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Secretary of State for Defence John Hutton speech on The Defence Industry in the North-West: Investing in the Future, Barrow-in-Furness, 31 January 2009

The Defence Industry in the North-West: Investing in the Future, Barrow-in-Furness Speech delivered by Secretary of State For Defence at the Defence Industry Conference, Barrow-in-Furness on 31 January 2009.

I’m delighted to have this opportunity to speak with you today. It is of fundamental importance to the UK that we have a healthy and thriving Defence industry that can provide the capability that we need to support the frontline. And all of us with a connection or affection for this part of the country know how important defence is to us.

The north-west and the defence industry have grown and developed together. When the schooner, Jane Roper, Barrow’s first ship – was launched in 1852, there were fewer than 5,000 people in Barrow. By the time Holland 1, the first Navy submarine, was launched in 1901 the reputation of this region as a centre of ship-building excellence had been established.

The relationship between the local population and the defence industry has been close ever since. Forged through two World Wars, then the Cold War and now, as we face a new era of security challenges, I believe this relationship will continue to deepen and evolve in the years ahead.

Today the north-west remains one of the UK’s defence industrial heartlands; some 17,000 people in the region are employed in jobs directly linked to defence – at 13% this is more than the north-east, Yorkshire and Humberside and the West and East Midlands combined. So we have a close interest in the future of Defence investment. From ship-building, through high-tech military aircraft, to development and innovation, Defence makes a vital contribution to the UK’s economy, supporting well paid, highly skilled jobs and careers.

Globally, the UK remains the second largest defence spender, in cash terms. Only the US spends more. Our defence spending is currently undergoing the longest period of sustained real growth since the 1980s: by 2011, the Defence budget will be 10% higher in real terms than it was in 1997.

The budget for this financial year alone is over £34 billion. This is in addition to over £13 billion spent on our efforts in Iraq and Afghanistan since 2001. This includes more than £4 billion – with around 240 current programmes running - on Urgent Operational Requirements, or UORs. BAE Systems at Warton know the importance of UORs as they equip the Tornado strike aircraft for their forthcoming deployment in support of our troops in Afghanistan.

So far, so good. But as every one of us knows, the budget pressures in today’s global economic environment are acute – there is no point in pretending that is not the case. And that is why we have recently conducted an examination of our equipment programme. This examination looked at how we could best use our increased defence budget to support our troops on the front line today while preparing for the threats of tomorrow.

This region knows better than any the importance of getting that balance right.

As you know, the Astute programme is sustaining a world class submarine building capability in the UK and in particular in Barrow. HMS Astute is currently undergoing initial testing and trials before completing her final build stages. Boats Ambush and Artful are under construction and the initial construction phase of Audacious is underway. We continue to plan for an Astute class of seven submarines.

The nearly 4,000 people working on the Astute submarines will provide the Royal Navy with its largest and most capable attack submarines to date. The Astutes are capable of a range of roles: they will ensure that the Navy can meet the challenges of the 21st Century.

But not only are the Astutes important for the Navy and the UK’s defence, they are also important for the local economy and will help to secure thousands of jobs for the north-west. For every three BAE Systems jobs in the north-west, nearly four jobs are created in the supply chain. In the current economic climate, the security of these jobs, and the building of skills and careers, is something we all acutely appreciate, and must act to secure and defend for the future.

We are in the middle of an extensive programme of investment in new warships, bringing in some £14 billion worth of investment over the next 10 to 15 years. This significant investment in our Navy is felt nowhere more keenly than here in the north-west and in Barrow-in-Furness in particular. Since 1997, more than 30 new ships have been brought into service.

Our current shipbuilding programme of highly capable vessels includes the future aircraft carriers, Astute class submarines and the Type 45 destroyers: the first of which, HMS Daring, I was proud to see berthed in her home port of Portsmouth for the first time on Wednesday.

We recognise the importance to industry of having better visibility of our future defence capability requirements. That is why we published the Defence Industrial Strategy in 2005 to give greater clarity about which industrial capabilities and skills bases we need to retain in the UK.

This visibility of our plans can be seen in the Government’s intention to build the successor nuclear deterrent. The anticipated injection of £10-15 billion at today’s prices should help ensure the viability of the ship-building industry for future decades, as will the work associated with the two aircraft carriers.

Visibility of our plans also helps the Defence industry to make informed investment decisions to secure for the future. The multi-million pound investment that BAE Systems have made at their Samlesbury site will help sustain the future of the aerospace industry in the region.

Our priority in the air environment remains the completion of Tranche 2 Typhoons and the support, maintenance and upgrade of our air capabilities. BAE Systems’ Lancashire-based Military Air Solutions is the home of the Typhoon fighter. This highly advanced combat aircraft, which I had the chance to fly myself recently, is bringing a versatile, world class capability to the Royal Air Force. This programme has brought high-skilled engineering jobs to this region: more than 10,000 people work on this and other projects at BAES’s Warton and Samlesbury sites.

The innovation this region is proud to show-case can also be seen in the innovative development of the unmanned air systems Taranis and Mantis. The domestic and export potential of these aircraft is great. And not just for military applications: there is also significant potential in civil application - defence overseas and security in the country go increasingly hand in glove.

Our long-term partnership with the defence industry also includes supporting industry in its efforts to expand exports. I and my Ministerial colleagues are absolutely committed to the promotion of exports: not only do they bring money into the economy and secure jobs in the north-west and across the UK, they also widen the platform on which the UK defence industry is based, making it less dependent on a single buyer – the government.

The purchase of 72 Typhoon by Saudi Arabia is a case in point. We need to understand and help the UK Defence industry in its promotion of exports. But in return, the industry must factor in the importance of UK defence – our defence – first.

But none of this work is possible without people, without a skilled workforce that can deliver the cutting edge equipment for our defence needs. The UK learnt the hard way in the 1990s that neglecting the workforce, its skills, careers and prospects, was ultimately damaging to individuals, the community, the defence industry and the UK itself.

Nowhere was this felt more keenly than here, in my constituency. Our Defence Industrial Strategy recognised the importance of maintaining and building these skill sets in the future: and that is why I place such importance on investing in people.

I am delighted to see that the concept of apprenticeships is finally receiving the recognition it deserves – nowhere more so than in the north-west. The Military Solutions Sites, like those at Warton and Samlesbury, recruit 100 graduates in the north-west every year. The BAE Systems Training Centre in Preston trains 400 apprentices every year.

The Maritime and Engineering College next to Cammell Laird has 49 apprentices on its training programme. They are the next generation to provide for the defence of the UK. The Cammell Laird name, revived last year, is symbolic of the link between the great past and the future for the north-west. And today, here in Barrow, there are now over 300 apprentices at BAE Systems – almost the level they used to be 20 years ago.

2009 and beyond will also be a challenge for all of us in the current economic climate. Our challenge nationally and locally is to develop the defence sector to a point where it is both sustainable and profitable in the long term. This is not an easy task at the best of times. And the current global economic climate makes that more challenging than ever. But we in the north-west have worked hard to reach the strong position where we are today. We have every reason to be realistic, but also confident about our future.

Source: UK Ministry of Defence, www.mod.uk.

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