UK Sovereign Capability

Debate between Lord Beamish and Paul Sweeney

Tuesday 20th November 2018 Westminster Hall

[Mr Sweeney]

I thank the hon. Lady for that pertinent intervention, which drives home the point that I am trying to make. I am highlighting the landscape as I see it now, which is not what we want to achieve and is not optimal. That is not necessarily the fault of the Ministry of Defence, but of what Sir John Parker’s report refers to as the “total enterprise” of shipbuilding, which very much includes the Treasury as financial controller.

[Mr Kevan Jones (North Durham) (Lab)]

Further to the point raised by the hon. Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), the MOD is at fault. It takes no account whatever, either in shipbuilding or in other procurement contracts, of the value added to the UK economy, not just in skills but in the money that the Treasury gets back through tax and national insurance.

[Mr Sweeney]

The Minister might have been hopeful that I was absolving him of all blame in the matter, but I did not quite mean that; I meant that it was not entirely the fault of the Ministry of Defence, because there is a combined silo mentality across Government. My right hon. Friend makes the important point that in shipbuilding and in major defence procurement programmes, there has been a failure to understand the total prosperity effort across the UK. Royal Caribbean would never approach financing the building of a cruise ship in the way that the Ministry of Defence finances its frigates. The MOD does not achieve anywhere near the sort of efficiencies that commercial operators such as Cunard or Royal Caribbean achieve.

The MOD and the UK Government’s considerations ought to be about what maximises industrial and economic benefit to the UK as a whole, but they have failed to incorporate that into their processes for making these critical decisions. To give a classic example, modelling done by the Confederation of Shipbuilding and Engineering Unions makes it clear that if major shipbuilding programmes were procured in the UK, the return of wage and supplier payments to the Exchequer would effectively achieve a 20% net material discount. The prosperity of those programmes would flow back into the UK economy instead of being bled out into another country.

Ministry of Defence

Debate between Lord Beamish and Paul Sweeney

Monday 26th February 2018 Commons Chamber

[Mr Jones]

That situation was predictable when the system was set up. What is worse, I have heard stories about young people who have nearly got to the end of the selection process but do not get called back in, but then get a telephone call from some Capita call centre saying, “I’m sorry, you’ve failed. That is it.” I am sorry, but that is not the way to treat people who have tried to join the armed forces.

The right hon. Member for Rayleigh and Wickford (Mr Francois) makes a good point. When we had senior non-commissioned officers stationed in recruitment offices, they could work out how to handle the recruits and use their breadth of experience to explain what life in the armed forces is like. This situation could have been avoided. Unless something has changed radically in the last few years with injuries, I agree with the right hon. Gentleman. I had case in which someone had a childhood knee injury. That person had to wait six months for a decision and then the knee injury was flagged up as the reason why he could not join the armed forces. That cannot be acceptable.

[Mr Sweeney]

To give a personal example, I joined the Territorial Army back in 2006 with a good friend, who went on to serve in Afghanistan. He left the reserves and when he sought to rejoin, he was disqualified on medical grounds. That is someone who had actually served in Afghanistan and who did not have any obvious injuries.

[Mr Jones]

My hon. Friend raises a very good case from personal experience. This needs to be looked at. I would scrap the contract and take it back in house. The old system perhaps needed tweaking, but it was delivering.

--- Later in debate ---

[Mr Kevan Jones]

Does my hon. Friend agree that when equipment such as ships is being ordered, the payback to the Exchequer in tax should be taken into account and the jobs should not be exported?

[Mr Sweeney]

Absolutely. My hon. Friend has made an excellent and salient point. He and I are both members of the all-party parliamentary group on shipbuilding and ship repair, which is currently undertaking a study of that issue. According to another study, conducted by the Fraser of Allander Institute at the University of Strathclyde, the overall benefit to the UK economy per annum from the shipbuilding industry on the Clyde alone is £366 million a year, in purely multiplier effects. As for the idea that we can competitively tender programmes overseas, we are losing the opportunity of industrial benefit as well. We are not just talking about the loss of core capabilities; we are talking about the loss of revenue and economic potential for our country.