| The Scottish Economy
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Mr. Ingram: I thank the hon. Gentleman for his welcome to the statement. He has asked some pertinent and important questions on what is undoubtedly a complex build-up to a contract. The headline cost is about £2.8 billion, with £6.4 billion in whole life costs thereafter. In my opening statement I said that it would be in the region of £3 billion. I want to ensure that he is aware of that area of cost. The contracts have not yet been signed, so to give a breakdown of the costs, as the hon. Gentleman suggested, would not be wholly appropriate. A big proportion of total cost is on the design element and the on-board equipment—probably about 80 per cent.—and 20 per cent. is tied up in construction. That is the usual breakdown, and the hon. Gentleman can do his own calculation based on that. Given the scale of the figures, to be precise to the nearest £100,000 would not be the best way forward. Thales UK, which is a UK design facility, is the whole-ship design element of that alliance. In setting BAE Systems design against that of Thales UK, it was felt that Thales UK offered all the best characteristics. That is why it was chosen, with BAE Systems being the prime contractor. The role of the alliance of those two key partners will be driving that process forward, with the Ministry of Defence putting project management Column Number: 007 expertise and other support into the alliance to ensure that it delivers on time. The risk will be shared within the partnership on the apportioned cost once the contract is determined, but the rewards will also be shared on a similar basis.As for the final construction of the ship, it is anticipated that there would have to be investment in Rosyth and that remains a matter for the company. Is it prepared to invest? We think that that is the preferred option. In my closing comments, I referred to the need to get more commercially minded, although it was probably directed more towards the Clyde than Rosyth. That should drive them forward, as well as what is being provided by the Government and the taxpayers. If investment is made in Rosyth, it will open up tremendous possibilities for the shipyard to attract other commercial activity, as it has the key skills. However, I also said that other yards have not been ruled out. The lobbying will continue and cases will be made. The outcome depends on which yards best fit what the MOD is seeking. We want the ships to be delivered on time, made to the quality that we require and built on the best basis for the taxpayer. Jim Sheridan (West Renfrewshire): I thank the Minister for his statement. He took the time to mention yards on the Clyde, but he will be well aware that the Clyde runs long and weary and there are other yards on the Clyde, such as Ferguson's on the lower Clyde, which would be extremely grateful for any offshore work. Will the Minister give me a detailed list of companies that might benefit from the order, and will he use his good offices to ensure that those companies who are successful make every effort to invest in training not just at the higher level, but at the lower level? There is a distinct lack of basic skills such as joinery and plumbing. Such skills are needed not only in the manufacturing industry, but in the wider society. Mr. Ingram: My hon. Friend makes good points and has been active in driving forward his constituents' interests. He alighted on Ferguson's yard. It would be inappropriate to give a list of every area of build or yard that might benefit, but I repeat that other yards could benefit. It depends on their bids and what they offer the alliance in terms of best value for money. The ultimate decision rests with the Government, but initially the matter rests with the supply chain. My hon. Friend made a point about other companies. They should say, ''We want to be part of this partnership, because we have the expertise and ability.'' In the main, it is for the prime contractor to ensure that all that melds together, that the ships are built on time and that we get best value. At the end of his comments, my hon. Friend raised an interesting point about training and the skills base. What he said is undoubtedly true. As well as investing in the existing work force, I would expect the companies involved to invest in the future, not just by trying to attract commercial work, but by building up the skills base. Obviously, much of the support for that rests with the Scottish Executive. I know that they Column Number: 008 are tuned into that and will work alongside the development. It is important to up the skills base and ensure that we have a wide range of skills to maintain shipbuilding in the Clyde and in Scotland in the decades to come.Mr. Peter Duncan (Galloway and Upper Nithsdale): I obviously welcomed the announcement when it was first made some two weeks ago, and I welcome the Minister taking time to reiterate it today. There is nothing as good as good news when heard the second time. We welcome the 10,000 jobs that will be sustained in Scotland and the fact that investment in the Union's defence has been to the benefit of Scots—long may that continue. However, I seek clarification on a few points. First, given the way in which the defence interests of France and the UK have diverged so significantly and apparently during the past two weeks, what assurances have been sought and given on the substantial ownership that the French Government have of Thales UK and on whether that will have an impact on the delivery of the contract on an ongoing basis? Secondly, what are the Minister's views on the contract's design input? He will be aware that construction is a major factor in relation to jobs, but so is design. I should like some clarification on the impact on Glasgow, and I know that the hon. Member for Glasgow, Anniesland (John Robertson) will have some input into that. Finally, will the Minister say something on the state of the relationship with BAE Systems? That has had no small amount of damage in the past few months, by all accounts. Will he explain the process by which the relationship will be restored, and assure us that that will have no impact on the delivery of this promising good news? Mr. Ingram: I am grateful to the hon. Gentleman for welcoming this measure and, as others have muttered, he will be welcoming it again and again and again. It is a welcome measure and it is worth noting, for those who listen to and take note of these debates, that the Conservative party recognises that it is a major investment in Scotland. I welcome its support for the Government, which I hope extends to a range of other policies. On the relationship between France and the UK, I do not want to start to give explanations on everything that is happening in terms of NATO. That relates to another aspect of our relationship. We have interrelationships and bilateral relationships on the industrial complex, the military complex and other aspects with various countries, including France. Another international initiative is examining the entire co-ordination of the acquisition stream for the defence sector across Europe, as we try to raise the capabilities of European nations and make best use of all the available spend in Europe. I do not think for one moment that those relationships are damaged, and I do not think that what we currently face is a long-term problem. There will be a resolution to that. The hon. Gentleman was right on the relationship between construction and design. I can say to him and to the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) that that type of mix is involved in this instance. The contracts have not been Column Number: 009 signed. The companies will form that alliance, and it is expected that Thales UK design, and the design team, which is UK-based in Bath, will take on the design work. The question of who can put other design capabilities into the team rests with the alliance. We in the MOD want to see the best designers. Getting the design right and ironing out all the problems means that we can make progress towards construction and keep to the time of delivery.The Government's relationship with BAE Systems is exceptionally strong. BAE Systems delivers across a wide range of fronts for the MOD and internationally. We see it as a prime UK-based company, with about 50,000 jobs, which delivers. Clearly, there are other projects where we are having to work our way through some problems. Many of those are inherited, and I should not want to start placing the blame, but I am sure that it is known where some of that blame lies. Several hon. Members rose—
The Chairman: Order. A number of hon. Members wish to ask questions. Given the time constraints, it would be helpful if questions and answers could be as reasonably brief as possible. Mr. George Foulkes (Carrick, Cumnock and Doon Valley): I congratulate my right hon. Friends the Minister and the Secretary of State for Scotland on their efforts in bringing this work to Scotland. Does my right hon. Friend the Minister agree with me that there is some inconsistency on the part of some Members? On the one hand, they welcome such jobs in Scotland but on the other, they have a policy of the break-up of Britain, which would make these jobs less likely to come to Scotland. Will he speculate, in the albeit unlikely event that the party that they represent will gain power in the near future, what might happen to that work? Mr. Ingram: I thank my right hon. Friend for those warm words—warm to me, at least—[Interruption.] And warm to my right hon. Friend the Secretary of State for Scotland; but I am sure that she will welcome them herself in due course. My right hon. Friend was right that one party in Scotland is campaigning to wreck the United Kingdom. [Interruption.] I hear the question asked from a sedentary position about which party that might be. It is the Scottish National party. Mr. Jim Murphy (Eastwood): Why would they want to do that?
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| ©Parliamentary copyright 2003 | Prepared 12 February 2003 |
