13th September, 2011, Westminster Hall
Mr Andrew Turner (Isle of Wight) (Con): Before I begin, I thank you for calling me to speak, Mr Dobbin. I also thank my hon. Friend the Minister for coming to discuss the future of radar. I have asked for the debate because my attention has been brought to a situation in my constituency involving BAE Systems and the procurement of radar systems by the Ministry of Defence.
Since 1940, Britain has been at the forefront of international research and development when it comes to radar. That heritage, along with our experience, knowledge and unsurpassed expertise, is routinely admired by militaries and Governments across the world. BAE Systems has been in the vanguard of the highly specialised radar industry for more than half a century. As the most significant UK company in the field, it is almost singlehandedly responsible for having put us in our current enviable position. At the same time, it has worked tirelessly with the Government, and particularly the MOD, to ensure that the nation is secure from airborne and seaborne threats. Additionally, it has provided skilled employment to a multitude of people and an unsurpassed graduate scheme, and it has generated huge sums for the taxpayer. It is also one of the largest private employers on the Isle of Wight.
Globally, the market for radar technology is £5 billion a year, with 20% coming from the US, and the majority of the balance coming from other markets. As a result of our highly regarded skill in the sector, UK radar products are now installed in approximately 100 countries, and the majority of those products are believed still to be in active service. BAE is the primary UK supplier of radar technology to global customers, but international competition is strong from the likes of Lockheed Martin, SELEX, Thales and Raytheon. If developed correctly, the UK has obvious political and economic advantages, which will allow BAE to remain a market leader.
On the island, BAE employs 290 people. In its radar business, it employs 510 people across the UK, and it has additional sites in Chelmsford, Portsmouth and Dunfermline. In 2009, an Oxford Economics report on BAE assessed its financial contribution to the UK as being more than £78,000 per full-time employee, which is 85% higher than the national average and 34% higher than in manufacturing in general. In the same year, it was estimated that BAE spent £4.1 billion paying for equipment, components, raw materials, rent, energy and other services from UK suppliers. That meant that for every 10 BAE jobs in the UK, another 12 were created in the supply chain. One example is a company called Pascall Electronics, which is also on the Isle of Wight, and that is just one of many local Isle of Wight suppliers in BAE’s supply chain.
Those figures cannot be ignored. The economy and defence of the UK, and the population of the Isle of Wight, simply cannot afford to lose the radar industry. Recently, however, events have conspired to threaten the current situation, and this incredibly specialized and niche manufacturing industry is in danger of being lost. The first reason for that is that a number of large long-running programmes have finally been finished. They have been delivered to the MOD after years of extensive planning, research, development, trials and testing. The most notable are Sampson, which is in the Type 45 destroyers, and the forthcoming Artisan RT997, which will be in the Type 23 frigates. Sampson has been universally recognised as a world leader, and Artisan has benefited greatly from the reuse of parts of the same technology. Consequently, it, too, has been designed to be extremely competitive in the global market. That has particular significance because both systems are designed and constructed on the Isle of Wight.
As those contracts with the MOD come to an end, BAE’s work load in the UK has decreased. There is simply not enough work to sustain such high employment and the range of specialist skills required for further development. BAE therefore recognises that it must focus on its international markets to avoid redundancies. Additionally, the MOD has chosen to take delivery of an off-the-shelf system from the US company Lockheed Martin rather than a BAE system to cope with the modern problem of offshore wind farms. That was done instead of working with BAE to mature a wind farm solution that could have been made available through its existing radars.
Having made that observation, let me quickly stress that the company appreciates the MOD’s logic in making that particular decision at that particular time, but the side effect has been to create genuine concern. If the MOD is planning further purchases of off-the-shelf products from the US or any other foreign supplier, and BAE so much as appears to fall out of favour with the MOD, its opportunities for export business will be adversely hit. The reason for that is that when potential clients abroad look at BAE products, they judge their worth by the standards of the UK. Has the MOD bought these products? Does it endorse them? Should the MOD cease to work in partnership with BAE, it will indirectly, and probably irreparably, damage the company’s credibility in foreign markets.
Should global sales in BAE start to diminish, it is likely to do what companies do when sales decrease—make employees redundant. Should it then go as far as deciding to cease work on radar, the MOD will simply lose the only technical experts in the field of radar in the UK. The inevitable outcome will be a huge increase in the costs of through-life care for the MOD’S current radar fleet, because it will have to pay a foreign company to keep it running.
The possibility that a company might lose international credibility and have to lay off staff is not a reason in itself for the MOD to purchase equipment from any defence company, let alone BAE. Indeed, BAE is not asking for handouts, subsidies or guarantees of sales at some point in the future—far from it. It recognises that having just come to the end of some very long-term programmes, the MOD has no need to buy further equipment. It accepts that there will be a competition for the replacement of the rest of the air defence system in 2017, and it is confident that its entry into Project Vigilance will be of the highest standard. However, it feels a firm appreciation of the relevant issues by the MOD is vital for the protection of the UK radar industry’s future. The most cost-effective method of developing the next generation of radar defence for the UK is by defining a cohesive and credible long-term partnership with the MOD. That was demonstrated successfully with the last projects, and those before them, including the multi-function electronically scanned adaptive radar and advanced radar technology integrated system testbed programmes. I also fervently hope to protect the employment of my constituents, and those constituents of my colleagues who are also affected by the issue.
I want to make a final point. Radar has defended our country definitively at least once, in 1940. It is likely that it has done so on many other occasions that are not in the public domain and it is more than likely that it will do so again in the future. I pose this question: is it not essential that the radar technology our military are asked to use should be of British origin, in research, design and manufacture? It makes perfect sense to me that the company that we use to develop such sensitive technology should be British-based, like most of its employees. What would happen if there were to be an incursion into our airspace by a foreign power and the UK Government did not have the control and flexibility that we enjoy today, because the designs were not British? Many might scoff at that suggestion, and say that surely it makes no difference which of our allies makes our radar. It probably does not at the moment, when our airspace is not being challenged on a daily basis, but none of us knows what will happen in the future. Why should we take the chance when there is a world-class company specializing in the area in question, native to our country? Why would we even think about taking the risk? That would not only be imprudent, but would smack of recklessness.
No one is asking the Government to help one company over another, to provide subsidy or even to point fingers and lay blame about previous decisions that have affected a company’s reputation. By continuing to ignore those companies in the UK that add genuine value to the economy, that are recognised world-class providers of technological solutions, that carry the British brand globally, that employ large numbers of people and, in the case of BAE Systems, are integral to the very defence of the United Kingdom, we will end up cutting off our nose to spite our face.
The Parliamentary Under-Secretary of State for Defence (Peter Luff): I begin in the customary way, but entirely sincerely, by congratulating my hon. Friend the Member for Isle of Wight (Mr Turner) on securing the debate. I am always impressed by the diligent way my hon. Friend represents his constituents’ interests, and I hope to encourage him by showing that there is a significant amount of work for British radar companies both here and overseas.
I hope that my hon. Friend will forgive me for saying that he gave a rather half-empty view of the radar world and the future of the British industry. I hope to persuade him that the glass is comfortably more than half full. The future of the British radar industry is an important topic and I am pleased to be able to share with the House all the good work in which the Government are involved, in support of that industry. My hon. Friend will understand that success has many fathers and failure is an orphan, and in that spirit I offer the thought that, as a Worcestershire Member, I look towards Malvern’s proud role in the development of British radar systems; I take a close interest in the development of radar.
The defence and security of our nation and people is the primary responsibility of Government, and defence is, as will be appreciated, my primary interest. There is a vital requirement for the detection of airborne assets entering and travelling through UK airspace, as my hon. Friend emphasised in his excellent speech. Radar is the primary tool used for such detection, whether for the tracking of co-operating civil aircraft or the detection and engagement of potentially hostile aircraft. UK companies such as BAE Systems, SELEX and Thales supply many of the radars that we rely on for that critical role. I want to emphasise that: I regard SELEX and Thales as British companies, and later this afternoon I will receive a delegation from colleagues in the House, making the case for SELEX, and will be visiting its excellent offices in Edinburgh on Monday to see its radar work. However, my hon. Friend is right to recognise the proud record of BAE Systems as well.
Our armed forces operate across the world—not just in Afghanistan and Libya, but also in our permanent bases overseas such as the Falkland islands. Accordingly, radar technologies sourced from British companies are deployed by our armed forces around the world so we recognise the importance of radars across a range of military systems. They are a critical element of our air defence capability, supporting operations on land and sea and in the air. Recent operations over Libya have clearly demonstrated the effectiveness of commanding the air domain. Radars are required for combat systems working alongside our complex weapons from ships, submarines and aircraft as well as troops on the ground, so our ability to sustain and develop those systems, including our ability to respond rapidly to emerging and evolving threats, is essential to our operational effectiveness. On that point, there is nothing between my hon. Friend and me.
I am glad to reassure my hon. Friend that the UK’s industrial capability is critical to meeting the vital defence requirement that I have outlined. Indeed, we are currently working with BAE Systems and other UK industrial players, together with our scientists in the Defence Science and Technology Laboratory, better to understand the issues and to share our thinking regarding the evolving requirements—and they can evolve quite fast. That is very much in the spirit set out in last year’s Green Paper on technology, equipment and support. We enjoy a close and productive working relationship with our radar suppliers and look forward to maintaining that in the years ahead, so I was slightly disappointed by the way my hon. Friend characterised our relationship. I hope that BAE Systems feels that it has a constructive relationship with us.
On my hon. Friend’s points on air defence radars and wind farms, I must stress that the provision of up to three proven wind farm-tolerant radars by the wind farm developers, removing the objections of the Ministry of Defence to those wind farms and releasing significant renewable energy potential, is seen across Government as very encouraging. My ministerial colleagues have worked hard to achieve that. Indeed, the Secretary of State for Energy and Climate Change has acknowledged that work, which has been achieved by co-operating across Government, and with industry, to reach an outcome that is beneficial to our national security, energy security and decarbonisation goals. Furthermore, it is not the case that the UK’s air defence radar network will be made up of a foreign fleet in the future. I am assured that UK industry is developing a wind farm-tolerant air defence radar, and I welcome that.
There are many radars in service with our armed forces, Some examples are long-range air defence sensors, medium-range air defence systems, Type 45 air defence sensors—my hon. Friend referred to the Type 45 during his speech—and air traffic control sensors, many provided by UK companies, including BAE Systems. In the long- range sector, UK BAE Systems produces the Type 101 and 102 radars used in support of the defence of the UK. In air traffic control there is UK involvement in the Watchman radar—again with BAE.
However, it is in ensuring the future capability and reach of the Royal Navy that UK companies stand out. I am happy to endorse what my hon. Friend said about the Sampson multi-function radar fitted to our newest class of destroyers, the Type 45, which, incidentally, is supported by MBDA UK and BAE Mission Systems. I want to make the point that support is extremely important. My hon. Friend should not concentrate only on manufacture, although I understand its importance for his constituency. The supporting of radars is also hugely important, and it brings many important jobs. It is an important skill for the UK.
Also in the Type 45 class of ship there is the Thales long-range radar, which is supported by BAE Mission Systems, and the Royal Navy’s next generation of radar capability, the UK company BAE Mission Systems radar—the RT997. The contribution to the Royal Navy’s current capabilities by UK companies is evidenced by the BAE mission systems radar 909, fitted to Type 42 destroyers and mainly supported by the same British companies. There is also the RT996, which is fitted to many ships throughout the fleet, including Type 23 frigates and destroyers, amphibious support ships and Illustrious, for which in-service support is provided through an award-winning long-term contract with a UK company. There is no shortage of business here, especially for UK companies.
Penny Mordaunt (Portsmouth North) (Con): I thank the Minister for giving way. Does he agree that, when deciding whether to buy in the UK or from overseas and where to invest in research and development, we should be thinking about the export market, about how many can be built over a particular cycle, and about whether the technology is genuinely innovative? The examples that he gives fit into all three categories.
Peter Luff: I agree with my hon. Friend. I hope to talk later about exports and our export ability, an important part of the future of the UK’s radar industry. One of the major changes that we seek to achieve through our acquisition strategy—not only in radar but across the board—is to ensure that the exportability of a product developed for UK purposes is considered early in the life-cycle and acquisition process. When investing in capability for the British armed forces, we should develop a capability that has a ready export market. My hon. Friend is right to emphasise that point, and I shall return to it later.
I turn next to a future capability referred to by my hon. Friend the Member for Isle of Wight. Project Vigilance will provide an upgrade to existing air defence radar systems, with the opportunity for industry to compete for those elements of the air defence radar system that need replacement. The project is still in its early days, and its exact scope and requirements are still being decided.
Project Vigilance is currently planned to sustain the long-range surveillance and air defence capabilities currently provided by the T101 and T92 radars, which allow United Kingdom air surveillance and control system force command and chief of joint operations to detect, track, identify, monitor and, if necessary, take action against objects flying within, approaching or adjacent to UK and Falkland Islands airspace. Work to develop the strategy is under way.
Given the current financial climate, taking an incremental approach to Project Vigilance will ensure that existing sensors are utilised to full effect, that the whole air defence network is coherent and that each reaps maximum benefit from other interlinked projects. That applies not only to MOD projects, but to other Departments’ initiatives and requirements, including the need, whenever possible, to enable the use of renewable energy; I say “whenever” to emphasise the great importance that we attach to that.
Surveillance data is not limited to military air defence radars; information comes from a multitude of sources that includes military and civilian air traffic management radars, and links to NATO air defence sites and tactical data link from air, surface and land platforms. Again, industry has been and will be invited to compete in these and other projects.
Moreover, the utilisation of a plethora of data sources provides not only resilience, but allows defence to optimise the air defence radar footprint to ensure that an appropriate level of redundancy is met. We must have the capacity to ensure that we can carry on doing what we need to do in adverse circumstances. It is on this foundation that the air command and control strategy is being developed, but we recognise the need to ensure that value for money is obtained from the Project Vigilance procurement strategy, as my hon. Friend would wish.
There is also good news on another radar project. Project Marshall is a large and wide-ranging project for the provision of terminal air traffic management, essentially the provision of air traffic services to military and civil aircraft operating in and out of Government aerodromes. Air traffic control services are currently provided to 70 MOD-owned airfields and air weapons ranges through the use of a wide range of equipment located on more than 100 locations in the UK and overseas.
Project Marshall has four key objectives. The first is to ensure a safe and enduring terminal air traffic management capability; the second is to address current issues of equipment obsolescence through a programme of capital investment; the third is to address current regulation changes and make provision for emergent regulatory issues; the final one is to rationalise arrangements in order to benefit from associated efficiencies and savings. This transformation project will ensure that military air traffic control services continue to be operated in a safe manner, while complying with relevant legislation. The new services are planned to commence in 2014, and several UK companies are involved in the ongoing competition.
There is more good news, this time on the naval side. I have already highlighted some of the support that the Royal Navy receives for radars from UK companies. Five types of primary and secondary navigation radars are fitted to Royal Navy surface warships and submarines. I recognise the excellent support that a range of radar contractors have provided over recent years in maintaining the primary and secondary navigation systems used by the Royal Navy.
As for the future, the navigation and situational awareness radar is planned to replace 1007, which is fitted to most Royal Naval vessels; it is being designed to provide primary navigation and sustained situational awareness on surface warships. The project is in its assessment phase and, against current plans, the radar system is due to enter service in 2016.
I turn next to the air sector. I bear in mind what my hon. Friend the Member for Portsmouth North (Penny Mordaunt) said about export ability. Our highly capable Typhoon aircraft have long been served by the mechanically scanned, or m-scan, Captor radar, which is produced by the four partner nations on the Typhoon project. However, as the defence environment evolves, no matter how good those mechanically scanned radars are, they are having to be replaced by electronically scanned, or e-scan, radars, which provide increased detection and agility against a wider range of targets and a less easily countered capability.
In partnership with our Typhoon partners and industry, we are developing an e-scan solution that will further enhance Typhoon’s capabilities well into the 21st century. Industry has played, and continues to play a full, active role in achieving the optimum solution on e-scan. Not only will e-scan result in a capability leap for the UK Typhoon fleet but it will further the chances of success for Typhoon in the highly competitive fast-jet export market, where e-scan is a key discriminator for many export customers. For example, the Indian Government order depends on the development of the e-scan radar, and we attach great importance to winning it, as it will represent a lot of business for UK industry—and not only in radar but across the aerospace sector.
We must not forget exports. There are significant opportunities to supply civil radar, for airports and air traffic control services throughout the UK. There will be an increasing demand for solutions that can mitigate against interference from wind farms. There are also increasing opportunities overseas, driven by airport expansion and upgrades in markets such as Brazil, Russia, India, China and the middle east. UK strengths in civil radar and air traffic control solutions, which my hon. Friend the Member for Isle of Wight rightly emphasised, mean that we are well placed to make the most of these prospects—but in a responsible manner, consistent with the UK’s export controls. UKTI can help UK companies sell overseas through a range of support, including trade missions, overseas exhibitions and inward buying missions. I encourage UK industry to make the most of these opportunities. Although I suspect that BAE systems needs no such encouragement, I encourage it none the less.
The defence and security equipment international exhibition takes place in docklands this week, and it will showcase UK industry on the world stage. My ministerial colleagues and I will use that event to meet a large number of overseas Government delegations; high on the agenda, if not at the top, will be defence exports and the scope for the UK to engage in greater industrial partnerships across the globe. There are a number of attractive export prospects for UK radar systems, from a range of British companies, including those companies that I mentioned at the outset. It is a diverse sector. For example, UKTI DSO is already actively supporting BAE Systems with a campaign in Qatar.
In summary, I assure my hon. Friend and the House that we remain committed to supporting the future of the radar industry. To me, the future of the industry looks exceptionally bright. My hon. Friend has every reason to be confident about it, and about the future of his constituents.