Shipbuilding: Appledore Shipyard

Monday 26th November 2018 Lords Chamber

Question

14:46

Asked by

[Lord West of Spithead]

To ask Her Majesty’s Government what is their assessment of the importance of the Appledore shipyard as part of the United Kingdom's future shipbuilding strategy.

[The Minister of State, Ministry of Defence (Earl Howe) (Con)]

My Lords, the Government were very disappointed to learn of Babcock’s decision to cease operations at Appledore. While it is a commercial decision for Babcock, I recognise how concerning the news is for Appledore employees, their families and the wider community. Appledore is not central to successful delivery of our national shipbuilding strategy. However, more broadly, we are committed to encouraging a more competitive industry, driving innovation and growing the Royal Navy fleet.

[Lord West of Spithead (Lab)]

I thank the noble Earl for his Answer. I am glad he shows that feeling for Appledore because this is highly destructive of the whole of that community. Appledore shipyard has been amazingly competitive in producing survey ships for the Navy, parts of the Type 45 and parts of the carrier, and it won the latest competition for four Irish OPVs. It is a very efficient and very capable yard. I find it extraordinary that a firm has to close it because it has problems on its balance sheet elsewhere in its structure. However, that is not my question.

My question relates to the amount of work that is available for shipbuilding in the United Kingdom, because other yards will go the same way unless there is a core, basic loading of building. The loading of building that we have at the moment is insufficient. We are paying for fleet solid support ships to go elsewhere out of the UK, but that is an opportunity to add to the loading, enabling us to keep key shipyard workers and these key industries going. I am sure the Minister feels that that would be the way to go. I would be very interested to know the Government’s position on this. Does he feel that those in Appledore ought to fight, fight, fight again, like those from Appledore and Bideford who fought with Sir Richard Grenville down in the Azores some 427 years ago against huge numbers of Spaniards? We must keep fighting to keep it open.

[Earl Howe]

My Lords, the noble Lord asks a very serious question about government spend on naval shipbuilding. I do not think it is a fair charge if his implication was that the Government have not been supporting our yards at home. Babcock alone has had £1.7 billion-worth of business just in the last year. It recently started work on a £360 million contract to be the technical authority and support partner for the Navy’s new aircraft carriers. In general, we are seeing in Scotland, for example, a £3.7 billion contract for the first three Type 26s, and at Cammel Laird there has been a £619 million support contract. Then there will be the competition for the Type 31e frigate, which is worth £1.25 billion. Those will be built in the UK. As regards the fleet solid support ships, there is no bias on the part of the Ministry of Defence. This is an open competition and we encourage British shipyards to bid.

[Lord Hamilton of Epsom (Con)]

My Lords, is it not true that the noble Lord, Lord West, was told, when he ordered the aircraft carriers and there was no money to pay for them, that they would have to be paid for by reductions in the surface fleet, and that is what is happening now?

[Earl Howe]

My Lords, I do not accept that. We are committed to maintaining a fleet of 19 frigates and destroyers. That is what we have at the moment. The Type 26 frigates will replace some of the Type 23s and the Type 31s the rest of the Type 23s. I do not accept that the fleet is somehow dwindling because of the aircraft carriers.

[Lord Campbell of Pittenweem (LD)]

My Lords, I cannot restrain myself from the observation that if the Royal Navy had as many ships as we have Questions about ships, we would be in a pretty good position altogether. The last time that this issue was discussed, the Minister told the House and myself that, notwithstanding the worst-case deficit in the Ministry of Defence equipment budget of £14.8 billion, the MoD would still be able to balance the books. Will that include cancellation or creative accounting, as has happened in the past?

[Earl Howe]

Not at all, my Lords. We are committed to our capital programme. If there has been any creative accounting in the past, we want to put that behind us because we want to be absolutely transparent about what our spending plans consist of. With regard to shipbuilding, as I said in my initial Answer, part of the trick will be to make the British shipbuilding industry more productive, innovative and competitive, and that is what we are seeking to do through the strategy.

[The Lord Bishop of Worcester]

My Lords, having been vicar of the parish in which the Swan Hunter shipyard was when that yard went into the hands of the receivers a number of years ago, I am acutely conscious of the devastating effect that such closures have not just upon individuals but upon whole communities. The Minister has acknowledged that. Will he undertake, if the yard does go under, to provide necessary assistance both to individuals and to the community, which will suffer terribly?

[Earl Howe]

The right reverend Prelate focuses on a very important issue. There is no doubt that the site is regarded as at the heart of the local community, with generations of families employed there. Naturally, as a result, local councils for one are very keen to find a solution. I can tell him that Babcock has offered all affected employees other positions, including at Devonport. It is planning to hold discussions with affected individuals about their long-term options, and it has committed to being as flexible as possible in accommodating travel and relocation needs.