Defence Industrial Strategy

Lord Fox Excerpts

Wednesday 10th September 2025 Lords Chamber

[Baroness Goldie (Con)]

My Lords, I place on record my support for the enormous amount of work that has clearly gone into the production of this industrial strategy. It is very evident that those at the Ministry of Defence have put their thinking caps on, done the hard work and constructed a plan based around defence’s current and future requirements. There is therefore much to be applauded. The six priority outcomes are absolutely aiming in the right direction and the commitment to strengthening the MoD’s links with SMEs is particularly welcome.

A strong industrial base is vital for the future of our Armed Forces and our defensive resilience as a whole. The need has never been more evident than today, when we have seen a Russian incursion into a NATO ally’s airspace and the largest attack in Ukraine by Russia to date. This escalation is deeply troubling and underlines the importance of swiftly putting Britain into war-fighting readiness.

This is a solid piece of work, but the caveat is this: the solid piece of work crumbles if the bricks are not cemented together. That cement is implementation at a wartime pace. What matters now is that the words on these pages are translated into missiles, drones, equipment and ships. Critical to this is procurement. The chilling reality is that procurement has essentially dried up. There have been promising words in the SDR, but we have yet to see the major procurement contracts that the MoD has promised.

Procurement is the lifeblood of a successful industrial strategy. For example, I ask the Minister: how will the Government ensure that the Typhoon factory in Warton remains open and thriving? We have heard that the Government will be opening up six new munitions factories, but they must have orders. When will they be placed?

I understand that the promised defence investment plan will detail much of the procurement endeavour, but when? The defence industry has been waiting with bated breath since July of last year, and industry must have greater certainty. I implore the Minister to do everything in his power to ensure that the defence investment plan is published as soon as possible. In that connection, will the UK’s defence orders be joining a queue or with they be prioritised over orders for export?

When it comes to the new structures within the MoD, co-ordination of accountability to the Secretary of State is paramount. At the same time, duplication must be eradicated. The SDR and this strategy both mention the creation of a number of new bodies within the MoD: UK Defence Innovation, the Defence Industrial Joint Council, the office of defence exports, a defence office for small business growth and the national armaments director.

The strategic defence review identified a 10% reduction in Civil Service costs by 2030. Can the Minister clarify how, with the addition of these new offices, the MoD will achieve that staffing cost reduction? What existing structures will be merged or abolished, and who will be auditing progress? While I am on this topic, can the Minister update the House on the progress of appointing the national armaments director?

Page 30 of the industrial strategy details nine milestones to be reached by the end of this year. I do not believe any of these have as yet materialised, and the end of the year is fast approaching. Is the Minister confident that the 2025 timeline will be met?

In conclusion, I raise an issue that will come as no surprise to the Minister—budget. My right honourable friend the shadow Secretary of State and I have raised concerns about the bundling together of intelligence spending within the defence budget. That means that, despite the Government’s claims of spending 2.6% of GDP on defence by 2027, the actual money available to the MoD for defence spending is 2.2% of GDP. I am not trying to catch the Minister out, but I want to make this clear: the Government may have increased defence spending, but this level of spend is simply not enough to deliver everything in the SDR and indeed in this industrial strategy.

The Russian incursion into Polish airspace yesterday and the triggering of Article 4 of the North Atlantic Treaty serve as a stark warning: complacency is not an option. The contents of this strategy, which, as I have said, these Benches fully support, cannot be a prayer for the future. Wartime pace means delivering from now on and, quite simply, there is no safe alternative.

[Lord Fox (LD)]

My Lords, it is a pleasure and a challenge to follow the noble Baroness, Lady Goldie, who has such expertise in this area. We on these Benches also welcome the Government’s announcement of this new defence industrial strategy. We support the objectives of both boosting defence capability and increasing economic activity within our country. As someone who has worked in the sector—I no longer have an interest in it—I can say that, in the main, the jobs in the defence sector are high-quality jobs that pay well over the national average, so they are very worthwhile jobs for our citizens. More than that, they will contribute in large measure, we hope, to the resilience and security of our country.

Like the noble Baroness, Lady Goldie, I will focus on procurement. I will not repeat the questions that she has already asked, although I am very interested in the answers. It is clear that an improved framework is needed and that, in the Government’s own words, waste, delay and complexity have prevailed. Big changes are therefore needed. We also support the aims of involving more SMEs and driving innovation. These are important, but how? Section 7 of the strategy sets out some details of process, but I would suggest that, as well as process, this all requires an entire change of culture across the sector, from the MoD to the primes and the SMEs. How will the Government fast-track the necessary culture changes that we need in order to move at pace?

The implementation of a UK offset regime is welcome and the sections in the strategy are encouraging. I appreciate that consultation is needed, but I also note that there are—we hope—contracts being let already before this regime is put in. Can the Minister tell your Lordships’ House how any offsets will be gained from contracts that are let before then?

Similarly, a buy British focus is really good and very important. However, some contracts are being let at the moment that do the exact opposite. They are contracts that may call into question the future of established capacity in this country: capacity that, once lost, will not be regained. Can the Minister therefore ensure that these are reviewed as soon as possible to ensure that permanent damage is not being done before this strategy is implemented. I will be happy to discuss further details on that with the Minister.

In the Spring Statement, Rachel Reeves confirmed an extra £2.2 billion of UK military funding. This increase will be paid for by cuts in overseas aid, which the Minister knows we deplore. This strategy contains spending of £773 million on the Government’s estimate, but can the Minister confirm that this is not in fact new money, but money out of the pot that was announced in the spring by the Chancellor? At the time, the Chancellor also announced the new Defence Growth Board. Can the Minister say what role this will play, and indeed what role it has played in the preparation of this strategy? How does this fit with the new defence investors advisory group that is announced in the strategy?

I also seek information on the whereabouts of the Defence Growth Partnership, which has been in place for some time and shares many of the same aims, particularly around SMEs and innovation. What is its role? Is it still working and how does it contribute?

A key drag on the success of this strategy will be the lack of available skills. Part of this announcement includes skills investment, which is largely focused on five new defence technology colleges. This is also welcome, as is the emphasis on apprentices. However, what is the role of Skills England in all this, given that it was supposed to be part of the picture on the national skills programme.

Following events, it is very clear that things are moving very fast globally, and moving in the wrong direction. They underscore the vital importance of working alongside our European allies in securing the UK’s defence. As I am sure the Minister will tell us, we continue to play key roles in JEF, E3 and other groupings, while NATO is of course our foremost security defence relationship and always will be. However, more can be done to deepen the co-operation and integration with our European allies. They share security challenges and together we can build scale to rearm at pace. Will the Government, for example, now agree to seek the UK’s associate membership of the European Defence Agency?

While EU institutions have a more limited role in defence, the Security Action for Europe—SAFE—defence fund is being established by the EU Commission. Recognising the opportunity that SAFE presents, the Minister of State, Stephen Doughty, told the Foreign Affairs Select Committee on Monday:

“It is a €150 billion instrument. It is very significant and could lead to significant opportunities for our defence industries”.


Can the Minister therefore update your Lordships’ House on the UK’s discussions with the Commission and the nation states on our participation in SAFE and tell us whether UK industry will be eligible to bid in the first round, which I believe is in November?

I have lots more queries, but I close by saying that this strategy is a first step and I absolutely concur with the noble Baroness that implementation is key to its success. We will happily support and work with the Government to help deliver the strategy and its objectives.

[The Minister of State, Ministry of Defence (Lord Coaker) (Lab)]

My Lords, I thank the noble Lord, Lord Fox, for his constructive comments about the strategy and the important questions he asked. I know it is from a position of support for our overall direction. I say the same to the noble Baroness, Lady Goldie; I know that her questions are from a position of overall support for the strategy, but seek clarification on how we can improve it in the interests of our country and the nation’s Armed Forces. I very much appreciate the comments from both the noble Lord and the noble Baroness.

Notwithstanding the points that have just been made, sometimes we, as a nation, do not praise some of the things that are happening. Yesterday I was at DSEI at the Excel centre, which I know the noble Baroness and the noble Lord will be aware of. It was a phenomenal statement about UK industry and UK business—small, medium and large—and what a phenomenal statement about the projection of British power across the globe. Many noble Lords have told me they have been, or will go, to DSEI and they too have been overwhelmed by the number of foreign visitors, armed forces and businesses that are here.

So, yes, there are questions about our strategy and how we might do better, but I challenge anybody—and this is for the audience out there, rather than in here—to not say that we have an awful lot of which to be proud in this country when we look at DSEI. I know that is a view shared by everyone, and it is an important starting point.

The strategy seeks to do more in different ways. I will try to run through many of the questions asked by the noble Baroness and the noble Lord, Lord Fox. Yes, it is about trying to get to war-fighting readiness. We cannot have a situation, now or in the future, where we cannot do what we want to do because we cannot produce the equipment we need at the pace we need it. We must do better than we have done, and part of that is building our sovereign capability. Of course we will work with our international allies, but sovereign capability has been something that we have not given enough attention to over the past few decades. The noble Baroness and the noble Lord asked about the implementation plan. A whole chapter is dedicated to implementation. In each part, there are matrices about being held to account. The noble Baroness is right that on page 30 there are things that have yet to be implemented. I would point out that the strategy was published on Monday, but we are doing our best to get going.

On implementation, can I read directly from a note I was given, since I asked about this? An implementation team headed by a senior civil servant has been created. The Chancellor and the Defence Secretary—note to the noble Lord, Lord Fox—will hold the department to account via the defence growth board, and the Defence Industrial Joint Council will monitor delivery with our industry partners. The defence growth board will continue to exist to try to ensure, through the Chancellor and the Defence Secretary, that all the various things that are outlined in the strategy are delivered.

In relation to what the noble Baroness said, we are working hard to try to protect jobs with respect to Typhoon. We have allocated £6 billion to munitions factories over the lifetime of the Parliament, with the six additional munitions sites, to try to ensure that we can have the munitions that we need. The defence investment plan will be this autumn.

The 10% reduction in the Civil Service headcount that the noble Baroness referred to is the aspiration. The new boards and bodies that are set up will see others disappear, others amalgamated, but all of it trying to give a greater focus. The noble Baroness went through some of the new bodies. They are not in addition to the existing bodies; they are going to be more directly focused to deliver the outcome we want and will subsume some of the existing bodies. We wait to see how that happens.

On the national armaments director, we have an interim director who will be in post for a period while we recruit the new director. I am not certain of the exact timetable for that. In terms of intelligence spending and defence spending, I think the amalgamation of that is not a smoke and mirrors; it is to try to reflect the reality of the new geopolitical context of our time, where we talk about homeland defence, cyber, and the importance of our security agencies working with our Armed Forces. The totality of the defence and security of our nation encapsulates all the above, and that is the totality of the spending. The noble Baroness and others can debate whether it is enough, but that is the concept behind joining those two together—to give us a sense of how much is being spent in the sphere. I know my noble friend Lord Beamish is behind us and will know the importance of some of the work that intelligence does to keep us safe, particularly from a homeland perspective.

The noble Lord, Lord Fox, asked about fast-tracking cultural change. I totally agree with that. Let me give the noble Lord one example of that. Why does the urgent operational requirement operate only when there is a war or a crisis? Why can we not bring that same culture—I think the noble Baroness asked this when she was a Minister—that same process and that same attitude to the situation when it is not a crisis or a war? It is not about being flippant; it is not about disregarding proper financial process, but it is about saying: “Come on, let’s get these decisions made; let’s give some certainty; let’s give a drumbeat to orders”. If we can do that, we will do ourselves a favour. I am perfectly happy to meet the noble Lord and others, if he wishes, with my colleague. I will volunteer him for it with the Defence Procurement Minister, and we can discuss the point he made about offset.

Offset is a really interesting concept as we go forward—the idea of trying to have mutual benefits. If we buy abroad, how can we ensure through offset that we do not lose any benefit that may accrue or that a complementary benefit accrues to UK industry? I take the noble Lord’s point, which was on what happens before the offset system comes into effect, and we will consult on that. What happens if decisions are made now? I will take some advice on that and talk to the noble Lord and his friends.

The noble Lord also mentioned skills. Skills is a massive issue for our country. If a cultural change is needed anywhere, it is in trying to ensure that skills-based occupations, skills-based learning and skills-based opportunities are seen to be as valuable as some of the other opportunities. That the skills option is not seen in that way has bedevilled our country for decades. We are trying to deal with that through the defence technical colleges. We are going to work with Skills England and the devolved nations—he will have noticed that the devolved colleges are here.

On working with our European allies, of course we will work with them. We have the EU-UK security and defence partnership. I say to the noble Lord that we could not have entered SAFE without an EU-UK security partnership. The fact that we have that means that we can start to answer all the questions that the noble Lord has asked.

I thank the noble Baroness and the noble Lord for their support; I hope that I have answered many of the questions that they asked. This is an exciting time. At the end of the day, the defence industry is on the front line with us. If we want to defend our democracy, we need to improve, extend and develop our industrial capability as well.

Russian Maritime Activity and UK Response

Lord Fox Excerpts

Tuesday 28th January 2025 Lords Chamber

[Lord Coaker (Lab)]

I do not know what the noble and gallant Lord would say to me if he disliked me.

Having said that, he raised a number of really important points. He heard what I said about funding in response to the noble Baronesses, and we are looking to set out the pathway to that. Others will have heard his call for more resources. There are issues around what capabilities we have and how we take them forward; we have heard demands not only to provide traditional capabilities but to be prepared for the changing threats we face and to establish how we develop the capability to deal with them.

My reading of the view that other countries have of us does not entirely accord with that of the noble and gallant Lord. In many respects, the NATO countries that I have met, notwithstanding the debates about capabilities, often look to the UK to see what we think about what we should do and for leadership.

I have already outlined the NATO response to what is happening in the Baltic with Baltic Sentry. That is a group of allies from NATO: eight countries coming together to provide maritime capability and do other things, and we are providing the reconnaissance for some of that. That is a NATO project, a NATO alliance acting together to deliver security. Of course, the whole point of NATO is that each country comes together to do that. We are looking at the capabilities that the noble and gallant Lord mentioned, but also as part of that, we have the JEF, which is a complementary part of NATO specifically looking at the Northern region, and the UK set that up; the UK is the lead for that. The Nordic Warden campaign that has been set up is run from London, based at Northwood, and the JEF countries are looking to us to provide that leadership, because we are the only country that has the necessary artificial intelligence which allows us to track some of the vessels that we may be concerned about.

Yes, there are issues, and the noble and gallant Lord laid them out very articulately. I just say to him that we are developing abilities, and I would say that, in my view, our role and status within NATO, and the view that many other countries have of us, are perhaps higher than the noble and gallant Lord set out in his remarks. Certainly, that is what people say to me when they say, “Where is the UK on this, because we want to see them there with us?”

[Lord Fox (LD)]

My Lords, whether one signs up to the noble and gallant Lord’s view or the Minister’s, I think it is safe to say that the NATO theatre is becoming ever warmer and the requirements from the United Kingdom are getting greater. But it is not only in NATO that we make commitments. As the Minister will know, we are set to join the US-Bahrain Comprehensive Security Integration and Prosperity Agreement—a very long name—which cements us into quite considerable naval activity based in Bahrain. Does the Minister share my concern that we are cementing and placing resources that we cannot move back into the European theatre by signing this treaty, and it puts another strain on already strained resources?

[Lord Coaker (Lab)]

I understand the point the noble Lord is making with respect to Bahrain, but let me say this. The UK acts wherever it needs to to protect its interests. I often make the point about the indivisibility of conflict. I went to Vietnam recently. Vietnam is concerned about Ukraine, because it has brought Russia and China closer together in a way that it never expected. I am proud of the fact that, notwithstanding Bahrain, later this year, we will lead a carrier strike group out into the Indo-Pacific to demonstrate that the law of the sea, the international rules-based order, is something that is important to us. There are numerous countries, both in Europe and in the Far East, including our allies Australia and New Zealand, that will stand with us in delivering that capability. Defending the rule of law in those areas is important. You cannot divide peace and security in one part of the world from peace and security in another, and I for one am pleased that the carrier strike group is going out into the Indo-Pacific later this year.

Decommissioned Nuclear-Powered Submarines

Lord Fox Excerpts

Wednesday 23rd October 2024 Lords Chamber

[Lord Fox (LD)]

My Lords, the noble Baroness, Lady Bryan, mentioned the disposal of nuclear material as and when it is eventually removed from the submarines. Can the Minister confirm, perhaps by letter, whether the establishment of a new disposal site—which has been debated for many years and is still no nearer, as far I can tell—will require primary legislation to be enacted? If not, how would the planning process be developed for the future disposal of that nuclear material?

[Lord Coaker (Lab)]

I may need to write to the noble Lord. I usually like to be able to respond directly to questions, but I do not want to get the planning process wrong or give the wrong answer on whether primary or secondary legislation is needed. I will respond to him with a letter to make sure that I am accurate and will place a copy in the Library so that it is available to all noble Lords.

Combat Air Capability

Lord Fox Excerpts

Thursday 10th October 2024 Lords Chamber

[Lord Coaker (Lab)]

The noble Baroness will know that I know Northern Ireland reasonably well and I have seen the fantastic skills base that Northern Ireland has. At the moment, as it stands, the particular emphasis in respect of the Global Combat Air Programme is that the main centres are in the south-west of England, Lancashire and Edinburgh. Of course, the spin-off from that is numerous small industries. We need to ensure that the growth agenda of this Government reaches all parts of the United Kingdom, including Northern Ireland, as the noble Baroness pointed out.

[Lord Fox (LD)]

My Lords, manned aircraft require a supply of pilots. Is the Minister satisfied that sufficient resources are being made available to train the pilots of the future and that they are getting sufficient, real airtime in order to be effective?

[Lord Coaker (Lab)]

The noble Lord knows that there have been problems with the training of pilots. That is partly the point of his question. The Government are looking at training and also at the recruitment and retention of all these particular skills, not just in respect of pilots but right across the Armed Forces. That is why this Government have launched a recruitment and retention review to see what we should do about it. Pilots will form an important part of that.

AUKUS Defence Partnership

Lord Fox Excerpts

Thursday 16th March 2023 Lords Chamber

[Lord Fox (LD)]

My Lords, a number of noble Lords have mentioned concerns over industrial performance in delivering on this contract. I think I heard the Minister say that, because there are three parties involved, it would be embarrassing if we did not keep up to time. I suspect that that is just one of the things that would be a problem; it would also be extremely expensive. My noble friend asked a specific question about what benchmarking is being done between the industrial complex in this country and that available in both France and the United States. Can the Minister please answer that?

[Baroness Goldie (Con)]

To be absolutely accurate, I did not use the word “embarrassing”. Nothing on which I represent the MoD on at this Dispatch Box is ever to be embarrassing; it is a privilege to represent the MoD in this Chamber and to do so on such a positive occasion as this one. I do not have details as to how the benchmark will apply, nor an answer on whether there is to be some measurement of appraisal against what other countries do. I undertake to investigate that, and if there is any information that I can share with the noble Lord, I will do so.

Royal Navy: Ships

Lord Fox Excerpts

Wednesday 22nd June 2022 Lords Chamber

[Baroness Goldie (Con)]

I do not have that specific information before me, but the noble Lord’s point is noted and I shall make inquiries.

[Lord Fox (LD)]

My Lords, I am sure the Minister agrees that much has changed in the world since the OSS was first conceived and the contract let. Would the Minister concede that it is inappropriate to stand at the Dispatch Box and find reasons why this project is being delayed? It would be more appropriate for the Minister to explain how it is being expedited and sped up to meet the new world situation.

[Baroness Goldie (Con)]

The MROSS is not a military engagement ship, per se; it is a ship that will do important surveillance activity, with reference to our subsea cables and energy infrastructure. I do not for one minute disagree: it is an important project; the MoD recognises that, but it is complex. That is why proper regard to due process must be taken.