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The Minister for the Armed Forces (Luke Pollard)
It is good to see you, Dr Murrison. As a former Defence Minister, you will know these subjects well. I might be a proud Janner—someone from Plymouth—but my great-grandfather, Alfred Carey, worked in the automotive industry making Hillman Minxes in the west midlands, so I feel that the debate has a connection with my past.
I thank my hon. Friend the Member for Tamworth (Sarah Edwards) for securing this debate and for speaking so passionately about not only why we need to defend our national security and learn lessons from Ukraine, but how we can spend the increased defence budget announced by the Prime Minister to create more British jobs and more opportunities for our young people to develop skills that will last them a lifetime and support the growth mission, which is this Government’s No. 1 mission.
As a native of the area, my hon. Friend the Member for Tamworth knows better than most the importance of defence to the west midlands. Although it is clear that defence makes a considerable contribution to the west midlands in jobs, investment and prosperity, today’s debate also reminds us of the huge contribution that the west midlands makes to UK defence, and the possibility of doing even more. Billions of pounds are injected annually into west midlands defence enterprises by industry and Government, but we know that our military is only as strong as the supply chain that supports it. What we have heard today is not only a clarion call of support for the big defence companies in the west midlands—the Rolls-Royces, the BAE Systems, the Babcocks—but a call for further investment in SMEs, which I will come back to.
As a Government, we are determined to nurture and develop the region’s defence cluster and defence businesses. As part of that, we need to invest more in skills, and I am glad that my hon. Friend the Member for Tamworth spoke about that. We know the world is becoming more dangerous and Britain is facing rising threats. The Government also face the challenges of rebuilding and reinvigorating our armed forces after a decade and a half of underfunding and hollowing out. That is why we launched the strategic defence review: to assess the dangers we face and determine the capabilities we need to meet them. It is why we brought forward our promise to spend 2.5% of GDP on defence to April 2027, and 3% in the next Parliament when economic conditions allow. It is why we are working hard on defence reform and the new defence industrial strategy: to unlock the potential of suppliers across the country.
As my hon. Friend the Member for Tamworth alluded to, there is a well-known phrase in military circles that soldiers win battles, but supply chains win wars. She was right to make the case that we need to invest more in our defence industry, because there are companies out there that will not regard themselves as defence companies.
People who work in data, digital or advanced manufacturing, or who support the wider supply chain, are defence companies in waiting. They are the innovative people who could support the next generation of military equipment and military operations. In making the case for investment in defence businesses, the Government need to be aware that if we get defence procurement right, we can expand the number of companies involved. That increases the economic benefits of spending, but also enables us to access skills, ingenuity and innovation, especially among SMEs.
Sarah Edwards
The Minister has mentioned the examples of the automotive sector and cyber-security, and how many people do not realise that they are working in comparable industries. As parliamentarians, how can we work to showcase the different ways that people are contributing to the defence industry, or could be working in it? How can we promote that? What does the Minister think we can do to make sure people realise that this is a wider, shared endeavour and that their skills are very transferable?
Luke Pollard
That is an excellent question. It comes down to how we implement the defence industrial strategy that my colleague, the Minister for Defence Procurement and Industry, is leading within the Department. That needs to tie in with the whole-of-Government and whole-of-society effort for our national defence, which is something Parliament will need to speak more of in future. To defend our nation and support our allies, we will need this mission to be held passionately not just by people in uniform and the Ministry of Defence. We will need every Department to understand its contribution to that mission. When we invest in skills, we will have the opportunity to do that.
I am grateful that my hon. Friend mentioned the Type 26 builds in Scotland. As the MP for Devonport in Plymouth, where the Type 26s will be based, I know how incredible these frigates will be, how they will deter Russian submarine activity in the north Atlantic, and how they will contribute directly to the security of our nation and our allies.
To build those frigates, we will need to invest in skills on a long-term basis. We are looking at how we can have multi-year budgets, to invest more in skills and supply chains, rather than having the annual cycle. Frankly, and as the Defence Secretary has made very clear, defence needs to spend money better than it has in the past. That is why he started a programme of defence reform to make sure we reform not only how we fight and how we are configured, but also how we procure. The recruitment for a new national armaments director is a significant part of driving the defence reform needed to support SMEs as well as primes.
Alex Ballinger
We are talking about procurement. Just this week I met Members of the European Parliament in Brussels to talk about our collective response to Ukraine. One of the challenges that Somers Forge in my Halesowen constituency faces is the struggle with European supply chains and the trade barriers between the UK and Europe. As we go through a new reset with Europe, will the Minister commit to push for greater access for defence industries to the European market?
Luke Pollard
I am grateful to my hon. Friend for talking about Somers Forge and those opportunities. It is certainly something that my Cabinet Office colleagues, who are leading that reset work with Europe, are very conscious of. It is also something that the Defence Secretary picked up with High Representative Kallas from the European Commission yesterday. They looked at the opportunities for UK industry, which is already integrated across our European partners, to work without some of the obstacles in the way of delivering the defence capabilities we need to deter Russian aggression. There is an opportunity here.
A number of Members have spoken about the importance of SMEs in their constituencies and the jobs that they provide. Five years ago, the Ministry of Defence spent 5% of its direct spend with SMEs. In July 2024, we inherited a situation where that had fallen to 4%. The Department has now set an ambition to spend more direct spend with SMEs across the country. We are consulting on what the level should be, so that it is achievable but stretching.
We are working with organisations such as Make UK to understand what barriers need to be overcome and removed to support SMEs to access that direct spend—rather than just supporting the brilliant work of our primes as subcontractors—because we know that if they have a direct spending relationship with the MOD, they are more likely to be able to access overseas export markets. It is precisely for that reason that we are adjusting how we deliver defence procurement within the Ministry of Defence. It could not only spend the money better in the UK and create more jobs, it could also increase the size of our economy by receiving export orders from abroad.
In their interventions on my hon. Friend the Member for Tamworth, Members talked about how we can invest more. I am keen to invest more in SMEs, and I am keen that we speak about the opportunity for young people to find a brilliant career in defence. The zig-zag career proposal is absolutely vital. We need to make sure that we do not create cliff edges and that transferring from regular service to the reserves is easier, so that people can serve in our military, move into industry and then return to service without there being cliff edges that get in the way. There are huge opportunities.
I am glad that my hon. Friend the Member for Tamworth secured this debate and that we have had this conversation about how we can invest in our defence, grow our economy and provide jobs that will benefit our young people for their entire careers.
Motion lapsed (Standing Order No. 10(6)).