Defence Manufacturing and Procurement: Shropshire

Wednesday 16th December 2020 Westminster Hall

[Mrs Maria Miller in the Chair]

16:00

[Mark Pritchard (The Wrekin) (Con)]

I beg to move,

That this House has considered defence manufacturing and procurement in Shropshire.

I thank Mr Speaker for allowing me the opportunity to bring this issue to the House’s attention. I am particularly pleased that the Minister of State is in his place, and look forward to his response to today’s debate.

Shropshire, and Telford and Wrekin, are fast becoming a crucial defence hub. Of course, there is a lot of defence history in Shropshire, which many Members will know about, but on the manufacturing side Shropshire, and Telford and Wrekin, are very much becoming a geographical engineering cluster that feeds not only the UK defence market, but the wider European defence manufacturing and procurement sector. I am proud that Shropshire continues to play its part in UK defence manufacturing, with existing contracts for Boxer and Warrior vehicles, and hopefully the Challenger 2 life extension programme.

The defence sector, locally and nationally, continues to grow under a Conservative Government. We should not ignore that material fact, for as you know, Mrs Miller, it is only with a strong defence that any country can have a strong peace. Defence manufacturing is an important part of the UK’s strong defence, and I am pleased that on 19 November, the Prime Minister committed the UK to increasing its defence budget—the largest boost in the nation’s defence for the past 30 years, and indeed the biggest increase post world war two—investing an extra £24 billion in our national security and sustaining and creating thousands of jobs across the UK, including in Shropshire. It is the biggest investment in the nation’s defence since the end of the cold war, which is fantastic news for the nation as a whole, and specifically for my constituents in The Wrekin.

The Minister will know that BAE Systems employs 300 people in Telford, and spends more than £6 million in the midlands supply chain and in the region as a whole, based at Hadley Castle Works. I am grateful that he took the time to visit my constituency some months ago and meet with many of these dedicated engineers, as well as those who manage the business. Rheinmetall BAE Systems Land is a very welcome joint venture between Rheinmetall and BAE Systems, designing, manufacturing and maintaining combat vehicles at Hadley Castle Works, with Rheinmetall owning a 55% stake in the joint venture and BAE Systems owning 45%. That joint venture will sustain a skilled workforce of about 450 employees across the UK, including those engineers based at RBSL in Telford. General Dynamics Land Systems—Force Protection Europe’s manufacturing spares facility is also based in my constituency.

Then, of course, there is GKN, a manufacturer of off-highway wheels also based at Hadley Castle Works. GKN has had some challenges in recent years, but I hope that, whether it is under the current ownership of GKN or a future, different ownership, that site and the skill set there will be retained, not only for Shropshire but for the UK defence sector as a whole. It is important that GKN is supported, too. We also have Lockheed Martin, currently delivering the Warrior capability sustainment programme—the demonstration contract, that is—and that is welcome too. Babcock International, the defence engineering business, has a site in Donnington, and in April Babcock was awarded a contract to manufacture 10,000 ventilators to help to control the covid-19 pandemic. I pay tribute to all the workforce there and to the wider MOD staff at all those facilities—whether civilian or non-civilian, uniform or non-uniform —at MOD Donnington and RAF Cosford, as well as the private sector companies I have mentioned.

I want to put on the record my thanks to my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski), who quite rightly is a champion of Caterpillar Defence, based in Shrewsbury, which as the Minister knows specialises in the design and development of engine and drivetrain packages to meet the needs of many of the tracked and wheeled military vehicles that the MOD uses. Of course, there are myriad local supply chains and small and medium-sized enterprises, and I am delighted that the Government have committed to getting more small businesses into defence supply chains.

We have had very welcome news about Boxer. It is designed to transport troops to the frontline and was described as a “leader in its field” by the Secretary of State for Defence, no less, and of course he is absolutely right. Over the next 10 years, RBSL will build 260 Boxer vehicles—almost half the British Army’s fleet, I hasten to add—in Telford at the Hadley site. That contract, worth £860 million, will create and sustain 200-plus skilled jobs in the area, and probably more. RBSL officially received its manufacturing subcontract just a few weeks ago. That was a very welcome pre-Christmas present, but the real Christmas present would be if the Minister were to announce today that the life extension of Challenger 2 is going ahead, and that much of that programme will be required to be delivered in my constituency.

Of course, we have the integrated review at the moment, and it is important that we have it to look at the whole piece, covering defence, foreign policy, diplomacy and intelligence—the whole gamut of how Governments protect themselves and project their own values and interests around the world. Hybrid warfare, information technology, the National Cyber Force, which is now public, and unmanned aerial vehicles are all vital, but at the end of the day there is still a requirement for hard kit—not just boots on the ground, but metal on the ground too. I hope that that is metal in the form of Challenger having its life extended and being delivered in, of course, Shropshire. The Boxer vehicles will be delivered in 2023, so the timeframe is quite short, but I have absolutely no doubt that they will be delivered on time.

The contract has been secured for RBSL’s main upcoming programme—the mechanised infantry vehicle programme—and I understand from the research done by my office that the Challenger 2 life extension programme will support 60 local suppliers. Covid has had an impact, albeit at the moment not a huge impact, but every job lost in my constituency is a job loss too many. There have been job losses since March. We have seen an upward tick in job losses in the constituency, and it would be great to have new job announcements to fight those unemployment figures.

Lockheed Martin is in charge of Warrior, the fighting vehicle capability and sustainment programme. Locally, we are seeing more and more people in our universities, including Wolverhampton and the new university campus in Shrewsbury—not so much Harper Adams, because that is mostly agritech—and more young people in the region being interested in defence manufacturing and a career in defence. Another fresh, good announcement would help a lot of those young people to make the right career choice.

The life extension programme is a UK MOD programme to deliver the next generation of heavy armoured capability. It is important to put that the record, but I know the Minister knows that. The programme will deliver Challenger 3, a network-enabled digital main battle tank that will reinvigorate the UK’s and Shropshire’s design and engineering skills. That digital element is critical and feeds into other Government streams of thinking. As I am sure the British Army would say, it will deliver a world-class capability, generating significant export opportunities and support for global Britain, and the UK’s wider economic growth. The maintenance of Challenger 2 will be carried out by Babcock Defence Support Group, which supports my constituents.

The Minister kindly answered a question that I put to him at the last Defence questions. I will quote it back to him, which is always a novelty. He said:

“The proposition is now being worked up prior to a decision being taken on the investment case.”—[Official Report, 7 December 2020; Vol. 685, c. 557.]

I understand that we are in the midst of the timetable where such decisions are being made. I am pretty sure that this debate is being held after some of those important decisions, rather than before. Perhaps the timing of this debate is purely coincidental, but I would proffer that it is not. I hope the Minister is therefore in a position to enlighten the Chamber today on the progress of the life extension programme.

As the Minister will be aware, RBSL won the contract for the Fuchs chemical, biological, radiological and nuclear reconnaissance vehicles and training simulator earlier this year. It will sustain the British Army’s fleet of reconnaissance vehicles and the training simulator. The contract has been awarded. Again, Hadley is playing its part, sustaining hundreds of jobs. That vehicle, with its built-in detection equipment for chemical, biological, radiological and nuclear threats, is absolutely critical.

I want to give the Minister plenty of time to respond. Of course, every Member of Parliament rightly defends and speaks out for their constituency, but it is a matter of fact that the defence engineering skill set and the geographical cluster of those skills—to use management speak—in Telford and Wrekin in Shropshire is there for everybody to see. It does not make sense, whatever advocacy make take place for other parts of the country, for this work to go elsewhere, only for companies to struggle to recruit or relocate a workforce.

I put the case that if the Ministry of Defence wants to move quickly on a programme that is vital for the UK armed forces and the British Army, which will be the user, it makes sense to deliver it where the skills are, where the workforce is committed and where there is a history of dedication to Her Majesty’s armed forces, both in uniform and out of uniform.

14:30

[The Minister for Defence Procurement (Jeremy Quin)]

I am grateful to my hon. Friend the Member for The Wrekin (Mark Pritchard) for calling this debate. He is an assiduous constituency MP. He is one of those people, to whom he referred, who will always advocate the cause of their constituency, but he is also one of my hon. Friends who serves on the Intelligence and Security Committee. He had a previous role with the Organisation for Security and Co-operation in Europe and therefore knows the threats that we face, and the capabilities we need to meet those threats and deter them, both now and into the future.

It is a huge boon to my hon. Friend that he knows about the threats and capabilities, and that so many deterrents to them can be produced in the heart of Shropshire and in his constituency in particular, which combines great companies with tremendous skills, and an enthusiasm for embracing and supporting our armed forces in all their endeavours.

My hon. Friend referred to Boxer vehicles and the capabilities that they produce, which are just one good example. We look forward to bringing them into our armoury and helping to export them around the world. He touched on that, and we recognise it as a way we can help to drive forward the success of our sector in the future. We are currently the second biggest defence exporter in the world. We need to maintain that position to help ensure that we maintain research and development in our country, so that we continue to get the capabilities we need and to enhance those capabilities for the future.

My hon. Friend referred to the ventilator challenge and the work performed in his constituency. I recognise the fantastic achievements of the whole of the defence supply chain in supporting our great NHS throughout the pandemic. I highlight the work of everyone at the Defence Fulfilment Centre at Donnington in his constituency. I know that he knows it well. It has been the nerve centre and at the forefront of the logistics effort to provide vital equipment in support of the Department of Health and Social Care, including the supply of ventilators, to which he referred, and other critical medical equipment to the frontline.

The figures are astounding. Over the past seven months to November, more than 3.8 million items were handled by the defence supply chain, with the vast majority passing through Donnington. That includes over 20,000 ventilators, 70,000 pieces of equipment and over 3.7 million consumables. Those vital items have been moved and delivered across the length and breadth of the British Isles, from Belfast to Great Yarmouth, from Guernsey to NHS National Services Scotland. This has been a truly great endeavour in the face of adversity. I commend those people in defence across Shropshire, the west midlands and beyond who have risen to that vital challenge.

Donnington is just one of the valuable contributions Shropshire makes to defence. In addition to providing a central role in our pandemic response, the team at Donnington has continued, as has the rest of the defence team, to do the day job, processing 1.5 million requests, 135,000 trade receipts and 110,000 customer returns in the last 12 months for millions of items in support of our armed forces worldwide—a truly exceptional performance.

My hon. Friend referred to the broader footprint. The Royal Air Force has a significant footprint through its stations and operations at RAF Shawbury and RAF Cosford. That includes training around 200 personnel a year in basic and advanced rotary wing flying as part of the UK Military Flying Training System at Shawbury and the provision of world-class aeronautical engineering training to RAF and international students at RAF Cosford.

The school offers an extensive range of advanced apprenticeships spanning mechanical, avionics, weapons and survival equipment disciplines, from which around 2,000 aircraft engineers graduate each year. This investment in our people not only benefits defence, but sustains jobs and supports the local and wider regional economies. This is a classic example of how defence—in this case through its training school in Shropshire—provides vital skills to support our research and industrial base of the future.

More broadly, in 2018-19 we spent some £583 million in the west midlands, sustaining around 4,300 jobs, and Shropshire plays a vital role. In addition to the good work being undertaken by Kuehne+Nagel and Team Leidos at Donnington, Babcock Defence Support Group provides vital maintenance, overhaul and engineering support for our Warrior infantry fighting vehicles and other military vehicles at the Donnington site.

I would also highlight, as did my hon. Friend, the work being undertaken by Rheinmetall BAE Systems Land—RBSL—at Telford in support of the Challenger 2 life extension programme and congratulate it on the recent award of a contract of £860 million to manufacture more than 260 Boxer vehicles at its Telford facility, as part of the £2.3 billion mechanised infantry vehicle programme, to deliver a state-of-the-art capability to equip the Army’s strike brigades. It is also under contract to modernise and support the British Army’s chemical, biological, radiological and nuclear reconnaissance vehicles.

My first industrial engagement as Minister for Defence Procurement was a pre-lockdown visit to RBSL in March this year. I was very impressed by the professionalism and dedication of the workforce in delivering for defence. I was especially delighted to meet RBSL apprentices, who showed real enthusiasm for their work in supporting our defence programmes. It is vital that we continue to seek to empower future generations through science, technology, engineering and mathematics to grow a dynamic, innovative economy.

Our investment in the UK defence industry is allowing us to do just that. Within RBSL, in addition to the excellent work of the STEM ambassador scheme, the Boxer vehicle sub-contract award will allow the company to provide work and training opportunities to more than 60 apprentices over the next five years, and may also provide further opportunities throughout the supply chain. RBSL’s £20 million investment in its Telford site will not only provide state-of-the-art manufacturing facilities, but support the company’s apprenticeship schemes by delivering a high standard of training, enabling apprentices to benefit from work-based learning and paths to formal qualifications. Those schemes and other similar initiatives will help to grow and sustain engineering and manufacturing skills in Shropshire and across the UK, ensuring that we can deliver for defence now and in the future.

My hon. Friend referred to other companies, which are there in legion, be it Caterpillar or GKN, supporting us directly or through the wider supply chain doing vital work such as that on the F-35, for which we are the only tier 1 partner of our American allies. I also recognise the work of small and medium-sized enterprises, who play a vital role in the UK defence industrial base. We want to harness their ingenuity and niche capabilities in providing and supporting battle-winning capabilities for our armed forces.

In 2019, we published an SME action plan and, to support that commitment, appointed SME champions at senior level within our 19 strategic suppliers. We are targeting 25% of our procurement spend to be with SMEs by 2022. We are making progress. SMEs accounted for over 19% of the MOD’s procurement spend in 2018-19, representing some £3.9 billion, which was a significant increase on the previous year and the third year in a row in which the proportion of funds going to SMEs rose.

SMEs working in Shropshire provide valuable support to a varied range of defence activities. Air Covers Ltd is manufacturing and supplying canopy covers for the Typhoon combat aircraft fleet and Skylaunch Ltd is providing glider winches for our air cadets, among many others. Alongside our support to SMEs, we continue our internal programmes of transformation and reform, allowing us to work better with the defence industry to deliver what defence needs now and in the future. That includes leading the cross-Government review of the UK’s defence and security sectors, continued investment to manage and enhance the resilience of our supply chains, and improving the pace and agility of our acquisition processes. We are also taking the opportunity offered by our departure from the EU to develop defence and security procurement regulations tailored to better meet the UK’s needs.

We can be positive about the future, underpinned by the huge boost to defence recently announced by the Prime Minister. The four-year settlement to which my hon. Friend made reference amounts to an extra £24 billion —including at least £6.6 billion for R&D—and provides us with the opportunity to modernise and compete effectively in the digitised battlefield and, above all, deter. As one of the biggest defence spenders in the world, our investment already injects over £19 billion into our industry every year right the way across the United Kingdom, securing thousands of jobs and growing opportunities across the whole nation. The settlement will allow us to build on that and provide new opportunities across the supply chain, helping the country to build back better from the pandemic by supporting UK skills, jobs and industry.

It came as no surprise that, on the back of the Prime Minister’s excellent announcement of a multi-year spending review, my hon. Friend inquired about specific procurement exercises that I know from his previous questions are at the front of his mind and are of interest more broadly in Shropshire. On his ask for an early Christmas present, I am afraid it will come as a disappointment—but probably no surprise—that I cannot be drawn on those specific issues at this time. However, I am aware of both the capability enhancements and prosperity benefits elucidated. I am grateful to him for giving us yet another opportunity to raise them in the House, and I look forward to being able to say more in due course.

Defence is part of the fabric of the UK. Through our defence industries both big and small, the UK supports our armed forces with the equipment they need to get the job done, provide our security and keep us safe. I am convinced that the Government’s funding commitment to defence will secure the long-term future of our defence industry both in Shropshire and across all the regions and all four nations of the UK.

Question put and agreed to.

16:24

Sitting suspended.