Shipbuilding Strategy

Debate between Chris Stephens and Wayne David

Tuesday 23rd January 2018 Westminster Hall

[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.