Oral Answers to Questions
Lord Spellar Excerpts(4 years ago)
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John Spellar (Warley) (Lab)
The Minister for Defence Procurement (Jeremy Quin)
It is a pleasure to hear from the right hon. Gentleman. No one could ever accuse him of being inconsistent on this subject. I am pleased to assure him, as I have previously, that we will be commencing the competition in the spring.
John Spellar
The Confederation of Shipbuilding and Engineering Unions has argued forcefully for defence orders to be brought forward to help our industry through the economic crisis, especially in our regions and nations. The Navy carrier group needs the fleet solid support ships, and the Department has the specifications from the previous bidding round. It is a project that is really shovel or welding-ready, so when is the Secretary of State going to get off his backside and start ordering these ships? [Interruption.] He may even want to intervene and answer himself.
Defence Procurement and Supply Chains
Lord Spellar Excerpts(4 years ago)
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John Spellar (Warley) (Lab)
I congratulate my hon. Friend the Member for Birkenhead (Mick Whitley) on securing the debate. He listed a number of criteria for people to be here. I tick two of the boxes: as a former union national officer and as a Minister. Indeed, I have been campaigning on this issue for many years, including when I was a Minister. I think colleagues need to understand that, underlying the debate, is a deep sickness within our civil service, which disregards, and even has a contempt for, manufacturing. It is laughable that we are having a debate with the EU over state aid when the Government refused to use the powers that they already have under European regulations. Quite frankly, other countries do not have to do that.
Let us take the example of the fleet solid support ships. France and Italy have ordered ships and prescribed that they be made in their own yards, and the same is true of the Germans. They use, interestingly enough, a foreign design, but they stipulate that the ships have to be built in German yards. There should never have been a question about this. There should have been a lot of work for our shipyards that would maintain a flow of work for the supply industries and, in particular, for the steel industry. Now there has been a welcome development in that the Secretary of State, who previously said that he would be putting out the invitation to bid in the spring, told a recent hearing of the Select Committee that that would happen shortly. I hope that that means that we are bringing that work forward. The Minister will be pleased to learn that I have been drawn to take part in Defence questions next week, when I shall be pursuing this issue.
We need to press on and do what would be taken as read in other countries. Companies understand that. They understand that if they are to sell in those other countries, they have to have substantial manufacturing bases there. Here they believe they can get away without having that. Furthermore, in its assessment of contracts, the Treasury refuses to consider the 30-odd per cent. that will come back to the Treasury directly in the form of the taxes paid by the workforce.
As the hon. Member for Bracknell (James Sunderland) pointed out, the problem goes across the board and includes police cars, fire engines, trains and, recently, hydrogen buses. We are putting lots of money into green hydrogen buses, and there is a nice picture of one in Tyne and Wear that clearly shows that it was made in China. The UK and the Scottish Governments are putting a lot of money into wind turbines, but a huge amount of the work is going overseas. As I said, no one else behaves like that.
I also draw attention to and praise the document from the Confederation of Shipbuilding and Engineering Unions on shovel-ready defence programmes. It argues that we should do what Germany and France are doing and bring work forward. We already know that we need the kit and have already contracted for it, so we can help those companies and, in particular, their long supply chains to keep their workforce and to continue investing in equipment if we bring forward orders for equipment that we already know about. That is also important for aerospace. The civil aerospace industry is flat on its back as a result of the aviation crisis. Helping the supply chain through help to military aerospace is enormously important. As the hon. Member for Bracknell said, the issue is also important for exports. People will come to our companies and say, “If it is not good enough for the British armed forces, why do you say it is good enough for us?”
It is not just about the companies but about the apprentices who are the skilled workforce of the future and the backbone of engineering. It is about good skilled jobs, often in communities that are at the centre of the levelling-up agenda across the country. Many of the companies depend on major plants that have satellite plants around them. They have served us well for many generations. We should back them now.
Jeremy Quin
I have the gift of foresight. Only very recently, I was on a call with the First Minister of Northern Ireland with Northern Ireland defence contractors, talking about the opportunities that may come up. I know that the Chief of the Air Staff will be in the Province to talk about opportunities in aerospace, and we are minded to see how we can support all parts of the United Kingdom, absolutely including Northern Ireland.
To go back to the north-west, the Typhoon programme makes a significant contribution to the UK economy, generating billions of pounds through exports. That is an important issue, which my hon. and gallant Friend the Member for Bracknell raised. That will be enhanced not only by the recent radar development, which has secured in excess of 600 jobs, including 120 jobs at BAE Systems Warton in Lancashire, but also by the recently signed Quadriga contract, which secures further skilled manufacturing work to build parts of 38 new aircraft at BAE Systems Samlesbury, including engineering roles that are central to the UK’s future combat air ambitions.
We can be positive about the future for defence across the UK. The four-year settlement provides the financial certainty needed to pursue a radical modernisation programme to meet today’s threats and prepare for the future.
I urge the hon. Member for Portsmouth South to be a little patient. We have the funding envelope and we are looking forward to producing the integrated review and the defence and security industrial strategy. These are three important parts of the stool that will take us forward for the next few years. It is a platform for the future. I recognise the hon. Member’s eagerness to see those things announced. I would ask him to be patient a little longer. He is obviously happy with the first part of the stool—we have the other two legs to produce, and I hope to bring them forward as soon as practical. As he appreciates, these are cross-Government reports. We will bring them forward when we can.
The four-year settlement ensures that the armed forces will be able to adapt to the threat with cutting-edge technology, compete effectively in the information age and fight decisively when required. It will position the UK as a global leader in the new domains of cyber and space and transform the UK’s capabilities across sea, land and air.
As has been stated, it is underpinned by record investment of at least £6.6 billion on military research and development. I hope to encourage the hon. Member for Liverpool, Riverside (Kim Johnson), who is keen to see us committing to programmes. The announcement that the Prime Minister made confirmed our order of eight Type 26 and five Type 35 frigates.[Official Report, 7 December 2020, Vol. 685, c. 6MC.] It also supports a subject close to the heart of a number of people in this Chamber—the future of the fleet solid support ship programme, which will supply our carrier strike group, and which I know is of direct interest to the right hon. Member for Warley (John Spellar), as it is to the hon. Member for Birkenhead, among many Members. That is an ongoing process, as the right hon. Member for Warley knows; I look forward to his Defence question next week. The competition will be launched next year. I was going to say in the spring, which is but a short step away. We are looking forward to spring dawning.
Jeremy Quin
I give way to the right hon. Gentleman, as I thought I might have to.
John Spellar
This is absurd. We know what the requirement is. It has already been out to one tender. The only argument was about whether it was a warship. Why are the Government still dithering? Why do they not get the order there, let companies bid in and let their suppliers know and start tooling up and getting supply chains working? Why can they not get a move on?
Jeremy Quin
The right hon. Gentleman will be aware that these are warships, which I know he regards as a great step forward in our thinking, as we have learned more about how they will operate in the carrier strike group. He will just have to be a little more patient. We are getting on with the procurement. Come the spring, he will see that competition launched.
John Spellar
Why the delay? Quite frankly, they could always have been designated as warships, because they always had guns on them. What is holding it up now?
Jeremy Quin
First of all, we have had a delay in this programme for quite some time—I do not know if it goes quite back as far as the previous Administration, but it might well have done. For a long period, people have been thinking about the FSS and how exactly it should be incorporated. All I can say is that I am delighted that, very soon, the right hon. Gentleman’s pain will be over, with the competition being launched. I am pleased that we have reached that point. It is critical, as the right hon. Gentleman will agree, that the next competition is extremely well founded, well based and successful, and we are putting in place the basis to ensure that that is the case.
I must move on. Another major project of direct importance is the future combat air system, which is a truly strategic endeavour. It will build on the success of Typhoon and F-35 to again promote great jobs in engineering in our high engineering base in the north-west of England and throughout the UK. On land, our exciting £2.8 billion commitments to Boxer at Telford is now feeding through supply chain orders throughout the sector. All these programmes, whether at the cutting edge of maritime combat, air or land capabilities support jobs not only at tier 1, but throughout the supply chain, as has been said, with 119,000 directly employed and a further 80,000 or so employed through the defence supply chain. While decisions on the allocation of funding across the breadth of our capabilities will be made and announced in due course, this settlement will support skills and jobs, and apprenticeships, as mentioned by my hon. Friend the Member for Barrow and Furness (Simon Fell), throughout the UK.
In order to ensure a strategic approach, I announced earlier this year that we are leading a cross-Government review of the UK’s defence and security sectors. It will identify how we can ensure that we have competitive, innovative and world-class defence and security industries that drive research and investment. We recently launched the social value in procurement model which, to the hon. Member for Portsmouth South’s point, will provide another tool to ensure our major procurement projects evaluate priority social value themes and outcomes linked to prosperity. As part of the defence prosperity programme, we are working with industry and Government colleagues to develop a joint economic data hub within the UK Defence Solutions Centre to collect and aggregate economic data from across the sector. It will provide a better understanding of the economic contribution of the defence sector at a UK, national and regional level that can inform our decision-making process.
Throughout defence, we are committed to ensuring that we seize the opportunities provided by smaller companies. We are targeting a 25% spend with such companies. We have already hit 19%, up from 13% a couple of years prior to that. We are extremely mindful of the need to maintain a clear vision of our supply chain, and we are working through a Department-wide supply chain resilience and risk programme. Defence has some of the most complex supply chains and challenging procurement programmes across government. However, they contribute to the UK’s proud history of providing the skills, capabilities and equipment that keeps us and our allies safe, and I am convinced that, given the Government’s commitment, the UK will have an equally proud future.
Oral Answers to Questions
Lord Spellar Excerpts(4 years, 3 months ago)
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Jeremy Quin
My hon. Friend is a great advocate for her constituents. We have recently received a bid from the council for that asset of community value and will be contacting it to discuss the offer and the value it would deliver for taxpayers.
John Spellar (Warley) (Lab)
Mr Wallace
The right hon. Gentleman will know that one of the challenges for our yards is not that they cannot make ships: it is simply that there is feast and famine. Sometimes we go from a pipeline that is full to a pipeline that is empty, and it is incredibly important that we schedule our shipbuilding to make sure we keep as much productivity and throughput in our yards as possible. On the point of the Fleet Solid Support ship, as I have said, we have started discussions and the competition will be issued. He will know that the previous competition was stopped. I am keen to make sure that we get it right for our Royal Navy, and the right hon. Gentleman should wait for the competition to be issued.
Oral Answers to Questions
Lord Spellar Excerpts(4 years, 9 months ago)
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Jeremy Quin
My hon. Friend has in the past raised this company, its work and particularly its apprenticeships with me. Diary permitting, I would be very pleased to visit it with him.
John Spellar (Warley) (Lab)
If companies such as David Brown are to be sustained, they need orders, as does the shipbuilding industry. Once again I ask whether we can start behaving like every other country. Will the Minister tell us from the Dispatch Box when he will start the fleet solid support vessels programme again, and tell us that these ships will be built in British yards?
Mr Wallace
The right hon. Member is a proper champion for British shipbuilding. After we ceased the competition, because it was delinquent the first time round, I have re-examined many of the terms and conditions of the contract, so he should watch this space.
Oral Answers to Questions
Lord Spellar Excerpts(4 years, 10 months ago)
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Mr Wallace
The United Kingdom is a full member of NATO and completely committed to ensuring that that alliance has a long-term future. The announcements that we made at the NATO summit in December set NATO on the right path of expanding into areas of hybrid threat and cyber. I am confident that, with Britain and our partners working to ensure NATO’s success, NATO will have a long and fruitful future.
John Spellar (Warley) (Lab)
But military capability also depends on industrial defence capability, which depends on a steady workstream. As a number of Members have said, now that we have come out of the EU, why will the Secretary of State not back our shipbuilding industry, start the new contract and specify that support ships should be built in British yards by British firms? Here is the opportunity—why will he not do it?
Mr Wallace
The right hon. Member will have heard that we stopped the competition for the future solid support vessels. We will look at why that competition could not proceed but, like shipbuilders, I have a lot of faith in the British shipbuilding industry, which is why we have the Type 31 and the Type 26—excellent aircraft carriers that were delivered on time and on budget—and we will continue to invest in the yards. It is also important to make sure that this SDSR and everything else are budgeted for. No SDSR that I can remember, going back to the early ’90s, has been properly funded to back up the ambitions.
Oral Answers to Questions
Lord Spellar Excerpts(5 years, 2 months ago)
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Mr Wallace
I shall have to write to the hon. Lady about the Red Arrows, because I was not expecting that question, but the Tempest project is an important signal to BAE Systems that the Government are committed to another generation of fast jets. I shall be meeting representatives of BAE soon, and I shall ensure that its desire to be part of the programme is reflected in the locations of its workforce around the country.
John Spellar (Warley) (Lab)
The Secretary of State made a very significant statement from the Dispatch Box a while ago when he said that companies should invest where the skills are and where the customers are. That only applies if the customers are prepared to use their buying power to insist that the manufacturing takes place in the UK. Why will the Secretary of State not change Government policy, even before Brexit, and insist that the solid support vessels are built in British yards? Make a decision, man!
Mr Wallace
The two aircraft carriers are built in British yards, the Type 26 is built in British yards, the Type 45 is built in British yards, the offshore patrol Batch 2 is built in British yards, the Type 31 is currently built in British yards, and we will continue to invest in our yards. The right hon. Gentleman will have heard the hon. Member for Stoke-on-Trent North (Ruth Smeeth) ask how we could ensure that BAE continued to invest in its workforce. It can continue to invest in its workforce because it also manages to export around the world When we export, we must recognise that we need an international consortium, because we cannot sell purely to ourselves; we have to export around the world.
Defence Spending
Lord Spellar Excerpts(5 years, 5 months ago)
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Anne-Marie Trevelyan
The hon. Gentleman pre-empts some of what I am going to talk about. He is absolutely right.
Our doctors and nurses tell us directly and bluntly if the funding systems for the NHS are not working properly so we can do something about it and advocate for them. However, that is not an option for our defence chiefs, so it is hard for us to know whether their resources would be sustainable and resilient if there were a major crisis. The question is not only whether enough funding is going into our defences but whether we are spending it correctly—a narrative that ran successfully after the strategic defence and security review in 2010, when the country was in dire financial straits and the former Member for Whitney had the unenviable challenge of trying to put it back on to a stable financial footing. SDSR ’10 declared—conveniently, perhaps, to match the financial crisis—that the Ministry of Defence, like other Departments, had to find efficiencies. There is no question but that that was the right thing to do.
John Spellar (Warley) (Lab)
First, I resent the use of the word “efficiencies”. Basically, that is Treasury speak for cuts, and it would not face up to that. Secondly, the hon. Lady is clearly under a misapprehension: the country was on a very steady path to reducing the deficit. Owing to the crash-and-burn tactics of Mr George Osborne, we went into a recession, which lessened the revenue coming in, deepened the crisis and worsened the deficit.
Anne-Marie Trevelyan
As ever, the right hon. Gentleman is a great defender of his party’s financial position. I would not choose to pick a fight with him, because he is a staunch defender of all matters defence.
Anne-Marie Trevelyan
The hon. Gentleman’s point is well made. I will refer to submarines later. We need to challenge the Department continually on whether Committees such as the Defence Committee and the Public Accounts Committee, on which I sit, have the tools to look pre-emptively at the risks of those sorts of decisions.
There is also a mantra that technology is changing how we do everything and that it will, as if by magic, solve all challenges. It is implied that it will make everything cheaper, and that we can stop doing things the old way because there will be a whizzy, less manpower-hungry solution. Although it is true that world-leading UK defence businesses are creating extraordinary cutting-edge kit, that is not the only tool for solving our defence challenges. From Florence Nightingale and her medical advances to Alan Turing, the urgent need to gain advantage over the enemy has always brought out the brilliance of our citizens’ inventive genes. Defence has always been at the forefront of innovation because defence in action stretches human ingenuity under the insane pressures of war.
John Spellar
I congratulate the hon. Lady on her excellent speech. However, for industry to be able to respond, there needs to be an industry. That requires the British armed forces and the Treasury to put orders into British factories and British yards, rather than applying a model of international competition that takes no account of the prosperity agenda and no account of the long-term sustainability of the defence industry and its ability to innovate.
Anne-Marie Trevelyan
That question of sovereignty and the prosperity agenda—the third pillar of defence’s remit—is one we need to continue to challenge. As a Brexiteer, I am happy to say that I think we will have more authority to speak in how we choose to do that—
Anne-Marie Trevelyan
Well, that is my opinion. Leaving the EU will give us more flexibility to bring the various parties together and will enable UK businesses, which are world leading, to make their case as effectively as possible.
John Spellar
The hon. Lady should not allow herself to be misled by Treasury-speak. In both European regulations and the Treasury Green Book, the Ministry of Defence has all the tools it needs to support British industry. The problem is a lack of will. It does not help to blame the EU. The problems are in Whitehall, not in Brussels.
Anne-Marie Trevelyan
I thank the right hon. Gentleman. The Minister will have heard his perspective.
One of the key issues for defence is its people, who are flexible, selfless, uncomplaining and serve willingly—indeed, alongside the Minister, who puts his life on the line to serve his country. Equipment changes constantly—if it did not, we would still be sending our Navy to sea under sail—but the quality of our people is always critical. We spend more than a third of our defence budget on people. I say that that is an investment, since they are highly trained and we invest in their training throughout their careers, in a way almost no other employer does. However, we classify them as a cost, so departmental behaviour fails to look after them—our human capital—as assets.
We would not fail to repaint a warship—clearly, that would make her less seaworthy or less capable of dealing with the scars of battle—yet we are perfectly content to fail to invest in the personnel who serve, by not looking after their families and by failing to demonstrate what the armed forces covenant should mean: that if someone has served or is serving, this country genuinely thinks they and their family should not suffer disadvantage. It is imperative that we change the financial models the MOD is allowed to use so that our human capital can be classified as an asset. Service chiefs cannot determine how to reward their personnel, because they are not allowed to use their budgets freely to maximise the benefit to their people and their service. For small change—in both senses of the word—the behavioural changes achieved by flexibility would be substantial and immediate.
I believe the reason change is not happening is that the Department and the Treasury fail to understand the nature of military preparedness, and do not seem to question our resilience if we need to put our military under pressure. Although we put kit that is small, plentiful, cheap and speedy to resource on to the soldier, we put highly skilled men and women, who take years to train, into equipment in the Royal Navy and the RAF that takes years to build. A modern warship or fast jet cannot be whipped up in a few months. It is at the mercy of international supply chains, the risks of which, as the right hon. Member for Warley (John Spellar) mentioned, perhaps are not properly understood.
Importantly, that equipment would take a long time to replace if lost. Although bullets for small arms can be produced at speed if necessary, the missiles sustaining our warships and Air Force cannot be churned through a production line at speed if they are suddenly required. Training a submarine commanding officer or fast jet pilot takes years of investment—it takes time. Too often, it feels like the Department’s financial models simply refuse to acknowledge that and fail to understand the human capital investment that is being made, leaving us with huge risk from poorly assessed decisions.
We must consider the key tenets of successful defence and assess whether we are investing enough to sustain them. The first is deterrence. Deterrence works. Nuclear is the ultimate deterrent, but we must never forget that conventional deterrence has greater utility and that strong power generates respect. Let us consider for a moment our nuclear deterrent in its 50th year in our Royal Navy. Our continuous at-sea deterrent is an extraordinary feat. I always refer to it as our best weapon of peace, because the threat of nuclear war has ensured that we have had no more global wars. Humanity understands genuine existential threat, and the CASD is the embodiment of the UK and USA’s global policing, which reminds any rogue state why using a nuclear weapon would be a bad decision. But do we invest properly in our submarine service?
Oral Answers to Questions
Lord Spellar Excerpts(5 years, 5 months ago)
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Mr Speaker
Ah! Tweedledum and Tweedledee. Or, as one might say, R2-D2 and C-3PO.
John Spellar
I hope that the Minister will also acknowledge the great role of the Defence Committee, under the right hon. Member for New Forest East (Dr Lewis) as Chairman, and the trade unions in maintaining the facility at GE Rugby and seeing off GE’s attempts to close it. May I bring the Minister back to the solid support ship contract and ask him to answer the question asked by my right hon. Friend the Member for North Durham (Mr Jones)? What weighting is given to prosperity? Will he please stop blaming the European Union, when every other country in the European Union looks after its own industry and supports its own yards and its own steel industry? Why will he not show some gumption and do the same?
Stuart Andrew
I thought I had shown some gumption. As I have said, my right hon. Friend the Secretary of State has said that the policy will be changing—
Stuart Andrew
I have just explained that the timelines are critical in the current competition, because the existing fleet that will offer support to the carrier will be coming to the end of its life. We have to have that capability. Surely he thinks that is more important than just trying to score a political point.
Combat Air Strategy
Lord Spellar Excerpts(5 years, 5 months ago)
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Robert Courts (Witney) (Con)
I beg to move,
That this House has considered Combat Air Strategy progress and next steps.
It is an honour and a pleasure to serve under your chairmanship, Mr Stringer. I refer the House to my entry in the Register of Members’ Financial Interests.
As we consider what aircraft will replace the Typhoon, it is appropriate for us to remember those who operate that aircraft now. I am particularly mindful that only a couple of days ago we heard the tragic news about the loss of two German Eurofighters and a pilot in a crash. The German air force remains a key ally, as it was during the cold war, and it is one of the best equipped in the world. Germany is one of our closest friends, as well as being a key NATO ally. I am sure that we are all mindful of the loss of that German pilot. We cannot know the reason for the crash at this stage, and we ought not to speculate, but it may be that we touch on issues such as training or serviceability as part of the debate. Whatever the reasons, it is a sad moment for all friends of Germany and of aviators. I would like us to remember them all at this time.
It is good to see so many Members here as we consider the combat air strategy, particularly given that so many were also present in November 2017 when the hon. Member for Stoke-on-Trent North (Ruth Smeeth) and I sponsored the original debate calling for a combat air strategy—in fact, it was for a defence aerospace industrial strategy; I will refer to that terminology, which is not just semantics, in a moment or two. Progress has certainly been made: the combat air strategy was published in July 2018, while Team Tempest—including the Royal Air Force, the Ministry of Defence, BAE Systems, Rolls-Royce, Leonardo UK and MBDA UK—and the mock-up of the Tempest aircraft were unveiled at the Royal International Air Tattoo last year.
However, there is much more to do. It is appropriate for us all to take stock at this stage, not least because other competitors in the field are forging ahead. This is the right moment to have this debate, given that only last week at the Paris air show the Franco-German team unveiled what has been referred to as their “squashed Raptor” design; anyone who does not know what I mean should take a picture of the F-22 Raptor and then look the Franco-German model, then they will see it exactly. The Turkish fighter concept was unveiled at the same time. In some ways, they are a year or so behind Team Tempest’s efforts, but in some ways they are more developed. They seem to have dates for first flight outlined, which I think I am correct in saying we do not yet have. In any event, there is clearly no room for complacency.
I make one perhaps basic point, although it is not the most important: perhaps we could just call the aircraft that we are discussing “Tempest”. The name has historic resonance—the Hawker Tempest replaced the Hawker Typhoon, as this Tempest should replace our Typhoon. It also provides a logical progression, from Tornado to Typhoon to Tempest. I appreciate that this is not the most important point that we will discuss, but it might make it easier for everyone if we do not have to wrestle with baffling military acronyms or phrases such as “combat air” or “FCAS”—future combat air system. I would rather that we did not have a minor international incident, as with Typhoon, by debating at the end of the programme what the aircraft will be called. In any event, I suggest that we call this aircraft Tempest, and I will refer to it as Tempest today.
Before we get into the details, we should look at why it is so important that we have a combat air strategy. Defence aerospace has accounted for about 87% of defence exports over the last 10 years, and the UK combat air sector has an approximate annual turnover of more than £6 billion. The F-35 programme directly employs around 2,200 people, with Hawk at 1,500 and Typhoon around 5,000. Hawk is estimated—through the 1,000 or so aircraft built or on order—to bring in £15.8 billion over its lifetime to the UK Government, for an outlay of around £900 million. Typhoon will have brought in £28.2 billion, against an outlay of £15.2 billion, showing a clear economic benefit, entirely leaving aside the geopolitical desirability of British sovereign capability. Those figures are before we consider the recent Qatar deal or any future sales over which discussions are ongoing.
However, the issue is not all about money: it is also about finding a way to develop, sponsor and bring on the technology that then has a spin-off in other areas of everyday life, as it has throughout history; the combat air strategy rightly points out that the software used in the Tornado, the Typhoon and the C-130J now provides the rail timetabling system for the London Underground. However, the battle that we often seem to fight in the House is over funding for these projects, in the face of the short-sighted argument that military equipment is simply a financial drain. Of course it costs money, but it brings in money, as well as maintaining vital national independence.
John Spellar (Warley) (Lab)
I thank the hon. Gentleman for introducing the debate so well. He particularly highlights the contribution of the hardware side. Is it not also important that we maintain the military side, because of the impact right the way through the supply chain on many specialist subcontractors—often at tiers 3 and 4 —that are also a vital part of civil aerospace, Formula 1 and the motor industry? Those are all areas in which we are internationally competitive and which help us to pay our way in the world.
Robert Courts
I agree entirely. We often do not realise the impact of the defence industry on each of our constituencies. Many of us will have in our constituencies sometimes quite small companies that make something as part of the supply chain for a much bigger machine. That is absolutely right, and we must work hard to protect that. As the right hon. Gentleman rightly identifies, it goes to the wider impact of technology on the rest of our lives.
I would like each and every one of us, as individual MPs, to consider making arguments to the Treasury about how defence is accounted for. We have to start fighting the battle to turn the tide against the perception that defence and the defence industry simply cost money. I am very encouraged by the Secretary of State for Defence’s comments in the current edition of The House magazine; I hope you will not mind if I quote her, Mr Stringer. She says:
“I think that the Treasury has been missing a trick. It has not really understood the full value of defence to the nation. The methodology that it uses is flawed. So, in advance of the spending review I will be setting out why I think it should change its methodology towards its assessment of the return to the UK of investing in defence. I think there’s much more we can do to reap the benefits that defence brings to the UK prosperity agenda.”
I entirely agree. However, I do not think it is a matter for only the Defence Secretary to deal with. It is a matter for each of us—whether we have military or the defence industry in our constituencies, or both—to keep making the case for what the defence industry and our armed forces bring to UK plc.
John Spellar
I thank the hon. Gentleman for giving way again. What he describes requires a really significant change in mindset in the civil service, and particularly in the Treasury, regarding procurement guidelines: they relentlessly refuse to take into account the impact on the prosperity agenda, which they talk about, or even how much they will get in as revenue from the taxes of people working in this country, rather than working in other countries. That goes across the board. Is not it time for a fundamental rethink, in line with how every one of our major international industrial competitors operates?
Robert Courts
Again, I am grateful. The right hon. Gentleman has made the point succinctly. I agree entirely, as I suspect all of us will today—and I think that the Secretary of State is on the same page as we are. Yes, it is time; that is exactly what I am asking for.
Robert Courts
We are very much asking for a fundamental rethink of the way the Treasury accounts for the contribution of defence. It is probably time for me to make the old joke that we often make when having these debates. I am mindful of the words of my grandfather, who was in Bomber Command during the war. He used to say that the opposition, the opposing armed forces, were not the enemy; they were just people who were playing the same game but at the other end of the pitch. The opposition are just the opposition; the real enemy is the Treasury.
As I said, we often make that old joke in these debates, but it is true. We all find ourselves constantly having to ask the Treasury for more money, but also begging the Treasury, as we have done on both sides of the House, to see the value that defence brings to the economy—it is not just the cost—when programmes have to be invested in. It was a slightly flippant point, but this is the ongoing battle that we have to fight every time any of us stands up to speak about the defence industry or investing in the equipment that our armed forces will need for the future.
That understanding is vital. Although I am addressing my remarks to the Minister responsible for defence procurement, the ramifications of what I am saying go far beyond this Minister and his Secretary of State. They extend also to the Department for Business, Energy and Industrial Strategy, because we need people to have the skills required to build the systems that we are talking about. We need to look also to the Department for International Trade and the Foreign and Commonwealth Office, because of the diplomacy required to assemble the multinational team who are likely to be required to build the aircraft. Of course, the Treasury will always sit in the middle, because it is the one that holds the money, but this work will require top-level political direction to ensure that it takes place. We will want to see the next Prime Minister direct and ensure the cross-Government co-ordination required for this project to be a success.
We ought to look at the form of the project. The Franco-German team who announced their project last week have made it clear that it will involve the next- generation fighter, as it is called, but also remote carriers—they are sometimes called loyal wingmen; essentially they are unmanned aerial vehicles that feed off and support the main manned aircraft—and that that will encompass an air combat cloud, the manned aircraft accompanied by UAVs as a swarm concept. Although we are likely to look to do the same, the form of the project is not yet entirely clear, but it does have significant ramifications in terms of work share, intellectual property protection and, consequently, who the national partners are or can be.
I would like to talk first about national partners. We will all welcome the British drive and British lead, but it probably is not a wild stab in the dark to suggest that we will probably not design and produce a sixth-generation aircraft all on our own, only to equip the Royal Air Force, because sales and production of aircraft are inextricably linked to work share and to the ultimate sales partner. We are aware that conversations are taking place. The Swedish, the Italians and the Japanese are perhaps the obvious partners with whom we are considering working, but there is a real need for urgency.
In November 2018, the Spanish announced that they were considering options for replacement of their F/A-18 Hornet fleet and they were in discussions with the Dassault and Airbus team, who are a Franco-German operation, as well as Team Tempest. They stated that the key factor was the level of industrial participation that was offered. Of course, last week, they signed up with the Franco-German operation at the Paris air show. I have no way of knowing—the Minister may—whether that was as a result of a deliberate British decision. It may be that the level of expertise or financial input offered was unattractive to us, or it may be that it was a result of a Spanish decision to go elsewhere, but at the very least we can say that it is clear that there is competition between the rival British and Franco-German blocs, either to become the more established and advanced programme and to persuade the other to join in, but on their terms, or to ensure the success of their programme because national participation naturally brings orders.
The Franco-German operation is naturally looking at the same potential partners as we are, so it is essential that we have top-level political engagement, repeating Mrs Thatcher’s work in the early stages of the Eurofighter programme in the 1980s. I will turn to the issue of political engagement for a moment now. The Minister will have to forgive me. I know how deeply engaged he is, but this is something that goes beyond his hard work and his Secretary of State as well. It goes up all the way up to full Cabinet support and the support of the Prime Minister.
We can see the approach taken by France. President Macron launched the Franco-German project on 17 June, introducing the partnership of those countries with Spain and signing an agreement at the Paris airshow. There is no doubt that for the French and Germans, that is a national and European project in which they invest considerable prestige, and they will be determined to succeed and to claim for themselves, potentially, aerospace territory that has traditionally been the purview of the British, and they are deploying top-level politicians to achieve that.
The downside of the Franco-German approach is that they will want to be the architects of the project, shaping the capability and design of the aircraft. They may allow others to make the metaphorical bricks, but they will not allow them to sculpt the resulting edifice. We therefore have a golden opportunity to involve those who have outstanding aerospace sectors that either are under-appreciated—such as, perhaps, the Italians—or have not achieved the cut-through that they deserve, which may be the case with Sweden. However, as I have said, that will require political engagement at the very highest level to bring them together.
Just as the Franco-German project is a symbol of those countries’ increasing integration in political as well as military terms, so it is vital that the Tempest project is, for us, a symbol of an outward-looking, co-operative, internationally minded UK post Brexit, a practical illustration of the frequently uttered words that although we are leaving the European Union, we are not leaving Europe, and proof that European co-operation and a European identity exist and thrive outside the political union of the EU.
The current terms of the combat air strategy suggest that it would not be possible for Britain to join the Franco-German project, for reasons such as retaining UK IP—I will return to that point in a minute—but the very last thing that the country or industry needs is lukewarm political commitment leading to a British folding into a rival project, with all that that would mean for our national industry. I am wary of warm words. We are heading in the right direction, and the document that we have seen is very valuable, but history has shown that what I am warning about has happened all too often in the past. There is no avoiding the fact that top-level political commitment is needed not only now, but in the months and years ahead.
We have the biggest air show in the world at the Royal International Air Tattoo in July, as well as the Defence and Security Equipment International exhibition, which international leaders will be visiting, but I would like to see our national leaders going abroad to visit other countries to seek and gain their support. When that is got right—as it has been with Australia for frigates and Wedgetail—we can see the benefits, in terms of not just capability but international influence, as we are a country that does not just work within the Five Eyes intelligence network but provides top-class capability. We stand to gain skills and prosperity as well as international influence if we can manufacture and support aircraft. Hawk shows us how successfully that can be done.
The ambition to secure international influence is shown on page 25 of the combat air strategy, as part of the colourfully illustrated national value framework. I am glad to have that in front of me, and I know the Minister does as well. I am pleased to see it, but currently these are just words; they need to be supported by the top-level political leadership of which I have spoken. I would like to dwell for a moment on the wording of paragraph 38 at the top of page 25, which reads:
“The framework allows the Ministry of Defence to compare the relative benefits of a range of options from procuring ‘off-the-shelf’ to partnering with allies. When placed alongside detailed cost analysis it will enable us to determine relative value for money of the options and consider trade-offs.”
That seems to me to be very broadly drafted and to encompass about five possible options. The Minister might tell me that there are others.
First, that could encompass life extensions to Typhoon. Although that would be welcome for the purpose of bringing on new technology, it is not something that we should be looking at long term. Secondly, it could mean no aircraft—a re-heated Sandys report. I think that was wrong then and remains wrong now. Thirdly, that wording could simply mean buying off the shelf. In fact, the phrase “off-the-shelf” is used. There has always been a good argument, on the face of it, that we can buy good kit cheaply from the Americans. That is true, so far as it goes, but it would leave us without a domestic industry or the ability to make our own combat aircraft, and would remove the international influence that I have spoken of, which is the main advantage of a combat air strategy. I suggest that that option ought to be no more than a last resort.
Fourthly, partnering with allies might mean being a junior partner, as is the case with F-35. That is fine. We might have the advantage of large workshare, but be unable to shape the aircraft for our needs, obtain international influence or protect our leading high-tech capability, which we all want to protect. Fifthly, there is the option of being a leading partner, which is what Team Tempest seems to be aiming for. I would favour that option.
The wording leaves a lot of room for manoeuvre. Perhaps—heaven forbid!—it was deliberately drafted like that. I am pushing for the fifth option, where the UK is a lead partner. Other hon. Members and I are pushing for political leadership to that end. We do not want a strategy that sounds good in practice but ends up leaving sufficient space for a far less ambitious position, which does not provide the Royal Air Force with the capability it needs or protect the sovereign industry, about which hon. Members in all parts of the Chamber have spoken so powerfully. We have seen that in the past.
Any hon. Members who have been in debates with me before will remember my aviation history lessons—I will not give them another. [Interruption.] I am sorry to hear that that is regretted. Perhaps I will do so another time; I have spoken for long enough already. The whole point of the combat air strategy, which the hon. Member for Stoke-on-Trent North and I pushed for way back in November 2017, was precisely to avoid that happening again. Can the Minister confirm that the Government are determined to pursue the lead partner option and whether any of the options that I have posited have been ruled out?
We will need to consider whether the offer of an airframe alone will be enough to make a success of this strategy, or whether it will need further expansion. I suggest that we ought to be looking at a system, rather than an airframe, so that we can include other capability and diplomacy. We can look at the Qatari Typhoon sale as an example. As part of that multibillion pound contract to supply Qatar with Typhoon and Hawk, No. 12 Squadron is integrating Qatari personnel, including pilots and ground crew at RAF Coningsby, before moving to Qatar.
That is a package of training and co-operation with UK counterparts that has not been seen since the second world war, when the RAF last formed a squadron with another nation. Perhaps we need to be a little careful and assess the success of that project, to ensure that it is working for the RAF as well as for industry. However, we have seen from that sale that the need for training—particularly the desire for training associated with the world-class quality mark of the Royal Air Force—may be a major part of any deal in the future, whether regarding aircraft alone or as a package. We ought to consider that sort of thing as part of the combat air strategy as well.
Saab has added GlobalEye airborne early warning and control aircraft to its offer of Gripens for the Finnish air force, which Typhoon is already also competing in. If we are to offer Tempest to other nations in due course, will it include, for example, an air combat cloud, and if so, who will we be able to share that IP technology with? Would we want to offer, for example, tanker or ISTAR—intelligence, surveillance, target acquisition, and reconnaissance—transport assets as part of the package? Would we want to offer training packages or training aircraft?
That last point is important, and it is why I return to the title of the debate. I am not simply focusing on semantics here. The debate held in November 2017 called for a defence aerospace industrial strategy. That encompasses more than just combat air, which is what this strategy principally deals with. This deals with the airframe that will become Tempest, but I suggest that an overall strategy ought to consider what will replace, among other things, Hawk. I ask the Minister to approach that issue again.
The point of having a defence aerospace industrial strategy is to understand what air power we will need as a nation in the future. That includes not just the frontline fast jet aircraft, but the training aircraft and the training regime that will be needed to accompany it.
I would like to talk about the industrial base and the skill base before I conclude—I am conscious that other hon. Members want to speak. I welcome the Eurofighter Typhoon development plan that was launched last week, with the NATO Eurofighter and Tornado Management Agency. We need to ensure that Typhoon has ongoing investment in the years ahead. It might seem counter- intuitive, but everyone here will realise that, to an extent, the airframe is simply a framework into which other things are put. That is not entirely true, because there is technology around low observability, engine nozzles, stores carriage, and optimisation for air-to-air or air-to-ground; but to some extent it is true.
Much of the technology we will see on Tempest will not really be brand new, but will have been debuted on Typhoon, so it is essential that the Typhoon and Future Combat Air System teams are in constant contact with each other, rather than being in separate silos, to ensure that the capability is rolled out as it becomes available, so that it is bedded in and matures on Typhoon, which therefore not only benefits from the upgrades, but leads us to a seamless transition from Typhoon to Tempest in about 20 years’ time—it is extraordinary to say that.
The political engagement that I have spoken of also needs to be deployed in order to continue to see Typhoon exports, and to produce and continue to protect the industrial skills base that will be needed for Tempest. That brings me to the importance of engagement with science, technology, engineering and maths in education. Students throughout the UK should realise that this is their aircraft. It is something that they can work on and perhaps even fly. We cannot wait until people are in their teens or 20s before trying to get them interested in defence aerospace.
I am grateful to Royal Air Force Brize Norton for engaging enthusiastically with Carterton Community College to design a STEM programme, which was so successful that it has been mentioned in the report from Chief of the Air Staff to Her Majesty the Queen. I appreciate that that is not possible everywhere, but where there is a local asset, whether in the defence industry or a military asset, let us try to link up local schools and enthuse young people about the possibilities of the exciting national project that Tempest will be.
That will also require a Government assessment of the skills that we will need and consideration of how we will keep them. We cannot consider what skills we will need until we have decided whether to build radar, airframes, pilot support, or mission control systems and so on. That must all start now, which is the reason for my gentle prodding today.
I have four asks of the Minister, beyond the more detailed Team Tempest updates that he will remember having promised when we discussed military manufacturing in May, in particular on the outline business case that the report said would be produced by the end of last year. I hope that the Minister will relay to the Department that top-level political support and re-engagement are needed to require international partners to come on board. We need improved cross-departmental working, with the Treasury seeing the benefits to British industry as a project of national value, rather than seeing the defence industry simply as a cash drain. We also need next-stage funding; the £2 million that Team Tempest has had is only seedcorn money, and more will be needed to move to the next stage. Finally, the wider requirements of the defence aerospace industrial strategy should be considered alongside the Tempest combat air strategy.
We are on the cusp of a very exciting national project. I look forward to the Minister’s comments and to driving this forward with colleagues in all parts of the House.
Defence Industry: Scotland
Lord Spellar Excerpts(5 years, 7 months ago)
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John Spellar (Warley) (Lab)
I thank my hon. Friend for the speech that he is making, which is very helpful. The British space industry has not only been successful here, but has played a huge part in the European project Galileo. Does he share my regret that the European Commission, in a fit of pique, has decided to kick us out of the project, to which we have made not only a financial contribution, but an enormous industrial contribution? Europe should really be holding that up as an example of competing in the world.
Ged Killen
My right hon. Friend will not be surprised to know that we have different views on Britain’s membership of the European Union. I largely consider that we are kicking ourselves out of the EU and should accept the consequences of that, although I regret the impact that it will have on projects such as Galileo.
Further to the space sector, the construction of advanced land vehicles offers an excellent opportunity for the expansion of the defence industry in Scotland. Glasgow now hosts an armoured vehicle centre of excellence, which was set up by defence company Thales. The centre aims to provide the MOD with an excellent new resource for the development of armoured vehicles.
Thales is currently bidding for the MOD’s multi role vehicle-protected programme which, if successful, would see 50 highly skilled engineering design and manufacturing jobs brought to the Glasgow site, and the possibility of 30 additional jobs created over the programme’s lifetime. Thales has said that if it is selected for the MRV-P and as the UK design authority and integrator for the Boxer and its variants, 100 new jobs could be created directly, while 180 jobs could be created through supply chains and around 200 further jobs could be supported indirectly.
Such programmes are vital for expanding the diversity of the defence industry in Scotland and introducing new skills, as well as deepening the existing skills base. A great example is my constituent Stewart Macpherson, an employee at Thales Glasgow who has been chosen as one of the top 30 electronics engineers under 30 in the UK.
Encouraging and supporting new skills and professionals is a great benefit of defence investment, so I should be grateful for an update from the Minister on the progress towards reaching a decision on the MRV-P programme. I appreciate, however, that he may only be able to reveal certain information as some might be commercially sensitive.
Ged Killen
I thank the hon. Gentleman for his point, which was well made. I am sure that the Minister will respond in his remarks.
John Spellar
Is it not the case that the solid support ships would be ideal for the Rosyth site to maintain its workforce until aircraft carrier refits are necessary? Does that not show that the Government have not learned the lesson of the gap in work at Barrow, which then required a reconstruction of the workforce at huge cost? Surely the Government are saving pennies now but costing pounds later.
Ged Killen
My right hon. Friend is absolutely right. To be frank, I find it amazing that the red, white and blue Conservative party of Great Britain does not see the merit of building such ships in Britain, creating so much benefit for years to come.
In the context of this debate, we must also look at the Scottish Government’s role. Recently, the First Minister set out her plans for a new independence referendum. We must therefore consider the impact of that policy on long-term investment. Scotland’s shipyards rely on the pipeline of complex warships to be constructed for the Ministry of Defence—at least one remaining aircraft carrier, five offshore patrol vehicles and eight frigates—but if Scotland were to become independent before the next Holyrood election, as the SNP plans, the MOD has indicated that Scotland could be excluded from producing UK warships under article 346, or a similar rule if the UK has left the EU. Without those contracts, the shipyards would need to find alternative sources of demand in order to remain open, and I hope that the SNP will elaborate on that in any contribution today.
The MOD spends about £1.6 billion a year directly on Scottish industry, with £900 million spent directly on shipbuilding. The Growth Commission report stated that the entire defence budget for an independent Scotland would be £3 billion, plus £450 million to be used over five years to set up the apparatus of an entire independent state, of which a defence force is just one part. From that combined pool, therefore, the SNP proposes to find at least £900 million a year just to keep the shipyards open, while also setting up a new defence force, equipping it, and ensuring that its IT and support systems work properly. That is before we get on to the implications of importing the necessary components required for advanced manufacturing under a new currency.
That is £450 million to set up a new state in five years, including a defence force, but in less than five years it has cost the Scottish Government £200 million to set up a Scottish social security system and £178 million to set up an IT system to allocate payments to farmers. When we consider the complexity required to set up a new modern military force with all the support and complex IT architecture necessary, we realise that the figures do not add up. Scotland is being let down by both its Governments.