Plenary, 17 Jan 2008

Meeting date: Thursday, January 17, 2008

Official Report 742KB pdf

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Defence Aviation Repair Agency (Almondbank)

The final item of business today is a members' business debate on motion S3M-969, in the name of Roseanna Cunningham, on the Defence Aviation Repair Agency at Almondbank—no to privatisation.

Motion debated,

That the Parliament respects the important role played by the DARA rotary wing and components business at Almondbank near Perth which provides in-depth maintenance, repair and overhaul of components for the UK's military helicopter fleet; applauds the management and workforce at DARA for creating what has become a world-class centre of excellence; recognises the important role played by helicopters at the front line of modern conflicts; notes that an announcement is expected in Westminster on 15 December 2007 on the future of DARA; regrets that, far from protecting the critical work that DARA does to keep its helicopters flying, the Ministry of Defence (MoD) seems set to sell the organisation to the private sector with the sole bidder being the small Canadian company, Vector Aerospace, in a decision which would mean the permanent loss of helicopter support to the MoD and would be effectively exporting the intellectual property and design skills required to maintain operational sovereignty; welcomes the proposals submitted by the joint trade unions which, through measures such as mobile repair teams, integrating service personnel into the business, funding for capability rather than fixed pricing and directing MoD work into the business, would ensure the long-term viability and success of the business inside the MoD; notes that Baroness Taylor of Bolton is the minister responsible for the decision, and believes that support should be given to the unions' proposals which will protect jobs, technologies and armed forces personnel.

It would probably be helpful if I gave a little background to the motion. DARA Almondbank, which is in my constituency, is part of the wider Defence Aviation Repair Agency, whose principal centres are in south Wales, north Wales and Fleetlands near Portsmouth. DARA does what it says on the tin: it maintains, repairs and overhauls aircraft, including helicopters, for the Ministry of Defence, and has done so since the 1940s, albeit under different guises. The work is extremely technical, as members will imagine, and very highly skilled. Currently, DARA Almondbank employs about 350 people, including a number of apprentices. Many of the skills are not replicated anywhere else in the United Kingdom, much less in Scotland, so Almondbank is significant well beyond my constituency.

Currently, DARA's rotary wing and components business, which includes Almondbank, is up for privatisation. The process has been going on for quite a while. To date, the only bidder for Almondbank is Vector Aerospace. For some reason, the sale is being pushed by senior civil servants at the MOD, who see it as an alternative to managed decline. The presumption is that Vector—if the sale goes ahead—will be better able to secure commercial work, and therefore to safeguard jobs. However, DARA, and therefore Almondbank, is already permitted to contract for non-MOD work, and it has been very successful in doing so, for example Boeing is on Almondbank's customer list.

It is not so long since some major investment was made in Almondbank. I last had a members' business debate on DARA in September 2003, only one month prior to which the new hydraulic test facility was officially opened. That £5 million investment was supposed to guarantee the future of the plant and its employees, but only weeks later it was clear that the uncertainty that had hung over the plant for many years was going to continue. It was magnified by the announcement not long after that privatisation was being viewed as the best way forward.

We are now nearing the end of that process. I have had many meetings with local trade union representatives, with employees of DARA, with members of the local chamber of commerce and with officials from Perth and Kinross Council, all of whom have expressed concern. The council long ago prepared a local impact survey to assess Almondbank's importance to the surrounding area, and it has kept updating it because of the continued uncertainty. The most recent update was in 2006, although the council is now having to reconsider the survey, as a crucial point has now been reached.

In 2006, Almondbank accounted for 6.4 per cent of total employment in the area, and DARA's presence contributed about £38.4 million to the local economy. More important, however, is the type of work that can be found at Almondbank. The economy of Perthshire, like that of many other areas of Scotland, is overly dependent on tourism and the service industry. I do not decry either of those areas of employment, but any one of us would want a wider variety of work to be available in our local areas. Tourism in particular is notoriously poorly paid and seasonal, and many of the jobs that are available in the service industry are equally low paid.

It is not the general image of Perthshire—I am fed up saying this in the chamber, and I know that others have said it too—but Perth and Kinross wage rates are among the lowest in the UK. People generally find that difficult to accept or understand, but it is the truth, therefore the availability of well-paid, highly skilled technical jobs is vital for the area. People come to work at Almondbank from quite far afield—from all parts of Perthshire and Kinross, Fife, Dundee, Stirling and even further. It is not just the fully trained jobs that are important. DARA Almondbank is enthusiastic about taking on apprentices, and its continued commitment to that is important locally.

True, at the moment we are not discussing closure. The Westminster Government was meant to make an announcement on DARA's future before Christmas, but it has been delayed for reasons we know not—I cannot even begin to guess why. The single bidder for the Almondbank site, Vector Aerospace, is a very small Canadian company that would double in size should it succeed in the purchase—that is how small it is. If Vector ownership does not work out—frankly, given its size, that remains a pretty major question for all the employees—then what? What will happen to the defence work that still needs to be done? What will happen to the employees and who will protect them in the future? Many questions are still hanging over us.

The end-to-end review of logistics, which was the subject of my 2003 debate on DARA Almondbank, recommended that helicopter work should be rolled back into DARA, therefore that Government review did not support what the current Government proposes. The trade unions are opposed to the sale and they have put a proposal to Baroness Taylor, who is the relevant minister. In an echo of the approach that the Government has taken to the Post Office, it has directed work away from DARA, thus bringing about the very situation that it wishes to use to justify privatisation. For example, that has included getting service personnel to do some of the work, on the basis that they are somehow a free resource, which of course is a mistaken way to view the matter.

The joint trade unions—the Public and Commercial Services Union, Unite and Prospect—have proposed the creation of mobile repair teams to service helicopters at bases or at the front line; a change in funding from output funding to contracting for capability; and integrating service personnel into the business. The joint trade unions need to hear that they have the support of as many people as possible, which is what this debate is really about. That support needs to be communicated to the trade unions.

The future of DARA Almondbank is important to me and my constituents, many of whom work there. The issue is at the forefront of Perth and Kinross Council's attention and Perthshire Chamber of Commerce maintains a watching brief. The three trade unions are jointly involved in proposing a different outcome from the one that the Government is considering. I want the Scottish Government at least to do what the Welsh Assembly Government has always done and give full backing to the DARA workforce and to the joint trade union proposals. I am extremely pleased that the debate will be responded to by my colleague the Cabinet Secretary for Finance and Sustainable Growth, who also has many constituents who work at DARA Almondbank.

I welcome the debate and I pay tribute to Roseanna Cunningham, the member for Perth, who has consistently supported DARA Almondbank and raised its profile. As a regional member for the area, I am acutely aware of DARA Almondbank's important role as a world-class centre of excellence and as part of the fabric of the local economy, as Roseanna Cunningham said. DARA provides the expertise and ability to strip completely, replace, repair and rebuild everything, from systems, components and equipment to whole aircraft, for military and commercial organisations. As Roseanna Cunningham outlined, it has an impressive record in providing component support for the Sea King and Tornado aircraft, which has rightly given it an unparalleled national and international reputation. Over the years, DARA Almondbank has achieved state-of-the-art status and I join Roseanna Cunningham in paying tribute to the outstanding professionalism of all those who work at the site.

Everyone knows that the helicopter forces are among the most pressed of our military resources in Iraq and Afghanistan. Because insufficient numbers of helicopters are available—as evidenced by the recent hurried Government decisions to buy six Merlins from Denmark and to convert eight Chinooks that had been intended for special forces into so-called standard configuration—those that are being deployed at present are being used at a rate that is far in excess of what was planned. Scottish Conservatives therefore support the retention of DARA Almondbank so that, at this critical time, the expertise that is available to Her Majesty's forces is in no way impaired.

Although our first concern must be for the national interest, we want the site to develop a strong future within Scotland's manufacturing industry. There is no doubt that the closure of DARA Almondbank or any scaling down of operations at the site would have a devastating effect on the Perthshire economy. We must approach the issue of how best to provide for DARA's future in the United Kingdom with that in mind. It is clear from Roseanna Cunningham's comments that the activities that DARA Almondbank currently undertakes will continue to be required to provide essential services to our military capabilities, especially when there is a growing need for those military capabilities to be enhanced to meet the extensive demands of our foreign policy. The challenge therefore is to ensure that the potential is achieved not only in the short term but in the long term.

The UK Government's indecision over DARA is unacceptable. It cannot be right to put in jeopardy a vital support operation when our troops are engaged in some of the most demanding military operations since world war two. The great uncertainty that that poses for the workforce in Perthshire is likely to undermine the workers' morale as they do their very best to provide support for our troops on the front line.

The role played by DARA in the supply of helicopters to the front line is critical, and the military logistics that it provides are pivotal. Our front-line forces are currently at full stretch. They need to be confident that the essential back-up is in place. DARA Almondbank has demonstrated on many occasions that it can meet the challenge.

The Scottish Conservatives welcome any moves designed to make the logistics back-up for our armed forces more efficient. We shall resist any measures that so cut our logistics capability that they starve the front line of vital support.

It is vital that SNP ministers are in close contact with the MOD on this and other defence issues that are important to the Perthshire economy. I hope that the cabinet secretary will be able to tell Parliament this evening about the approach that the SNP Government has taken and about any meetings that he intends to have with UK ministers about DARA Almondbank's future.

I congratulate Roseanna Cunningham on securing the debate. I am also pleased to see that John Swinney, the Cabinet Secretary for Finance and Sustainable Growth, is here to sum up.

In situations such as the one at Almondbank, it is important that Parliament is given the opportunity to express a view and highlight the concerns of the workforce. I, too, have met the shop stewards to discuss the situation. I must stress to Parliament that they are a pragmatic set of individuals who are very keen to find a sensible resolution to the predicament in which they find themselves. They are conscientious and are doing an excellent job of representing the workforce at Almondbank. From a trade union perspective, they are providing a robust and proportionate defence of their members and using their expertise and knowledge to influence the decision-making process. I commend them for that and look forward to working with them on the proposals as they develop.

It is fitting, during trade union week, that we consider and highlight this approach to trade unionism. This brand of trade unionism has been championed here in Parliament over the past week; it is a brand of trade unionism that will ensure a vibrant, relevant and effective trade union movement in Scotland in years to come.

Of course, such situations are never easy. I have been through them myself as an individual, I have represented people who were moving into the private sector from the MOD, and I have been part of a management team helping people to adjust to the private sector after a move from the MOD.

Trade union proposals for an alternative to the sale have come late in the process. I understand that the proposals were at the request of former MOD minister Lord Drayson. It is vital that the trade union proposals are given maximum consideration by the MOD. There has now perhaps been a period during which the proposals have been considered in more detail with the MOD, and I really hope that they will play an important part in whatever future DARA has.

From the taxpayer's point of view, it is only fair that the trade union proposals be given the same sort of weighting as the proposals from the private company. As Roseanna Cunningham said, the unions have also flagged up legitimate concerns about the potential new owner. I hope that the MOD will factor those concerns into any final decision.

I have worked with the MOD over a number of years and I know that the organisation is always sensitive about the transfer of employees into the private sector. The MOD works closely with private sector employers to ensure that standards continue to be met following any transfer. However, we are not talking about minimum and statutory protection should a sale go through; we are talking about ensuring that high-quality standards of employment are maintained, and we are talking about recognising the importance of effective industrial relations in high-performing workplaces.

What about the future? Concerns remain over a possible secondary transfer; there are fears that a transfer between two private sector companies would be very different from a transfer between the MOD and the private sector. I would be very happy to work on a cross-party basis over the next few weeks—in particular with Roseanna Cunningham and Elizabeth Smith—to see what we can do. We have to try to ensure the best possible future for DARA.

Today I spoke to Gordon Banks MP, who told me that he had secured an adjournment debate in Westminster next week. He has also made representations to Des Browne and Baroness Taylor on the importance of visiting the site to see at first hand the excellent job done by the workforce. I hope that they will pay such a visit in the near future.

It is also important to acknowledge that the First Minister has signalled his intention to visit the site, which I welcome. I stress to the First Minister that there have been a number of job losses in Scotland over the past few weeks. I hope that he can support the individuals involved as we move forward.

I wish the unions the best of luck over the next period, which is important for them. I have been through a similar process and I know that this is a worrying time. The unions are pragmatic and are doing a really good job of defending their members. I look forward to giving them my support in future.

This is the first occasion on which I have had the opportunity to close a members' business debate and I am delighted to do so for two reasons. First, I am delighted to close a debate that was led by my dear friend and colleague, the member for Perth, Roseanna Cunningham. Secondly, the subject of the debate is one in which my constituency of North Tayside has an interest, given how close the plant is to the constituency boundary. The DARA plant can be only about two miles away—[Interruption.] Two minutes, as I hear Ms Cunningham saying.

The plant employs many people in Roseanna Cunningham's constituency and many people in my constituency, so I am delighted to be able to close the debate and set out the Government's position.

I congratulate Roseanna Cunningham on securing the debate and on providing the opportunity for members to put on public record their views and their recognition of the vital role of the workforce of the Defence Aviation Repair Agency Almondbank as it, once again, faces an uncertain future.

I welcome the contributions that were made by Elizabeth Smith and John Park. On John Park's comments, it is of course appropriate that the debate is taking place during trade union week. It has been a pleasure to see so many of our trade union colleagues involved in the events that have been taking place in and around the Parliament. We have had the opportunity to engage with the trade union movement and to address an issue of concern in this debate.

I say to Mr Park and to other members that the First Minister has taken a close interest in the situation at DARA Almondbank and will be visiting the plant shortly. I say to Elizabeth Smith that the Government welcomes the points that she put on the record. We, as a Government, have made a number of representations on Almondbank to the United Kingdom Government. I wrote to the Secretary of State for Defence in August, following his notification letter to the Scottish Government about the selection of Vector Aerospace as the preferred bidder for DARA's rotary-wing business. I reminded him of the community's concerns about the implications of the proposed sale of Almondbank. In continuing with those representations, I will ensure that the Ministry of Defence is brought up to date on the views that members have expressed today.

Although no final decision has been taken about the future of DARA's rotary-wing and components business at Almondbank, the threat of privatisation is real. I understand that an announcement on the way ahead will be made soon. I have to say that the Scottish Government questions the Ministry of Defence's belief that a decision to sell DARA Almondbank to a private bidder would be in the best interests of defence and of the workforce at Almondbank. As Roseanna Cunningham said, there was a debate on the subject in 2003, when the focus was on the threat of closure that hung over DARA Almondbank. We face a new challenge at this stage, which has to be addressed with the same vigour with which members pursued the concerns that they raised in the previous debate.

It could be argued that the closure of DARA Almondbank has been avoided and that privatisation is the saviour and the cure for the site and its workforce, but the Scottish Government does not take that view. Our concern is that the potential transfer to a private bidder does not guarantee permanence and stability for the workforce. Such permanence and stability would be much more likely if the Ministry of Defence were to give whole-hearted consideration to the proposals that have been put forward by the various unions that represent the Almondbank employees. I appeal to the MOD to undertake that whole-hearted consideration.

Although, as Mr Park correctly said, the unions intervened at a fairly advanced stage of the process, in the circumstances it would be a reasonable response to ensure that their propositions were fully and adequately considered before a final decision was reached by the MOD. Not to do so would cast doubt on the MOD's commitment to the trade unions that there will be a level playing field in considering in-house and external solutions.

The text of both the 2003 motion and the one that we are debating today makes clear the importance of DARA Almondbank and its employees. With their technical and specialised skills, the management and workforce at DARA Almondbank have created not just a Scottish or UK but a world-class centre of excellence. The last time I visited the plant, I encountered individuals whose skills and depth of knowledge on the individual specialisms reassured me of the strength of the engineering skills base that exists in Scotland.

In his speech, Mr Park—who is making a formidable contribution to Parliament on skills policy in general—recognised the significance of the skills resource and asset that is contained in the workforce at Almondbank. It would be folly to move in a direction that potentially undermined the availability of such a skills base to the Perthshire and Scottish economies.

The economic impact of DARA Almondbank is significant to the local economy, which is the preoccupation of Roseanna Cunningham and me—as the constituency members in the local area—and the other members who have spoken tonight. DARA Almondbank is one of the largest employers in the Perth and Kinross area, and the nature of its work is truly unique. If DARA Almondbank were to see a reduction in the number of workers, particularly high-skilled engineers, that would have a significant multiplier effect on the local economy.

In drawing my remarks to a close, I congratulate Roseanna Cunningham on the tenacious way in which she has pursued the issue in Parliament over many years. Let me reassure her of the Scottish Government's firm support for the workforce at Almondbank and of its determination to ensure that the Ministry of Defence takes adequate account of the views of the Scottish Government and Parliament in ensuring that DARA Almondbank and its workforce can continue to make a formidable contribution to the Perthshire and Scottish economy.

Meeting closed at 17:42.