Thursday, 16 September 2010

North West defence contracts - A letter from Ed Milliband to Liam Fox

I have had the opportunity to speak with Ed Miliband briefing him on the importance of the BAe systemns and defence contracts to this region as part of my ongoing efforts to raise the importance of this sector to Britain and defnd workers and their jobs from ideological, unneccessary and damaging coaltion cuts.

Following our conversations, Ed took up the fight and wrote to Liam Fox to support Britain's industrial policy and the jobs of defence workers and their familes. David Miliband also came to visit workers at Salmesbury to support the argument.

Rt Hon Liam Fox MP
Secretary of State
Ministry of Defence
Main Building
London SW1A 2HB

6 September 2010

Dear Secretary of State,

There is growing concern about the Coalition's commitment to the Eurofighter Typhoon, and to the communities that rely on the employment this project brings.

During the election campaign debates, the Deputy Prime Minister made clear that he would axe the next stage of the Eurofighter Typhoon deal, regardless of the view that emerges in the Strategic Defence Review (SDR).

The Liberal Democrat manifesto stated "We will not purchase Tranche 3B of the Eurofighter." In contrast, Labour signed the contract for Tranche 3A and made clear the decision on when and how to proceed with Tranche 3B was a matter for the SDR.

The section on Defence in the Coalition Agreement made no mention of the Eurofighter despite its strategic importance. Despite this being an issue of clear and substantial disagreement between the parties, Burnley's new Liberal Democrat MP Gordon Birtwistle has said: "I don't think they got down to that level of detail in the talks." Yet this isn't a 'detail' but of real strategic economic importance to the region.

The aerospace industry has been clear that scrapping the Tranche 3B order would cost thousands of jobs at BAE Systems in Samlesbury and Warton and at supply chain firms across the region. One study has demonstrated that for every one BAe employee, a further ten are dependent on the local investment for their employment.

The company's R&D investment is one of the nation's biggest investors in R&D. It also risks greatly damaging the Rolls Royce plant in Bristol where the engines are made and the Selex plants in Edinburgh and Luton where the proposed E Scan Radar is manufactured.

The 4,000 strong BAe workforce employed on this project, and the 750 companies reliant on being part of the supply chain, would welcome a clear statement from the MoD to clear up the confusion that exists regarding the Coalition's approach to the Typhoon.

Can you therefore confirm that you intend to honour the commitment given by the previous Labour government to move ahead with the third tranche of orders for this aircraft?

Can you confirm that there has not been a decision, in advance of the SDR, to rule out completing Tranche 3B of this project and that the SDR is able to approach this decision with an open mind?

Considering the Coalition's approach to industrial policy to date, you will understand why concerns are growing that a decision may already have been taken. There is a growing view that the Coalition may make a short term decision on narrow cost grounds alone to look to off the shelf foreign procurement, ignoring the impact on the region in terms of employment, skills and growth.

The decision to withdraw the Labour government's loan to Sheffield Forgemasters showed that the Coalition does not understand the value of an active industrial policy in ensuring that we can become world leaders in high tech manufacturing, not least in green technologies.

After the decisions to axe the Regional Development Agencies, cut investment allowances which will hike the tax bill of manufacturers and the Coalition Agreement proposals to strip the R&D tax credit from large companies, there is now a clear pattern emerging of a lack of understanding of the importance to our economy of supporting manufacturing.

Our competitors such as Germany, France, the USA and South Korea are all using active industrial policies with a mix of grants, loans, infrastructure investment and higher education funding. The Coalition ideological slash and burn approach is sending a signal that Britain is closed for business.

The BAe workforce, local community and I look forward to you taking the opportunity to make clear that the Coalition shares our commitment to this vital national defence and industrial project.

Yours sincerely,
Ed Miliband MP
CC Rt Hon Vince Cable, Secretary of State for Business