Shipbuilding Strategy

David Drew Excerpts

Tuesday 23rd January 2018 Westminster Hall

[Luke Pollard]

I thank my hon. Friend for that intervention; I agree with him. In fact, our hon. Friend the Member for Glasgow North East (Mr Sweeney) has raised the concern that state aid from the South Korean Government was potentially part of the consideration of the value of the MARS tankers contract, which went to South Korea. That £452 million contract was potentially subsidised by the South Korean Government, who are building skills and employment in Daewoo shipyards in that country. Excluding a little bit of final outfitting in the UK, those jobs have been outsourced and offshored.

Contracts to build ships for the Royal Navy and Royal Fleet Auxiliary should be onshored. The ships should be home grown, British designed and British made, using British steel and British technologies, and preserving Britain’s sovereign defence capabilities to design, build and equip complex and important ships for our own use and for export. The MOD could give its friends in the Treasury the good news that between 34% and 36% of the contract value would be flowing back into its coffers in tax and national insurance—bad news potentially for Kim Dong-yeon, the South Korean Finance Minister, but good news for our Chancellor of the Exchequer, who I am sure is following this debate closely and with avid interest. He is, after all, a big fan of the armed forces.

If UK shipyards build elements of the ships, it could help to fill gaps in the order books of yards right across the UK and contribute to what I believe should sit alongside the shipbuilding strategy: a clear running order of contracts over the next 30 years for the Royal Navy and RFA; a pipeline of work; a reason to invest in world-class design and production facilities, not just on the Clyde, but in reanimated yards such as Appledore in north Devon and those of Harland and Wolff and Cammell Laird. Ipsos MORI research commissioned by the Department for Business, Energy and Industrial Strategy found that 100 shipyard jobs lead to an additional 32 jobs in the manufacturing sector within a 60-km area, so there is a multiplier effect from investment in UK shipbuilding.

[Dr David Drew (Stroud) (Lab/Co-op)]

Does my hon. Friend accept that at the other end of the scale, the commercial end, there are also very profitable yards? There are two in Stroud, funny as that may seem, at Sharpness and Saul. It is important that we understand that the whole shipbuilding industry needs support, but also recognise that it is a very integrated industry. Does my hon. Friend agree?

[Luke Pollard]

I thank my hon. Friend for that intervention. I do agree. The great strength of this debate on the national shipbuilding strategy is that we can praise the contribution not only of those yards that might be seen on the 10 o’clock news—the ones with the very large cranes and very large warships—but also all the supply chains to the smallest yards, and all those businesses that supply the kit that goes on the ships. That makes the UK a formidable power when it comes to shipbuilding. I am glad that the shipbuilding strategy hints at that, but perhaps it could go a little further in celebrating it.

That brings me to the second point, and recognising that many hon. Members want to speak, I will be brief. In my maiden speech in the House of Commons in June 2017, I called for more, and more capable, frigates. The Type 31e is not exactly what I had in mind. I am concerned that the shipbuilding strategy embeds the reduction of truly world-class frigates from 13 to eight. The Type 26 is a fine global combat ship, although one of the City class should be named after Plymouth—a campaign started by my Conservative predecessor and continued proudly by me. It is a good ship and a good programme that will serve UK interests well, but there are too few of the ships—to be precise, five too few.

The top-up light frigates have an ill defined military role, a confused capability and a price tag that gives this the potential to be the Snatch Land Rover of the Royal Navy—a comment by the Royal United Services Institute’s director of military sciences. I have a different name for that class: corvettes. I am genuinely concerned that over the next few years this class of ship will be the focus of much critiquing, as it fails to hit established frigate standards and looks less capable than the Type 23 frigates that the ships replace.