Defence Procurement and Supply Chains

Debate between Angela Crawley and Charles Walker

Tuesday 1st December 2020 Westminster Hall

[Angela Crawley (Lanark and Hamilton East) (SNP)]

It is a pleasure to serve under your chairship, Sir Charles. I congratulate the hon. Member for Birkenhead (Mick Whitley) on securing this important debate about defence procurement and supply chains.

This debate is set in challenging times. We not only are living through the second wave of a global pandemic but are on course to leave the single market and the customs union by the end of this year. Therefore, I want to take a slightly different approach to the debate from that taken so far and highlight the fact that this problem is faced not only by this Government but by the many Governments around the world who are grappling with the self-inflicted harm that we are potentially causing and the unnecessary damage to people’s livelihoods and to our economy through Brexit.

The defence industry and those who work in that industry are not immune from the Brexit effect, and the end of the transition period is just a month away. This will undoubtedly have a damaging impact on the sector in the long term. The industry body, ADS, has reported that almost 30,000 jobs are already at risk as a result of covid-19. That will be compounded by leaving the world’s largest trading bloc without a deal.

The movement of skilled labour and the collaborative spending programmes of the EU allies will be negatively impacted by the decision to leave the European Union. That is summed up frankly, with the chief executive of ADS outlining the following:

“The UK’s aerospace, defence, space and security industries will face major disruption without a deal, through delays to cross-border trade, costly administrative requirements and a new regulatory system”.

Although defence supply chains are less intense, in terms of volume and complexity, than those of some commercial sectors, new processes at the borders and ports will ultimately create delays and additional logistical challenges for this sector.

Of course, much of this debate so far has rightly focused on the skills of the workforce, the essential role that that will play in the future and the significant contribution of the defence industry to the north and in Scotland. The announcement of £16.5 billion is welcome, of course, and it is necessary that that backing will go into the defence manufacturing industry as a whole as a vital means of support. We can do nothing but welcome that announcement.

As has been outlined, however, further jobs announcements by BAE, and the concerns raised by Rolls-Royce and others about the levelling-up agenda, deserve to be heard in further detail. I want to take this opportunity to highlight concerns on the Clyde about the future maritime support programme, its competition element, the potential fragmentation of contracts and the race to the bottom that could come of that. I would like the Minister to address those concerns directly.

I am conscious of time, so I will bring my speech to an end. It has been demonstrated that the lack of understanding of the strategic and logistical planning required—both for the pandemic and in the coming months with Brexit—needs to be considered in greater detail. The definition of “defence” should perhaps have been widened in this debate, to cover pandemic resilience and wider concerns with respect to climate change, but I do not have enough time to address that.

It is important that we consider the weaknesses in the defence supply chain—across many of our industries—that have been exposed by covid. We must learn the lessons of the pandemic, and whatever happens in the next few months, the UK Government must prepare for the impact of this critical economic change on the defence industry.

[Sir Charles Walker (in the Chair)]

The shadow Minister has 10 minutes.