Defence Industry and Shipbuilding

Bob Stewart Excerpts

Wednesday 11th July 2018 Commons Chamber

[John Spellar (Warley) (Lab)]

I will now bring us back to the real world of the defence procurement industry. The Minister wrapped himself in knots over article 346, and it very much reminded me of Madeleine Albright’s response to Robin Cook when he told her during the events in Kosovo, “Our lawyers say I can’t do that.” “Change your lawyers,” she said, “and get better legal advice.” As I will come on to later, that is what every other country does.

We are not saying that we do not want to work in partnership with other countries; we do, and we want to do so effectively, and not just for shipbuilding, which obviously we are focusing on today. We have to look forward. I am pleased that the Minister announced an announcement on the air strategy next week. In particular, we are hoping for an announcement on the future combat aircraft, which we hope will go ahead, and some indications of who we will be partnering with.

Many firms in Europe are concerned by attempts to exclude us from such developments, as we are already seeing with Galileo. It is a bit ironic, in the week of the Brexit crisis, that we are asking Ministers and the Ministry of Defence to be good Europeans—to behave like our European partners. However, the MOD seems to want to act like the three wise monkeys, keeping itself in blissful ignorance. It told the Defence Committee:

“The MoD does not hold information on how other countries apply EU Regulations for defence acquisition.”

Why the hell not? Why has it not asked those questions? Why would it not make those inquiries? It almost reminds me of the sign outside Balliol College during the student demonstrations of 1968: “Do not adjust your mind—reality is at fault.” The MOD does not even want to know the reality, in case it finds it uncomfortable.

France is a very good example. Let me make it clear that I regard France as an excellent defence partner, both militarily and in manufacturing. I congratulate the Minister for Defence Procurement on an excellent performance in front of a joint committee of our Defence Committee and that of the Assemblée Nationale. That is what we are talking about—co-operation and collaboration between our two defence industries.

Let us be very clear: the four auxiliary oilers were awarded with no competition, and furthermore the work was directed to the Saint-Nazaire yard, which was the yard that needed it. From my experience as a Minister, that is not uncommon in Europe, in defence and in many other areas, particularly transport. Not only will European countries decide that work goes to a company of their nationality, they will say which company it goes to.

My respected colleague, the right hon. Member for New Forest East (Dr Lewis), the Chair of the Defence Committee, talked about the percentage of the economy that is spent on defence. I am sorry that he is not here; perhaps he has another commitment. He ought to understand that the economic multiplier effect—the taxes that are paid, and the money that is spent, by the people who work in the yards that will build the vessels—would increase national gross domestic product, and with it the amount that went to defence.

[Bob Stewart (Beckenham) (Con)]

I thank the right hon. Gentleman, who is my friend, for giving way. Will he say quickly why we should not also support things such as Thales UK, Boeing UK and Leonardo in the UK? This is a way of doing it.

[John Spellar]

If they have locations in the UK and there is a fair share of the work, that is absolutely right, but let us look at shipyards. I have mentioned what happens in France. The Berlin-class support ships are built in Germany. The Vulcano-class tanker support ships are built in Italy. The Cantabria-class oilers are built in Spain, and of course the United States has an absolutely rigid “buy American” policy as well. That is the real world, not the fantasy world of neo-liberal economics.

It is poignant that, in the week of the National Audit Office report on the failure of Carillion, in particular through under-pricing contracts and the Government encouraging it to go for “cheapest is best”, we are still being urged to adopt “cheapest is best”. Even within that, we do not drive a hard bargain. We do not insist, in work in the UK, on compensation.

The hon. Member for Moray (Douglas Ross) talked about maintenance work for maritime patrol aircraft. Maritime patrol aircraft will be maintained by the RAF and/or by industry, or in collaboration. That is not the issue. The real issue is what actual work there will be in manufacturing. Of course, maintenance is important, but that has to be done anyway. I refer not just to our shipyards and our aircraft factories, but to the UK’s very successful defence supply chain, particularly in engineering, electronics and, with regard to shipbuilding, our steel industry, which has been so dismissed by Ministers in the past.

This is also about maintaining the necessary flow of work, partly for that supply chain but also for our yards, in particular Rosyth. Rosyth shipyard will have a gap between the completion of HMS Prince of Wales, the second aircraft carrier in 2019, and the expected refit of HMS Queen Elizabeth, the first aircraft carrier, in 2030. Work on ships could keep the shipyard operational in between those dates and would therefore be very important in maintaining flow of work. We know how important that concept is, because of what happened in Barrow. There was a break in the drumbeat in the manufacture and production of nuclear submarines. The workforce drifted away to other industries and it cost a lot of money to recreate it.

As I said at the start, I urge the Minister to look at how other countries operate; to drive out the Treasury dogma, which has been imposed on the health service, transport and defence, that the cheapest and short-term is best; to think long-term; to work with industry, the trade unions and the supply chain. Back British industry. Back British shipyards. Back British steel.