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Dr Rosena Allin-Khan (in the Chair)
I will call Adam Dance to move the motion and then the Minister to respond. I remind other Members that they may make a speech only with prior permission from the Member in charge of the debate and the Minister. As is the convention for 30-minute debates, there will not be an opportunity for the Member in charge to wind up.
Adam Dance (Yeovil) (LD)
I beg to move,
That this House has considered the future of the New Medium Helicopter programme.
It is a pleasure to serve with you in the Chair, Dr Allin-Khan. I thank the Minister for coming to answer pressing questions. I recognise how hard he and his team work and the headache that we must be giving him by going on about the new medium helicopter.
After retiring the Puma from service last year, the UK currently has a capability gap. We have no medium-lift helicopter ability for our armed forces, which means there is a clear requirement for helicopters to transport troops, equipment and supplies over long distances and difficult terrain on a wide range of missions. Although we hear a lot about the future of warfare, in the age of drones and even greater technology development, crewed helicopters are still key to a joint force that will allow our military to respond effectively to the ever-growing threats we face.
We have a gap that needs to be filled. That is what the new medium helicopter programme is for. As the last remaining bidder for the £1 billion contract, Leonardo is ready to fill that gap by offering the AW149 helicopter, built at the home of British helicopters in my constituency of Yeovil. The Minister will tell us that it is far more complex than many people outside defence may realise, but I think he can appreciate that it does seem quite simple. There is one bidder in a contract; that is a win, win, win. It fulfils a capability requirement, will help to boost defence spending and modernise our armed forces. It will provide investment in the British jobs and apprenticeships in Yeovil, which is what the Prime Minister told me he is determined to deliver.
Jim Shannon (Strangford) (DUP)
I commend the hon. Gentleman for securing this debate. He is right to highlight jobs in his constituency and further afield, because many other companies depend on this work. Does he agree that this contract is crucial for replacing the RAF Puma HC2 fleet, and is critical to national security? The Minister and Government must prioritise and fund the replacement accordingly. The dithering must come to an end and action must be taken.
Adam Dance
I agree that we need action. We need to ensure that we arm our forces with the correct equipment now. By contrast, not awarding the contract is lose, lose, lose, particularly for my constituency.
The future of the new medium helicopter is the future of Yeovil. Leonardo has been clear that if the programme does not go ahead, it will need to seriously consider the future of the Yeovil site. That puts more than 3,000 skilled jobs at the Yeovil site directly at risk, alongside 12,000 in the regional supply chain and the £320 million contribution to local GDP. It would also lead to a huge loss of investment in my community—starting with £1.2 million to Yeovil college, which does fantastic work training the skilled people we need in our defence sector—and the loss of the Westlands entertainment centre, and would leave a new solar farm unfinished, and so much more. It will be the death of my town. Local businesses have told me that they will shut overnight if Leonardo goes. House prices will fall and young people trained in Yeovil will leave.
Not awarding the new medium helicopter also has a knock-on effect for our country’s defence. That point gets a little lost in jargon of sovereign capability. If the site in Yeovil closes, we risk losing our country’s ability to build our own helicopters from start to finish, at the exact time that the world is becoming unstable and insecure. Put like that, as people back home tell me, it sounds insane not to get on with the programme and secure the future of the Yeovil site.
Edward Morello (West Dorset) (LD)
I thank my hon. Friend and constituency neighbour for giving way. He will know that many people who work at the Leonardo site live in West Dorset and commute. The company is responsible for providing training and apprentice opportunities for thousands of my constituents. I feel like every strategic defence review about the urgent need to speed up procurement—that is repeated ad nauseam. Even the most recent one recognises that the uncertainty around procurement undermines national security. My hon. Friend has rightly identified that there was a sole bidder, and that the programme is vital for the UK’s sovereign capability. Does he agree that unless the Government start to show that they are serious about speeding up procurement in the defence sector, we will lose vital industries, such as those that secure our ability to make helicopters, as well as thousands of businesses in the supply chain that support them?
Adam Dance
I completely agree with my hon. Friend. This issue affects not just our constituencies but many constituencies in the south-west. Leonardo is the backbone of our area, and we must secure the contract, but the effect on our area is not the only knock-on effect. The site in Yeovil is making fantastic progress on the Proteus uncrewed helicopter, which was recently successfully tested. Even though we are one of the few nations leading on such technology, if Leonardo cannot sustain its current workforce, skills and funding, we will lose those skills and could potentially lose Proteus. Once those skills are gone, they are really hard to get back, so not awarding the contract will undermine the Government’s drive for greater autonomy in our armed forces.
Given all that, why the delay? As far back as June last year I was told to “listen out”. I have heard so little since that I was worried that I might have lost my hearing—but don’t worry: I had my ears checked and they are working just fine. It seems that the problem is getting the defence investment plan to work. We were told that the DIP would answer all. It would set out the Government’s plan for spending on our defence and armed forces, including on the new medium helicopter, but at this point we might as well call it the delayed investment plan.
Ian Roome (North Devon) (LD)
The new Chief of the Defence Staff told me, as a member of the Defence Committee, that the medium helicopter programme was still very much on the armed forces’ priorities list. Does my hon. Friend agree that the Government need to ensure that it is in the defence investment plan, because the service chiefs are asking for it? It is not all about uncrewed capability; we will always need crewed capability. This programme needs to be prioritised now, even before the defence investment plan comes out, because the Minister will tell us that they are still working it through. The Treasury and the Ministry of Defence need to get their act together and reinforce the programme to save the 3,000 jobs, plus those in the supply chain of SMEs that enable Yeovil to deliver it.
Adam Dance
I completely agree with my hon. Friend. I will come on to that point and his question to the Chief of the Defence Staff later in my speech.
In a response to my last urgent question on the defence investment plan, the Minister told me that it will be published when it is ready. That is the real problem, as Leonardo’s best and final offer will expire in March this year. Even more worrying are the reports of the £28 billion funding gap for our armed forces over the next four years, which suggest that the money for the new medium helicopter is not there. That raises quite a few questions that I will ask the Minister—I apologise in advance; he should please grab his pen and paper. I will not bother asking when we will get an announcement on the new medium helicopter, because we all know that the answer will be, “Wait for the DIP”, but if the Minister would like to show me up on that point, he should please do so.
First, the Chief of Defence Staff told my hon. Friend the Member for North Devon (Ian Roome) at a Committee hearing that, although the new medium helicopter is not at the bottom of the investment list, how high it is up that list is
“ultimately…a matter for Ministers.”
Will the Minister tell us how much of a priority the new medium helicopter is compared with other programmes that his Department is considering?
Secondly, if the new medium helicopter is a priority, then we can only assume that the problem is the money. That begs the question: why did the Government press ahead with the tender as it was, if they knew that Leonardo was the only bidder and that the money was probably not there? One billion pounds is not the kind of money we might lose down the back of the sofa, is it?
That leads me to what my constituents really want to know: what is going on now to solve this? Is the Minister’s Department committed to making sure that the deal does not time out? I know that he cannot comment on the endless rumours about who is causing the delays in the DIP, but will he tell us how many conversations he has had in recent months with colleagues from No. 10 and, importantly, the Treasury on the DIP and the future of the new medium helicopter?
Will the Minister also tell us—yes or no—if his Department has had any discussions with Government and with Leonardo on how changes to the scale or timeline of the new medium helicopter programme could make it workable? If the Minister cannot answer that, will he at least consider the Liberal Democrats’ calls for issuing defence bonds? That could raise up to £20 billion for capital spending on defence over the next two years. Does he recognise that the MOD could make greater savings by improving its counter-fraud work? Between 2021-22 and 2023-24, the MOD was getting a return of only 48p for every £1 spent, when public bodies should save £3 for every £1 spent on counter-fraud. That is money that we are losing and that could surely be going into funding programmes like the new medium helicopter.
Finally, can the Minister tell us what he is doing to manage the fallout from all this uncertainty? Importantly, will he clarify what steps his Government will take to protect the factory site and jobs in Yeovil and the south-west, and to reassure businesses and international partners that the Government are doing all they can to put increased defence spending to work in our fantastic factories? I am worried that the Government’s inability to get a contract agreed with only one bidder has undermined confidence in that.
I hope that the Minister can properly answer my questions, because we need clarity on the future of the new medium helicopter programme. It is good for the future of our armed forces and good for Yeovil and the south-west. If the Minister needs more motivation, I will finally stop annoying him about the new medium helicopter contract—that alone has to be worth it; it will be one headache off his books.
The Minister for Defence Readiness and Industry (Luke Pollard)
It is good to see you in your place, Dr Allin-Khan. I thank the hon. Member for Yeovil (Adam Dance) for scheduling this debate. I am afraid that he will know some of my answers to his questions, because he has asked me them before, and I will give him broadly similar answers to those he has had before. In relation to his challenge, I will try not to show him up on the questions that I have already answered previously. I appreciate his passion for this topic, and I commend the Westland Helicopters tie that I have spotted he is wearing—we seem to be at a Putin-esque table in this debate, with one person down at the far end away from the other, but we have much in common on this issue, as he knows from our private conversations.
I welcome the opportunity to talk about the contribution that Leonardo UK makes to our armed forces and our economy, especially at a time when we are reassessing every pound of defence spending and investment that we are making. Our intention is very clear, as we set out in the strategic defence review and the defence investment plan: we need to fundamentally rewire defence and build a stronger, more lethal military, which can deter and, if necessary, defeat, those who threaten us. As such, we are looking at the whole programme of defence spending.
Let me get straight to the issues that the hon. Gentleman raised. He will not be surprised when I say that I cannot announce a decision on the new medium helicopter programme today, but I can assure him that we will announce that decision as soon as possible as part of the defence investment plan. I am acutely aware that the contract decision is of great consequence, not to just Leonardo and its workforce at Yeovil but the wider community. As a fellow south-west MP, I can assure him that the importance to the wider region is not lost on me.
I also remind the hon. Gentleman that when we discussed this in the main Chamber, I committed that we will not allow the decision to time out. He is right that the best and final offer price has an expiry date, but we have committed as a Government that we will not time out—that is, it will not simply fail at that point; we will make a decision ahead of that, as part of the work we are doing on the defence investment plan.
Adam Dance
I thank the Minister for reiterating that point. My concern is that we do not have a date for when the DIP will come out, and he has just said that the new medium helicopter programme will be in the DIP. Is he therefore saying that if it is not out by the end of March, he will make a decision outside of the DIP on the new medium helicopter programme?
Luke Pollard
I have been pretty clear on a number of occasions in the Commons that we are not letting this decision time out. Therefore, a decision will be made, which is consistent with what I have said before.
Ian Roome
This is a really important programme, and I see that the official Opposition have not even bothered to turn up to the debate. I asked the Defence Secretary about the DIP, and he told me it would be out by the end of December. Now it is going to be March. Can the Minister guarantee that it will be March? What is the hold-up? Is it that the Treasury and the MOD cannot agree the finances? Could he be honest and let us know what the delay is in getting the DIP out?
Luke Pollard
As a Department, we are working flat out to deliver the DIP. It remains one of the key actions that we are trying to deliver as a Department. As a Defence Minister, I would prefer to get it right to getting it done quickly, with decisions that may not be as comprehensive or clear as we would like them to be. We have committed that we will get it out as soon as we can. I have also said a number of times that we will not let the decision on the new medium helicopter time-out. In the spirit of commenting on ties, it is good to see the hon. Gentleman wearing an RCDS tie; as a graduate of the Royal College of Defence Studies, which I know he is as well, it is good to see that.
I want to set out the engagement we are having with Leonardo, because it is important that we tell the story about what is taking place while we are looking at the new medium helicopter programme, as well as the wider record that we inherited. We have been engaging closely with the management team at Leonardo in both the UK and Italy, and we have stressed throughout that the company remains a vital strategic partner to UK defence. In fact, the Defence Secretary spoke to Leonardo’s global chief executive, Roberto Cingolani, last week. I continued those discussions in Riyadh in Saudi Arabia this week, when he and I were at the world defence show, where I met with both Roberto Cingolani and the managing director of Leonardo’s helicopter division, Gian Piero Cutillo.
Last month, the Secretary of State visited Leonardo’s radar and advanced targeting system centre in Edinburgh to confirm the award of a £453 million contract to manufacture upgraded and new radars for the Eurofighter Typhoon fleet, which is a huge investment in cutting-edge British technology with Leonardo. That investment will support 400 highly-skilled jobs at Leonardo’s site in Edinburgh and Luton, as part of a network of nine main sites that the company operates across the UK, employing more than 8,500 people. The Secretary of State’s Parliamentary Private Secretary, my hon. Friend the Member for Luton South and South Bedfordshire (Rachel Hopkins), is sitting behind me. The Leonardo site in her constituency will also benefit from that contract, which reinforces the fact that contracts are about not just the point of manufacture but the supply chain across the entirety of the UK—a point that I know has been made in a number of these debates.
It is important to reflect on the challenges as we came into government. We inherited a procurement system that was overcommitted, underfunded and fundamentally unsuited to the threats that Britain faces today. Reforming, refinancing and restructuring that programme for a new generation of warfare is a challenging task but a necessary one, and it is one that we are tackling methodically and thoroughly. This is the first line-by-line review of defence investment for 18 years, a period in which our armed forces have been increasingly hollowed out and yet the world has become a far more dangerous place.
Luke Pollard
The hon. Gentleman is certainly right that we inherited a situation where there are far too many platforms across all our forces, which complicates servicing, operations and interoperability—the warfighting effect they can have—and does not create the inter- changeability that we are looking to deliver, as set out clearly in the strategic defence review.
The hon. Member for Strangford (Jim Shannon) is no longer in his place, but in his intervention he spoke about the Puma helicopter, which is a really good example. Those helicopters were on average between 43 and 50 years old. It is hard to make the case that the Puma helicopter was at the cutting edge of military aviation. It was also an incredibly expensive helicopter to keep up. As we made decisions about removing old technology and investing in new technology, we announced that platforms like Puma would be retired. Retiring old equipment and bringing in new equipment is the right decision, and that is effectively the work we are trying to do at the moment.
Edward Morello
I do not disagree with the points the Minister is making, and Lord knows I am happy for us to dedicate the rest of the debate to bashing the previous Administration for their failures. He talks about the need to future-proof decision making. Part of the problem that we have with defence procurement is the length of time it takes to get from a decision to deployment. That means that we end up changing the spec of what we are asking for, which ends up with the Ajax disaster that we are all looking at. In the remaining time, will the Minister speak to what the plans are to speed up defence procurement to make quicker decisions on both smart tech and dumb tech and on crewed and uncrewed, so that we can get to that war footing as quickly as possible?
Luke Pollard
I had noted the hon. Gentleman’s question and was coming to it in a moment, but as he has invited me to, I will deal with it now.
Since the general election, we have signed 1,100 major defence contracts as a Government, and 84% of those have gone to British companies. Where we do buy from international companies, we do so either because the technology is solely available from international supply or because it provides a military advantage in terms of timescale, price point or interoperability function with existing technologies. That is a necessity. I want to see more of our rising defence budget spent with UK firms, and that includes international firms that are based in the United Kingdom, creating jobs and growth opportunities.
Adam Dance
I thank the Minister for that comment, because that is so important. As he knows, Leonardo, which is based in Yeovil in the south-west, is the only end-to-end helicopter factory left in the UK. Surely, that is definitely a win-win. I hope that when the Minister said he would not let the decision time-out, a positive decision will be coming.
Luke Pollard
I would be surprised if the hon. Member was advocating for another position on that point.
At the risk of getting another intervention from the hon. Member for West Dorset (Edward Morello), I will finish the point on procurement. In the defence industrial strategy, which is a good read if he has not been through it, we have set out the ambition that was mentioned in the SDR of improving our procurement times. That means large, complex programmes that take five or six years on average going to two years; two-year programmes going to one year; and one-year programmes going down to a few months to six months. That is a big change in terms of how we procure, and it is a fundamental part of the decisions that will be coming out of the defence investment plan.
Rather than looking at the procurements that started under the previous Government—and as the House will know, the new medium helicopter began in February 2024—we continued. That is because, once a procurement policy has started, it is best practice to continue it with the rules of the road that were in place at the point where the procurement began; otherwise, it can be opened up to legal challenge and so on. To address the point that the hon. Member for Yeovil mentioned about pressing ahead, we pressed ahead with that procurement because it had begun and it was in train. That was the right thing to do, because the sense from industry and from the MOD was that restarting it carried greater risk than bringing it to a conclusion. The framing, setting, financing, financial arrangements and specifications were all set by the previous Government in relation to the new medium helicopter.
Finally, I will deal with the intervention from the hon. Member for North Devon (Ian Roome), before returning to the point raised by the hon. Member for Yeovil. The challenge about whether we will always need crewed helicopters is a live one. If we look more broadly at our transition from crewed systems to autonomous systems, the SDR sets out very clearly that, at this period in time, the Government will invest in a mix of crewed, uncrewed and autonomous systems with a greater drive to autonomy, which not only increases lethality and mass, but provides jobs and growth opportunities. We know our adversaries are investing in similar technologies, so the question about the crewed, uncrewed and autonomous mix is a live one.
That brings me nicely to the point that the hon. Member for Yeovil mentioned around Proteus, which is a brilliant example of how investment in new technologies can deliver more change. It is a good project, which was funded by the Ministry of Defence through our work with UK Defence Innovation and was delivered by Leonardo. It is a sign of our strong partnership with Leonardo that we collaborated on the Proteus project, which experiments with a future rotary wing uncrewed air system. I have spoken to Leonardo about not naming helicopters after our ships. I would also like to get to a point where we stop naming things after bad guys in science-fiction movies, such as Skynet from “The Terminator” films, which is the name for our satellite communications systems, or giving things existing names.
However, the technology is outstanding. That is an area that provides huge growth opportunities for British industry, including, potentially, for Leonardo, subject to the usual competitive tendering processes around Proteus in the future. It is a good example of how an autonomous full-size helicopter can be demonstrated, but the mix that we are looking for in the strategic defence review is a mix of crewed, uncrewed and autonomous systems as we move in that direction. The investment that Leonardo has made in uncrewed and autonomous systems is to be welcomed.
Adam Dance
I am worried that if we do not get the new medium-lift, and if we should want Leonardo to be a bidder for Proteus, its job force might not be there—the company has that concern—so Proteus may not come. I am glad the Minister has said that he wants a mixture of both; that sounds promising.
Luke Pollard
The strategic defence review sets out very clearly the mix that we are looking for, partly because the technology is not currently available. In many cases, there is not an off-the-shelf product that we can simply buy from UK, or largely international, firms. It is something that requires the innovation that we are looking for.
The work we are continuing to do with Leonardo recognises the opportunities for growth in the defence sector, the importance of sovereign capability, and the importance of different military capabilities within our overall force picture. Given the defence knowledge present in the debate, the hon. Member for Yeovil will appreciate that there are different and changing priorities, and that we are learning lessons from Ukraine in terms of what capabilities we need.
Some of the programmes that we inherited from the Conservatives, who are not represented in this debate, were unsuitable for modern conflict, and unfunded. A key part of the defence investment plan is ensuring that every programme that is in our programme of record is sustainable, funded and can exist in reality, not just on PowerPoint. That is a big difference to the previous Government’s approach. As we move to warfighting readiness, which is my No. 1 mission as a Minister, I need to ensure that the equipment that we are purchasing and supporting can provide the deterrent ability that we need to deter aggression, but also has the ability to defeat it if required. That is why we are preferencing battlefield-ready technologies and those that give an increase in lethality.
I appreciate the passion that the hon. Member for Yeovil has for his hometown, and the importance of the contract. I will commit to continuing to have conversations with him and MPs from the wider region, and we have frequent discussions with our colleagues from Leonardo.
Edward Morello
I am aware of the time and it sounds like the Minister is wrapping up, but I did not want to be the only Member in the debate who had not been complimented on their tie.
Luke Pollard
I am afraid I did not bring my long-vision glasses, so I cannot spot everyone’s tie.
Adam Dance
The Minister made the point about funding; is a lot of this tied up with the money for the contract not being there from the Treasury?
Luke Pollard
Unlike in previous Governments, our Treasury colleagues are aligned to our defence mission. We are working more closely with our Treasury colleagues than I have ever seen before. The close co-operation that we have, on the preparation of the SDR, the DIS, and the work that we are doing with Treasury colleagues on the DIP, is a good example of how the MOD with a different approach can find a close friend in the Treasury, which will ultimately help support the growing defence budget that the Chancellor and Prime Minister have announced for the Ministry of Defence.
There is £5 billion extra in our budget this year, and there is not a single person who has ever served in our armed forces before with a decade of rising defence spending ahead of them. What we spend that money on—and, importantly, how we spend it—is the debate around the defence investment plan. I welcome that debate, because there needs to be more discussion about how we can not over-spec, as the hon. Member for West Dorset suggested, and then change the specs during procurement. That is something that we have embraced fully, learning the lessons from the last Government, where that was not the case.
I have committed, earlier in the debate and previously, to not letting the decision on the medium helicopter time-out. We will continue our conversations with Leonardo, and I am happy continuing conversations with the hon. Member for Yeovil in a constructive manner to ensure that the points he raised on behalf of his constituents can be taken on board as part of the broader defence investment plan work.
Question put and agreed to.