Defence Industry and Shipbuilding

Baroness Anderson of Stoke-on-Trent Excerpts

Wednesday 11th July 2018 Commons Chamber

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

I must begin by directing the House to my entry in the Register of Members’ Financial Interests. I am a proud member of the GMB, the trade union that represents thousands of workers in our shipbuilding industry.

It is slightly challenging to follow so many Members who have spoken with such authority. I do not want to repeat what has already been said, and I shall speak as briefly as possible so that everyone can enjoy the football this evening.

The shipbuilding sector is of vast economic and strategic importance to our country. It is a £2 billion industry that directly employs over 32,000 people, with a further 20,000 jobs in the supply chain. It is a sector that continues to provide well-paid, highly skilled jobs for British workers—jobs that are desperately needed. The industry’s dependence on the Royal Navy means that MOD procurement policies such as those that we are discussing today are critical to the success of British shipbuilding, as was recognised in the Government’s national shipbuilding strategy. However, I fear that the Government’s narrow interpretation of EU procurement rules means that they are needlessly limiting themselves in their efforts to support a major national industry.

Under article 346 of the Lisbon treaty, EU member states have nearly unlimited freedom in respect of defence procurement. It is a freedom of which many other EU nations have taken advantage in order to safeguard their own sovereign capabilities, as in the case of Germany’s Berlin-class support ship and Italy’s Vulcano-class logistic support vessel. Yet the UK has so far applied those protections only to the production of vessels that we define as “warships”. That approach lays bare the paradox at the heart of the Government’s attitude to our shipbuilding strategy. The very existence of a national shipbuilding plan suggests a recognition of the industry’s vital importance to both our economy and our national defence, but the long-term success of that industry is being impinged on by a refusal to do everything that could be done to support our national shipbuilding industry.

Nowhere is that demonstrated more clearly than in the Government’s decision to put the bid for the fleet solid support ships order out to international tender. We have already seen them begin to backtrack on their commitment to build three support ships, with the official tender for the project now stating

“a firm commitment for 2 ships and an option for a further 1 ship”

—so, apparently, two and a half. We should not be cost-cutting when it comes to the long-term capabilities of our Royal Navy, nor should we be putting an order of national significance out to tender abroad. The construction of those ships could give vital economic support to our national shipbuilding industry, and the £1 billion deal could provide long-term stability and investment in UK shipbuilding. As the shadow Secretary of State stated, GMB research shows that up to 6,700 jobs could be created or secured if the order were to go to a domestic shipbuilder, as well as a further 4,700 in the supply chain. That would build on BAE’s recent success in securing the SEA 5000 Australian programme.

As the House knows, I am adamant that due to the industry’s dependence on naval contracts, a steady drumbeat of orders is vital. Building these fleet solid support ships here in the UK would provide a real guarantee to British workers and show that the Government are serious about supporting British business.

I have spoken before in the Chamber about the importance of the wider defence family. Those who design and build these ships are as vital to our long-term national security as those who serve on them. If we were to lose those skills and that knowledge now, as we prepare for a new post-Brexit world, the damage could last for a generation.

We cannot afford to sit back and let the free market take its course while competitor countries recognise the value of using public procurement to support security-critical industries. We must not allow our skill base to erode or our communities to decline by failing to do everything we can to provide that steady drumbeat of orders that is so vital to our continued prosperity.

During the 1980s, the UK’s withdrawal from the defence export market and our failure to establish a solid base in commercial production saw 75,000 jobs disappear. The impact on our communities and on our domestic capacity was devastating, and the Minister, who has now left, should be ashamed that he compared it with the mining industry. We simply cannot allow this to happen again.

A national shipbuilding strategy is a great step forward, but it needs to be more than words—we need orders. Our Royal Navy is still the best in the world. Let us see to it that it holds on to its ability to rule the waves. We must protect our domestic shipbuilding and ensure that these orders, and the jobs they bring here, are coming home.

--- Later in debate ---

[Guto Bebb]

The key thing, as my hon. Friend the Member for Torbay said, is that when Opposition Members talk about threats to the south Wales steel industry as a result of the “America first” policy, they are quite happy to attack Donald Trump for his protectionist attitude. The same thing can apply to this debate in spades, I am afraid. Competition and the ability to compete internationally are based not on protectionism but on the ability to be open in the way that we deal with this issue.

[Ruth Smeeth]

Will the Minister give way?

[Chris Stephens]

rose—