Shipbuilding Strategy

Guto Bebb Excerpts

Tuesday 23rd January 2018 Westminster Hall

[Wayne David]

That is precisely the concern with including the arbitrary figure of £250 million. I hope that the Minister will be able to dispel those concerns and clarify the situation.

Secondly, the national shipbuilding strategy correctly states that there is a potential export market for light frigates—the Type 31e. Much of that is for the purchase of a light frigate designed for construction in the market, not by means of traditional production. How is the Government’s exporting enthusiasm for that going? How many orders have they received? How many do they now think are likely? That key question was also raised by my hon. Friend the Member for Plymouth, Sutton and Devonport.

My third point is that, sadly, less than half the steel in the new Type 26s will be British. That is a crying shame, and I hope the Government will ensure that as the shipbuilding strategy develops, it is increasingly seen as an integral part of industrial strategy in this country, and that there will be complementarity with other parts of British industry.

My fourth question is about delays to the Type 26 programme. There is a great deal of concern among the workforce. Apprentices have been laid off and have had to find training elsewhere. Can the Minister say anything about that?

We are all proud to have seen the launch of the Queen Elizabeth carrier, which was formally commissioned into the fleet in December. We now look forward to the launch of the Prince of Wales carrier. The construction and fitting of both vessels has taken a great deal of commitment and dedication from a well-skilled workforce.

It is important to ensure that those skills are not lost but continually put to good use, which is why we should focus on fleet solid support ships. The contract for three new FSS ships will be subject to international competition. The decision is due in early 2020. I am concerned that that stipulation may put off domestic competitors, as the hon. Member for Glasgow South West suggested. That follows the awarding of a contract for four tankers under the military afloat reach and sustainability—MARS—project to Daewoo, a South Korean company that is widely believed to have been given a tremendous amount of state aid that made its bidding far more attractive than it should have been.

We hope that those ships will be built in Britain because that would secure the maintenance of the skills that have been built up in the industry, and support local economies. It would also help to enhance the national shipbuilding strategy’s domestic capability and to make real the renaissance in shipbuilding that Sir John Parker refers to in his report.

On sovereign capability, I ask the Minister to comment on the report that appeared in yesterday’s Western Mail. It suggested that the Ministry of Defence will award a contract for mechanised infantry vehicles to the Germans without any competition. I give the Minister the opportunity to deny that story.

[The Parliamentary Under-Secretary of State for Defence (Guto Bebb)]

Will the hon. Gentleman give way?

[Wayne David]

I will give the Minister plenty of time to respond.

Finally, I hope that the Government will demonstrate a real commitment to the Royal Navy and naval shipbuilding. This country has a proud maritime history—it had the largest and strongest Navy in the world at one time. That time is a long way behind us, but the challenge now is to ensure that our Navy can successfully meet the new threats and dangers that our country faces.

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[The Parliamentary Under-Secretary of State for Defence (Guto Bebb)]

It is a pleasure to serve under your chairmanship, Ms McDonagh. I thank hon. Members in all parts of the Chamber for their warm welcome. It is an honour to have been appointed to this position, but I suspect that I face a difficult task. In the debates on defence that I have attended thus far, I have found a wealth of experience and knowledge from hon. Members about these issues. There is also a significant amount of cross-party agreement, although not always. In my jousts with the hon. Member for Caerphilly (Wayne David) on Welsh issues, we did not experience more constructive debates of this nature.

On the hon. Gentleman’s question about the Western Mail story, that was speculation. It was nothing to do with the national shipbuilding strategy. There was a clear statement from the Ministry of Defence that no decision has been taken. I can say no more than that, but I hope that that keeps the issue at bay for the time being.

This has been an interesting and constructive debate. I congratulate the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) on securing it, and on his constructive speech. Of course, he highlighted his concerns about the national shipbuilding strategy, but it is only right to acknowledge that, as the Minister, I view the reasons why he raised the issues, and the way in which he did that, as a constructive contribution to the debate.

I hope that I will be able to answer many of the hon. Gentleman’s questions. He mentioned the importance of the national shipbuilding strategy in giving opportunities to young people in his constituency and, as we have heard from other hon. Members, across the United Kingdom. I cannot fail to be anything other than impressed when I meet apprentices, whether they are working on building new ships or on maintaining our Hawk aircrafts. The Ministry of Defence and I are very proud that young people have the opportunity to work in the defence sector. We are the largest creator of apprenticeship opportunities in the United Kingdom. I am sure we all agree on that.

The hon. Gentleman also said that he considers the Type 26 destroyer to be a good ship. I hope to be able to say that it is being built in a very good yard by experienced workmen on the Clyde. Again, there is agreement on that.

My right hon. Friend the Member for New Forest East (Dr Lewis), the Chair of the Defence Committee, made a thought-provoking speech. In my eight years in the House, he has always spoken with passion, commitment and an independence of mind when it comes to defence. I am sure that that independence of mind and that willingness to challenge will haunt me, as it has haunted other Defence Ministers over the eight years in which I have seen him perform. No one can doubt his commitment to the defence of this country and the wellbeing of our armed forces, or to his independent, cross-party chairing of the Defence Committee, which represents what is best about the Select Committee system.

I also acknowledge my right hon. Friend’s history lesson and his firm defence of the concept behind the Type 31 frigates programme. His description of the programme’s rationale was clear, and he was listened to with understanding by other hon. Members. His speech included the basis of the points that I will make in due course about Type 31s.

I enjoyed the contribution of the hon. Member for Strangford (Jim Shannon). As a Welshman, I am pleased that there has been a significant Celtic contribution to the debate. Scotland, Wales and Northern Ireland have contributed fully, because we understand the importance of defence to all parts of the United Kingdom.

Even the hon. Member for Dunfermline and West Fife (Douglas Chapman) acknowledged that, while Scotland remains part of the United Kingdom—long may that continue, in my view—we all appreciate and acknowledge its contribution to our defence in terms of capacity on the Clyde, our nuclear capability in Scotland and the contribution of Scots to our armed forces. I thank him for his contribution.

Other hon. Members intervened in the debate. The hon. Member for North Durham (Mr Jones), who is no longer in his place, is correct that at Defence questions a week ago, I responded in a robust fashion to his comment that our country had not exported any warships for 40 years. It is important to engage constructively with what we are trying to achieve through the national shipbuilding strategy. The aim is to ensure that we find ourselves in a position where we are exporting our warships to other parts of the world. It has been acknowledged across the Chamber that the capability, capacity, skills, ingenuity and innovation all exist in this country. When the hon. Gentleman raised that issue, I thought it was important to point out that the way we sell that capability, that capacity and those skills to the rest of the world is by talking our industries up, not down. I will not apologise for the comment I made at Defence questions.

I will turn to the body of my speech, because I have an obligation to try to respond to the debate. We have to step back and ask ourselves what the rationale behind the development of the national shipbuilding strategy was. Although people have asked questions and asked for clarity, even the most challenging comments have acknowledged that it is an attempt to move the issue forward constructively, and to ensure that our country’s capability and capacity are reflected more coherently. Hon. Members may not agree with every single statement in the strategy—there is clearly a debate to be had about it—but the fact that we are moving forward with a strategy is something that most hon. Members clearly seem to welcome.

It is important to understand the context. The Government have always recognised the need to retain operational advantage and freedom of movement in sectors that are critical to national security. That is an issue that I have come across since my appointment to the Ministry of Defence. Indeed, it was an issue that I came across in my time as a Wales Office Minister, which lasted for almost two years, because in that period, as the hon. Member for Caerphilly will be aware, I visited numerous defence establishments in Wales. That issue of national security, and having a national defence capacity, is something that I understand, as do hon. Members from all parties. Shipbuilding is an important part of that and is integral to our fortunes.

The aim was to ensure that we examined the shipbuilding sector, and identified how best to develop a shipbuilding strategy that would reflect our needs, the demands of our Navy in the future, and the potential to create a more coherent and successful shipbuilding sector. Sir John Parker’s report was upbeat and positive. It talked of the renaissance in British shipbuilding that is happening in many smaller yards and smaller businesses within our shipbuilding industry. The report looked at the issue of shipbuilding in a wider context than only defence. Obviously, from a shipbuilding strategy point of view, it was absolutely imperative that we learned from history, and understood what must be protected in the UK national interest, and where we can support capacity in the shipbuilding sector by supporting businesses that can provide us with the warships that we require. The strategy also provided the opportunity to train and support businesses and individuals who can contribute to a further expansion of our shipbuilding capacity.

In my new role as Minister with responsibility for defence procurement, I would very much like to meet the all-party group on shipbuilding and ship repair, because, from an MOD perspective, the shipbuilding strategy must clearly consider the issue of producing warships and defence capability, as well as the wider implications for the economy, which I am very interested in. I have seen the direct benefits of defence spending to the economy in Wales. I would very much appreciate the opportunity to talk to the hon. Member for Plymouth, Sutton and Devonport about issues that I could potentially learn about in relation to his work with the all-party group. In my time in this place, I have learned that all-party groups make a huge difference; I have no doubt about that. They are a constructive forum in which colleagues work on a cross-party basis, and I would be very grateful for the opportunity to discuss these issues in more detail with him.

The recommendations in Sir John’s report were accepted in full by the Government, as they applied to our responsibilities, and that created the national shipbuilding strategy that we now have. I would argue that that strategy examines three main issues. The first is better planning; we heard the history in numerous contributions. I am taken by the idea that my history degree might not be as redundant in this new role as I had thought, because learning from history is one of the things that we have to do if we are to improve the way in which the MOD procures.

The strategy gives planning a great deal of attention, so that we can give industry greater certainty and predictability. It sets out the key procurements of the next five years, from the purchase of eight Type 26 global combat ships to the new Type 31 ships. The hon. Member for Glasgow South West (Chris Stephens) asked what the commitment is in relation to the Type 26. The commitment in our strategic defence and security review of 2015 and in the recent NSBS is very clear: it is a commitment to eight ships. That is a commitment that will protect—

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[Mr Gary Streeter (in the Chair)]

The Minister will now continue his excellent summary.

[Guto Bebb]

It is a pleasure to serve under your chairmanship, Mr Streeter.

As I was explaining, the strategy is about planning. We are talking about the purchase of eight Type 26 global combat ships, the new Type 31 frigates and the next generation of fleet solid support ships. There has been a discussion on the competitive tendering for the fleet solid support ships, but that is in accordance with the strategy, which looks to ensure that warship capability is built within the UK, but that we are also open to go out to competition.

[Chris Stephens]

Will the Minister confirm that the eight Type 26 frigates will be built on the Clyde? Will he also remove the ban on Royal Navy personnel addressing the all-party parliamentary group on shipbuilding and ship repair on the national shipbuilding strategy?

[Guto Bebb]

I regret that I did not hear the second part of the intervention, but the commitment on the purchase of the eight Type 26s was clear, and I will be on the Clyde on Thursday.

The second element of the strategy is design. It is about taking a new approach to design and construction. We want to challenge outdated naval standards and introduce new ones. In effect, I am repeating the comments of the Chairman of the Defence Committee, my right hon. Friend the Member for New Forest East, but it is about forcing through advances in design, identifying new materials and looking at new manufacturing methods to try to make our shipbuilding industry even more competitive, which is part and parcel of ensuring that we have export markets.

The issue of the export markets for the Type 31 has been touched on by many Members. The figure of 40 frigates is the potential market that was identified for this type of frigate in 14 countries. That was part of market research that was undertaken. We have never argued that there are 40 potential orders for the United Kingdom; what we are saying is that there are 40 potential orders for that type of ship that will be open to competition from the United Kingdom.

[Dr Julian Lewis]

Given what the Minister has said about the design, and given what we know we need the design to do, can he confirm that this will be British design done in Britain and not abroad?

[Guto Bebb]

The value of the strategy is in ensuring that we have a British-owned design. The whole strategy is building on the manner in which the aircraft carriers were built successfully—the block-building capacity. That is the strategy we have undertaken, and it will pay dividends.

The third element is exports.

[Mr Sweeney]

Will the Minister give way?

[Guto Bebb]

I cannot, I am afraid; I only have three minutes left. We identified that the export market is crucial. Having the export market allows us to look at cost controls and the ability to create savings within the programme. It also allows the United Kingdom to show once again that we have the ability to design and deliver ships internationally. For the MOD, the whole effort in identifying the support for the shipbuilding strategy is about building capacity and ensuring we are in a position to target other markets. I hope that Members will join the Ministry of Defence and the Government in ensuring that the advantages of the Type 26 are made known to potential customers in all parts of the world.

The other issue I want to touch on is a key success for the strategy, which is the partnership approach. To return to Sir John Parker’s original point, the strategy hinges on the strength of the partnership between the Government and the sector. It is about our collective ability not simply to improve productivity and develop the product that the international market wants to buy, but to continue to develop the skills and the talent to keep the industry firing on all cylinders. That is exactly what Members have been asking for, it is absolutely what I want to contribute in my role in the Ministry of Defence, and it is the purpose of the shipbuilding strategy. Where we need to refine or take on board the advice and guidance given to us by colleagues, we will do that, because the aim of the strategy is to ensure that we leave the shipbuilding sector in a better place than we found it. I am confident we can do that, but we need support from all parts of the House.

I hope we are building on firm foundations. We are looking to move to the future with a strategy that is not starting from scratch, but builds on our strengths and reputation, while identifying that we have to rectify the fact that we have not sold a warship in 40 years. We have to be confident that what we have to offer is cutting edge. It is about working with the industry, which has a reputation to live up to and has contributed so much in so many parts of the United Kingdom. We need to ensure that the industry is capable of producing ships of value to the UK and the Navy while competing internationally and making a cutting-edge contribution at the world level.

Members have touched on the economic contribution that the strategy can make. I am very aware of that. Ipsos MORI has conducted research that highlights what we need to do. It is available on the Department for Business, Energy and Industrial Strategy website. I am aware that I need to allow the hon. Member for Plymouth, Sutton and Devonport time to sum up the debate, so I will finish. I genuinely believe that we are moving forward constructively. As a Minister, I want to work with Members to ensure that the strategy delivers for the United Kingdom and our Navy.