Shipbuilding Strategy

Tuesday 23rd January 2018 Westminster Hall

[Siobhain McDonagh in the Chair]

14:29

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

I beg to move,

That this House has considered the National Shipbuilding Strategy.

It is a pleasure to see you in the Chair, Ms McDonagh, and good to see many experienced hands from defence debates assembling for yet another one. It is also a pleasure to welcome the Minister to his place and to the wonderful world of defence procurement.

I declare two interests. First, I introduce this debate not only as the Member of Parliament for Plymouth, Sutton and Devonport—Plymouth is a proud military city in uncertain times because of the possibility of defence cuts—but as a vice-chair of the all-party parliamentary group on shipbuilding and ship repair. It is good to see so many members of that small but illustrious group—a band of brothers and our sister from Berwick-upon-Tweed—in their places today. Secondly, as a proud GMB and Unite member, I have had the input of those unions into the debate, for which I am grateful. The combined skills and experience of shipbuilders, engineers and master craftsmen and women contribute hugely to the debate, and it is in defence of those jobs and skills and that industry that many of us are here today.

I am sure that the Minister’s new officials have brought him up to speed, but it might be useful if I recapped briefly why shipbuilding and this debate are so important at the moment. First, though, every hon. Member, on both sides of the Chamber, wishes him and the new Secretary of State for Defence well in their battle with the Treasury to secure more funding.

The UK spends too little on defence, and that has consequences for what the Ministry of Defence can spend on shipbuilding, ship repair and ship procurement, capabilities and weapons systems. The excellent report by the Select Committee on Defence, “Shifting the goalposts? Defence expenditure and the 2% pledge”, shows that the last Labour Government spent on average 2.5% of GDP on defence, and the figure did not fall below 2.3%. Many hon. Members, on both sides of the House, would like a return to that level of spending.

With defence inflation running at a greater level than consumer prices index inflation, the extra bit that the Treasury affords defence is being eaten away as the real-terms value of defence procurement is put under more pressure. I think I speak for most hon. Members when I say that we strongly oppose, on a cross-party basis, cuts to our amphibious ships based in Devonport, in the constituency that I represent, and plans to merge the Royal Marines, but that should be taken as a given in this debate.

That is the backdrop, but the military context is important as well. We live in very uncertain times. Russia is expanding her horizons, has invaded European countries and has largely got away with it. China has ambitions across the Pacific. And the Royal Navy’s ability to command the waves is severely constrained by a shortage of manpower, a privatised recruitment system that is not delivering, and ships tied up because of faults, personnel shortages and a lack of resources. There is a focus on the carriers and continuous at sea deterrence, but the rest of the Royal Navy is suffering, and my argument is that this House will not stand for it.

The national shipbuilding strategy was much delayed, but was at least a good start. It accepted in full Sir John Parker’s recommendations, so I am not sure why it took so long to be produced. Defence aerospace is not as fortunate as shipbuilding, because at least we have a strategy. Britain is good at shipbuilding, and the many warships on sea trials, in dock being built and being planned are testament to our naval heritage and the up-to-date skills of a superb workforce right across the UK. I hope that today’s debate will illustrate to the new Minister and his officials not that that plan is wrong per se, but that with scrutiny we can make it more robust and more valuable to industry and our armed forces.

I want to highlight two principal areas in asking for revisions to the document. One is the procurement of the Royal Fleet Auxiliary’s vessels, especially the new fleet solid support ships, and the other is the configuration, capabilities, roles and realities of the proposed Type 31e frigate. As I said, the first issue is the new RFA solid support ships. The proposed three ship orders, with the vessels coming in at 40,000 tonnes apiece, would match the 120,000-tonne construction contract for the new carriers so ably delivered by British workers across the UK and assembled in Scotland.

I personally favour a restricted tender for the ships, so that only UK shipyards could build them, as they will be carrying arms, munitions and supplies, but I concede that international competition is the most likely option that the Minister will choose for them. In such circumstances, not only must the UK industry be encouraged to submit a bid and not actively discouraged by the MOD, but we must ensure that the procurement does what the procurement for the MARS—military afloat reach and sustainability—tankers did not: it must truly value the social, employment and economic impact of the work for shipbuilding and supply chain communities right across the country.

[Mr Stephen Hepburn (Jarrow) (Lab)]

I am sure that my hon. Friend is aware that shipbuilding industries throughout the world are very heavily subsidised, in one way or another, by their Government. That does not happen in this country. Does my hon. Friend think that we could get a better, more level playing field if the Government addressed their mind to that?

[Luke Pollard]

I thank my hon. Friend for that intervention; I agree with him. In fact, our hon. Friend the Member for Glasgow North East (Mr Sweeney) has raised the concern that state aid from the South Korean Government was potentially part of the consideration of the value of the MARS tankers contract, which went to South Korea. That £452 million contract was potentially subsidised by the South Korean Government, who are building skills and employment in Daewoo shipyards in that country. Excluding a little bit of final outfitting in the UK, those jobs have been outsourced and offshored.

Contracts to build ships for the Royal Navy and Royal Fleet Auxiliary should be onshored. The ships should be home grown, British designed and British made, using British steel and British technologies, and preserving Britain’s sovereign defence capabilities to design, build and equip complex and important ships for our own use and for export. The MOD could give its friends in the Treasury the good news that between 34% and 36% of the contract value would be flowing back into its coffers in tax and national insurance—bad news potentially for Kim Dong-yeon, the South Korean Finance Minister, but good news for our Chancellor of the Exchequer, who I am sure is following this debate closely and with avid interest. He is, after all, a big fan of the armed forces.

If UK shipyards build elements of the ships, it could help to fill gaps in the order books of yards right across the UK and contribute to what I believe should sit alongside the shipbuilding strategy: a clear running order of contracts over the next 30 years for the Royal Navy and RFA; a pipeline of work; a reason to invest in world-class design and production facilities, not just on the Clyde, but in reanimated yards such as Appledore in north Devon and those of Harland and Wolff and Cammell Laird. Ipsos MORI research commissioned by the Department for Business, Energy and Industrial Strategy found that 100 shipyard jobs lead to an additional 32 jobs in the manufacturing sector within a 60-km area, so there is a multiplier effect from investment in UK shipbuilding.

[Dr David Drew (Stroud) (Lab/Co-op)]

Does my hon. Friend accept that at the other end of the scale, the commercial end, there are also very profitable yards? There are two in Stroud, funny as that may seem, at Sharpness and Saul. It is important that we understand that the whole shipbuilding industry needs support, but also recognise that it is a very integrated industry. Does my hon. Friend agree?

[Luke Pollard]

I thank my hon. Friend for that intervention. I do agree. The great strength of this debate on the national shipbuilding strategy is that we can praise the contribution not only of those yards that might be seen on the 10 o’clock news—the ones with the very large cranes and very large warships—but also all the supply chains to the smallest yards, and all those businesses that supply the kit that goes on the ships. That makes the UK a formidable power when it comes to shipbuilding. I am glad that the shipbuilding strategy hints at that, but perhaps it could go a little further in celebrating it.

That brings me to the second point, and recognising that many hon. Members want to speak, I will be brief. In my maiden speech in the House of Commons in June 2017, I called for more, and more capable, frigates. The Type 31e is not exactly what I had in mind. I am concerned that the shipbuilding strategy embeds the reduction of truly world-class frigates from 13 to eight. The Type 26 is a fine global combat ship, although one of the City class should be named after Plymouth—a campaign started by my Conservative predecessor and continued proudly by me. It is a good ship and a good programme that will serve UK interests well, but there are too few of the ships—to be precise, five too few.

The top-up light frigates have an ill defined military role, a confused capability and a price tag that gives this the potential to be the Snatch Land Rover of the Royal Navy—a comment by the Royal United Services Institute’s director of military sciences. I have a different name for that class: corvettes. I am genuinely concerned that over the next few years this class of ship will be the focus of much critiquing, as it fails to hit established frigate standards and looks less capable than the Type 23 frigates that the ships replace.

[Mr Kevan Jones (North Durham) (Lab)]

On the point about an undefined task, we had it from the Minister—I have had it in a written answer—that the ship will not be able to do any NATO tasks, and it will not be able to do any carrier protection work, so can my hon. Friend suggest what the role of this vessel will actually be, apart from being a glorified fishing protection vessel?

[Luke Pollard]

My hon. Friend is spot on. The confusion about the role of this warship is at the heart of the problem with the shipbuilding strategy. It looks like we put the cart before the horse in defining a price tag but not a role. It is essential that in the next couple of months the Ministry of Defence comes forward with that, to provide all defence-leaning Members of Parliament, on both sides of the House, with a reason to celebrate this warship, not critique it, because I worry that the critique will not support it and help its attractiveness as an export product. We should turn those weaknesses of the Type 31 into its strengths and promote a corvette class, not a poorer frigate. That would give the Royal Navy two carriers, two amphibious assault ships retained and not cut, six destroyers, eight proper frigates, five corvettes and the new offshore patrol vessels. That is still too few ships, but a line we should not go below, or accept further cuts or reductions against.

The shipbuilding strategy suggests that UK yards will build five Type 31s as replacement for the Duke class, and pitch for competition for 40 to export. As Darth Vader warned Director Krennic in “Rogue One”—a film I am sure we have all watched:

“Be careful not to choke on your aspirations”.

I truly want to believe the MOD when it says that there is a market abroad for 40 Type 31s, built in Britain, but I cannot see where that might be.

[Chris Stephens (Glasgow South West) (SNP)]

Given that we do not know the capability, and given the comments made by the hon. Member for North Durham (Mr Jones), is there not a question as to who we would export these Type 31 frigates to? Does the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) agree that the view of many in the shipbuilding industry is—to quote his hero Darth Vader again—that we want these ships, not excuses?

[Luke Pollard]

As a Luke, I am not sure Darth Vader is quite my hero, but the point the hon. Gentleman makes is a good one. There are 14 other ship manufacturers globally providing a light frigate option of between 2,000 and 4,000 tonnes. That is an awful lot of competition when the customers are ill defined. Let us look at some of those competitors for the Type 31 frigate: there is the French and Italian FREMM class; the Spanish Navantia F-105; the Danish StanFlex; Germany’s F-125 Baden-Württemberg class; and South Korea’s Incheon class, let alone the myriad cheaper platforms built by China and other far-eastern nations.

[Mr Kevan Jones]

It is a fact that Britain last exported a frigate over 40 years ago. When I raised that with the new procurement Minister at Defence questions, all I got was an accusation of talking down the British shipbuilding industry. Does my hon. Friend agree that as a matter of urgency the MOD needs to clarify exactly where it sees the market for these 40 frigates?

[Luke Pollard]

I agree with my hon. Friend. Clarity around the role, capabilities and market for the Type 31 is absolutely critical in building a strong case—a marketing dossier—that says, “British Members of Parliament support this ship and will actively go out and sell it,” because I am concerned that we cannot even advocate for the Type 31 for UK military use, let alone military use for those abroad.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

Does my hon. Friend agree that an increasing pattern in the procurement of ships around the world for naval purposes is that the proposition for bidders, such as Fincantieri and BAE Systems, is that those ships will be part of an industrial offer to the customer country, in that they will be built in their country, so the potential for build in the UK for export is extremely limited, and part of the competitive drive is to move that work into the country purchasing the ships as part of an industrial offer?

[Luke Pollard]

My hon. Friend perfectly sums up where this is going. It is clear that we need to look at what those jobs will be. Will they just be in design, or will they be in build in the UK?

We need to recognise that the Royal Navy needs to sell the best in-class version of the Type 31 if it is to be a compelling export product; it should be a floating showcase, an example par excellence, not a cut-back, scaled-down, bargain-basement, cheap as possible, poorly-armed, combat-light, barely acceptable platform. We need clarity on whether the export version will be built here or abroad. Britain is building ships. Britain is building corvettes and offshore patrol vessels. Babcock is building the Irish navy OPVs at Appledore: the Samuel Beckett-class OPV is lightly equipped, but capable. BAE Systems is building OPVs: the Batch 2 river-class ships and the Khareef class for Oman. They have similar armaments, but with the ability to add Exocets and a medium helicopter. Those ships could well form the basis for the Type 31 Arrowhead or Leander-class options—extended OPVs, rather than frigates in their own right.

My hon. Friend the Member for Glasgow North East mentioned customers and where they will be. Australia and Canada are looking to procure new frigates in the coming months, but they are more in the market for a Type 26 all-rounder anti-submarine warfare frigate, rather than Type 31s. I appreciate that the Minister has inherited someone else’s homework and ambitions, but where will the 40 export orders come from and can the Type 31 really win 40 orders? I am naturally cautious about suspiciously round numbers, and this shipbuilding strategy suggests not only a suspiciously round £250 million per ship, but that there will be 40 exports. As aspirations go, it is good to be bold, but I would prefer us to be realistic about the delivery of this ambition, especially against the backdrop of post-Brexit uncertainty and volatility in the value of sterling.

As with the national security review, I fear that the national shipbuilding strategy puts the cart before the horse. We know the price tag, but not the capabilities. We know the final bill, but not what foes will be faced, what waters will be patrolled or what role it will have. Clarity is our ally if we are to make a strategy that is truly joined up and deliverable. In very uncertain times for our armed forces, this strategy should offer us hope of long-term thinking. I say to the Minister that the paralysis and the pitched battles of the national security review are understandable, but they do not have to lead to the paralysis announcements from the MOD.

I encourage the Minister to announce the base porting arrangements for the Type 26s and the Type 31s, providing clarity for future investment in base ports. Devonport offers a genuine world-class base, as he would expect me to say. I also encourage him to announce that the fleet support ship contract will be open to UK bids, and that no UK shipbuilder will be discouraged from entering by the MOD in order to curry favour for other contracts, especially the Type 31. I also encourage the Minister to announce that the social, economic and employment impact of the contracts will be assessed as part of the contract decision making process. Bring forward greater detail about the Type 31—its capabilities, roles and operations—and be clear about how it will be built in the UK.

There is a huge opportunity to be ambitious here, an opportunity to build and sustain a revitalised shipbuilding industry providing good, well paid and high-skilled employment across the country, backing British supply chain jobs, creating apprenticeships and, importantly, providing the Royal Navy and the Royal Fleet Auxiliary Service with the ships they need for Britain’s sea power to rule the waves once again. A strong defence is worth fighting for, and we know that a strong defence cannot be done on the cheap.

14:39

[Dr Julian Lewis (New Forest East) (Con)]

It is a pleasure to contribute to this debate under your chairmanship, Ms McDonagh, and to follow the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard), who has done a service—not for the first time—to the House of Commons, by bringing key defence issues for our consideration.

Having said that, I am going gently to disagree with the hon. Gentleman. I did not know what line he was going to take until I heard his speech this afternoon and I shall be a little heretical myself, because there is a track record on this question of what we ought to do in terms of designing replacement frigates, particularly lighter replacement frigates.

The context in which one wishes to set this is the relentless decline in the size of the frigate and destroyer fleet. The House will probably not need reminding that we had more than 60 frigates and destroyers at the time of the Falklands campaign. By the time that my cohort came into the House of Commons in 1997, that number had come down to 35 frigates and destroyers.

The incoming Blair Government conducted the strategic defence review of 1997-98. That was where the twin concepts of the carrier strike force and the amphibious force making up the sea base, which would be able to exert land and air power from the sea in any particular theatre of warfare across the globe, was born. As a price for bringing forward the idea of the two super carriers, a modest cut in the number of frigates and destroyers was put forward, from 35 to 32 vessels. We all know what happened next: the 32 came down to 31; the 31 came down to 25; and the 25 then came down to the present woefully inadequate total of 19. That is the issue that the hon. Gentleman quite rightly wishes to address. If there had not been any changes in the method of warship design, I would have signed up entirely to his argument from beginning to end.

But the one factor that I wish people to take away from my contribution to this debate is the concept of a template warship. The phrase “modular build” is the one that we need to keep in mind.

I talked about the way in which the numbers of frigates and destroyers were reduced. Part of that process was the way we went about replacing the destroyer fleet. At the time we started introducing the Type 45 we were down to 12 destroyers, and the original idea was that those 12 destroyers would be replaced with 12 Type 45 destroyers. We know what happened then: the same process —the 12 went down to eight, and eventually we ended up with six. Why did that happen? It happened because of our insistence, and the Royal Navy’s understandable concern, that the new warships should be top of the range, ab initio, in every respect that can be thought of. When we do that and we keep adding, in the long course of a period of design and build, more and more requirements to a new warship, inevitably the price goes up and the number of units we can afford to build comes down.

I was fortunate enough to see the Type 45 destroyers close up at a very early stage. Being taken on a tour of the ship, I was struck by the fact that a very large area in the forward part of the ship was devoted to the ship’s gymnasium. Why did the Type 45 destroyer have such a large gymnasium? The answer I was told was that the space that was going to serve as a very large gymnasium was earmarked for the future, so that when we could afford to add a suite of tactical Tomahawk cruise missiles—surface-to-surface, long-range missiles, which we could not afford to equip the Type 45 destroyers with at the time—we would be able to remove the paraphernalia of the gymnasium and insert a module into that area, thus installing this massive upgrade in the weapons system at some future stage in the ship’s life. Warships are rightly designed to have a long lifespan; we are told that the new carriers, for example, are meant to last us for the next 50 years. So how much better is it—the answer is hugely better—to design them from the outset so that instead of having to rip the ship apart halfway through its life to upgrade it, we can easily add to its capacity?

In 2009, I published an article that got me into a lot of trouble. In the RUSI Defence Systems journal in February 2009, I said what was perhaps the unsayable: that if we were ever going to get the future frigate fleet back up to the sort of numbers we needed, we would have to design it in such a way that it was as “cheap as chips”. The First Sea Lord of the day, Admiral Sir Jonathon Band, who is a great man, was not at all happy with that phrase. But I did not use the phrase lightly; I used it because now we have this technique of plug-and-play, of modular build. If we could design a template warship that had all sorts of empty compartments in it from the outset, and if we could get a large number of hulls into the water from the outset, by a process of incremental acquisition, we could arm them up so that, over a period of years, they would become more and more capable.

I see the hon. Member for Plymouth, Sutton and Devonport nodding as a sign, I hope, of some approval of the line that I am taking. We are not disagreeing about ends; we are slightly disagreeing about means. I do not wish to see the Type 31e become more and more expensive before even the first one has been completed. I wish to see a hull design—I look to the Minister to tell us how that is progressing—that will enable us to maximise the number of hulls and to spread the cost of a really high-capability warship, which the hon. Gentleman rightly wants to see and I want to see at the end of the process, over a longer period of years. That is so that, when the defence budget gets the uplift that it needs—and we all hope it will if the Secretary of State for Defence is successful in his so far heroic but incomplete campaign to take on the Treasury—we can hope to start to reverse the terrible downward spiral in the number of frigates and destroyers that had rendered our fleet incapable of doing its duty. The Royal Navy, as we know, is very strong on doing its duty, and we need to give it the tools and the warships to finish that job, whatever job it is confronted with in the uncertain future.

14:55

[Jim Shannon (Strangford) (DUP)]

It is always a pleasure to speak in debates, Ms McDonagh.

May I first congratulate the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) on setting the scene so well, and the right hon. Member for New Forest East (Dr Lewis), the Chair of the Defence Committee, on his special contribution? I am very pleased to make a contribution, and in debates such as this I always refer to the fact that as an ex-serviceperson—on the land, of course—I have an interest in the support of service personnel and wish to see that we do our best, whether it be for the RAF, the Royal Navy or the Army. This debate gives us a chance to focus on the Royal Navy. My hon. Friend the Member for Belfast East (Gavin Robinson) is doing the armed forces parliamentary scheme with the Royal Navy and is also on the Defence Committee. We are very privileged to have his contribution in that Committee, and hopefully in this debate as well.

I am proud to be from a party—the Democratic Unionist party—that pushed the last Government hard into increasing the spend on defence by 1%. As we try to do, we used our influence in a very constructive fashion to make sure that defence issues are the top priority for Government. We have also got some feedback on that, as my hon. Friend will know. We have some commitment to defence spend in Northern Ireland in relation to reserves—this debate is not about that, of course—and capital spend. Those are some of the good things that we are doing positively in relation to Northern Ireland with the Ministry of Defence.

The reason for that defence spend is clear. While it is great to have money spent locally, the fact is that no matter where in the United Kingdom of Great Britain and Northern Ireland someone lives, they will benefit from armed forces that are well trained, well fed and well equipped. That is the reason we are here. The summary in the national shipbuilding strategy, which I am not going to read because I am sure that Members have it in front of them, is clear that the Royal Navy needs to have the eight Type 26 frigates and the strategy for the Type 31e frigates as well. Again, the hon. Member for Plymouth, Sutton and Devonport referred to that.

I believe that we benefit by having been able to send aid over after the recent Hurricane Irma and during the crisis period. Our Royal Navy was already there and able to respond. We benefit by being able to meet our responsibilities throughout the world with a fleet that is capable, and we further know that we can defend these islands and our British colonies when needed. Better than our knowing that we can do that, the rest of the world also knows—it is important that it does—that we can and will do so if and when the need arises.

I will tell this story, not flippantly but to have an illustration on the record. I once had a teacher who advocated picking out a pupil at the start of the year to be introduced to Cain and Abel. The premise was that he had a cane and was able to use it. He then demonstrated that to the class at the first opportunity—I was a recipient of it on many occasions in the ’60s—and we knew from then on that we did not want ever to meet Cain and Abel again. That is perhaps rather simplistic, but it illustrates why it is important that the Royal Navy has the ability to be our Cain and Abel wherever it may be in the world. I am not advocating the use of blunt force to make a statement; I am saying that we have proven in the past that our abilities are numerous, and that we have the premier armed forces in the world. We also need to underline the fact that that is not simply a historical fact; it is a present-day reality. For that, we need facilities that are capable and that make the grade. Every one of us in this debate, whatever angle we come from, will want to impress that on the Minister, whom I am pleased to see in his place; I am also pleased to see the shadow Minister in his. Hopefully, we will all make constructive contributions to this debate, so that we can move forward in a positive way.

I read an interesting article on the topic on the website Save the Royal Navy that gave a concise view of where we are and where we are headed in terms of our shipbuilding strategy and defence capability:

“When the Tide class oil tankers were ordered in 2012 (a remnant of the Military Afloat Reach and Sustainability (MARS) project), no British company had bid for the construction work. There were two main reasons: most UK yards were occupied working on the QEC aircraft carriers blocks, but they also knew they would not be able to compete on price with foreign state-subsidised shipyards. The controversial decision to look abroad made sense at the time, the MoD got four ships at a bargain £452 million and no British shipbuilder could claim they would go under without the work. (£150 million was spent in the UK with BMT who designed the ships together with A&P Falmouth, who are fitting them with additional military equipment). Five years later, the landscape has changed significantly”,

which is why this debate is important.

“The QEC construction project is in its final phase, but one of its very positive legacies has been to help stimulate a modest revival in commercial shipbuilding, and there are now yards hungry for further naval work.”

In a past life as a member of the Ulster Defence Regiment back in the ’70s, I guarded the Samson and Goliath cranes in the old Harland and Wolff shipyard, which made a significant contribution to shipbuilding in Northern Ireland. On the border of my constituency, within that of my hon. Friend the Member for Belfast East, the shipbuilding giant was at one stage the biggest employer of men in both our constituencies, with some 35,000 workers at its peak in the 1920s.

Harland and Wolff has not produced a ship in about 14 years, although it continuously built and provided ships over a period of time. The last to leave Queen’s Island was the £40 million Anvil Point, at the start of 2003. The 22,000-tonne ferry was the second of two vessels built for the Ministry of Defence. Harland and Wolff is teaming up with other companies such as Thales, also in my hon. Friend’s constituency, to bid for a £1.25 billion contract. I believe that they have not only the ability but the drive and desire to deliver the best that can be given. They are invested in securing every bolt and screw, not simply for the sake of their reputations but for the sake of their own children and grandchildren, who may well serve their country on the ship.

[Gavin Robinson (Belfast East) (DUP)]

I am grateful for the lettered references to me in glowing terms. Harland and Wolff in my constituency is one of many shipbuilders seized with the aspiration associated with the national shipbuilding strategy. Does my hon. Friend agree that it would be helpful for the Minister to clarify the distinction between UK content and UK benefit? What is intended, and what surety can UK shipbuilders take from that distinction?

[Jim Shannon]

Everything that I said about my hon. Friend was absolutely true, so he can take my comments as such, but his intervention was specific to the Minister, to whom we look for a helpful response. My hon. Friend outlined some of the issues in the briefing document that we had beforehand about building only in the UK and skills. We need skills not only in the Royal Navy but in the shipbuilding programme. Costs can never be ignored; it comes down to how we do it best. I understand that we are considering exports for the ships and frigates that we are building, but it seems that that may not have been realised yet. Quantity or quality is a difficult debate. What is best? We certainly want quality, but perhaps we need quantity to go along with that.

To return to the Royal Navy’s ability to fulfil all its missions, let us consider some of the things that we are aware that the Royal Navy does today. Fisheries protection will become more apparent when we leave the European Union on 31 March 2019. All our seas will be back in our control, and when they are, we will need to police them to ensure that other countries do not take advantage of places where they once fished, but where they will only be able to fish if they have an agreement with us. We must put that on record. The Navy has a role in the Falkland Islands and in anti-piracy in eastern Africa, as well as in dealing with refugees in the Mediterranean. The demands on the Royal Navy are immense; we should keep that in mind.

I am suddenly conscious of time, so I will finish with this. It is vital for the local economy that shipbuilding is done in-house and not outsourced, and the collaboration of local and UK mainland companies seeks to do that. I believe that that trumps the freedom of trade thought process, with which I agree to an extent, although I do not believe that it precludes the fact that charity begins at home. It is not charity, of course; it is having business, workers, jobs and contracts at home. If we have the capability to produce, which we clearly do, then that work can and must be carried out right here at home.

15:06

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

Thank you for giving me the opportunity to speak in this debate, Ms McDonagh. I thank my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) for his comprehensive contribution, in which he outlined the key concerns about the national shipbuilding strategy, and the right hon. Member for New Forest East (Dr Lewis) for outlining his longer term perspective on the attrition of the capability of the Royal Navy’s frigate and destroyer fleet, which the national shipbuilding strategy ought to aspire to address as an outcome.

I first encountered the man who wrote the report that spurred the creation of the national shipbuilding strategy, John Parker, about three years ago when he attended Glasgow University to deliver a speech on his history of working in the shipbuilding industry. He had a great reputation as a managing director at Harland and Wolff shipbuilders in the 1980s, where he started as an apprentice and grew up through the ranks. There was an international discussion about the long-term decline of British capability, from the global world leader in the shipbuilding industry that it once was to a marginal player now even in Europe, never mind the rest of the world.

I asked him three years ago when I was working at BAE Systems what his greatest regret was in his career. He stood up and said, “My greatest regret is that Europe is building 90% of the world’s cruise ships, and Britain, with such a great heritage of building world-beating ocean liners and passenger ships, is building none. There are high-wage, highly equipped shipyards in Europe building these vessels, and Britain isn’t building one of them.”

As managing director of Harland and Wolff when it was under the ownership of the British Shipbuilders Corporation—the industry was nationalised until the late 1980s—he recognised the emerging market for cruise ships, which were once again becoming a popular recreational pursuit. Harland and Wolff developed proposed designs for cutting-edge new cruise ships and went to the Government for funding to build them for Carnival, now the biggest cruise company in the world, but the Government said that they were not interested in the design. They wanted to hold a fire sale, get rid of the assets and remove shipbuilding from public ownership. They were not interested in any further investment in what they saw as a dying industry.

In the very same year—1987, the year before Harland and Wolff and Govan shipyard were sold off—Meyer Werft in Germany, a family-owned business, got funding from the German state investment bank to build a completely new, undercover shipyard and then the world’s first modern cruise ship. Today, that shipyard dominates the global market for cruise ship and complex shipbuilding in Europe, building about two 100,000-plus-tonne ships every year. That contrasting approach is symptomatic of a broader malaise that we face when it comes to industrial policy and planning in Britain.

[Chris Stephens]

Will the hon. Gentleman outline what the devastating economic consequences were of that decision on cities such as ours, Glasgow, as well as Belfast and elsewhere in the UK?

[Mr Sweeney]

The impact was absolutely devastating, and we saw the wider impact in Govan as well, which was a commercial shipyard up until 1999 when Kvaerner pulled out. That Norwegian oil company rebuilt the yard in the early 1990s for commercial oil tankers and gas carriers. The result of that collapse was disastrous. Sir John Parker said that just as we had got British shipbuilders match-fit, ready to compete, the rug was pulled from under them. Just as the industry was ready to re-enter the market and be a globally competitive player, it was wrecked. That is the sad legacy of the collapse of British merchant shipbuilding to the point where we are entirely reliant today upon the Ministry of Defence to sustain what is left of British shipbuilding capability. That is partly why I am concerned about the national shipbuilding strategy, if it is restricted in its entirety to naval shipbuilding and not the wider issue of how we re-establish a market foothold in commercial shipbuilding. The two are intrinsically linked.

If we are to achieve a competitive advantage we ought to broaden our horizons and re-establish how we deliver a resurgence in British commercial shipbuilding capability. That was Sir John Parker’s biggest regret. That is what drove his frustration at that time, and a lot of that is what underpins the recommendations in his report. He talks about a vicious cycle of changing requirements, which the right hon. Member for New Forest East mentioned, and a year-zero approach every time we have a new MOD shipbuilding programme which duplicates effort and introduces unnecessary costs. It is so bespoke in its approach to designing ships that it introduces unnecessary costs, which render British shipyards uncompetitive, even in the naval sphere, never mind the commercial sphere.

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

I thank my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) for securing this debate. My hon. Friend the Member for Glasgow North East (Mr Sweeney) has just hit the nail on the head. Does he agree that the lack of a steady drumbeat of orders to ensure our industrial base has caused this problem, and that the wonderful words of the shipbuilding strategy are not being delivered by the Government?

[Mr Sweeney]

I absolutely agree. We see a cognitive dissonance between the vision of the outcome desired and the prescription to deliver that vision and commitment, which are not in alignment. They are not going to deliver it. That is the tragedy of it. We all want to see the national shipbuilding strategy succeed. We are trying to deliver our own collective understanding of what is best for the British industrial capability into this document, so that we achieve the outcome of a globally competitive and effective shipbuilding industry in the UK again.

My hon. Friend mentioned a feast and famine approach to British shipbuilding, which has long been an issue, particularly as the commercial capability has fallen away. I look in stark contrast at the American approach to shipbuilding. The Arleigh Burke destroyer programme plans to build 77 ships. Those ships have been consistently under construction with the same hull since 1988. They have been built since the year before I was born, and it still plans to build more. That is a consistency of approach that we ought to think about adopting in the UK. It would essentially be a continuation of the Type 23 frigate programme, but adapting its technology and capability and maintaining the learning curves achieved over a 30-year build programme. That would be a huge opportunity for British shipbuilding. Why do we insist on stopping every time we build six Type 45s and starting from scratch on a Type 26 when a Type 45 platform could have been adapted to deliver the same capability as a Type 26? The approach is wrong-headed.

The Type 45 project has 13 different types of watertight doors. Why do we have such a huge level of variance in the programmes? We have no standardisation, no grip on the design, no standard approach to delivery, and no innovation in adopting new products and defence standards. We have no resilience or innovation in defence when it comes to an entrepreneurial way of delivering ships. If we were to benchmark it against how Meyer Werft build a complex cruise ship, the lead time between specification to delivery of the ship is minuscule compared with what we do with the equivalent ship of, say, our Type 26 platform. It is years and it is unacceptable. We need to seriously grip that if we want to drive down costs, deliver value in the naval shipbuilding industry and achieve the outcomes in terms of numbers for the Royal Navy that we desire.

The prescription is chaotic. It talks about a vision for having more

“certainty about the Royal Navy’s procurement plans”,

yet it wants to introduce a competitive programme for a Type 31. That goes right back to the early 1990s with the Type 23 programme, when Swan Hunter was competing with Yarrow shipbuilders on the Clyde, and what happened? None of those shipyards could invest in modern facilities and modern practices that would deliver the benefits in terms of timescale and minor efficiencies that would allow the ships to be built for value for money. It ended with the collapse of Swan Hunter and a drip-feeding of orders. There were huge redundancies in the shipping industry and huge uncertainty. This is a recipe to return to that model that was deeply flawed in the 1990s and led ultimately to the loss of British shipbuilding capability. That is why we are appealing today for a commitment to uphold what was originally planned in the terms of business agreement, which was extinguished.

A letter of 19 October from the Under-Secretary of State for Defence, the right hon. Member for Bournemouth East (Mr Ellwood), said that the terms of agreement was extinguished. It committed to a single world-class site for complex warship building on the Clyde and investing in that shipyard facility to make it world class, upper quartile. That would deliver the benefits industrially to allow us to deliver a national shipbuilding programme for frigates and destroyers, which would ensure that they had a consistency of build that would deliver the long-term benefits, learning curves and efficiencies. It would drive down the cost of the ships and allow them to be built at volume, which, as the right hon. Member for New Forest East mentioned, is necessary to sustain a larger Royal Navy fleet. That is how we should do this. It is not about spreading it around, which will not work.

The Royal Fleet Auxiliary programme has better potential because it has a lower gross compensated tonnage and is a less complex ship, although it is still complex. If the tonnage of 40,000 tonnes each was spread around the remaining UK shipyards, that would provide the bedrock of capacity to sustain all the shipyards around the UK, while having the designated complex war shipyard on the Clyde. That is what happens with the Canadian and Australian shipyards and it is what happens in the United States. That is the approach we ought to have. Why has the national shipbuilding strategy not taken account of international benchmarks? Why has it not got a commercial shipbuilding focus as well to develop a longer term model based on European norms? Why are we not committed to building British ships, including the Royal Fleet Auxiliary ships, in the UK? I could go on for much longer because I am closely associated with the topic.

In summary, I have outlined what we want to see changed in order to make the national shipbuilding strategy worthy of the name it deserves. We need world-class UK shipbuilding back, and the way to do it is to adopt those suggested improvements.

15:16

[Chris Stephens (Glasgow South West) (SNP)]

It is a pleasure to see you in the Chair, Ms McDonagh. I thank the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) for securing this debate. During the defence debate less than two weeks ago in the Chamber, every single Member of the all-party group on shipbuilding and ship repair complained that we had applied for debates since the publication of the national shipbuilding strategy. All of a sudden, at the very next ballot, the hon. Member for Plymouth, Sutton and Devonport secured one, so I thank him for that. I hope he will accept my apology to him in relation to Darth Vader. I actually misspoke. I did not mean to say “his hero”. What I meant to say was “their hero”, because Darth Vader is a Conservative icon and not of any other political party. I can see nods coming from the Conservative Benches.

The history of how we have got to this point is important, particularly for those of us who represent the best shipbuilders in the world: the shipyard workers on the Clyde, and those in the Govan shipyard in particular. In 2014 they were promised that 13 Type 26 frigates would be built there, plus a frigate factory. Ever since, there has been a real concern that there has been a row-back by the Ministry of Defence. The frigate factory was cancelled. Then, in November 2015, during the national strategic defence review, there were no longer 13 Type 26 frigates, but eight. We were told not to worry and remain happy because instead of five Type 26 frigates, there will be five Type 31 frigates, which the Clyde will build and will be exportable. I will come back to that later.

Sir John Parker’s report was an honest attempt to deal with the feast and famine that we have heard about from the hon. Member for Glasgow North East (Mr Sweeney), but it contained several historical inaccuracies that concern me because the national shipbuilding strategy seems to be based on those historical inaccuracies, which is that two different types of ships have never been built in the same shipyard. That is not the case. Anybody who had worked at Yarrow’s would tell us that that was not the case, because, while they were building ships for the Royal Navy, they were building a different type of ship for the Malaysian navy. If the Government are basing their decision on such an historical inaccuracy, it is up to us Members of Parliament to tell them that it is an historical inaccuracy, and perhaps they might want to comment on that and put that right.

[Mr Sweeney]

I thank the hon. Gentleman for his comments, particularly about the frigate factory. Does he agree that the major issue was the fact that financing could not be achieved, because of fragmentation of the programme? If that had been gripped in the same way as programmes such as HS2 or the London Olympics, and the budget had been assured through its whole life, there would have been a business case to finance, through commercial means, the investment necessary to build a world-class shipyard on the Clyde.

[Chris Stephens]

I agree entirely. My Glasgow comrade is absolutely correct. That was one of the significant reasons for the frigate factory being cancelled.

My concern about the national shipbuilding strategy has been expressed by others: it is that we are going back to 1980s thinking and introducing competition. One of two things can happen when we start to introduce competition on that basis. Shipyards will try to undercut. As we heard earlier from my Glasgow comrade, that meant the collapse of Swan Hunter. It would be inevitable if we went back to the days of competition. Alternatively, companies would get together and the prices of ships would increase.

I think I am being fair and moderate in my remarks when I say that we are now at a place where the announcement of the national shipbuilding strategy was a presentational dog’s breakfast. The then Secretary of State, the right hon. Member for Sevenoaks (Sir Michael Fallon), claimed six times in the Chamber that there was a frigate factory on the Clyde. While he was on his feet in the Chamber making that claim, GMB officials were taking Scottish journalists around the proposed site, which was rubble and ash. There is no frigate factory on the Clyde. It was a presentational disaster for the Government.

I add my support to that expressed already for the argument that there is no need for the Royal Fleet Auxiliary Service ships to go to international competition. The reason no British yard has yet asked to be considered is that they believe the work will be sent out internationally; that is inevitable. As has been said, there would be clear economic benefits from building those ships not just for the local economies of the places where they could be built, in a modular format, but from the tax and national insurance take.

I also want to add to concerns expressed about the Type 31 frigate. It seems to me that the price is setting the capability of that ship, vessel or whatever we call it. The suggestion that it could be built for £250 million has already been described as a conspiracy of optimism. We need to know its capability and its role and purpose within the Royal Navy. To put it more simply: is it a complex naval warship? If it is, it should be built on the Clyde, which has been designated by the Government as a specialist shipyard to build complex naval warships.

[Mr Sweeney]

The hon. Gentleman says that the Clyde has that designation, but in reality, under the terms of business agreement, it was extinguished in 2014, although that has not been explained. Why did the rationale change? It makes sense to build all the complex warships on one integrated site where all the learning curves, benefits and efficiencies are concentrated. Why has that changed?

[Chris Stephens]

I think that is a question for the Minister. We need to know the reason, and I shall explain why. I understand that the only country with more than one specialist shipyard is the United States of America. That is probably no surprise given the size of the US Navy. We need to know such things, because recently there was an accident at sea involving a US Navy ship. If it had been built to commercial standards rather than by a specialist yard the collision with another ship would have been a real disaster. The model elsewhere, especially in Europe, is that one specialist shipyard builds complex naval warships.

There is a contract for three Type 26 frigates on the Clyde and I ask the Minister to confirm that the other five will be built there. There is a feeling in the yards and the trade unions that represent the workers that there has been a roll-back on delivering on promises.

I echo the points that the hon. Member for Glasgow North East made about shipyard construction. If the Ministry of Defence is concerned about economies and efficiencies and similar issues, it has a role to play in investing in shipyards and speaking to companies. The Clyde should have a frigate factory, and there is a role for the MOD to play in that.

The national shipbuilding strategy needs a bit more work. This is the first opportunity that hon. Members have had since the statement to raise concerns, and I hope that the Minister has listened carefully and will be able to respond to many of the points we have made.

15:20

[Douglas Chapman (Dunfermline and West Fife) (SNP)]

It is a pleasure to serve under your chairmanship, Ms McDonagh. I thank the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) for his significant move in bringing the debate to the Chamber today.

Shipbuilding, as hon. Members know, is a key part of our industrial base. Although the industry has undergone much change in recent years, including to the number of people involved in it, it is still a key element of our industrial heritage. The national shipbuilding strategy that was introduced last September gave some rays of hope to the industry more generally. Sir John Parker recognised that a steady drumbeat of orders was crucial if investment in technology and skills was to make new-build projects more competitive, and that the sharing of risks between yards would give flexibility and speed to help in meeting our aspirations to renew our, albeit diminished, naval fleet. On that last point, there has been a debate about the sense of sharing work between yards, and perhaps that is a debate for another day. The proof of the pudding, for the national shipbuilding strategy, will be in the eating. Already the signs are not good.

There is no clear sign that a drumbeat of orders will be forthcoming at a sufficient pace to give some surety to the industry. As workers on the Clyde are all too aware, we have already witnessed the number of Type 26 frigates being reduced from 13 to eight, and then the placing of an order for just three. My good friend the Chair of the Defence Committee, the right hon. Member for New Forest East (Dr Lewis), cited the example of the Type 45s, which started at 12, were reduced to eight and ended up as six. The direction of travel in MOD thinking is a matter of some concern. The only drumbeat that is evident to me is the one to which Type 23s will come out of service, starting in 2023 with HMS Argyll and ending 13 years later, in 2035, with HMS St Albans. That is a steady drumbeat for the withdrawal of ships from service; we need one for a process going in the opposite direction. Indeed, the previous First Sea Lord said that that time scale for the Type 23s was not extendable. If we are to maintain 19 surface frigates and destroyers at sea or in a state of readiness, something needs to give from the Minister’s office.

[Mr Sweeney]

The hon. Gentleman mentioned sustaining the drumbeat. Does he agree that there is an unnecessary constraint on that because of the arbitrary in-year spend profile that the MOD is lumbered with? The key to unlocking that is the Treasury, which can adapt its method of financing huge generational programmes for things such as complex warships. Those are unique in relation to the way the Government buy kit. The undertaking is huge and unique and should be financed in a way appropriate to the project.

[Douglas Chapman]

I know that the hon. Gentleman is very experienced in such matters and I am sure that he has considered it long and hard for a number of years, both as an industry professional and as an MP. It is obvious, given the amount of investment being put in, that it must be done in the long term, and looking at the project overall rather than as its component parts. I agree with the hon. Gentleman.

The Government’s watchword has been that we must live within our means. The Tory manifesto in 2017 spoke of meeting the NATO target of at least 2% of GDP going on defence spending, and increasing defence spending by at least 0.5% over inflation each year. According to the Institute for Fiscal Studies, it has been cut in real terms since 2010-11 by some 13%. That has resulted in a massive black hole of around £20 billion. Big-ticket items such as F-35s are purchased in US dollars, and only one carrier can be used at a time. Last night, Max Hastings said on “Newsnight” that the Dreadnought has an outdated capability.

All that has contributed to the black hole with which the Ministry of Defence currently has to cope. Such things have pride of place in the Government’s strategy, but in the current financial climate it is a case of pride coming before a fall because the budget for them—and for many other things, such as the P-8s, which are also purchased in US dollars—is simply unsustainable. Decisions that would offer hope and a future to the likes of the Clyde, Rosyth, Appledore and Tyneside are delayed, and we miss the chance to synchronise the drumbeat that would secure jobs, skills and investment.

If we are to “live within our means” as the Government mantra suggests, the MOD either needs to find more money, or something else has to give. The SNP would choose to get rid of nuclear weapons. Think of the opportunity-cost benefit if Trident, or Dreadnought—call it what you will—was not a consideration in our defence budget. How much would that release for more conventional forces? How many more surface ships could we start to build to create a real drumbeat of orders? How much more money for cyber, land forces and the Royal Air Force? Is it not madness that we have a NATO ally with nuclear weapons just 20 miles off our coastline? In trying to satisfy the most pro-nuclear lobby in the House, could not that capability be shared between those two adjacent NATO nations, instead of their both paying top dollar for it? If we can share a tapestry, as I believe we are about to do, who knows what other things we could share on a larger scale? If we are to meet the key dates for bringing the Type 26s and Type 31s into service, something has to give. The Government cannot keep delaying orders, lengthening the pace of decision making, and not making savings in the budget to allow contracts to be signed, sealed and delivered.

SNP Members long for the day when Scotland becomes an independent country that is responsible for its own defences. Small nation Norway has a shipbuilding industry order book as long as your arm, and it has also bought into F-35 and P-8 capability. That can be done even with a small nation budget. Last week, small nation Denmark agreed to increase its defence budget by some 20% to meet the threats that the Danish people might face now and in the future. Small, well-equipped, effective, flexible, good partner nations can play their part in the defence of Europe both individually and through NATO.

Finally, while Scotland is still a constituent part of the UK, I urge the Minister to make surface shipbuilding his priority. In my constituency, workers at Rosyth have delivered carriers and a wide range of refit projects on time and to budget. We now have an opportunity to deliver the Type 26s, Type 31s and the fleet solid support ships. The message is simple: let us make the national shipbuilding strategy a working document that encourages the engineering talent of our nation to get on with the job, at pace, and with that vital steady drumbeat.

15:33

[Wayne David (Caerphilly) (Lab)]

It is a pleasure to serve under your chairpersonship, Ms McDonagh, and I congratulate my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) on securing this important debate and delivering such a fine opening address.

We have had a good debate—I genuinely mean that. We heard an excellent and thought-provoking contribution from the Chair of the Defence Committee, the right hon. Member for New Forest East (Dr Lewis), and good contributions from my hon. Friend the Member for Glasgow North East (Mr Sweeney), the hon. Members for Strangford (Jim Shannon) and for Glasgow South West (Chris Stephens), and a particularly ambitious speech from the hon. Member for Dunfermline and West Fife (Douglas Chapman).

Last year the Government published the national shipbuilding strategy, and the importance of naval shipbuilding should not be underestimated. Approximately 15,000 people are directly employed in UK shipbuilding because of spending by the Ministry of Defence, and at least 10,000 additional jobs are in the wider British supply chain. Some months before the publication of the national shipbuilding strategy in November 2016, Sir John Parker published his independent report on the UK’s national strategy for shipbuilding. Many people thought that that would become the national shipbuilding strategy, but—for reasons that are unclear even to this day—the NSS was a response to Sir John Parker’s report.

Those two important publications gave a degree of coherence and a sense of direction to the industry. We were, however, disappointed by the lack of emphasis on many of the points on which Sir John Parker developed coherent arguments. In particular, we would have liked an explicit recognition of the significant contribution that shipbuilding can make to the development of regional economies, and for that to have been put at the heart of the national shipbuilding strategy. That important point in Sir John’s report is not really reflected in the Government’s national strategy.

Today we have heard about the multiplier effect and investment in shipbuilding—that point was coherently expressed by my hon. Friend the Member for Plymouth, Sutton and Devonport. My hon. Friend the Member for Glasgow North East pointed out that our shipbuilding strategy must be part of a broader strategy that goes beyond the defence sector, and that can happen if we have the right perspective to develop it in such a way.

As we have heard, the new Type 31e and Type 26 frigates—albeit eight rather than 13, as we were initially led to believe—will be replacing the Type 23 frigates as they leave service. I have a number of questions about that ongoing programme. Some of them have already been touched on by other Members, but other questions are new. First, the MOD has said that there should be a cap of £250 million per Type 31e frigate. Why has that cap been fixed, and why at that figure? We need to know, because we have been reassured by people in the Navy that that amount may well be sufficient, but there are also plenty of experts who say that this insufficient and arbitrary figure has been plucked from thin air. Nick Childs, a naval specialist for the International Institute for Strategic Studies, has raised specific concerns about the level of capability and stated that,

“the naval staff seems to think it can get a vessel of about 3,500 tonnes, with an adequate military capability, for the £250m target price. That will be a challenge”.

That is an understatement. It certainly will be a challenge, and many industry experts say that it is frankly impossible. If it is impossible, what contingency measures will the Government take?

[Chris Stephens]

Does the hon. Gentleman share my concerns, and those of others who have spoken in this debate, that the price is dictating the capability of this frigate, instead of the capability being sorted out first, followed by the price?

[Wayne David]

That is precisely the concern with including the arbitrary figure of £250 million. I hope that the Minister will be able to dispel those concerns and clarify the situation.

Secondly, the national shipbuilding strategy correctly states that there is a potential export market for light frigates—the Type 31e. Much of that is for the purchase of a light frigate designed for construction in the market, not by means of traditional production. How is the Government’s exporting enthusiasm for that going? How many orders have they received? How many do they now think are likely? That key question was also raised by my hon. Friend the Member for Plymouth, Sutton and Devonport.

My third point is that, sadly, less than half the steel in the new Type 26s will be British. That is a crying shame, and I hope the Government will ensure that as the shipbuilding strategy develops, it is increasingly seen as an integral part of industrial strategy in this country, and that there will be complementarity with other parts of British industry.

My fourth question is about delays to the Type 26 programme. There is a great deal of concern among the workforce. Apprentices have been laid off and have had to find training elsewhere. Can the Minister say anything about that?

We are all proud to have seen the launch of the Queen Elizabeth carrier, which was formally commissioned into the fleet in December. We now look forward to the launch of the Prince of Wales carrier. The construction and fitting of both vessels has taken a great deal of commitment and dedication from a well-skilled workforce.

It is important to ensure that those skills are not lost but continually put to good use, which is why we should focus on fleet solid support ships. The contract for three new FSS ships will be subject to international competition. The decision is due in early 2020. I am concerned that that stipulation may put off domestic competitors, as the hon. Member for Glasgow South West suggested. That follows the awarding of a contract for four tankers under the military afloat reach and sustainability—MARS—project to Daewoo, a South Korean company that is widely believed to have been given a tremendous amount of state aid that made its bidding far more attractive than it should have been.

We hope that those ships will be built in Britain because that would secure the maintenance of the skills that have been built up in the industry, and support local economies. It would also help to enhance the national shipbuilding strategy’s domestic capability and to make real the renaissance in shipbuilding that Sir John Parker refers to in his report.

On sovereign capability, I ask the Minister to comment on the report that appeared in yesterday’s Western Mail. It suggested that the Ministry of Defence will award a contract for mechanised infantry vehicles to the Germans without any competition. I give the Minister the opportunity to deny that story.

[The Parliamentary Under-Secretary of State for Defence (Guto Bebb)]

Will the hon. Gentleman give way?

[Wayne David]

I will give the Minister plenty of time to respond.

Finally, I hope that the Government will demonstrate a real commitment to the Royal Navy and naval shipbuilding. This country has a proud maritime history—it had the largest and strongest Navy in the world at one time. That time is a long way behind us, but the challenge now is to ensure that our Navy can successfully meet the new threats and dangers that our country faces.

[Siobhain McDonagh (in the Chair)]

I remind the Minister that we hope the sponsor of the debate will have a few minutes at the end to sum up.

15:42

[The Parliamentary Under-Secretary of State for Defence (Guto Bebb)]

It is a pleasure to serve under your chairmanship, Ms McDonagh. I thank hon. Members in all parts of the Chamber for their warm welcome. It is an honour to have been appointed to this position, but I suspect that I face a difficult task. In the debates on defence that I have attended thus far, I have found a wealth of experience and knowledge from hon. Members about these issues. There is also a significant amount of cross-party agreement, although not always. In my jousts with the hon. Member for Caerphilly (Wayne David) on Welsh issues, we did not experience more constructive debates of this nature.

On the hon. Gentleman’s question about the Western Mail story, that was speculation. It was nothing to do with the national shipbuilding strategy. There was a clear statement from the Ministry of Defence that no decision has been taken. I can say no more than that, but I hope that that keeps the issue at bay for the time being.

This has been an interesting and constructive debate. I congratulate the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) on securing it, and on his constructive speech. Of course, he highlighted his concerns about the national shipbuilding strategy, but it is only right to acknowledge that, as the Minister, I view the reasons why he raised the issues, and the way in which he did that, as a constructive contribution to the debate.

I hope that I will be able to answer many of the hon. Gentleman’s questions. He mentioned the importance of the national shipbuilding strategy in giving opportunities to young people in his constituency and, as we have heard from other hon. Members, across the United Kingdom. I cannot fail to be anything other than impressed when I meet apprentices, whether they are working on building new ships or on maintaining our Hawk aircrafts. The Ministry of Defence and I are very proud that young people have the opportunity to work in the defence sector. We are the largest creator of apprenticeship opportunities in the United Kingdom. I am sure we all agree on that.

The hon. Gentleman also said that he considers the Type 26 destroyer to be a good ship. I hope to be able to say that it is being built in a very good yard by experienced workmen on the Clyde. Again, there is agreement on that.

My right hon. Friend the Member for New Forest East (Dr Lewis), the Chair of the Defence Committee, made a thought-provoking speech. In my eight years in the House, he has always spoken with passion, commitment and an independence of mind when it comes to defence. I am sure that that independence of mind and that willingness to challenge will haunt me, as it has haunted other Defence Ministers over the eight years in which I have seen him perform. No one can doubt his commitment to the defence of this country and the wellbeing of our armed forces, or to his independent, cross-party chairing of the Defence Committee, which represents what is best about the Select Committee system.

I also acknowledge my right hon. Friend’s history lesson and his firm defence of the concept behind the Type 31 frigates programme. His description of the programme’s rationale was clear, and he was listened to with understanding by other hon. Members. His speech included the basis of the points that I will make in due course about Type 31s.

I enjoyed the contribution of the hon. Member for Strangford (Jim Shannon). As a Welshman, I am pleased that there has been a significant Celtic contribution to the debate. Scotland, Wales and Northern Ireland have contributed fully, because we understand the importance of defence to all parts of the United Kingdom.

Even the hon. Member for Dunfermline and West Fife (Douglas Chapman) acknowledged that, while Scotland remains part of the United Kingdom—long may that continue, in my view—we all appreciate and acknowledge its contribution to our defence in terms of capacity on the Clyde, our nuclear capability in Scotland and the contribution of Scots to our armed forces. I thank him for his contribution.

Other hon. Members intervened in the debate. The hon. Member for North Durham (Mr Jones), who is no longer in his place, is correct that at Defence questions a week ago, I responded in a robust fashion to his comment that our country had not exported any warships for 40 years. It is important to engage constructively with what we are trying to achieve through the national shipbuilding strategy. The aim is to ensure that we find ourselves in a position where we are exporting our warships to other parts of the world. It has been acknowledged across the Chamber that the capability, capacity, skills, ingenuity and innovation all exist in this country. When the hon. Gentleman raised that issue, I thought it was important to point out that the way we sell that capability, that capacity and those skills to the rest of the world is by talking our industries up, not down. I will not apologise for the comment I made at Defence questions.

I will turn to the body of my speech, because I have an obligation to try to respond to the debate. We have to step back and ask ourselves what the rationale behind the development of the national shipbuilding strategy was. Although people have asked questions and asked for clarity, even the most challenging comments have acknowledged that it is an attempt to move the issue forward constructively, and to ensure that our country’s capability and capacity are reflected more coherently. Hon. Members may not agree with every single statement in the strategy—there is clearly a debate to be had about it—but the fact that we are moving forward with a strategy is something that most hon. Members clearly seem to welcome.

It is important to understand the context. The Government have always recognised the need to retain operational advantage and freedom of movement in sectors that are critical to national security. That is an issue that I have come across since my appointment to the Ministry of Defence. Indeed, it was an issue that I came across in my time as a Wales Office Minister, which lasted for almost two years, because in that period, as the hon. Member for Caerphilly will be aware, I visited numerous defence establishments in Wales. That issue of national security, and having a national defence capacity, is something that I understand, as do hon. Members from all parties. Shipbuilding is an important part of that and is integral to our fortunes.

The aim was to ensure that we examined the shipbuilding sector, and identified how best to develop a shipbuilding strategy that would reflect our needs, the demands of our Navy in the future, and the potential to create a more coherent and successful shipbuilding sector. Sir John Parker’s report was upbeat and positive. It talked of the renaissance in British shipbuilding that is happening in many smaller yards and smaller businesses within our shipbuilding industry. The report looked at the issue of shipbuilding in a wider context than only defence. Obviously, from a shipbuilding strategy point of view, it was absolutely imperative that we learned from history, and understood what must be protected in the UK national interest, and where we can support capacity in the shipbuilding sector by supporting businesses that can provide us with the warships that we require. The strategy also provided the opportunity to train and support businesses and individuals who can contribute to a further expansion of our shipbuilding capacity.

In my new role as Minister with responsibility for defence procurement, I would very much like to meet the all-party group on shipbuilding and ship repair, because, from an MOD perspective, the shipbuilding strategy must clearly consider the issue of producing warships and defence capability, as well as the wider implications for the economy, which I am very interested in. I have seen the direct benefits of defence spending to the economy in Wales. I would very much appreciate the opportunity to talk to the hon. Member for Plymouth, Sutton and Devonport about issues that I could potentially learn about in relation to his work with the all-party group. In my time in this place, I have learned that all-party groups make a huge difference; I have no doubt about that. They are a constructive forum in which colleagues work on a cross-party basis, and I would be very grateful for the opportunity to discuss these issues in more detail with him.

The recommendations in Sir John’s report were accepted in full by the Government, as they applied to our responsibilities, and that created the national shipbuilding strategy that we now have. I would argue that that strategy examines three main issues. The first is better planning; we heard the history in numerous contributions. I am taken by the idea that my history degree might not be as redundant in this new role as I had thought, because learning from history is one of the things that we have to do if we are to improve the way in which the MOD procures.

The strategy gives planning a great deal of attention, so that we can give industry greater certainty and predictability. It sets out the key procurements of the next five years, from the purchase of eight Type 26 global combat ships to the new Type 31 ships. The hon. Member for Glasgow South West (Chris Stephens) asked what the commitment is in relation to the Type 26. The commitment in our strategic defence and security review of 2015 and in the recent NSBS is very clear: it is a commitment to eight ships. That is a commitment that will protect—

15:53

Sitting suspended for a Division in the House.

15:59

On resuming—

[Mr Gary Streeter in the Chair]

[Mr Gary Streeter (in the Chair)]

The Minister will now continue his excellent summary.

[Guto Bebb]

It is a pleasure to serve under your chairmanship, Mr Streeter.

As I was explaining, the strategy is about planning. We are talking about the purchase of eight Type 26 global combat ships, the new Type 31 frigates and the next generation of fleet solid support ships. There has been a discussion on the competitive tendering for the fleet solid support ships, but that is in accordance with the strategy, which looks to ensure that warship capability is built within the UK, but that we are also open to go out to competition.

[Chris Stephens]

Will the Minister confirm that the eight Type 26 frigates will be built on the Clyde? Will he also remove the ban on Royal Navy personnel addressing the all-party parliamentary group on shipbuilding and ship repair on the national shipbuilding strategy?

[Guto Bebb]

I regret that I did not hear the second part of the intervention, but the commitment on the purchase of the eight Type 26s was clear, and I will be on the Clyde on Thursday.

The second element of the strategy is design. It is about taking a new approach to design and construction. We want to challenge outdated naval standards and introduce new ones. In effect, I am repeating the comments of the Chairman of the Defence Committee, my right hon. Friend the Member for New Forest East, but it is about forcing through advances in design, identifying new materials and looking at new manufacturing methods to try to make our shipbuilding industry even more competitive, which is part and parcel of ensuring that we have export markets.

The issue of the export markets for the Type 31 has been touched on by many Members. The figure of 40 frigates is the potential market that was identified for this type of frigate in 14 countries. That was part of market research that was undertaken. We have never argued that there are 40 potential orders for the United Kingdom; what we are saying is that there are 40 potential orders for that type of ship that will be open to competition from the United Kingdom.

[Dr Julian Lewis]

Given what the Minister has said about the design, and given what we know we need the design to do, can he confirm that this will be British design done in Britain and not abroad?

[Guto Bebb]

The value of the strategy is in ensuring that we have a British-owned design. The whole strategy is building on the manner in which the aircraft carriers were built successfully—the block-building capacity. That is the strategy we have undertaken, and it will pay dividends.

The third element is exports.

[Mr Sweeney]

Will the Minister give way?

[Guto Bebb]

I cannot, I am afraid; I only have three minutes left. We identified that the export market is crucial. Having the export market allows us to look at cost controls and the ability to create savings within the programme. It also allows the United Kingdom to show once again that we have the ability to design and deliver ships internationally. For the MOD, the whole effort in identifying the support for the shipbuilding strategy is about building capacity and ensuring we are in a position to target other markets. I hope that Members will join the Ministry of Defence and the Government in ensuring that the advantages of the Type 26 are made known to potential customers in all parts of the world.

The other issue I want to touch on is a key success for the strategy, which is the partnership approach. To return to Sir John Parker’s original point, the strategy hinges on the strength of the partnership between the Government and the sector. It is about our collective ability not simply to improve productivity and develop the product that the international market wants to buy, but to continue to develop the skills and the talent to keep the industry firing on all cylinders. That is exactly what Members have been asking for, it is absolutely what I want to contribute in my role in the Ministry of Defence, and it is the purpose of the shipbuilding strategy. Where we need to refine or take on board the advice and guidance given to us by colleagues, we will do that, because the aim of the strategy is to ensure that we leave the shipbuilding sector in a better place than we found it. I am confident we can do that, but we need support from all parts of the House.

I hope we are building on firm foundations. We are looking to move to the future with a strategy that is not starting from scratch, but builds on our strengths and reputation, while identifying that we have to rectify the fact that we have not sold a warship in 40 years. We have to be confident that what we have to offer is cutting edge. It is about working with the industry, which has a reputation to live up to and has contributed so much in so many parts of the United Kingdom. We need to ensure that the industry is capable of producing ships of value to the UK and the Navy while competing internationally and making a cutting-edge contribution at the world level.

Members have touched on the economic contribution that the strategy can make. I am very aware of that. Ipsos MORI has conducted research that highlights what we need to do. It is available on the Department for Business, Energy and Industrial Strategy website. I am aware that I need to allow the hon. Member for Plymouth, Sutton and Devonport time to sum up the debate, so I will finish. I genuinely believe that we are moving forward constructively. As a Minister, I want to work with Members to ensure that the strategy delivers for the United Kingdom and our Navy.

16:13

[Luke Pollard]

It is good to have a second Plymouth MP here in a Defence debate. I am grateful for the contributions we have heard from all parts of Westminster Hall. I hope it is the start of a productive conversation between the Minister and the all-party group on shipbuilding in particular, but also with Members.

The importance of a drumbeat of orders has been reinforced time and again, and the Minister has heard that. Clarity on the capability of the Type 31s is key, and I would be grateful if the Minister removed the ban on Royal Navy personnel speaking at the all-party group. I would also be grateful if, one year on from the Sir John Parker review, the Minister looked at how the review could be reinforced with feedback from Members of Parliament representing shipbuilding and ship repair communities across the country. There is a collective will in the House to make it work, and the honest conversation we can have here will be an important part of that.

Question put and agreed to.

Resolved,

That this House has considered the National Shipbuilding Strategy.