Shipbuilding Strategy

Douglas Chapman Excerpts

Tuesday 23rd January 2018 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Ms McDonagh. I thank the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) for his significant move in bringing the debate to the Chamber today.

Shipbuilding, as hon. Members know, is a key part of our industrial base. Although the industry has undergone much change in recent years, including to the number of people involved in it, it is still a key element of our industrial heritage. The national shipbuilding strategy that was introduced last September gave some rays of hope to the industry more generally. Sir John Parker recognised that a steady drumbeat of orders was crucial if investment in technology and skills was to make new-build projects more competitive, and that the sharing of risks between yards would give flexibility and speed to help in meeting our aspirations to renew our, albeit diminished, naval fleet. On that last point, there has been a debate about the sense of sharing work between yards, and perhaps that is a debate for another day. The proof of the pudding, for the national shipbuilding strategy, will be in the eating. Already the signs are not good.

There is no clear sign that a drumbeat of orders will be forthcoming at a sufficient pace to give some surety to the industry. As workers on the Clyde are all too aware, we have already witnessed the number of Type 26 frigates being reduced from 13 to eight, and then the placing of an order for just three. My good friend the Chair of the Defence Committee, the right hon. Member for New Forest East (Dr Lewis), cited the example of the Type 45s, which started at 12, were reduced to eight and ended up as six. The direction of travel in MOD thinking is a matter of some concern. The only drumbeat that is evident to me is the one to which Type 23s will come out of service, starting in 2023 with HMS Argyll and ending 13 years later, in 2035, with HMS St Albans. That is a steady drumbeat for the withdrawal of ships from service; we need one for a process going in the opposite direction. Indeed, the previous First Sea Lord said that that time scale for the Type 23s was not extendable. If we are to maintain 19 surface frigates and destroyers at sea or in a state of readiness, something needs to give from the Minister’s office.

[Mr Sweeney]

The hon. Gentleman mentioned sustaining the drumbeat. Does he agree that there is an unnecessary constraint on that because of the arbitrary in-year spend profile that the MOD is lumbered with? The key to unlocking that is the Treasury, which can adapt its method of financing huge generational programmes for things such as complex warships. Those are unique in relation to the way the Government buy kit. The undertaking is huge and unique and should be financed in a way appropriate to the project.

[Douglas Chapman]

I know that the hon. Gentleman is very experienced in such matters and I am sure that he has considered it long and hard for a number of years, both as an industry professional and as an MP. It is obvious, given the amount of investment being put in, that it must be done in the long term, and looking at the project overall rather than as its component parts. I agree with the hon. Gentleman.

The Government’s watchword has been that we must live within our means. The Tory manifesto in 2017 spoke of meeting the NATO target of at least 2% of GDP going on defence spending, and increasing defence spending by at least 0.5% over inflation each year. According to the Institute for Fiscal Studies, it has been cut in real terms since 2010-11 by some 13%. That has resulted in a massive black hole of around £20 billion. Big-ticket items such as F-35s are purchased in US dollars, and only one carrier can be used at a time. Last night, Max Hastings said on “Newsnight” that the Dreadnought has an outdated capability.

All that has contributed to the black hole with which the Ministry of Defence currently has to cope. Such things have pride of place in the Government’s strategy, but in the current financial climate it is a case of pride coming before a fall because the budget for them—and for many other things, such as the P-8s, which are also purchased in US dollars—is simply unsustainable. Decisions that would offer hope and a future to the likes of the Clyde, Rosyth, Appledore and Tyneside are delayed, and we miss the chance to synchronise the drumbeat that would secure jobs, skills and investment.

If we are to “live within our means” as the Government mantra suggests, the MOD either needs to find more money, or something else has to give. The SNP would choose to get rid of nuclear weapons. Think of the opportunity-cost benefit if Trident, or Dreadnought—call it what you will—was not a consideration in our defence budget. How much would that release for more conventional forces? How many more surface ships could we start to build to create a real drumbeat of orders? How much more money for cyber, land forces and the Royal Air Force? Is it not madness that we have a NATO ally with nuclear weapons just 20 miles off our coastline? In trying to satisfy the most pro-nuclear lobby in the House, could not that capability be shared between those two adjacent NATO nations, instead of their both paying top dollar for it? If we can share a tapestry, as I believe we are about to do, who knows what other things we could share on a larger scale? If we are to meet the key dates for bringing the Type 26s and Type 31s into service, something has to give. The Government cannot keep delaying orders, lengthening the pace of decision making, and not making savings in the budget to allow contracts to be signed, sealed and delivered.

SNP Members long for the day when Scotland becomes an independent country that is responsible for its own defences. Small nation Norway has a shipbuilding industry order book as long as your arm, and it has also bought into F-35 and P-8 capability. That can be done even with a small nation budget. Last week, small nation Denmark agreed to increase its defence budget by some 20% to meet the threats that the Danish people might face now and in the future. Small, well-equipped, effective, flexible, good partner nations can play their part in the defence of Europe both individually and through NATO.

Finally, while Scotland is still a constituent part of the UK, I urge the Minister to make surface shipbuilding his priority. In my constituency, workers at Rosyth have delivered carriers and a wide range of refit projects on time and to budget. We now have an opportunity to deliver the Type 26s, Type 31s and the fleet solid support ships. The message is simple: let us make the national shipbuilding strategy a working document that encourages the engineering talent of our nation to get on with the job, at pace, and with that vital steady drumbeat.