Defence and Security Industrial Strategy

Lord Duncan of Springbank Excerpts

Wednesday 24th March 2021 Lords Chamber

[The Minister of State, Ministry of Defence (Baroness Goldie) (Con)]

My Lords, I thank the noble Lord, Lord Tunnicliffe, and the noble Baroness, Lady Smith, for their comments. I think I feel a bit like the musical song, “Getting to Know You”. I never seem to be quite away from this Dispatch Box on defence matters, but that is a privilege. I thank the noble Lord and the noble Baroness for their generally positive response to the strategy. I understand that the noble Baroness had some reservations and I shall try to assuage her concerns.

Frankly, I think this new defence, security and industrial strategy marks a watershed for the MoD. It is a substantial document. It is the first time in a long time that we have had true analytical discernment of what the challenges are. We need to understand not only what the threats are but how we are going to respond to them and then recognise that we actually need to be able to respond to them when they arise rather than thinking about the response and hoping to find the technology or the equipment some way down the line. The strategy completely turns on its head the whole pace and depth of the co-operation and collaboration with industry in a very positive manner.

The noble Lord raised the issue of jobs. As he is aware, the defence and security industry in this country is one of the major job providers. We think that over 200,000 jobs across the UK are sustained by these industries, which are globally recognised and renowned. The whole essence of the strategy is not only to secure the defence equipment support and technology that we need when we need it but also to ensure that there is an input to the economy and there is an export potential, so I think his reservation about the job situation is perhaps unfounded. We can look to the strategy to make a singular improvement in how we relate defence investment activity to a broader benefit to the economy and to our exports.

The noble Lord narrated a number of aspirations. I largely agree with them and I suggest that those are in essence met by the paper. He wanted to know how individual parts of the intelligence would join up, and he was interested in some of the specifics about acquisition and procurement.

In the section devoted to that, there are some very reassuring statements, including the proposed reform of the defence and security public contracts regulations, reforming the single-source contracts regulations, and publishing afresh the MoD SME Action Plan; I reassure him that is to be published later this year. In that connection, I mention the successful and effective investments of DASA, the defence and security accelerator, which has done pivotal work since it was introduced. It is an essential support, not least to SMEs and start-ups. That is conducive to a more diverse and innovative market.

The noble Lord particularly mentioned the artificial intelligence strategy. That will be in conjunction with the new defence artificial intelligence centre, which is hoping to accelerate the adoption of this transformative technology across the full spectrum of our capabilities and activities.

The noble Lord also raised the very important matter of measuring delivery against the laudable intentions and objectives of the strategy document. I say to him that, yes, this is recognised and that, because a lot of this is not just MoD but across government, Ministers across government, led by the Secretary of State for Defence, will regularly review progress against the strategy.

The noble Baroness, Lady Smith, was perhaps a little less warm in her reception of the document, although I detected that she is broadly in approval. She asked the pertinent question: is this about today or the day after tomorrow? I suggest that it is about both because, given how the strategy is structured, it recognises and continues much of the good work that has emerged in recent years. It is knitting that together, as I said, based on analysis of the threats we face and how we must respond. There are certain strategic imperatives and areas of independence of operation where we will want that to happen from providers in the UK. I say to her very strongly that this is a strong signpost of the direction of travel for both the MoD and our industry partners.

The noble Baroness asked a pertinent question, which was well justified, about the international community because, as the noble Lord, Lord Tunnicliffe, identified, we have departed from the former premise of “global by default”. She is quite right because, although there will be a premise on which we operate for our strategic imperatives and areas where independence of operation is absolutely critical—it will fall to our UK providers to assist with that—we also recognise of course the importance of the international community.

Our global alliances and partnerships are of strategic importance and, as a leading advocate for the development of innovative, adaptive capabilities, the UK will invest in emerging technologies, using the strength of the UK’s world-class industrial and technological base. We will be open to working with allies and partners through international programmes, and these existing initiatives will continue. There is clearly an opportunity to work closely with our partners and other industry providers abroad. The noble Baroness will be aware that the UK will work internationally to develop key military capabilities, such as developing our future combat air system.

So I reassure the noble Baroness that, although we understand that this Statement gives a clear direction of travel to encourage and support our United Kingdom-based defence and security industry partners, it is not to the exclusion of international provision, where we consider that that does not compromise our security but offers an attractive proposition.

The noble Baroness spoke about overrunning budgets in the past. That is a very legitimate reservation to mention. There have been procurement issues in the past and these have not been proud moments for the MoD. But the way in which the strategy is constructed and conceived, which is about engaging with industry from the earliest moment, identifying what we need, discussing with industry how that might be provided and then being sure that there is a constant monitoring process of how that develops as orders are placed, means that many issues that used to obstruct the smooth progress of our procurement contracts are now being ironed out. In some cases, they are actually being eradicated, because of the much more innovative and intelligent approach to how we liaise with our industry and security partners.

I have tried to answer the principal points the noble Lord and the noble Baroness raised. I hope I have addressed them adequately.

[The Deputy Speaker (Lord Duncan of Springbank) (Con)]

My Lords, we now come to the 20 minutes allocated for Back-Bench questions. As ever, pith is the order of the day.

--- Later in debate ---

[Baroness Goldie (Con)]

The sort of scenario to which my noble friend refers may well have happened in the past—but that is where it belongs. The point of this strategy is that there will be hard imperatives for the commercial decisions we take. These will be based on what we need, what is best and who can best provide it for us.

[The Deputy Speaker (Lord Duncan of Springbank) (Con)]

My Lords, I am afraid that the time allocated for this Statement is now up; my apologies to the speakers who were not called.