Major Defence Contracts

Baroness Smith of Newnham Excerpts

Monday 3rd February 2025 Lords Chamber

[Lord Coaker (Lab)]

As many noble Lords have heard me say, the war in Ukraine has been a wake-up call not only for this country but for the alliances across the world. We need to be able to scale up our industry and do so quickly, and to reflect on the sovereign capability we need, so that we have that as well. It will require apprenticeships and investment in all areas of the country.

My noble friend also makes the point that we have to know what we wish to spend our money on. Whatever billions we end up spending, it will be important to spend money on the sorts of defence equipment and capabilities we need to meet the threats of the future, not those of the past.

[Baroness Smith of Newnham (LD)]

My Lords, the SDR suggests that the defence sector is important for growth, yet a couple of weeks ago the House magazine pointed out that many SMEs in the defence sector are struggling, and some are thinking of moving out of defence. What assessment have His Majesty’s Government made of this and what are they doing to support SMEs in the defence sector, which is so vital?

[Lord Coaker (Lab)]

We are supporting the SME sector by spending billions of pounds on defence. The noble Baroness makes an important point about the importance of small and medium-sized industries. We often talk about the primes—the really big companies— but they are often supported by small and medium-sized businesses, which are extremely important, along with ensuring we get investment across the country.

I will tell noble Lords the other thing that needs to be done. For decades in this country we have had a shortage of skilled workers and skilled apprenticeships, and certainly small and medium-sized businesses need help to recruit the skilled labour they need to deliver the products that they have on offer.

The final point I will make is that, clearly, we are now in a period of transition from pre Ukraine to post Ukraine. That obviously results in looking at who we are buying from and the sorts of things we are purchasing, and the defence review will deal with some of that as well.