§ Angus Robertson
To ask the Secretary of State for Defence how his Department calculates the number of people employed in and by defence related industries in the regions of the UK; what multiplier is used; and what the regional and national totals are. 
§ Dr. Moonie
[holding answer 10 December 2002]Estimates of employment can be determined as the addition of three elements. These are418Wdirect". The "direct" numbers are those employed in the supplying manufacturer i.e the company contracted by the Ministry of Defence to undertake the work, or the exporter;
§ Dr. Moonie
The information requested is as followsindirect". These include those indirectly employed through work generated in subcontractors and those who supply the main contractor. As well as manufacturers of products which are embodied in the final product, these will include suppliers of services e.g. consultants and electricity generators; andinduced", i.e. employment resulting from the additional consumer spending which arise from the direct and indirect employees.The Defence Analytical Services Agency (DASA) has never produced figures for the number of "induced" jobs. Estimates, however, have been calculated for UK direct and indirect employment dependent on (i) MOD equipment expenditure, (ii) MOD non-equipment expenditure, and (iii) defence exports. These have been published since 1992 in United Kingdom Defence Statistics (UKDS) and, before then, in Volume 2 of the Statement of Defence Estimates. The method of derivation is as follows:the "final demand" of expenditure by (grouped) standard industrial categories is determined for MOD UK expenditure on equipment and non-equipment using information from MOD systems. Figures for exports are more problematic—various sources are used for these;direct employment. Using MOD final demand and turnover per (full-time equivalent) employee for the sectors involved, direct employment follows by division; andindirect employment. Total and indirect demand is calculated using the MOD final demand and (adapted) UK Input-Output Analytical Tables. The latest available Analytical Tables, which are produced by the Office for National Statistics (ONS), are for the year 1995. They were published in May 2002. The Analytical Tables are assumed to change slowly, so may be applied to years other than the ones for which they were prepared. There are various ways of deriving indirect employment. The one proposed by DASA. is to calculate it as derived indirect demand divided by the appropriate rates (output at basic prices) for the sectors concerned. Such details are still subject to review (see below).The ONS has not published employment multipliers for the UK.
DASA has been leading a review into the method for estimating employment dependent on MOD equipment and non-equipment expenditure and exports. One of the outcomes of the review is that regional estimates of direct equipment related employment should not be published as National Statistics any more. The 419W underlying data are not of a good enough quality and they only ever represented less than a third of the total employment estimates.
Estimates of regional indirect employment have never been prepared. They are more difficult to establish. Although Analytical Tables and multipliers are produced for some areas, for example, for Scotland (by the Scottish Executive), the calculation of employment would require knowledge of the volumes of "exports" and "imports" of MOD defence equipment from other regions. These data are not available. Analytical Tables are not produced by the ONS for the English regions.
A detailed report on the calculation of the UK employment estimates has been prepared. This is currently being peer reviewed and will be made available on the DASA website.
Provisional figures for the UK were published as Table 1.11 of UK Defence Statistics 2002, a copy of which is available from the Library of the House.
Although numbers are no longer published as National Statistics, the Defence Analytical Services Agency has continued to derive regional breakdowns of the direct MOD equipment expenditure. The latest, provisional, and, as indicated above, qualified figures are:
2000–01 (thousands)1 Total employment 310 Direct (total) 155 Indirect (total) 150 Employment from MOD expenditure (sub total) 235 Equipment expenditure Direct 70 Indirect 70 Non-equipment expenditure Direct 55 Indirect 40 Employment, from defence exports (sub total) 70 Direct 30 Indirect 40 1 Provisional. The figures are rounded 10 the nearest 5,000. Differences between the totals and the sums are caused by the rounding.
Direct employment (thousands)1 Scotland 5 Wales 1 Northern Ireland 1 England North East 1 Yorks and Humberside 1 East Midlands 2 Eastern 8 London and South East 20 South West 16 West Midlands 2 North West 15 Total 72 1 Provisional. The numbers calculated have been rounded to the nearest thousand, but are indicative only. The difference between 'region totals' and the 'UK total' is due to rounding anomalies.