expensive projects. Inevitably, we must undertake them in collaboration with our European and American partners. These projects represent a significant commitment to such a collaborative approach.
§ Mr. Bruce George (Walsall, South)
My right hon. Friend the Secretary of State can rightly be pleased with himself. He has seen off the greatest enemy of the Ministry of Defence over the past 60 years: Her Majesty's Treasury. That is more than the Opposition succeeded in doing very often when they were in office. Is my right hon. Friend aware that, judging from the glum Conservative faces, he has done the right thing?
156 Has my right hon. Friend informed his wife that she is not likely to attend any White House functions over the next six months? However, that is a price worth paying. When the Defence Committee considers procurement in the next few weeks, it will seek more information about why these decisions were made, but my right hon. Friend can be confident that he and his team have got the decision right—a European missile on a European aircraft, the best heavy-lift aircraft available, and four of them, which is more than I anticipated. We, like my right hon. Friend, will give careful consideration to the fact that we have moved a little towards the European dimension of security. It is right for us to say to Europe, "We are watching you, and you must deliver."
§ Mr. Hoon
Again, I am grateful to my hon. Friend. He has pursued the matter with determination on behalf of the Committee which he so effectively leads. I look forward to providing further detail, as required, in due course.
It would be wrong to characterise these determinations as between Europe and the United States. There will be a great deal of work on both sides of the Atlantic as a result of our efforts. Crucially—this will be the most important aspect, as far as the White House is concerned—we are demonstrating a real commitment to improving European capability. The availability of the most advanced missile for Eurofighter and the availability of heavy-lift aircraft mean that Europe's capabilities and its contribution to NATO will be significantly enhanced. That is the message that the White House will most want to hear.
§ Madam Speaker
Order. May I have brisk questions from hon. Members and brisk answers from the Minister? I have in mind the need to safeguard today's business—after all, two motions have been tabled by the Opposition, and time is getting on.
§ Mr. John Wilkinson (Ruislip-Northwood)
The Secretary of State has chosen the riskiest options technically, the costliest, and those with the greatest potential for slippage, as regards both the missile and the aircraft elements. Can he put the House straight? The A400M is not a heavy-lift aircraft. Will he also make it plain that the A400M could not have taken four Puma helicopters all the way to Mozambique? It does not have the volume or the payload. Unless he retains some C17s in the fleet, when the A400M comes into service the Royal Air Force will no longer have a genuine heavy-lift capacity of its own.
§ Mr. Hoon
As I am sure the hon. Gentleman will recognise when he gives the matter some thought, in operations of the kind undertaken in Mozambique, what matters is not simply the capacity of an aircraft. One must also have regard to the size of the airfield where particular aircraft may land, and the number of times that it may be necessary to fly an aircraft into and out of an airfield. Sometimes, as we found in practice, the very large aircraft to which the hon. Gentleman refers by implication cannot fly into the airfields, and if they do fly into a particular airfield, it is closed for a number of hours before the next aircraft can arrive. A balance must be struck between the size and physical capability of the aircraft in question, and the number of occasions on which it is necessary to fly in 157 Aircraft—particularly if there is an urgent need to reinforce troops in the field, for example. The decisions are taken with such practical considerations in mind.
§ Dr. Doug Naysmith (Bristol, North-West)
May I thank my right hon. Friend for his statement and its clear commitment to the Meteor project and the A400M? The Meteor project will create job opportunities in my constituency. More important, it will keep the United Kingdom and Europe in the high technology end of the crucial business that we are discussing.
The A400M will create and safeguard thousands of jobs not only in Bristol and the surrounding area, but throughout the country and elsewhere in Europe. The project is needed to safeguard essential expertise in this country. It is good for Bristol, Britain and Europe. Will we be able to order more than the 25 that my right hon. Friend mentioned today if negotiations with other countries suggest that that is necessary or even helpful?
§ Mr. Edward Garnier (Harborough)
Bearing in mind the answer that the Secretary of State gave my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson), if the A400M is not big enough to carry heavy artillery and armoured vehicles and the larger helicopters, how does the Ministry of Defence propose to deliver those weapons and vehicles to a theatre of operation?
§ Barbara Follett (Stevenage)
I welcome my right hon. Friend's announcement of awarding the Meteor contract to Matra BAE Dynamics, which, as he knows, is mainly based in my constituency of Stevenage. Does my right hon. Friend know that, in the 1980s, Stevenage suffered job losses which were the equivalent of five pit closures through the downsizing of the aerospace industry? Does he realise the boost that he has given to the town's confidence through an announcement that is good for Britain, Europe and—most important to me—for Stevenage?
§ Mr. Julian Brazier (Canterbury)
While I welcome the decisions on Meteor and C17, will the Secretary of State place in the Library a list of the major equipments in the British armed forces that can be carried on the C17 and not on the A400M?
§ Mr. Bob Laxton (Derby, North)
I thank my right hon. Friend for the decisions, which I welcome. Can he tell us 158 yet whether the Rolls-Royce engine is the preferred engine for the Airbus A400M? If not, are there any steps that we could take to facilitate a decision? Can he suggest how many jobs may be created or secured, especially in Rolls-Royce in Derby, which is just outside my constituency, if the Rolls-Royce engine is procured for the A400M project?
§ Mr. Hoon
Under the terms of the agreement, Airbus Military, as the prime contractor, will be responsible for selecting the engines. However, as I made clear in my statement, we will stress to Airbus Military the quality of the proposal that we anticipate from Rolls-Royce. We are confident that Rolls-Royce will make a proposal that will fulfil the contractor's needs of price, quality and competitive advantage, while supplying jobs for the United Kingdom, especially for Derby.
§ Mr. Roy Beggs (East Antrim)
While I welcome the statement and the commitment to smart procurement, I am disappointed that Raytheon Systems did not succeed. However, I congratulate Matra and accept the assessment that the Meteor collaborative project will ensure that Eurofighter is equipped with the best possible weapon for air superiority.
The Secretary of State suggested in his statement that the choice of A400M and the UK order for 25 will create 3,400 long-term jobs and more than 10,000 jobs indirectly. Will Shorts in Northern Ireland benefit from the opportunities that he announced today?
§ Mr. David Borrow (South Ribble)
My right hon. Friend's announcement will be welcomed by thousands of my constituents who are employed on the Eurofighter and Airbus projects. Although they are mostly concerned about their job prospects, does he agree that it is absolutely vital to our defence capability that the European option for military aircraft and missile systems remains and that the announcement represents a crucial step to ensure that that capability remains in future?
§ Mr. Hoon
I am sure that that is right. The announcement will safeguard not only jobs in the United Kingdom and across Europe but our technology edge, which is a vital safeguard as we move through the new century. It is vital that we can compete for high-quality jobs in terms of not only numbers, but quality of the work. The decisions that we have taken have been influenced by that and it has contributed to the way in which we reached our conclusion.
§ Mr. Peter Luff (Mid-Worcestershire)
I certainly join those who welcome today's announcement on Meteor, but I am sorry that the Secretary of State did not include in his list of workers who will welcome it the 360 workers at BAE's rocket motors division in Summerfield, many of whom work in the constituency of the Parliamentary Secretary, Lord Chancellor's Department, the hon. Member for Wyre Forest (Mr. Lock). Those workers will produce and develop the boost motor for Meteor. May I 159 say that, given the technical excellence of the Meteor solution and the backdrop of 30,000 manufacturing jobs being lost in the west midlands in the past year alone, any other decision would have been unthinkable? The real sadness is that it has taken so long for the announcement to be made at the Dispatch Box.
§ Mr. Hoon
I am grateful to the hon. Gentleman. My apologies for not having mentioned his constituency. I am delighted at any opportunity to mention the important contribution that my hon. Friend the Parliamentary Secretary makes to his constituents. I apologise for overlooking that fact, but the benefit of those decisions will be felt in a long list of constituencies.
§ Ms Sandra Osborne (Ayr)
This is, indeed, good news for the workers at BAE Systems at Prestwick, although it is tinged with disappointment given that the Government propose to scale down HMS Gannet—also at Prestwick. However, can my right hon. Friend confirm that he will lobby hard to ensure that Britain receives its fair share of work in those collaborative projects?
§ Mr. Hoon
Certainly, Britain will be the contracting authority for the missile, and BAE Systems and the consortium will be responsible for leading the project. That is an important way in which Britain will express its leading edge in the organisation of work and the technology. I shall certainly look into the constituency matter that my hon. Friend raises, but there will be significant job opportunities in and around Prestwick as a result of those decisions.
§ Mr. Gerald Howarth (Aldershot)
BAE Systems has its headquarters in Farnborough, in my constituency, so the Secretary of State will not be surprised to know that there will be few glum faces in Farnborough today. I particularly welcome the Meteor decision, on which I pressed him as recently as last week, when he assured me that he would give an answer shortly. I am sure that the fact that we shall ensure that the missile technology will be retained in the United Kingdom will enhance Typhoon's export potential.
The A400M project, which my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) said is risky, will depend wholly on the other partner nations ordering in significant numbers. Will the Secretary of State tell the House how far those other nations have indicated their willingness to sign up to the project and how soon?
§ Mr. Hoon
The answers to those questions are obviously matters for those countries, but they have generally indicated their support for the A400M project. We are leading the way by announcing our determination to purchase 25 of those aircraft. We are confident that the specific announcement will cause other countries to follow, so it should be possible to reach an agreement by the end of this year whereby we take forward the project. Such collaborative ventures inevitably involve some risk, but we are confident that the quality of the aircraft and the contribution that it can make to creating and securing jobs in the United Kingdom and Europe make that risk worth while.
§ Mr. Gordon Marsden (Blackpool, South)
The decisions announced today on Meteor will be warmly welcomed by my constituents who work at British Aerospace's Warton plant, who will see it as a vote of confidence in British Aerospace in Lancashire. Does my right hon. Friend believe that the link that Meteor has forged with Boeing will be of significant assistance in expanding opportunities for export orders for the Eurofighter?
§ Mr. Hoon
I am grateful to my hon. Friend. We are delighted that Boeing is part of the consortium, because it demonstrates that, as I said earlier, this is not a simplistic "Europe against the United States" approach. What we have announced is of significant benefit on both sides of the Atlantic. Crucially, the fact that Boeing is part of one of the consortiums illustrates the point that I have made.
§ Mr. Crispin Blunt (Reigate)
I am sorry to rain on the Secretary of State's parade, but the truth is that the Ministry of Defence and the Royal Air Force are the losers from today's announcement as far as the strategic airlift is concerned. The truth is that the MOD has been directed by the Prime Minister and by other Departments, particularly the Department of Trade and Industry, to order the A400M.
The Secretary of State has got no extra money out of the Treasury. Will he make that clear to the House? The other armed services will have to find the money to pay for an expensive commitment that will also have to be supported and maintained by the RAF—a wholly unnecessary different type of aircraft in its tactical airlift inventory.
§ Mr. Hoon
I am slightly surprised at the hon. Gentleman's observations. In recent months, he has tended to complain that we are constantly concerned about money. On this occasion, we are not necessarily choosing the cheapest option; we are choosing the best option, as far as the RAF is concerned.
The RAF will not lose out. In the short term, we shall have an airlift capability that the last Government were not in a position to order when the hon. Gentleman was advising them, although heavy-lift requirement had been identified. The combination of orders that we propose will secure for the RAF a capability that it did not previously enjoy.
§ Mr. Lindsay Hoyle (Chorley)
Obviously, this is welcome news, and the cheers can be heard from the north-west. Many jobs have been dependent on both contracts. The news about the BVRAAM—the beyond-visual-range air-to-air missile—is certainly welcome to the workers in Chorley and in Lostock near Bolton. They have been awaiting the decision, and it is right, as is the decision on the A400M. I will press my right hon. Friend on only one point: 25 is welcome, but will he consider increasing the number? That is important for jobs in Lancashire, and for jobs in the north-west generally.
§ Mr. Hoon
We are talking about a valuable revision of the distribution of jobs related to the defence industry across the country, and I am delighted that the decision will be welcomed throughout the country on the basis that it will create and secure jobs in manufacturing industry.
161 I think that I have dealt with the point about numbers. These are firm orders, with which we shall proceed in negotiation with our partners.
§ Mr. Ian Bruce (South Dorset)
I am sure that component manufacturers in my constituency will also welcome the opportunity of further orders from the companies, but will the Secretary of State tell us what was the quid pro quo from the Treasury? We know that whenever the Treasury gives something, it takes something back. We know that we have replaced the Typhoon's gun with a lump of lead to save money; we know that soldiers are having to go around saying "bang" instead of using real bullets, and that we are having to cancel exercises because there is no fuel for vehicles. What else is having to be cut from the defence budget to pay for what has been announced?