National Shipbuilding Strategy

Douglas Chapman Excerpts

Wednesday 8th February 2017 Westminster Hall

[Douglas Chapman (Dunfermline and West Fife) (SNP)]

I beg to move,

That this House has considered the National Shipbuilding Strategy.

It is a pleasure to serve under your chairmanship, Mr Evans. I stand before you with the sense that we have been here before, and indeed we have. It is déjà vu on a grand scale, because at Defence questions, during Westminster Hall debates, in answers to urgent questions and in ministerial statements, the Government have had the chance to put at rest the minds of the various parties interested in the shipbuilding strategy. Yet again, we find ourselves hoping that the Minister will give us something more than the usual scorn sometimes reserved for SNP Members.

Any time I tire of waiting for answers, I simply remind myself that many people have been waiting much longer, whether they be the men and women who serve us in the Royal Navy or those in the yards on the Clyde and at Rosyth. That is not to mention the average taxpayer, who demands nothing more from the Government than that their money is well spent on equipment that actually works and the assurance that the Government are doing their utmost to fulfil their most basic duty—defending our homeland.

In 2021, it will be two decades since HMS St Albans slipped from Yarrows on the Clyde and became the last-of-class Type 23 frigate, meaning that the state that has always prided itself on being a maritime power will not have built a single frigate for the best part of 20 years. Furthermore, as the first-of-class Type 23, HMS Norfolk, left that same shipyard in 1990, it found that the mission for which it had been specifically designed had all but ended. It is quite incredible that in 2017, we are still unable to see a signed contract to begin the replacement of the Type 23s, which are a cold war platform. No one I have spoken to through my work on the Select Committee on Defence, whether fellow members, academics, shipbuilders, trade unionists or even civil servants, sees that as an acceptable way forward, yet here we are.

Its cold war mission may have ended, but the Type 23 has certainly done all that was asked of it, and more. Let us not forget that the range of tasks the Royal Navy has undertaken in the post-cold war era has dramatically increased, yet paradoxically, as the senior service’s task list is increasing, the number of frigates and destroyers available to it has sunk to an historic low. It is that paradox that I hope the Minister will help me with today. Although the Ministry of Defence has long been able to exploit the convoluted and confusing history of the Type 26s and Type 31s, there is no way to hide its failings. I will make it easy for the Government by posing three straightforward questions that I hope they will take in good faith and respond to appropriately.

First, and most simply, when will we see the national shipbuilding strategy? Secondly, the MOD has made much of 2017 being the year of the Navy, but 2023 is a much more appropriate choice, as that is when the MOD completes the purchase of 24 F-35B planes to fly from the carriers, and when HMS Queen Elizabeth becomes fully operational. Will the Minister reassure us that the Royal Navy will be able to form a fully functioning carrier group with Type 26s, Type 45s and the requisite Royal Fleet Auxiliary Service ships? Thirdly, on a related note, various media outlets have reported in recent days on the bandwidth problems in the procurement budget, which were highlighted in a National Audit Office report. So far as the equipment plan is concerned, how will the shipbuilding strategy ensure that surface naval ships are prioritised in procurement decisions?

When the Government committed to the national shipbuilding strategy as part of the 2015 strategic defence and security review, many of us thought we were reaching the end of a long journey with respect to the modernisation of the Royal Navy. How wrong we were. Early studies of what in 1994 was called the “future surface combatant” certainly thought outside the box. A whole range of options were considered, including a radical trimaran hull design. After a decade, the FSC had become the “sustained surface combatant capability”, which had as many as three designs. It was not a concept that would survive the financial crash. Indeed, by 2009, it was possible for my friend the right hon. Member for New Forest East (Dr Lewis), who chairs the Defence Committee, to call for a future surface combatant that was as “cheap as chips”. How did we get from as “cheap as chips” to building £1 billion frigates in less than a decade?

I contend that the blame lies squarely at the door of the MOD. One thing has become clear from the numerous conversations I have had with both management and unions at BAE Systems: it is a global company with a world-class workforce that is able to turn its hand to whatever design and specification is provided by the MOD. Up to this point, it has done that. Quite simply, the MOD’s unerring ability to change horses midstream has added to the cost, timescales and uncertainty of the ongoing naval procurement programme.

That continued after the shipbuilding strategy announcement in 2015. The initial reassurances we were given were replaced with disquiet last spring, when no contract for the Type 26s was signed. When The Guardian broke the story in April about potential job losses at the Clyde yards, there was a crushing realisation that, yes, it had happened again. Any hope that a refreshed team in the main building over the summer would lead to clarity on the Type 26 or the shipbuilding strategy did not last long. When the Minister repeatedly assured us in the Chamber that we would see a strategy by the autumn statement, we knew she was using alternative facts. When my colleagues and I on the Defence Committee released a report that concluded

“it is now time for the MoD to deliver on its promises”,

I imagine we already knew that it had no intention of doing so—although I am interested to know if that report played any part in delaying the strategy, or if Ministers simply chose not to tell Parliament of their intentions.

It was not entirely clear, when Sir John Parker’s independent report was announced, whether informing Parliament was part of the original strategy. When the report was finalised, we thought that it would be the formal strategy going forward. There is plenty to agree with in Sir John’s report. Many of its findings chime with my experiences of MOD procurement, namely that there was a

“vicious cycle of fewer and much more expensive ships being ordered late and entering service years later than first planned”,

and:

“The Government must drive cultural and governance changes in Defence that inject genuine pace into the procurement process with a clear grip over requirements, cost and time.”

However, we are now getting to a stage at which the report, far from being too little, too late, is too much, much too late. It will once more allow Ministers to take us around the houses and hope that we forget that they are running out of time to fulfil previous promises made to the House, the Royal Navy and the men and women on the Clyde.

While there is

“no precedent for building two ‘first of class’ RN frigates in one location in the UK”,

there appears to be no real alternative to the Clyde, as I am sure we will hear from my hon. Friend the Member for Glasgow South West (Chris Stephens). Let us get on with signing the Type 26 contract and ensure that the Type 31 is ready to go as soon as possible.

[Mr Kevan Jones (North Durham) (Lab)]

Can the hon. Gentleman shed any light on what the Type 31 is? There have been generalised views of what it will do and what it will be, but I understand that there are no plans and no actual specification. Is the Type 31 not one of those pipedreams that seems to be put out there to reassure the industry, when actually there is a lot of work to be done not only to design it, but to find out where it fits into the broader naval strategy?

[Douglas Chapman]

The hon. Gentleman makes a good point. We are constantly told that the Type 31s are also for the export market. I have asked parliamentary questions on whether the Government could provide details of their homework on what that export market might look like. I am afraid that, to date, there are no answers. We need to make progress with the information we have, which is why we are questioning the Minister today.

Anyone who has taken an interest in this matter will know that BAE Systems has two possible designs. It is important that we get on with picking one, so that we can ensure—to follow up on the hon. Gentleman’s point —that we have an exportable product that we can take to market. However, we are falling behind. The Franco-Italian Aquitaine class frigates are already in service with La Royale and have been exported to Egypt and Morocco, so we are already missing the export boat with regard to the Type 31s.

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

My hon. Friend should also note the Danish Absalon class frigates, which have proved to be very versatile, reliable and affordable ships for a valuable ally’s navy.

[Douglas Chapman]

Of course. That just makes the point that while the Government sit back, dither and try to work out what the strategy might be, we have great examples of other countries—small countries—that are able to export their own products into the markets that they want to serve.

Quite simply, we have been waiting for the future surface combatant, be it the Type 26 or the Type 31, since 1994. Sir John’s report may seek a “sea change” in naval procurement, but the fact is that we had a defence industry strategy in 2005, a 15-year terms of business agreement signed by BAE Systems in 2009 and a consolidated shipbuilding plan for the Clyde, with support from the Government and the trade unions, in 2013. How on earth has it taken the Government so long to get to a strategy? Why do they still not have one by 2017? Surely that is a damning indictment of their competence to run the country. Again, I plead with the Minister: let us get on with it.

My second question for the Minister is about ensuring that when HMS Queen Elizabeth enters service, it will do so with a carrier group worthy of a next-generation Navy. Those carriers—the largest ships ever built for the Royal Navy—are being built on time and on budget in my constituency by the superb workforce in Rosyth. It would be a great disappointment to those workers, those men and women—

[Mr Stephen Hepburn (Jarrow) (Lab)]

I congratulate the hon. Gentleman on securing this debate on a very important issue. He mentions the aircraft carriers. Let me respectfully advise the Minister that shipbuilding and ship repairs are still very much alive on the Tyne and that my local yard, A&P Tyne, has played a key role in getting those ships on time, within budget and with excellent quality. In the light of John Parker’s report, which identified that commercial yards have a great role to play in supporting traditional naval yards in providing the MOD’s requirements, I ask the Minister to ensure that when any lucrative contracts come forward in the future, commercial yards such as A&P are taken into consideration, bearing in mind their record.

[Douglas Chapman]

I thank the hon. Gentleman. That is a bit of a non-question for me, but I am sure the Minister will be happy to add it to her extensive list of questions already put.

The ships in Rosyth are the biggest that the Royal Navy has ever built, and various people have been involved in building them from day one and bringing the parts from all areas of the UK to Rosyth, but we must ensure that when those ships sail down the Forth, they are adequately protected. At the moment, I struggle to see how that battle group will fit together.

As I said, although 2017 may be the year of the Navy, 2023 will be far more significant, because in 2023 we will know whether the strategy has done what it set out to do in the first place. By 2023, the initial tranche of 24 F-35Bs should be in place to fly operations from the carriers, and the first Type 26 should be entering service to replace HMS Argyll, which will be the first Type 23 to leave service.

The Defence Committee highlighted the question of the carrier group in our November report and I hope we will press the Minister further on it, but quite simply the Government are running out of time to uphold their end of the bargain. Quite honestly, I am not holding my breath.

I expect many right hon. and hon. Members will talk today about the state of the Navy, but going over some of the history again might be worthwhile. At the time of the infamous Nott report, the Royal Navy had 60 frigates and destroyers, and even by the end of the Falklands conflict, it still had 50. In the 1998 strategic defence review, long after the cold war had ended, a floor of 32 ships was constructed. However, the Government now crow about their commitment to 19 frigates and destroyers.

Even as we move to an era of fewer and more powerful ships, 19 is still too low a number and has seen the UK fail in many of its commitments to its allies. I am not alone in finding it unacceptable that the UK has often been unable to provide a ship for NATO’s standing maritime groups; that we had to miss the recent anniversary celebrations of the New Zealand navy because a suitable ship was not available; and that offshore patrol vessels are having to fill in on tasks relating to the fleet ready escort and the Royal Navy’s presence in the Caribbean.

[Martin Docherty-Hughes]

My hon. Friend makes a good point about the 75th-anniversary celebrations for the royal navy of New Zealand. In November, our allies the United States, Canada and Australia sent ships to the international naval review—even Tonga and the Cook Islands sent ships to the naval review—but the United Kingdom Navy sent nothing. That is not exactly the best start to a brave Brexit diplomatic offensive, is it?

[Douglas Chapman]

Again, I cannot help but agree with my hon. Friend. He makes a very valid and good point, but if our backs were to the wall and we needed to provide ships for NATO, that would be a much more serious commitment that the UK would have to make. If we do not have enough ships to fulfil those commitments, that is even more concerning.

I said that the current fleet was 19 in number. Two ships, HMS Diamond and HMS Lancaster, are being used as training ships, so that reduces the number from 19 to 17 usable frigates and destroyers.

I hope that the Minister will break the habit of a lifetime today and actually give us the answers to the questions that we have asked. Quite simply, the Royal Navy and the carrier programme demand that. It starts with a contract for the Type 26 programme being signed, so let me reintroduce an old slogan: “We want eight and we won’t wait!” If we were to add anything to that, it would be that we cannot afford to wait any longer.

I hope that the Minister can also answer my last question. How can we ensure that surface shipbuilding does not suffer as a result of the proliferation of big-ticket items going through the order book over the next decade? The headline from Monday’s Financial Times says it all: “Spiralling cost of UK defence projects signals hard choices”. I raised this issue at the most recent Defence questions. With the years 2020 to 2023 being the most critical in the equipment procurement plan, I fear what Professor Malcolm Chalmers of the Royal United Services Institute highlighted in the FT article:

“the historic response at MoD has simply been to push programmes to the right and allow service dates to slip.”

That story followed last month’s excellent National Audit Office report, which highlighted, among other things, that the “headroom” used to account for any potential overspend had already been spent. The report stated that

“any further capability requirements during the lifetime of the Plan period will have to be met through a reprioritisation”.

I know that all those situations put the Minister in a really difficult position, but the clear questions that I must ask again are these. When will we see the national shipbuilding strategy? Can the Minister assure us that, by 2023, the Royal Navy will be able to form a fully functioning carrier group, with Type 26s, Type 45s and the requisite Royal Fleet Auxiliary ships? Finally, how will the shipbuilding strategy ensure that surface naval ships are prioritised in future procurement decisions? Let us hope that today we get some answers and that 2017 does become the year of the Navy, not the year that the Navy wants to forget.

[Several hon. Members rose—]

--- Later in debate ---

[Chris Stephens]

I remember that exchange, and there was clearly confusion about the report. I also find it extraordinary that although Sir John Parker’s report was sent to the Ministry of Defence on 3 November 2016, this is the first opportunity that hon. Members have had to discuss it in detail. In November or December, there should have been a debate, or a series of debates, on the report, so that hon. Members could give their views on it and feed into the process. I shall come to that later.

I was very concerned when it was pointed out to me that on 2 January in The Daily Telegraph—not necessarily a newspaper that I subscribe to—MOD sources were not only saying that there is no budget for the Type 31, but that it will not happen and the plan will not be realised. We need to go back to the former Prime Minister’s announcement on the Clyde in my constituency in 2014, when he promised that 13 Type 26 frigates would be built on the Clyde. We were then told that there would be eight Type 26 frigates and five general-purpose frigates. As the hon. Member for North Durham outlined, we do not know exactly what that capability is, but we were told, “It’s okay; relax, because eight plus five equals 13.” We are still awaiting the final sign-off, not only for the eight Type 26 frigates but for the five general-purpose frigates. I hope that the Minister will tell us, if there is indeed a budget for Type 31 frigates, what it is and what the procurement timetable is for Type 26 and Type 31 frigates.

[Douglas Chapman]

If what my hon. Friend is saying is anywhere near the truth and the Type 31s will not exist, what does that say about the drumbeat for Govan and Scotstoun?

[Chris Stephens]

I would be very concerned about that, and I will come to the effects of that later. Sir John Parker’s report is an honest attempt to end the “feast and famine” procurement processes by the Ministry of Defence that have often plagued the shipbuilding industry. If any other public services carried out procurement processes in the way that the Ministry of Defence does, there would be uproar in the streets—imagine if it was equipment for the health service or education, and so on.

I am pleased that Sir John Parker’s report also recognises the capability and skills of shipyard workers on the Clyde—in my constituency, in the Govan shipyard, and in Scotstoun, in the constituency of my hon. Friend the Member for Glasgow North West (Carol Monaghan)—working on digital technology adapted from the automotive sector and with new working practices that have increased productivity. It is an honour and a privilege to represent them in this Parliament. The shipyard workers are also supported by trade unions and are represented at shop-floor level by representatives who have campaigned tenaciously over the years to ensure that future work is secured. Any announcements that come from the Government are a victory for them more than anyone else. However, as someone who had family members in Yarrows who were made redundant under a Tory Government, I always view such commitments from this Government with suspicion when it comes to shipbuilding.

Sir John Parker’s report also recognises that the Royal Fleet Auxiliary ships should be assembled in the UK. It really is a nonsense that that work has been farmed out elsewhere. I would hope that Rosyth, to cite one example, would have that opportunity. Failure to ensure that Royal Fleet Auxiliary ships are built in the UK will make the report fall at the first hurdle. An award to a UK yard for Royal Fleet Auxiliary ships would demonstrate that the Government are serious about ensuring that an export model can be achieved and that investment in technology can be kept.

--- Later in debate ---

[Steven Paterson (Stirling) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate my hon. Friend the Member for Dunfermline and West Fife (Douglas Chapman) on securing this important debate. The timing could not be better, given the revelations about the cost of UK defence projects in all forces, not only the Navy. I want to raise two points. The first is about our priorities. They are set in the national security strategies and should flow into the strategic defence and security review and the Government’s priorities in this area. The second is the effect of the recent National Audit Office report on procurement for large defence projects and the affordability of the national shipbuilding strategy that we anticipate.

The national security strategy and the SDSR should inform the procurement process and, because of that, the national shipbuilding strategy. However, there seems to be a logical inconsistency in how that is applied. In paragraph 75 of the SDSR, the Ministry of Defence is quoted as saying that the document will

“determine priorities for investment to ensure that the UK has a full suite of capabilities with which to respond to defence and security threats”.

Page 67 identifies the three tiers of domestic and overseas risks, grading them as tier 1, 2 or 3 threats,

“based on a judgement of the combination of both likelihood and impact.”

Taking that at face value, the National Security Council has identified terrorism, international military conflict, cyber, public health, major natural hazards and instability overseas as the tier 1 threats facing the UK. That exercise having been undertaken, one would have thought the resources would follow the perceived threats and their perceived likelihood, but that does not seem to be the approach followed by the Ministry of Defence, particularly in the present case.

[Douglas Chapman]

Does my hon. Friend feel that the amount of resource going into the Dreadnought programme is skewing all other budgets and making the Minister’s job of preserving our surface ship fleet much more difficult?

[Steven Paterson]

Yes, I think that is a concern that many of us have—that the priorities identified in the risk assessment done for the document I have quoted are not being followed in Government spending. Perhaps that is why there has been delay after delay in the project.

--- Later in debate ---

[Douglas Chapman]

I opened the debate by talking about déjà vu, but the debate has been déjà vu writ large. I asked when we could expect an announcement on the national shipbuilding strategy. There was no reply from the Minister. We asked how the carrier group will be secured when it is at sea. There was no reply from the Minister. We asked whether surface ships would be prioritised in the budget, and again, there was no commitment from the Minister. What we did discuss was whether a signature was on a document. What we really need to see is her signature on contracts to ensure that jobs on the Clyde are safe and secure for the years to come.

Question put and agreed to.

Resolved,

That this House has considered the national shipbuilding strategy.