Defence Industry (Scotland)

Sandra Osborne (Ayr): I congratulate my hon. Friend the Member for West Renfrewshire (Jim Sheridan) on securing the debate. I very much agree with his assertion that many jobs that have been created and secured in Scotland by the defence industry would disappear like the proverbial snow off a dike if Scotland were ever to become independent.

I wish to raise the matter of the Nimrod contract, which is very important to my constituency. In March, an agreement was reached between BAE Systems and the Ministry of Defence to halt the production phase of Nimrod. That resulted in the loss of 1,005 jobs at BAE's five sites throughout the UK. In my constituency, 195 jobs were lost, as the hon. Member for Moray (Angus Robertson) has already said. I am pleased that he is taking such a close interest in my constituency. It is more than the Scottish National party candidate did at the Scottish Parliament election, but it is welcome nevertheless.

I met BAE's management and the Minister responsible for defence procurement to discuss the matter. I had been aware for some time that the contract was in serious trouble. The Government have provided substantial funding to put the contract back on track, as has BAE Systems. There was a real prospect that the contract would have been terminated if that had not happened. The negotiations were difficult for both sides, and I appreciate that the action that had to be taken was taken. However, as the revised contract stands, all production after the third aircraft will be stopped while the design matures and an assessment is made of the true cost of development. That is likely to create a two-year gap between the design and development phases and the date for restarting production.

John Robertson : What does my hon. Friend think will happen to the skilled labour during those two years? Will it go to other industries and be lost to the defence industry for ever?

Sandra Osborne : That is a good question, and it was asked at the lobby earlier today. When the aircraft carrier contract was announced, BAE Systems and Thales both suggested that there was already a 20 per cent. skills shortage in the area, so it is a major concern.

As I said, the company announced redundancies. The job losses will mean that employees who currently work on Nimrod will leave the company, thus adding to the skills shortage to which my hon. Friend referred. That will also have clear implications for the Government, because increased costs will be incurred as new workers on the project will have to go through a learning curve when production is resumed. Where will we get the skilled work force that will be needed once production starts again? As an example of the many lessons that have been learned, the inner wing on the first Nimrod started at a baseline of more than 75,000 hours. By the fourth aircraft, production time had fallen to just over 25,000 hours and was still falling to reach a target of less than 10,000 hours.

I have been aware of the tremendous efforts made by the work force at Prestwick to cut the costs of the project and to recognise the problems. Their efforts, as I have illustrated, had already started to pay dividends before the announcement, but if that skill is lost to aircraft manufacturing, it is likely to be lost for ever. Surely the strategy should be to fill the two-year gap by keeping work going in the meantime. It is recognised that some elements of the strip down and manufacture, which are not subject to design change, could continue in the interim, thereby retaining some of the current work force and enabling a more realistic plan for production to restart. That would also help to reduce redundancies and secure the affected sites for the future.

I have a list of stable work that could continue in the meantime, which will not be subject to design change in the future. I hope that the Minister will use her good offices to put forward my suggestion to the ministerial team at the Ministry of Defence. As the hon. Member for Moray said, a successful lobby took place today by Amicus. The fact that it was well attended by Scottish MPs was much appreciated. The trade unions believe that it would be feasible to bring forward such work now. They are not asking for more money from the Ministry of Defence, only that agreed funding is brought forward early.

Three important issues are involved, the first of which is mitigating the redundancies. Secondly, capability must be retained and, thirdly, we must avoid substantial restart costs. Such issues are serious and the trade unions have put forward practical proposals that merit serious consideration. It is imperative that, whenever the contract recommences, Prestwick and Scotland benefit from such a substantial investment by the taxpayer. From my discussions with the Ministry of Defence and BAE Systems, I am aware that that has not been ruled out. It is especially important at the moment while the aerostructures division of BAE Systems is up for sale. It may be significant that the Nimrod work was not included in that sale. Nevertheless, whatever the outcome, will the Minister make representations on behalf of the Scottish work force to make sure that Prestwick receives its fair share of the contract when it recommences and any other defence contracts in future?