National Shipbuilding Strategy

Tuesday 29th November 2016 Written Statements

[The Secretary of State for Defence (Sir Michael Fallon)]

Sir John Parker has submitted his independent report to inform the United Kingdom national shipbuilding strategy. He has consulted widely with Government, industry and the trades unions during his work.

I have today placed copies of the report in the Library of the House and it will be made available on the Government website, www.gov.uk.

The report is a balanced critique of the challenges faced by Government and industry in the naval shipbuilding sector in recent years. However, Sir John has identified a “renaissance” in a range of regional shipyards across the United Kingdom where he has found entrepreneurial attitudes and an enthusiasm to embrace change. His report includes 34 far-reaching recommendations to transform the United Kingdom’s shipbuilding industry which will lay the foundations for a modern, efficient and competitive sector capable of meeting the country’s future defence and security needs. It will also bring prosperity benefits for shipyards and their supply chains across the country. These are for the Ministry of Defence (MOD), wider Government and industry to consider.

The Government welcome the report and are committed to delivering a modern national shipbuilding strategy. We see it as a vital part of our industrial strategy focusing on increasing economic growth across the country and investing in a more skilled workforce: which is this Government’s approach for rebalancing Britain and delivering an economy that works for everyone, not just a privileged few. While many of the recommendations are for Government, the themes of Sir John’s report —modern digital engineering, industrial innovation, competitiveness, focus on apprenticeships and jobs, export focus—also show where industry, working with Government, needs to invest in order to increase opportunities for the shipbuilding sector across the United Kingdom and enable it to thrive and grow. It also means using our shipbuilding expertise to become a leading producer of ships for export. We must use the opportunities that Brexit provides to become a global trading power again.

Shipbuilding is an important part of our economy. The MOD estimates that the Government spent around £1.4 billion on shipbuilding and repair in financial year 2014-15, of which approximately 96% was spent with five UK prime contractors. Around 15,000 people are directly employed in UK shipbuilding and repair, with an additional 10,000 jobs indirectly supported through the wider supply chain in the UK. Realising Sir John’s ambition for shipbuilding would benefit the whole of the United Kingdom.

Our vision therefore is for a strong shipbuilding sector, backed up by a modern industrial strategy.

It is important that the Government give Sir John’s work the full consideration that it deserves. I have asked officials, working with others across Government, to examine the report and recommendations, and to discuss them with industry. The Government will then publish a full and considered response and implementation plan in spring 2017. This response will be the national shipbuilding strategy.

I would like to place on record my thanks to Sir John for providing such a thorough analysis of naval shipbuilding and recommendations for a new era of co-operation and drive across the shipbuilding enterprise.

[HCWS288]