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UK helicopter industry debate

24th January 2017

Harriett Baldwin responds on behalf of the Government to a debate on the UK
helicopter industry.

The Parliamentary Under-Secretary of State for Defence (Harriett Baldwin)

It is a pleasure to serve under your chairmanship, Mr Howarth, this morning. I congratulate my hon. Friend the Member for Yeovil (Marcus Fysh) on securing this timely debate on the UK’s helicopter industry. He is absolutely right to raise this issue, which is important for his constituents, particularly given Yeovil’s long history of supporting our helicopter industry, which he highlighted. I welcome the opportunity to highlight to the House the work we are doing.

This is an ideal moment both to take stock and affirm that our armed forces are indeed the biggest customer of the UK helicopter industry, and to summarise some of the investment that the Government have made and continue to make in the industry. We have spent considerable sums over recent years investing in our helicopter capabilities for our armed forces, and much of that investment has been focused on Leonardo, with more than £1 billion spent on the development and manufacture of 62 Wildcat helicopters; some £800 million spent on delivering 30 Merlin mark 2 into service; and about £330 million being spent on developing the Merlin mark 4 upgrades across a 25-aircraft fleet. That investment is vital in ensuring that we have the helicopter capability we need for decades to come. The helicopters also need to be kept in tip-top condition and filled with the latest equipment.

On 9 January I was delighted to go to my hon. Friend’s constituency of Yeovil to announce a £271 million deal with Leonardo’s helicopter division to provide through-life support and training for Wildcat, which is one of the most advanced helicopters in the world. That will not only deliver a key capability for the Royal Navy and Army but will sustain 500 vital skilled jobs in the UK, most of which, as my hon. Friend has pointed out, are in the Yeovil area.

In addition, just last week I announced a £269 million contract with Lockheed Martin for the Crowsnest helicopter-based surveillance system. It will act as the eyes and ears of the Royal Navy’s ships, helping to keep our armed forces safe as they deploy around the world. The contract will also secure more than 200 highly skilled UK jobs, about 60 of which, I understand, are in the south-west—no doubt very close to, if not in, the Yeovil constituency. I reassure my hon. Friend that that and other commitments underpin our spending of more than 2% of our GDP on defence and security, which will be maintained for every year of this decade. ​The commitments are all part of the Government’s 10-year £178 billion plan to provide our armed forces with the battle-winning equipment they need.

Given that Leonardo’s helicopter division is based in Yeovil, my hon. Friend is especially interested in the helicopter element of that. Last year, we put in place a 10-year strategic partnering arrangement with Leonardo, building on the many decades of work we have done with the company. That arrangement is key to maintaining and improving cost-effective support for our helicopter fleets.

On my recent visit, I was briefed not only about the thousands of people employed directly by Leonardo’s helicopter division in Yeovil, but about the supply chain of companies, which my hon. Friend mentioned. I pay tribute to the 4,300 people who work at the royal naval air station—RNAS—Yeovilton, one of the Navy’s two principal airfields. More than one third of the UK’s military helicopter fleet is based in, and maintained from, Yeovil. The people working there will continue to support our Merlin and Wildcat helicopters for at least the next two decades. Indeed, the company will also support our current Apache fleet until they are retired. Put simply, it is clear that none of that world-leading capability would be possible without the expert work undertaken every day by the British helicopter industry, particularly by those working in my hon. Friend’s constituency.

The industrial strategy Green Paper, which was launched yesterday, has been mentioned. It signals the start of an extensive period of engagement with businesses, local leaders, local enterprise partnerships and other stakeholders right across the country, and offers an “open door” challenge to industry to come up with proposals that will transform and upgrade the sector. The consultation will provide a firm basis on which the Government can deliver a strategy that will drive growth and productivity for decades to come across all parts of the UK and all industries. The Ministry of Defence is fully engaged with the work, recognising as it does that the defence industry provides significant opportunities in many sectors and in all parts of the UK.

For defence in particular, as we outlined in the 2015 strategic defence and security review, we have a national security objective to promote UK prosperity, part of which includes a refresh of our defence industrial policy, which was mentioned by the hon. Member for Leeds North West (Greg Mulholland). That work is well under way, and an industry consultation has just been completed. I will take on board the representations I have received today regarding the opportunities that UK defence and security companies have to compete, grow and develop successfully in a global market. We want to use our defence spending to help the industry sustain vital skills, and to promote prosperity through developing the export potential of new equipment, including helicopters.

The industrial backdrop and each of the themes that have come up in this debate—skills, exports and new technologies—is as applicable to the helicopter industry as it is to any other. Those themes are already enshrined in our strategic partnering arrangement with Leonardo’s helicopter division, which was signed in July 2016. I take on board my hon. Friend’s invitation to go and ​mark the anniversary of that signing with our Italian colleagues and friends. We are already very engaged in working with Italy on the Typhoon aircraft as well.

Jim Shannon

In my earlier intervention I mentioned apprenticeships but the Minister has not mentioned them. In the strategy, could we have a confirmation of a commitment to apprenticeships?

Harriett Baldwin

The hon. Gentleman is right to re-emphasise that point. It was a pleasure to meet the apprentices employed in Yeovil by Leonardo’s helicopter division when I visited. I think I am right in saying that the armed forces are the biggest provider of apprenticeships. The defence industry partners we work with are also enormous providers, so we have a key role in that regard.

I want, briefly, to touch on exports and on how important they are to our work on helicopters at Leonardo in Yeovil. Leonardo has sold the Wildcat aircraft to South Korea and the Philippines, and continues to sell the Merlin to customers with demanding operational requirements. The contract I saw last week, for example, was for the search and rescue variant currently being manufactured for Norway. Those sales bring valued jobs and prosperity to the local region, and have contributed an average of more than £700 million a year to UK defence exports for the past five years—a truly remarkable sum. We are doing everything we can, building on the specialist skills of Government, our network of defence attachés in embassies around the world and our newly created Department for International Trade, where the Defence and Security Organisation resides. The latter provides specific export support to Leonardo, meeting ​regularly with the company and doing whatever it can to use Government resources to create a strategic export plan for the firm, with the aim of maximising civil and defence exports and producing an ongoing impact on UK prosperity.

My hon. Friend mentioned important initiatives such as iAero, which is being driven by leading south-west aerospace partners. Through the aerospace growth partnership, industry and Government have committed £3.9 billion to aerospace research to 2026, including on rotary wing, from which the UK helicopter industry will benefit. We are also co-funding a project with Leonardo to understand the potential of a rotary wing unmanned air system capability, which I had the privilege of witnessing at first hand in Benbecula last October.

My hon. Friend raised the matter of jigs and tooling for Wildcat held at the GKN premises in Yeovil. I can confirm that that is Ministry of Defence equipment but also that we have not yet been given a proposal by the industry about the next steps. We would expect to be able to make a decision by July, however, and I look forward to working with my hon. Friend closely during this time. That decision will take into account not only the specific proposal but the UK’s wider interests.

In conclusion, I emphasise how grateful I am that the outstanding skills and expertise of those employed on helicopter-related work in the UK, particularly in the south-west, are helping us to meet our ambitions and our commitment, ensuring that we continue to deliver cutting-edge, battle-winning capability for our armed forces in the UK for years to come.

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