Defence

Guto Bebb Excerpts

Thursday 12th July 2018 Ministerial Corrections

[Andrew Bridgen]

Will the Minister confirm that any weaponry installed on the fleet support ships will be procured from British companies?

[Guto Bebb]

My hon. Friend is absolutely right. The weapons element of any ship that is not designated as a warship will be procured from the United Kingdom and fixed on to the platforms in the United Kingdom.

[Official Report, 9 July 2018, Vol. 644, c. 687.]

Letter of correction from Guto Bebb:

An error has been identified in the response I gave to my hon. Friend the Member for North West Leicestershire (Andrew Bridgen).

The correct response should have been:

[Guto Bebb]

The weapons element of any ship that is not designated as a warship will be supplied to meet that ship’s specific requirement and fixed on to the platforms in the United Kingdom.

Defence Industry and Shipbuilding

Guto Bebb Excerpts

Wednesday 11th July 2018 Commons Chamber

[Chris Stephens (Glasgow South West) (SNP)]

I will try my best to keep my remarks to four minutes, Mr Speaker. First, may I welcome the trade union representatives from the Clyde shipyards? Such is their passion for the industry that they have come down to London today to hear this debate.

The debate so far can be summed up by paraphrasing that great conservative icon Lord Vader because, “We want these ships, not excuses.” All we have heard from Government Members has been excuses, because—[Interruption.] If the hon. Member for Torbay (Kevin Foster) has ever watched the films, he would know that Lord Vader is far from a socialist.

What we have heard today is exactly what we heard at Defence questions on Monday, when Opposition Members were told that the reason why fleet support ships are going to international competition is that it is in the national shipbuilding strategy. Government Back Benchers have been told that the Government will make sure the weaponry for these ships will be UK-based.

The national shipbuilding strategy is based on Sir John Parker’s report, which says:

“There is the opportunity with the Fleet Solid Support ships for UK firms to make…bids, and hopefully secure the contract, thus contributing further regional economic benefits in the UK.”

The Parker report does not recommend international competition for the fleet support ships, so it is wrong for Ministers to say that the national shipbuilding strategy accepted all the recommendations of the Parker report. Frankly, we find ourselves in a position where the Government are saying there should be modular build for small frigates but not for fleet support ships, which is ludicrous.

The Government cannot have it both ways. I asked a written question on the range of the weaponry, sensors, arms and close-range guns, such as the Phalanx, and the answer, published on 27 April, has been mentioned. The Phalanx is a Gatling gun designed to shoot down fast anti-ship missiles, aircraft and fast attack craft. It is fitted only to high-value ships that are vital to naval operations, so it is ludicrous to say that these ships have limited weaponry.

The MARS vessels are fitted with cannons, mini-guns, machine guns and anti-submarine and anti-surface-warfare helicopters, yet we have been told by Ministers that they are not warships. I am sorry, but I strongly disagree. If it looks like a warship and acts like a warship, it is a warship.

Opening up shipbuilding contracts for international competition only makes sense if other countries are doing the same, so which other countries are putting auxiliary ships up for international competition? Is France, Germany, Italy, Spain or the United States of America doing so? The answer is no. No one treats auxiliary ships as a commercial commodity to be bought wherever, because the reality is that other countries see them as vital ships both for military and industrial reasons.

I support the Opposition motion, and the hon. Member for Llanelli (Nia Griffith) made important points about the economic benefits of these fleet support ships being built in the United Kingdom. It will keep people in work, and it will bring tax, national insurance and vital revenue into the country. Again, if it looks like a warship and acts like a warship, it is a warship, and it should be block built in this country.

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

Phalanx is a defensive weapon.

[Chris Stephens]

Again, the Minister is shouting from a sedentary position. The MOD website is full of the vital military components used by the Royal Fleet Auxiliary, which is why these ships should be built in the United Kingdom in a modular way—the same way as the Queen Elizabeth aircraft carrier.

--- Later in debate ---

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

It is a pleasure to respond to this important debate. I think that we have had 12 passionate speeches on this matter. [Interruption.] I thank the right hon. Member for North Durham (Mr Jones).

Although we all agree about the importance of the future of our shipbuilding sector, there is clearly a differential between my views and those of the Ministry of Defence, and the views of many Opposition Members. However, I am willing to recognise completely openly the commitment of those who have spoken in this debate to our defence sector, the defence industry and jobs within that industry.

Before I go on to my detailed notes, I want quickly to say two things. I have been asked to be short in my response because of a football match that is going on this evening—although, as a Welshman, I am quite happy to miss kick-off.

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

I assure the Minister that the rest of us are not—come on!

[Guto Bebb]

I just want to place on the record a clarification of the comments made by the Under-Secretary of State for Defence, my right hon. Friend the Member for Bournemouth East (Mr Ellwood). He was correct in saying that UK companies were involved in the MARS tanker competition and procurement process, but Opposition Members are also correct in saying that there was no British company involved in a final bid. I hope that that clarifies the point of order made by the hon. Member for Caerphilly (Wayne David).

I welcome the fact that the shadow Secretary of State has brought this debate forward. The comments made by the hon. Member for Glasgow South (Stewart Malcolm McDonald) were also very interesting, and there is no doubt that the team from Glasgow have very much argued the case for their city on this issue. I also welcome the speeches made by the right hon. Member for North Durham, the hon. Members for Dunfermline and West Fife (Douglas Chapman), for Barrow and Furness (John Woodcock) and for Glasgow South West (Chris Stephens), and of course my hon. Friend the Member for Torbay (Kevin Foster), who made an important speech highlighting the fact that we have to understand the context in which these decisions are being made.

The truth of the matter is that we did recommend a shipbuilding strategy and we commissioned a report from Sir John Parker. We have accepted all the recommendations of that report, and it is important to highlight that we have done that in full. The crux of this issue and of this debate may come down to the comments made by the right hon. Member for Warley (John Spellar). I thank him for his kind words. He said quite clearly that he had no problem whatever in companies based in the United Kingdom that are not owned or held in the United Kingdom competing for these contracts. That goes to the crux of some concerns that Government Members have about this motion, because it says very clearly that that contract should be offered only to “UK-only competition”. There is no definition of what that means, so the right hon. Member for Warley was probably discontented with the Opposition motion.

It is very clear that the Government are fully committed to supporting our defence sector. The shipbuilding strategy was not developed in order to avoid our support for the shipbuilding sector. The whole point was to ensure that we did support, in a coherent manner, a shipbuilding sector that would be competitive on an international basis, that would be able to retain the skills about which hon. Members have spoken so passionately, and that would allow the qualities of our shipbuilding sector to be understood and appreciated on a worldwide basis.

The Australian Government’s order of the Type 26 frigates in the SEA 5000 competition is an acknowledgment of the design skills that we have on the Clyde. It is also an acknowledgment of the confidence that the United Kingdom has in saying very clearly that we want to compete on an international basis and to offer our products on an international basis, and that we want to do so with a degree of confidence. We do not believe that the way forward for our shipbuilding sector is simply to say that every single vessel has to be built in the United Kingdom, because we are more ambitious for our shipyards. We want to see our shipyards winning contracts on an international basis.

I want to correct something. When I first stood at this Dispatch Box as a Defence Minister, I was told by the right hon. Member for North Durham that we had not sold a warship design in 40 years, so what made me think that we would start now? Well, we have. That is an indication of the fact that our strategy is working. It is working because we have confidence in our shipbuilding sector.

[Mr Kevan Jones]

The Minister is being economical with his quote, because it was not about design—it was about the export of a vessel, which we have not done since 1960. Does he envisage a day when we will be building French, German and Italian warships in UK yards?

[Guto Bebb]

I remind the hon. Gentleman of the comment by my hon. Friend the Member for Torbay: we won the contest to build OPVs for the Irish navy. Again, that seems to be ignored. I find it very odd that Members who claim to speak up for shipyard workers throughout the United Kingdom seem to dismiss our success in ensuring that we had that contract delivered for the Irish navy.

[Mr Sweeney]

rose—

[Guto Bebb]

I need to make some progress because I must cover some of the points that were touched on.

From a defence perspective, we are trying to put a coherent plan in place to ensure that we have a competitive UK defence industry that can compete with the best. The way to do that is not to be scared of competition but to embrace competition. We have a shipbuilding strategy that says very clearly that we will understand the need for a national sovereign capability when it comes to building our warships. We need to make sure that we can measure our shipbuilding industry against the best in the world. The way to do that is not to go down the route of a protectionist “Britain first” policy but to invest in the capability that we have in our shipyards. That is why we invested £6.3 billion in Rosyth when we saw the fantastic build quality in the completion of the Queen Elizabeth class. That is why we are investing £3.7 billion in the first three Type 26’s in Glasgow. That is why we are showing a degree of confidence in our shipbuilding sector that Opposition Members need to share.

[John Spellar]

In a throwaway line, the Minister just made a disparaging comment about putting Britain first. What is wrong with putting Britain first?

[Guto Bebb]

The key thing, as my hon. Friend the Member for Torbay said, is that when Opposition Members talk about threats to the south Wales steel industry as a result of the “America first” policy, they are quite happy to attack Donald Trump for his protectionist attitude. The same thing can apply to this debate in spades, I am afraid. Competition and the ability to compete internationally are based not on protectionism but on the ability to be open in the way that we deal with this issue.

[Ruth Smeeth]

Will the Minister give way?

[Mr Sweeney]

rose—

[Guto Bebb]

No, I will not give way any further at this point.

The key thing that Opposition Members need to be aware of is that in addition to developing a shipbuilding strategy, we are ensuring that we are looking at the future of our combat air. That shows that this Government are taking a coherent approach across the board. We recognise fully in the Ministry of Defence the importance of defence in terms of the contribution that it can make to the prosperity of the United Kingdom. I welcome the contribution made by my hon. Friend the Member for Ludlow (Mr Dunne) in his report on the prosperity agenda, which has been welcomed by Members in all parts of the House. This Government and this Ministry of Defence intend to make sure that the lessons and the ideas put forward in that report get full consideration.

Many Opposition Members have rightly argued that in our procurement processes we should be thinking very carefully as to the means by which we can ensure a contribution to the economic wellbeing not only of the United Kingdom but of localities within the United Kingdom.

[Stewart Malcolm McDonald]

One of the ways that other NATO countries do that is by the use of multi-year defence agreements. Why do this Government not look at that seriously?

--- Later in debate ---

[Guto Bebb]

The hon. Gentleman makes a very important point, which has been a significant part of the discussion and is certainly being looked at closely in terms of the modernising defence programme. I welcome that sensible contribution.

[Mr Sweeney]

Will the Minister give way?

[Guto Bebb]

I am sorry, but I have to make some progress.

What we are highlighting is that across the Chamber we want to see a successful British shipbuilding sector, and we categorically want to see the conclusion of Sir John Parker’s report implemented. He said clearly in recommendation 21 that he wanted to see the opportunity for British shipyards to compete for the fleet solid support ships contract. That is categorically the position of the Ministry of Defence. We want to see a competitive bid from British shipyards. It can be a competitive single bid or a block build option, but we want to see that bid forthcoming. We want that bid to win because that bid is the best, the most cost-effective, the one that offers value to the taxpayer and the one that shows that the confidence we have in our shipbuilding sector is justified and will be maintained.

[Wayne David]

Will the Minister give way?

[Guto Bebb]

I will, as a final point of courtesy, allow my fellow Welshman to intervene.

[Wayne David]

I thank my fellow Welshman for giving way. Does he think it is fair that we could be in a situation with the FSS ships where British companies will be competing with heavily subsidised companies from abroad? Is that a level playing field?

[Guto Bebb]

No, of course it is not, which is why every single tenderer in this process will be subject to the same procurement rules and the same European rules that exist at this point in time, to ensure that we have a level playing field. The hon. Gentleman should understand the importance of ensuring that we have a level playing field. The way to ensure such a level playing field is not to insist on only UK companies being able to bid for what is not a warship.

The strategy has been adopted in full and was consulted on widely. The Ministry of Defence has decided that we have to adopt the strategy and implement it, and we are confident that we will see the success of this strategy and, more importantly, a very successful future for our shipbuilding sector. I look forward to bids coming in for the fleet solid support ships from British yards with the confidence that seems to be lacking from Opposition Members.

Question put and agreed to.

Resolved,

That this House recognises the important contribution of the defence industry to the UK; calls on the Government to support the UK defence industry by taking into account the economic and employment benefits to the UK when awarding contracts and to publish a full, overarching defence industrial strategy; and further calls on the Government to make the competition for the Fleet Solid Support ships contract a UK-only competition to maximise the return on that contract.

Oral Answers to Questions

Guto Bebb Excerpts

Monday 9th July 2018 Commons Chamber

[Chris Stephens (Glasgow South West) (SNP)]

3. What recent progress he has made on procuring fleet support ships for the Royal Fleet Auxiliary; and if he will make a statement.

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

Since entering a four-year assessment phase in April 2016, the project has held three industry days. We have also undertaken a period of market engagement with UK and international shipbuilders. We formally launched the international competition on 5 June. Subject to normal approvals, our current intent is to award the contract in 2020.

[Chris Stephens]

Will the Minister finally give us a reason why the ships are being put out to international competition? Would it not be better if UK shipyards were block building the ships?

[Guto Bebb]

I am surprised by the hon. Gentleman’s question. I have explained several times at the Dispatch Box that we have adopted the shipbuilding strategy in full. The strategy is clear about defining warships as a capability that will be built in the UK and non-warships as a capability that will be subject to international competition.

[Andrew Bridgen (North West Leicestershire) (Con)]

Will the Minister confirm that any weaponry installed on the fleet support ships will be procured from British companies?

[Guto Bebb]

My hon. Friend is absolutely right. The weapons element of any ship that is not designated as a warship will be procured from the United Kingdom and fixed on to the platforms in the United Kingdom.[Official Report, 12 July 2018, Vol. 644, c. 7MC.]

[John Spellar (Warley) (Lab)]

Given that every other European country that has shipyards and procures such vessels builds them in their own shipyards, why will the Minister not accept that the problem is not with Brussels or with European regulations but with Whitehall and its refusal to back British industry, British workers and British steel?

[Guto Bebb]

I reject the right hon. Gentleman’s comments. This Department and this Government have supported our shipbuilding industry to such an extent that for the first time in 40 years we have actually secured significant orders for the export of British-designed warships to Australia. The right hon. Gentleman should recognise that the shipbuilding strategy is working by ensuring that our yards are competitive internationally. Protectionism is never a friend to a long-standing, secure industry.

[Kevin Foster (Torbay) (Con)]

I agree with the Minister that the superb recent news of the deal with Australia shows that we can compete internationally in this area. Does he agree that it is still important that local yards get the chance to bid and show that we are still at the cutting edge in this area?

[Guto Bebb]

My hon. Friend makes an important point. Our shipbuilding industry, our businesses and our yards are fully engaged with the process, and they are confident that they can bring forward a successful bid. The key thing is that they will be bringing bids forward knowing that they are competitive on the world stage, not just being protected due to a “Britain First” policy.

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

I have just attended a good briefing by the hon. Member for Ludlow (Mr Dunne), whose report is called “Growing the contribution of defence to UK prosperity”. On shipbuilding, will the Minister take the report’s recommendations seriously to help retain jobs in Rosyth in my constituency? My constituents need to know that prosperity means prosperity and that the contracts are coming home.

[Guto Bebb]

First, I extend my thanks to the workers of the Rosyth yard for their fantastic work on our carriers. Secondly, the report that has been produced about the contribution of defence to the prosperity of the UK is important, but I return to the point I made earlier: we have adopted all the recommendations of the shipbuilding strategy, and we are already seeing the results.

[Wayne David (Caerphilly) (Lab)]

We on the Opposition Benches join the Secretary of State in offering our deep condolences to the family of Dawn Sturgess and express our full support for the police as they investigate this appalling incident.

This morning, the hon. Member for Ludlow (Mr Dunne) published an important review titled “Growing the contribution of defence to UK prosperity”. The review was commissioned by the Secretary of State for Defence. It cites the new Type 31e frigate as an example of how the MOD has started to take the prosperity of the British economy into account in procurement. If that can be done with the new frigates, why on earth can it not be done for the fleet solid support ships?

[Guto Bebb]

I thank the hon. Gentleman for his question but, once again, I refer him back to the shipbuilding strategy, which was endorsed on a cross-party basis. The key thing is that the Type 31e is a frigate and, as such, is designated as a warship. The fleet solid support ships are not designated as warships. We are very clearly following through the shipbuilding strategy, which we think will clearly improve the productivity of our yards and contribute to UK prosperity. The hon. Gentleman should do likewise.

[Leo Docherty (Aldershot) (Con)]

4. What his priorities are for the NATO summit in Brussels on 11 and 12 July 2018.

--- Later in debate ---

[Martin Whitfield (East Lothian) (Lab)]

24. What assessment he has made of the effect on the UK defence and military aerospace industry of the UK leaving the EU.

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

The Ministry of Defence is working closely with the defence industry to understand the implications and opportunities presented by our departure from the EU. We will continue to work with our allies and partners on the development of the capability that we need to keep us safe, and much of this already takes place outside an EU framework. The UK defence industry is globally competitive and I am confident it will continue to thrive in the future.

[Mr Bailey]

The EU Galileo satellite navigation system is vital for Britain’s future defence capacity. What discussions has the Secretary of State had with the Chancellor of the Exchequer on the finances required for an independent system in the event of a post-Brexit exclusion from this EU project?

[Guto Bebb]

I am glad to say to the hon. Gentleman that a cross-governmental group is looking into this issue to ensure that we are prepared for the possibility of having to build an independent system for the United Kingdom, but I repeat from the Dispatch Box what I have said previously: our preference is to remain involved in the Galileo project. To exclude the United Kingdom from the project would harm the project and do nothing to enhance the defence of Europe or the United Kingdom.

[Thangam Debbonaire]

People in Bristol working in the defence and aerospace industry and its supply chain are worried sick about their future if Airbus leaves because of Brexit. The industry supports thousands of jobs across the country, so why can the Government not reassure trade unions and the employers that there is a clear plan for this sector? What have they got against people in the aerospace and defence industry?

[Guto Bebb]

I do not think that this Government have anything against the aerospace industry. Indeed, the combat air strategy, which was announced by this Department recently, is a sign of our confidence in a world-beating aerospace sector. I will be very pleased when the completion of that work on our new combat air strategy is announced, as it will highlight what this country has to offer. I can assure the hon. Lady that other countries in Europe are very keen to work with us on that combat air strategy.

[Martin Whitfield]

Given the importance of future co-operation with the EU on a multitude of defence and security issues, will the Minister confirm when the Secretary of State intends to hold a bilateral meeting with Federica Mogherini, the EU High Representative?

[Guto Bebb]

I will write to the hon. Gentleman about the meeting between the Secretary of State and the individual from the Commission whom he named. I have to say that I have also been in Brussels recently with regard to this issue. It is clear from our perspective that we want to be involved with European defence firms. We would also like to be involved with the European Defence Agency, but the way in which this has been put together by the Commission makes that very difficult, because the third-country offer being made to the United Kingdom would not be beneficial to our position at this point, so there is still a lot of negotiation to be done. None the less, we are very, very clear that we would like to be involved in these projects.

[Tom Pursglove (Corby) (Con)]

Does my hon. Friend agree that the £20 billion Australian frigate order is yet another example of the confidence that there is in the UK defence industry as we leave the European Union?

[Guto Bebb]

It is, undoubtedly, a fantastic good news story for the United Kingdom. As I have said, it is the first time that we have exported a warship design in more than 40 years, and great credit should be offered to the teams at BAE and across Government who have worked so hard to ensure that that happens. It is a great success story for our industry and for the United Kingdom.

[Fabian Hamilton (Leeds North East) (Lab)]

Major defence companies are clearly deeply concerned about the effect of this Government’s Brexit policy on their operations in the UK. Rolls-Royce has started to move some functions to Germany while the chief executive of Airbus has said that the Government have

“no clue on how to execute Brexit without severe harm.”

Given that the man who was meant to be leading the UK’s approach to Brexit has now resigned because he has no confidence in his own Government’s approach, how on earth can business trust that this divided Government will deliver a Brexit deal that protects jobs and the economy?

[Guto Bebb]

The chief executive of Airbus made very similar comments back in January, but he would also be very pleased with the plans that were announced by the Prime Minister at the Chequers meeting. The key thing is that defence industries in the United Kingdom are confident—they have larger order books and they are winning contracts for the first time in generations in some countries. On top of that, I am also in regular discussions with defence companies in other parts of the world, which are very keen to invest in the United Kingdom.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

8. What recent assessment has he made of the UK armed forces’ amphibious capability.

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[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

9. What estimate he has made of the number of jobs that are dependent on the UK’s status as a tier 1 nation.

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

The UK has always been and will always be a tier 1 military power, supported by a world-class defence industry. Last year, we spent £18.7 billion with UK industry and commerce, directly supporting 123,000 jobs throughout the United Kingdom. Through the modernising defence programme we are considering how to grow even further the already substantial contribution that defence makes to UK prosperity.

[Stephen Metcalfe]

Does the Minister agree that the excellent news of the BAE Systems contract to sell Type 26 frigates to Australia has come about in part because our Royal Navy has decided to buy them, and the rest of the world knows that, as a tier 1 military nation, we buy the best and most advanced equipment?

[Guto Bebb]

My hon. Friend makes an important point. Quite clearly the capability of the Type 26 was understood and appreciated by our Australian counterparts, but the key element was the fact that the Royal Navy is committed to this platform as our future anti-submarine warfare frigate. There is no doubt that my hon. Friend is absolutely right that when the Royal Navy shows confidence in a piece of equipment, the rest of the world takes note.

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

21. Now that the Foreign Secretary has resigned and the Prime Minister seems confused about what our tier 1 status is, what are we doing to ensure that we retain tier 1 military status?

[Guto Bebb]

Well, I thank the hon. Lady for her question. It is important to understand that tier 1 is shorthand for the fact that we are a country that can reach globally in terms of our military capabilities. That has always been the case for the United Kingdom, and it shall remain the case for the United Kingdom under this Government.

[Chris Davies (Brecon and Radnorshire) (Con)]

10. What steps he is taking to improve mental health support for members of the armed forces and veterans.

--- Later in debate ---

[Deidre Brock (Edinburgh North and Leith) (SNP)]

18. What steps the Government are taking to secure shipbuilding contracts from other countries for Scottish yards.

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

The national shipbuilding strategy seeks the long-term growth of UK shipbuilding, including Scottish yards. The Ministry of Defence works closely with industry and the Department for International Trade on export campaigns for platforms, sub-systems and support. We seek to build on our recent success in the Australian SEA 5000 competition—for example, through our Type 31e frigate programme, which considers exports from the outset.

[Deidre Brock]

Part of BAE Systems’s bid to win the order to build ships for the Australian navy was the promise that workers on the Clyde would have already ironed out any problems with the ships because they were being built for the Royal Navy first. Is it not the case that the expertise and craft of Clyde ship workers allow BAE to make huge profits by building those ships in Adelaide, but there will be no benefit for the Scottish yards at all? Is it not the case that Scotland’s shipbuilders have been sold down the river?

[Guto Bebb]

With supporters such as the hon. Lady, I shudder about the future of the Scottish shipbuilding sector. The yards on the Clyde will benefit immensely from this vote of confidence in their design capability. The supply chain will benefit immensely from opportunities that come from this contract, and other export opportunities are available for both the Type 26 and Type 31, which will be built in the United Kingdom. She speaks ill of her own constituency in Scotland with such a negative attitude.

[Michelle Donelan (Chippenham) (Con)]

19. What recent discussions he has had with the National Security Adviser on the existing and changing intensity of the threat environment.

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[Tom Brake (Carshalton and Wallington) (LD)]

T4. Much equipment is bought in dollars and the value of the pound has fallen since the EU referendum. How much less equipment have the Government been able to buy in dollars, and how will the shortfall be filled?

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

The right hon. Gentleman should be aware that, like every other Department, the MOD hedges to ensure that we are not affected by currency fluctuations. Indeed, changes since the start of the year have been beneficial. At this point in time, the effect will be minimal.

[Lyn Brown (West Ham) (Lab)]

T7. Cyber-security is more important than ever and should be—

Galileo Programme

Guto Bebb Excerpts

Thursday 14th June 2018 Commons Chamber

[Nia Griffith (Llanelli) (Lab)]

(Urgent Question): To ask the Secretary of State for Defence if he will make a statement on the UK’s future participation in the Galileo Public Regulated Service.

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

The Government have been clear that our preference is to contribute fully to Galileo as part of a deep security partnership with the European Union and that negotiations should be allowed to run their course. That includes UK involvement in the design and development of Galileo’s encrypted signal for use by Governments, the Public Regulated Service.

On 13 June at the European Space Agency Council, member states agreed to proceed with the procurement of the next phase of Galileo. UK companies are not eligible to bid for those contracts. By forcing through that vote while excluding UK companies from the contracts on security grounds, the European Commission has put all of this at risk. The Commission also published slides setting out the EU’s response to the UK’s technical note on Galileo published on 24 May, which explained our requirements for future participation in the programme. The EU proposal does not meet UK defence and industrial requirements, and we could not justify future participation in Galileo on that basis.

The UK has explained that without full, fair and open industrial involvement, guaranteed access to the signal and full understanding of the system’s technical characteristics, Galileo would not offer the UK value for money or meet our defence needs, and that we would be obliged to walk away, resulting in delays and additional costs to the programme that will run into the billions. The Government will need to consider the implications of the recent ESA vote, but we are looking at other options, including a UK global navigation satellite system.

[Nia Griffith]

The future of the UK’s relationship with Galileo is extremely important, and yesterday’s release from the Commission reveals the enormous gulf between the UK Government’s position and the Commission’s view. This matter must be dealt with urgently.

The strategic defence and security review highlighted the importance of Galileo for our armed forces, saying:

“we will enhance the resilience of military users and key domestic resilience responders using new technologies incorporating the European Galileo system.”

Having secure access to global positioning and navigation systems is vital for our armed forces, given the increasing threats to GPS integrity from cyber-attacks, jamming and spoofing. Will the Minister tell us what arrangements will be in place for the armed forces if the UK is excluded from the public regulated service, and what implications that will have for their ability to conduct planned operations?

The Commission’s latest release is clear that the UK outside the EU cannot have the same relationship with the programme as we would have as a member state, but it does say that access to the PRS is possible for third countries if a specific agreement is in place. Is that what the Government plan to do, and if so, what urgent steps is the Secretary of State taking to get such an agreement? How many times has the Secretary of State personally met or spoken to Federica Mogherini about the specific issue of Galileo?

We do not simply want to be third-party users of the EU Galileo systems; we want our industry to be at the heart of the design process. However, the Commission is insisting that working on the design and development of security-related and PRS elements is restricted to EU member states only. The UK space industry is worth nearly £15 billion annually to UK plc, with over 40,000 direct employees and 1,400 apprentices. What discussions has the Minister had with industry stakeholders about the impact of the UK dropping out of Galileo?

Finally, the Secretary of State and his Ministers have made repeated reference to a UK alternative to the Galileo system. Will the Minister tell us what steps they have taken to explore such an alternative, and what discussions about it they have had with key non-EU allies? We know that this would be an extremely expensive endeavour to undertake, so what contingency money has been set aside for the project and what advice has he received about a timeframe for delivery? Galileo and the PRS are of major importance to us, and I hope that the Minister will be able to provide us with some concrete answers.

[Guto Bebb]

I thank the hon. Lady for her questions. Indeed, it is important that we have a very strong cross-party view on this issue, because all Members of this House would find the idea that the UK is being excluded on security grounds to be completely unacceptable. The merest concept of the UK being considered a security risk should be challenged by all Members of this House, and I am sure the hon. Lady will join me in highlighting our disappointment that such a decision has been taken.

On the questions asked by the hon. Lady, at this point in time the PRS system under Galileo will not be in operation until the mid-2020s, and in the meantime we will be working under the current GPS system. The hon. Lady is absolutely right that the Ministry of Defence has made no secret of the fact that we consider the capability we will offer our military from Galileo to be increasingly important and crucial, and it is an issue of real concern that we will have to look at this in very great detail.

The hon. Lady asked whether the Secretary of State and Ministers are looking at this issue and talking to the industry. I assure her that the Secretary of State has had numerous meetings on this issue, and I have personally taken it up with every single counterpart from the European Union whom I have met over the past few months, including with the junior Defence Minister from Poland yesterday. The Department has communicated this very strongly to our counterparts, and we are disappointed that we have not as yet secured the agreement we need.

May I stress that the agreement we need is one that will be good for the security of Europe and for the security of the United Kingdom? I state again that the United Kingdom, in leaving the European Union, has made it very clear that we are not leaving our obligations to the security of Europe. Those obligations are unconditional and, frankly, we find it disappointing that the European Union has not taken those guarantees and assurances in the spirit in which they have been offered.

On discussions with the industry, I applaud the hon. Lady for acknowledging the strength of the UK industrial offer on space. Indeed, only recently when I spoke at the defence space conference, I highlighted the opportunities we see for the future of the space industry in the United Kingdom. We are now having to look extremely carefully at the possibility of developing our own options.

I stress again that this Government would prefer to remain involved with the Galileo project, but given the strength of this industrial sector and the strength of what we can offer the Galileo project, I think it is really a case of the European Union doing damage to itself, while we are in a position to move forward, building on the strength and expertise of the industry in the UK, to ensure that we meet the requirements of UK defence and the wider defence sector. I assure the hon. Lady that we will not allow any flight of expertise from the space sector as a result of the decision taken yesterday.

[Sir Desmond Swayne (New Forest West) (Con)]

I hope we are planning on getting even.

[Guto Bebb]

I can understand my right hon. Friend’s frustration, and I say again that I genuinely feel that the United Kingdom’s exclusion on the basis of what I consider to be a false security case is unacceptable, but this is not about getting even. It is about doing the right thing for the industry, the United Kingdom and our defence capabilities. I would prefer to get the right decision.

[Carol Monaghan (Glasgow North West) (SNP)]

This is an extremely concerning situation and clearly demonstrates how shambolic the negotiations are. It is in the UK’s strategic defence interest to maintain a UK-EU security partnership. We will not build or maintain trust by taking a high-handed approach to the negotiations. Back in April 2017, I asked a series of written questions about our commitment to Galileo. The then Science Minister, the hon. Member for Orpington (Joseph Johnson), replied:

“it is too early to speculate on the UK’s future relationship with specific EU programmes”.

Is it still too early to speculate? When I asked

“what contingency he plans to put in place in the event the UK is unable to access the Galileo or GPS navigation systems after the UK leaves the EU”,

he responded:

“The UK’s arrangements to access the encrypted GPS signals will be unaffected by UK exit from the EU.”

What representations has the Under-Secretary made to the European Space Agency about future access to contracts and the encrypted signal? For the second time, I ask: what contingency plans are in place in the event the UK cannot access Galileo? No doubt we have the expertise here in the UK to develop our own system, but where does that leave UK-EU collaboration, which is critical to our future security?

[Guto Bebb]

I would again stress that it takes both sides to come together. The United Kingdom has been very clear that it wants to continue to be involved in and to contribute to Galileo, but those requests have been rebuffed. Clearly, we hope that this situation can be resolved and reversed, but the good will that the UK has shown has not resulted in similar good will from the European Commission, which is a significant concern.

On the question about ministerial discussions, I can stress that those discussions have been across ministerial responsibilities. Defence has been involved, but others have clearly also been involved. In many ways, the frustration for Ministers is that although the bilateral discussions with counterparts in Europe have invariably been positive, it seems that the Commission sees this as a negotiating tactic. The United Kingdom has been clear that it will never negotiate on the basis of our security concerns. That is a key point we are highlighting. From a security perspective, we have always been committed to the security of Europe. It is a shame that the Commission does not share our good will.

On our obligations to industry, I entirely agree with the hon. Lady that we have the capability and capacity to develop our own system in due course. The Galileo system will not be online until the mid-2020s. We have had deep and meaningful discussions with the defence industry on alternative options, and I stress again that, if need be, the United Kingdom will respond and develop its own system, but we would prefer to ensure that the Galileo system works for the security of the whole of Europe.

[Mr Marcus Jones (Nuneaton) (Con)]

This is a classic example from the unelected Commission of cutting off one’s nose to spite one’s face. I encourage my hon. Friend to do all he can to resolve this matter, but if we cannot, I would say to him, without fear, that the other options he mentioned should be considered very strongly and that we should work with British industry to develop our own systems.

[Guto Bebb]

I agree with my hon. Friend that we do not want the European Union or the United Kingdom to cut off their nose to spite their face, but we will not take any risks with the security of our armed forces or the capabilities they need. Our space industry is responsible for 6.5% of the global market. We have an ambition to grow that to 10%. Be in no doubt: our discussions with the space sector show that, although it is very disappointed with the Commission’s decision, it is also very excited at the prospect of developing our own capability.

[Hilary Benn (Leeds Central) (Lab)]

The European Commission’s approach in this matter is counterproductive and, in suggesting that the UK could suddenly become a security risk after we have left, frankly insulting. If the current position holds, does the Minister share the concern some have expressed that some manufacturing capacity on space and satellites, which is currently located in the UK, might move to the EU?

[Guto Bebb]

I thank the right hon. Gentleman for his very clear statement on the comments made about the UK being a security risk. I think that that is appreciated by all Members. Is there a concern about UK industry leaving as a result of this decision? Of course there would be concern, but the key point is to respond to those concerns. That is why various Government Departments, including the Ministry of Defence, have been in constant communication with the defence sector. Indeed, if it were not for this urgent question I would be on my way to meet companies involved in the space tech sector in Oxford at this very moment. I will still be visiting them, but after this urgent question. I can assure the right hon. Gentleman that the prospect of developing our own initiative is very much to ensure that the skills that are so crucial for the future economic prosperity of the United Kingdom are retained in the United Kingdom.

[Dame Cheryl Gillan (Chesham and Amersham) (Con)]

The Chancellor is reported to have said that if we fail to continue in the Galileo programme we will build our own GPS system. Does the Minister have any idea of the cost and the timescale?

[Guto Bebb]

I thank my right hon. Friend for her very pertinent question. It is the case that the Chancellor has been very clear and across Government we have been very clear on this, but it would be too early for us to highlight the actual cost involved. She should have no doubt about the fact that the cost involved would be no greater than our current contribution to the Galileo project, and I think the benefits to the UK could be even greater. I assure my right hon. Friend that the Chancellor’s support on this issue should be taken as a clear sign.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Surely the Minister understands the size—18 hugely expensive satellites and so many years of research and development—of the Galileo project? My contacts in Cambridge say it would be catastrophic for us to be excluded, not just because of security and defence but for international air travel and much else. He must not underestimate how damaging this is. It is a symptom of leaving Europe and European co-operation.

[Guto Bebb]

I agree entirely with the hon. Gentleman about the importance of this matter, which is why he should also address his concerns to the European Commission. This will be damaging both to our partners in Europe and to the United Kingdom. We have done everything in our power to highlight the fact that we want to continue to contribute fully to the programme. Those efforts have been rebuffed thus far. That is a great shame and it is a mistake on behalf of the European Commission that places all our security at risk. I stress that we will continue to invest in our capabilities if that has to be the situation.

[Mr Philip Dunne (Ludlow) (Con)]

I commend my hon. Friend for his response to the urgent question and for seeking to build cross-party consensus to condemn the reaction of the European Commission, which is clearly undertaking protectionist policies in part because it sees the strength of the space industry developing in this country. EU-based companies are currently considering relocating some of their space capability to various regions around the UK to take advantage of the skills we have here.

The Prime Minister has been very clear to the EU that defence and security matters should not be affected by Brexit, and that we wish to have a continuing strong partnership with our EU nations. Does the Prime Minister intend to bring this matter up at the EU Council or at the NATO summit in July to ensure that our partners in Europe recognise that we are making a very fulsome offer for continued security co-operation, including on the Galileo project?

[Guto Bebb]

I thank my hon. Friend and predecessor in this role for his question. I also thank him for his work highlighting the contribution of defence to UK prosperity. As part of that work, he highlighted the contribution that defence makes to the space sector in the United Kingdom. I would argue that our lead in the space sector in the European context is coveted by others. It is key that we again express our willingness to work with our partners in Europe, but if that is again rebuffed we should build on the skills and the developments of the industry in the United Kingdom and highlight the fact that we could still push this issue forward with our fantastic industry capability.

[Wera Hobhouse (Bath) (LD)]

Can the Minister confirm that the possible threat to the Galileo project and the future of the British space industry was fully considered during the EU referendum debate?

[Guto Bebb]

Many and varied issues were discussed during the European referendum campaign. It is certainly the case that nobody, on either side of the campaign, took the view that the democratic decision of the British people would be met by a decision from the European Commission that would threaten the security of the whole of Europe. Nobody thought that such a response was likely.

[Bob Stewart (Beckenham) (Con)]

It would be a shame if our defence and security services were not fully a part of the Galileo system, but we can get around that. We have a world-beating, world-class space technology industry in our country. Does the Minister agree that, if that industry were not involved in the Galileo project, the project would be the poorer for its non-involvement?

[Guto Bebb]

My hon. and gallant Friend strikes the nail on the head. He is absolutely right that this decision will be damaging for the capabilities of the whole of Europe. In view of the Prime Minister’s statement on our willingness to co-operate on security issues, the situation that we are now facing is genuinely disappointing. Again, he highlights the fact that we have the capability, skills and expertise to develop our own system if that is what we have to do.

[Ian Murray (Edinburgh South) (Lab)]

I declare an interest as a trustee of the Royal Observatory in Edinburgh. The Government have said in response to a written question:

“In the long term, we believe that”

a British global navigation satellite

“system could be operated for around the same annual cost as the UK’s current contribution to the EU’s Galileo programme.”

Could the Minister tell us: what are the short-term costs?

[Guto Bebb]

The written answer highlights the fact that our current contribution is about £200 million a year. The total billed cost would be estimated at about £4 billion. So in the short term we still want to ensure that we have an involvement with Galileo: that is still our aim. The Prime Minister will take this issue up, and it is clearly important that she does so. It should be noted that, thus far, every single satellite utilised within the Galileo system has been built in the UK, so I wonder whether this urgent question should be taken in every other Parliament in Europe as a result of the decision taken yesterday.

[Vicky Ford (Chelmsford) (Con)]

A decision that would cut the UK out of Galileo would set very difficult precedents for our future ongoing partnership on security. Yesterday’s decision was made by the European Space Agency Council. May I join my hon. Friend the Member for Ludlow (Mr Dunne) in calling for this now to be raised at a higher level, such as through NATO or at this month’s European Council?

[Guto Bebb]

I hear my hon. Friend very clearly. I have no doubt that the Department will ensure that our representations are made to the Prime Minister, and I am absolutely confident that she will be raising these issues at the NATO conference and at further meetings with the European Union.

[Stewart Malcolm McDonald (Glasgow South) (SNP)]

We know from the National Audit Office report that the funding gap in the Minister’s Department is about 20 billion quid. What will it be if he has to set up his own Galileo system?

[Guto Bebb]

I now feel as though I am back at Defence questions and having to explain that the National Audit Office report on the so-called black hole was based on the worst-case scenario occurring in every single project, with no efficiencies whatsoever being generated. The truth of the matter is that we are increasing defence spending. There is an important message here: the United Kingdom is currently one of the few countries in the European Union that is meeting its NATO obligations and that is willing to put taxpayer-funded money into its protection. I know that that type of issue upsets the hon. Gentleman, but the reality is that we take the defence and the security of Europe seriously. [Interruption.] On the question of how much, we have a large and increasing defence budget—increasing above inflation every year—and we will be able to do this if we need to.

[Mark Pritchard (The Wrekin) (Con)]

Encrypted signals and encrypted signals intelligence are absolutely vital for our armed forces and other agencies to communicate safely and securely. Is not it the case that this flawed decision produces one beneficiary in national security terms, and that is Russia?

[Guto Bebb]

My hon. Friend makes a crucial intervention, and this decision will be welcomed in very few European capitals. However, the question depends on the unlikely situation of the United Kingdom not responding to the current situation by developing its own capability. My hon. Friend said that such capability is crucial for our armed forces, and I find it inconceivable that Parliament would allow such a situation to arise. I am sure there will be cross-party support for any decision we take to ensure that that capability is available to our armed forces.

[Mrs Madeleine Moon (Bridgend) (Lab)]

This decision has immense implications for the security of our region, and it is frightening to think that our missile defence capability and our ISTAR capability could be damaged in this way. I commend the Minister for the tone in which he has responded to the debate this morning. It is imperative that that reasonable tone continues, as well as a recognition that Britain remains as committed as ever to NATO and the defence of Europe. This issue also has implications on further discussions that we will need on Permanent Structured Cooperation—PESCO—and the European Defence Fund. How does the Minister see our ability to let the Commission, and others across Europe, understand the grave implications for regional safety and security that this small-minded decision has led to?

[Guto Bebb]

I thank the hon. Lady for her kind words, and I commend her for her fantastic work on behalf of our armed forces and for her contribution to defence issues in this House. She rightly touches on the impact of this decision on the security of the whole of Europe, including the United Kingdom, and I hope that in bilateral discussions with colleagues in other countries, she will highlight the dangerous nature of this decision. She asked about the European Defence Fund. Bilateral discussions with my counterparts have indicated that they would like us still to be involved with that, and we have been clear that that is our intention. Does this decision throw doubt on that? I think the answer is yes. Will we carry on negotiating and discussing in a constructive manner because we believe strongly in the common defence of Europe? The answer to that is also yes and I hope the hon. Lady will continue to support us in our endeavours.

[Alex Chalk (Cheltenham) (Con)]

British intelligence agencies, including GCHQ in my constituency, make an enormous contribution to European security. In those circumstances, for Britain to be threatened with exclusion on the grounds of security is unreasonable, unfair and bordering on the insulting. Does my hon. Friend agree that the Prime Minister should make it crystal clear in June that, in forthcoming negotiations, security should remain inviolable and not a matter for negotiation?

[Guto Bebb]

First, I pay tribute to the workers at GCHQ, many of whom are my hon. Friend’s constituents. I visited GCHQ last Thursday, and he is right to highlight the contribution that people there make to security not just in the United Kingdom, but across Europe and on a global basis. I entirely agree with my hon. Friend—I think the Prime Minister should raise this issue and highlight once more that we do not consider a threat to our security and that of Europe part and parcel of our negotiations to withdraw from the European Union.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

The UK’s space industry is world class and world leading, and a good example of that is Clyde Space in Glasgow, which is a world-leading manufacturer of cube satellites. The CEO of Airbus, Tom Enders, has called on Britain and the European Commission urgently to find a solution to this issue for the safety of the entire region. What reassurance can the Minister give to industry stakeholders that this issue will be resolved so that they do not move elsewhere, especially bearing in mind the huge time constraints on the procurement process for Galileo?

[Guto Bebb]

The hon. Gentleman will be pleased to know that the Government argued strongly that UK companies should not be excluded from the current round of contracts offered through the Galileo project. We have met industry partners and representatives on an ongoing basis. I have done that as well in my role as the Minister responsible for defence procurement. I assure the hon. Gentleman that we will continue to engage fully with this UK industry because we know how important the industry is for our future prosperity. We want to give confidence to that sector of our economy that there is a strong future for it in the United Kingdom. We have the technology and skills, and we will need to reassure the industry that the Government are fully committed to ensuring that we have the capability we need from the Galileo system in a UK context, if that is what has to happen. I stress, however, that our preference would be to have a reasonable response to our very fair request to the European Commission.

[Bob Blackman (Harrow East) (Con)]

What discussions have the Government had with non-EU NATO allies on the possibility of a NATO-wide scheme, which would actually suit Britain quite well?

[Guto Bebb]

I know for a fact that this issue has been raised with NATO allies, certainly by Defence Ministers. In terms of whether it is the way forward, we have always believed that NATO is a key component of our security, which is why we are one of the few nations within NATO that meets the obligation for a 2% spend on defence. Everybody within NATO understands the importance of having these systems in place. We understand the challenges to the current system that we are utilising, and I therefore have no doubts that this issue will be raised by representatives of this Government at the NATO conference.

[Patrick Grady (Glasgow North) (SNP)]

My constituency neighbour, the hon. Member for Glasgow North East (Mr Sweeney), is absolutely right about how crucial the satellite manufacturing and space industry is to Glasgow, as is the world-class space research that takes place in the University of Glasgow and other institutions in the city. As well as discussions with industry, what discussions has the Minister been having with the university sector and research institutions about the impact on their contracts and research as a result of the possible withdrawal from the Galileo programme?

[Guto Bebb]

I thank the hon. Gentleman for his question. He is absolutely right to highlight the key importance of academia to this issue. While I have not been in contact with any universities on this matter, I am assured that the Minister for Universities, Science, Research and Innovation has. The university sector has a huge contribution to make to the development of the UK space sector, and I think that those discussions should be ongoing, as they have been over the past few months.

[Mr Philip Hollobone (Kettering) (Con)]

This decision shows that there are key elements in the European Commission who are determined to punish the United Kingdom for Brexit, even if it is at their own expense. Our response to this decision has implications for the wider negotiations, so I urge my hon. Friend not to go back on bended knee, but to make it clear that, given that our good will has been rebuffed, and given our status as a security guarantor for the continent of Europe, unless this decision is reversed at the European Council, we will proceed forthwith to set up our own bespoke system.

[Guto Bebb]

I thank my hon. Friend for his question. It is certainly a huge disappointment that our straight offer on this issue, which was a very clear statement of intent to remain fully involved in the Galileo project, has been rebuffed. Time and again, Members—certainly on the Government Benches, and I think across this House—who were on different sides of the referendum campaign have been very clear that, while we have taken a democratic decision to leave the European Union, we have no intention of leaving or abandoning Europe. Those positions were made very clear in our negotiations on Galileo. It is a huge disappointment that they have as yet not been responded to in kind by our European Commission partners. I think that this issue will have to be taken up at a very high level. It has to be highlighted that the loss to the Galileo project from the UK not being involved should not be underestimated. But, if necessary, as I have said several times this morning, the United Kingdom will move ahead to develop our own system.

[Martin Whitfield (East Lothian) (Lab)]

Does the Minister fear that the decision is a precedent, or is it a mere blip with regard to future negotiations about the myriad agreements, particularly in science and defence, that are coming and will need to be discussed?

[Guto Bebb]

I sincerely hope that this decision will be reversed and, therefore, it will be a blip on the journey towards a sensible solution to the United Kingdom’s decision to leave the European Union. Again, we have made it very clear—the Prime Minister has made it very clear, as have Members across this House—that we are fully committed to security co-operation with our European partners. We want to be involved in the European Defence Fund. We want to remain involved in Galileo. We certainly want to continue to contribute to NATO in the way that we have over the years. Our messaging has been very clear on this issue, and it is hugely disappointing that the European Commission has responded in the way that it has. This issue will continue to be taken up by this Government, and I sincerely hope that good will will prevail.

[Jeremy Lefroy (Stafford) (Con)]

Are there currently any non-EU member states that participate in Galileo and whose companies have access to contracts from Galileo?

[Guto Bebb]

My hon. Friend makes an important point, but of course, there has not previously been a country that has been so heavily involved in Galileo and committed to the project being threatened with exclusion. The key issue is this: do we have more to contribute to Galileo? The answer is yes. Do we want to carry on making that contribution to Galileo? The answer is yes. Do we have the capability to develop on our own if we need to? The answer, again, is yes. The decision is now clearly one for the European Commission. In my view, it made the wrong call yesterday—the wrong call for the security and prosperity of Europe—and I think it is absolutely essential that we move forward very strongly in partnership both with those countries within the European Union and with those partners within the system who are not currently in the European Union.

Contingent Liabilities

Guto Bebb Excerpts

Tuesday 12th June 2018 Written Statements

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

I am today laying a departmental minute to advise that the Ministry of Defence (MOD) is retrospectively notifying Parliament about contingent liabilities not previously disclosed, due to procedural errors. HMT recognise the urgency for these contingent liabilities to be laid before Parliament and have approved them in principle. Final approval is expected pending the outcome of a wider departmental review, as part of the balance sheet review, being conducted by Her Majesty’s Treasury.

The minute describes the contingent liabilities that the MOD holds against three Air Command contracts, two Defence Infrastructure Organisation (DIO) and one Navy Command contract. It is usual to allow a period of 14 sitting days prior to accepting a contingent liability, to provide hon. Members an opportunity to raise any objections. Regrettably, this was not done ahead of contract award in these cases and I sincerely apologise for our failure to do so. The purpose of the minute is to regularise the position with Parliament. The contracts remain fully enforceable and the associated contingent liabilities will be reported in the 2017-18 MOD annual report and accounts.

Failure to notify these contingent liabilities prior to the award of the associated contracts has been reported to the Public Accounts Committee. The Department has noted the Committee’s concerns about this situation and fully accepts the need to follow the correct approvals and reporting procedures. Air Command, DIO and Navy Command have put in place a series of measures to address this issue including staff briefing, mandated training, improving the clarity of internal guidance and procedures and additional controls in the approvals process, to ensure compliance.

If the liability is called, provision for any payment will be sought through the normal supply procedure.

If, following the laying of the departmental minute, a Member signifies an objection by writing to me, I undertake to examine the objection and respond to the member concerned.

[HCWS759]

Oral Answers to Questions

Guto Bebb Excerpts

Monday 11th June 2018 Commons Chamber

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

We are taking steps to ensure strategic affordability through the modernising defence programme and our annual financial management processes. The cost of the plan is reviewed on an ongoing basis, and we expect to publish the equipment plan financial summary for 2018 to 2028 in the autumn.

[Mr Cunningham]

Can the Minister confirm that the Government still intend to procure the full 138 F-35s, as previously announced?

[Guto Bebb]

It gave me great pleasure to be present at RAF Marham on Wednesday to welcome the first four F-35s. As the hon. Gentleman is aware, the first 48 are fully paid for and committed to. We are looking at everything in the modernising defence programme, but the current situation is that we still anticipate the purchase of 138 F-35s.

[Graham P. Jones]

The Public Accounts Committee said in a recent report:

“The Equipment Plan for 2017 to 2027 is not realistic and the Department lacks cost control.”

Does the Secretary of State share my deep concern about his Department’s equipment budget being in such an appalling state?

[Guto Bebb]

I am sure that the Secretary of State shares my view that the Public Accounts Committee does an important job, but it is important to state that the assumptions made in the National Audit Office report, which underpin the report of the Public Accounts Committee, highlight the possibility that every single project will end up with no efficiency savings and that the worst-case scenario will be achieved on cost controls. We are very confident we have an equipment plan that is affordable but, as I have stated, we are looking at all issues as part of the modernising defence programme.

[Mr Philip Hollobone (Kettering) (Con)]

How many drones will we have for the RAF, the Royal Navy and the Army by 2027, both for reconnaissance and for taking out our enemies?

[Guto Bebb]

I am happy to concede that my hon. Friend has caught me on the hop. I am not able to give him a specific answer at this time, but I am sure that he will allow me to write to him to confirm those figures in due course.

[Bill Grant (Ayr, Carrick and Cumnock) (Con)]

Can the Minister confirm that the Type 26 frigates are being built within budget and will continue to provide jobs for the Scottish workforce for years to come?

[Guto Bebb]

I can confirm that the Type 26 project is going extremely well. The first blocks have been built, the steel has been cut and the first three ships have been named. The really important point, which was highlighted in a recent Westminster Hall debate, is the fact that the last apprentices to work on the Type 26 project have not yet been born. That shows the long-term commitment to shipbuilding on the Clyde that the Type 26 project represents.

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

The NAO estimates that, of the £9.6 billion shortfall in the equipment budget, £1.3 billion is for the new Type 31e frigate. Can the Minister assure the House that, in the autumn, the budget line for the Type 31e will be included in the financial summary?

[Guto Bebb]

The key submission for the Type 31 is that the procurement is going extremely well. It is currently on target, and our expectation is that the £1.25 billion budget for five Type 31 frigates will be achieved.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

Does my hon. Friend agree that the arrival of the F-35s on British shores is a signal to the world that “global Britain” is not empty rhetoric, as some would have us believe, but a demonstrable fact?

[Guto Bebb]

I agree with my hon. Friend that that is a statement of our aspiration, and it is also a significant statement on the contribution of defence to our national prosperity. Some 3,500 F-35s will be procured worldwide, and 15% of them will be produced here in the United Kingdom. That is equivalent to 525 platforms, which is a significant vote of confidence in UK industry.

[Carol Monaghan (Glasgow North West) (SNP)]

Can the Minister confirm to the House the details of a letter he sent to me saying that the fleet support vessels will be bound by EU rules on state aid?

[Guto Bebb]

The situation, as per the shipbuilding strategy and as per the letter I sent to the hon. Lady, is that we are looking to procure the fleet solid support ships. The shipbuilding strategy aims to ensure that we have a strong shipbuilding sector, and a strong sector also needs a degree of competition. We are protecting warships as a national capability, but we are opening other elements of the shipbuilding strategy to international competition.

[Andrew Bridgen (North West Leicestershire) (Con)]

Does the Minister agree that keeping our armed forces equipped to the very highest standard, well led and with a strong fighting spirit, is the best deterrent our country has?

[Guto Bebb]

I could not agree more.

[Wayne David (Caerphilly) (Lab)]

“Not affordable”, “not realistic”, “not complete”, “unbalanced” and “unmanageable”—those are some of the politer things that have been said about the Government’s equipment plan. The comments have been made not by the Government’s political opponents, but by the Public Accounts Committee and the National Audit Office. Not since the end of the second world war have there been such devastating criticisms of a Government defence programme.

This £20.8 billion black hole in the MOD’s equipment plan has arisen due to this Government’s shameful incompetence. How do they intend to get out of this mess, and can we look forward to extra resources from the modernising defence programme?

[Guto Bebb]

I would say, at the risk of repeating myself, that the National Audit Office and the Public Accounts Committee do important work for this House, but I should highlight the fact—I have said this once but I will say it again—that the figures quoted in the NAO report were a worst-case scenario. It looked at every single project hitting the worst-case scenario and at no efficiencies whatsoever being created within the programme. We are considering all these issues as part of our modernising defence programme, but I genuinely say to the hon. Gentleman that he should read the report with a bit more care and understand it.

[Rehman Chishti (Gillingham and Rainham) (Con)]

3. What recent assessment his Department has made of the threat posed to UK security by cyber-attacks.

--- Later in debate ---

[Mike Amesbury (Weaver Vale) (Lab)]

5. What steps he is taking to support the UK defence industry.

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

We are committed to supporting a thriving and internationally competitive defence sector. We have published our national shipbuilding strategy and refreshed our defence industrial policy, and we are developing a combat air strategy. In March, the Defence Secretary announced he had invited my hon. Friend the Member for Ludlow (Mr Dunne) to conduct a review of the defence contribution to prosperity, and I look forward to the publication of that report shortly.

[Mike Amesbury]

The fleet solid support ship contract said that there would be the potential to bring jobs and work to shipyards across the UK. Does the Minister not agree that those ships should be built in Britain, and will he make this a UK-only competition?

[Guto Bebb]

I have consistently argued that the national shipbuilding strategy should be supported across the House, as it offers real support for our shipbuilding industry. We designate warships as a sovereign capability to be built in the UK. Other ships are open to international competition, but I am confident that there will be British yards putting in bids for that work.

[Robert Courts (Witney) (Con)]

17. When considering a replacement for the RAF’s airborne warning and control system fleet, will the Minister commit to holding an open competition so that bids from all defence partners—from the UK as well as abroad—can be considered? Will he also consider whether Sentry and Sentinel may in future be replaced by one aircraft type?

[Guto Bebb]

My hon. Friend is well known for his championing of issues to do with the Royal Air Force. It is important to say that the Ministry of Defence is currently going through a process of considering the replacement for that capability, and we are also considering the situation with regard to Sentinel moving forward. A decision will be made in due course, and he will be informed at that point.

[Frank Field (Birkenhead) (Lab)]

When the Minister sits down after this series of questions, will he remind the Secretary of State, who I see is not listening, that he has been to a number of yards that will compete with Cammell Laird, but not to Cammell Laird itself? When he is deciding on the shipbuilding programme, he needs to be seen to be fair as well as awarding us orders.

[Guto Bebb]

I thank the right hon. Gentleman for his question. The process will be seen to be fair, because it will be fair. This is a real commitment that we are providing to the shipbuilding sector. We are absolutely committed to it, and we have adopted the shipbuilding strategy. I hope that he will have confidence in the process.

[Vicky Ford (Chelmsford) (Con)]

Engineers in Great Baddow in Chelmsford have been designing world-class radar systems for generations. Will the Minister take into account local skills and jobs when awarding the next contract, to make sure that British capabilities are not compromised?

[Guto Bebb]

My hon. Friend makes an important point about taking into account the whole contribution made to our economy when a contract is awarded. She will be interested in the new Treasury Green Book and also in some of the conclusions made by my hon. Friend the Member for Ludlow in his report on prosperity.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

6. What plans he has for additional UK force deployments to Afghanistan.

--- Later in debate ---

[Christian Matheson (City of Chester) (Lab)]

8. What discussions he has had with the UK aerospace sector on collaborations for future combat aircraft design.

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

The Ministry of Defence is working closely with other Government Departments, the UK aerospace sector, academia and international partners to explore the UK’s future approach to combat air capabilities. We intend to publish the initial findings this summer.

[Christian Matheson]

We have a world-leading aerospace sector, but we cannot deliver the combat air strategy on our own. Does the Minister expect most of our future collaboration to be with Europe or the United States?

[Guto Bebb]

I think it is fair to say that we are undertaking a combat air strategy because the UK is a global leader in the field. UK industry’s export capabilities in combat air are well known, with £6 billion of exports last year, so we are approaching partnerships across the globe. The Department has written to partners in the US, across Europe and further afield.

[Bambos Charalambous (Enfield, Southgate) (Lab)]

9. What assessment he has made of the effect on the defence and military aerospace industry of the UK leaving the EU.

[Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)]

19. What assessment he has made of the effect on the defence and military aerospace industry of the UK leaving the EU.

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

The Ministry of Defence is working closely with the defence industry to understand the implications and opportunities presented by the UK’s departure from the European Union. We want to explore how our industries can continue working together, but it is worth noting that current collaborative capability projects, such as Typhoon, are managed bilaterally or with groups of partners, rather than through the EU.

[Bambos Charalambous]

Does the Minister agree that a clear commitment to stay in a customs union with the European Union would provide certainty to industry and investors that they will not be hit by needless tariff barriers after Brexit?

[Guto Bebb]

What we need moving forward is a strong relationship with the European Union to ensure that we have as frictionless trade as possible with the European Union. I do not think that remaining within the customs union is a prerequisite for a successful defence industry.

[Alex Cunningham]

American-owned Darchem in Stillingham is just one of the manufacturing firms in my constituency providing aerospace and other engineering products to the military. It really needs certainty about future tariff-free trading with the EU. Will it get that tariff-free trading?

[Guto Bebb]

The Government’s aim and aspiration is to ensure that there will be tariff-free trade with the EU. I think that the company referred to by the hon. Gentleman will be very pleased to see a Government who are proactively pushing forward the combat air agenda. We are world leaders in combat air—as I highlighted, 15% of every F-35 is manufactured here in the United Kingdom. We are leading on this issue, and the Government are supporting industry in that leadership.

[Gill Furniss]

The Government have often used EU rules as an excuse for not buying British steel for big defence projects. Can the Minister guarantee today that post Brexit, Royal Navy support ships and similar projects will use 100% British steel?

[Guto Bebb]

I wish I could offer the guarantee that the hon. Lady requests, but it is not possible to do so, because the steel required for the parts of the ships that we are building is not currently available from the United Kingdom. In the work that we are doing on the Type 26 frigate, for example, well over 50% of steel, by value, is from the United Kingdom. However, I am sure that the hon. Lady would be the first to complain if we had defects in our capability as a result of buying incorrect steel.

[Stephen Kerr (Stirling) (Con)]

How are the preparations for the UK’s alternative to participation in Galileo going?

[Guto Bebb]

That is a crucial question, because our involvement with Galileo is important not just for our own security but for that of the European Union. We have committed significant funds to Galileo over the years. We have an obligation to our industry and to our defence capabilities to ensure that we investigate thoroughly the possibility of remaining within the Galileo programme. However, work is being undertaken on potential alternatives in case they are necessary.

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

The UK defence industry was on show this week with Operation Catamaran 18, involving UK and French amphibious forces. Can the Minister confirm that HMS Albion and HMS Bulwark, two great examples of UK military endeavour, will not be cut in the forthcoming modernising defence programme?

[Guto Bebb]

The hon. Gentleman is well aware of the situation. As I articulated in the Westminster Hall debate, Albion and Bulwark are currently expected to be in service until 2033 and 2034 respectively.

[Jeremy Quin (Horsham) (Con)]

10. What progress his Department has made on encouraging small and medium-sized enterprises to participate in defence procurement programmes.

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

Small businesses play a crucial role in our defence capability. To support them, we have launched a supplier portal that brings together a range of information and advice for new suppliers, and we have appointed a champion for smaller businesses to drive engagement. We also now require our largest suppliers to advertise their subcontracting opportunities on Government platforms.

[Jeremy Quin]

Anti-drone technology produced by an SME in Horsham has been used very successfully by US forces on operations for more than a year now. Will the Minister assure the House that the MOD will always go for best in class in procurement, and that this is open to smaller manufacturers, as it is with our allies?

[Guto Bebb]

My hon. Friend makes a really important point about the importance of SMEs in innovation and capability. Our refreshed defence industrial policy published last December highlights how we are encouraging competition within the defence sector, maximising opportunities for SMEs. For example, we have produced new short-form contracts that make it easier for SMEs to bid into MOD opportunities.

[John Spellar (Warley) (Lab)]

Does the Minister recognise that SMEs depend on main contractors for an enormous amount of their work, and that that is why his previous replies on the fleet support ships have been so disappointing? Can he imagine our European G7 partners, let alone President Trump, buying navy support ships from foreign yards? When is he going to shake off Treasury dogma, wake up to European reality, and buy British ships built in British shipyards by British workers, backing British engineering firms large and small, and backing British steel?

[Guto Bebb]

I listened very carefully to the right hon. Gentleman, but I would not think that we should take any lessons on trade policy from Donald Trump.

[Dr Julian Lewis (New Forest East) (Con)]

11. What recent discussions he has had with the Chancellor of the Exchequer on future funding for his Department.

--- Later in debate ---

[Toby Perkins (Chesterfield) (Lab)]

T2. The Warrior Capability Sustainment Programme is incredibly important for our Army’s capability and for the UK defence industry, so when will we finally get to the production contract stage?

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

We are at the demonstration phase, with 11 being manufactured. It is currently going through a trials programme and we will report back when that is complete.

[Leo Docherty (Aldershot) (Con)]

T10. The legal pursuit of our veterans and soldiers following combat operations is a national disgrace. The Secretary of State will be aware that many Members support a statute of limitations to protect those who have served. If a legally viable route towards such a statute can be found, will he confirm that he would support it and legislate for it?

--- Later in debate ---

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

In its most recent report on the recruitment plan, the National Audit Office said that the plan was “not affordable”—full stop. The Secretary of State has been given seven recommendations. Which will have the most impact?

[Guto Bebb]

Once again, we appreciate the work done on that report and are taking it seriously—it is being considered as part of the modernising defence programme—but we state again very clearly that the MOD does not recognise as likely outcomes some of the worst-case scenarios.

[Mr John Hayes (South Holland and The Deepings) (Con)]

rose—

Type 26 Frigates: Base-Porting

Guto Bebb Excerpts

Wednesday 6th June 2018 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Sir Roger.

I congratulate the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) on his speech, much of which I agree with and subscribe to. I also congratulate the other Members for the city of Plymouth on being present to support the debate. It is right to describe the Plymouth campaign as city-wide, and the campaign is appreciated. It was certainly difficult not to come away from my visit to Plymouth with the strong impression of the support afforded over centuries to the Royal Navy by the people of the city of Plymouth. I appreciate the passion displayed by all hon. Members, the three representing the city in particular, and the Ministry of Defence and I understand the feeling behind the speech.

The decision on the base-porting of the Type 26 is an important one that will have to be taken sooner rather than later. When we take that decision, we shall take into account a number of factors that have to be considered seriously and carefully, as the hon. Member for Plymouth, Sutton and Devonport will understand. We shall be looking at issues of logistics, infrastructure and personnel. On personnel, I echo the tribute he paid to the Royal Navy crews who man the frigates already based in Plymouth and to their support staff, whether military or civilian.

[Johnny Mercer]

On the timing, does the Ministry of Defence grasp the issue about us needing a commitment not even sooner rather than later, but before the summer recess? We need a decision point that we can look at, and take back to people and say, “Yes, we will get a decision on it,” so that we will have delivered something from the campaign.

[Guto Bebb]

My hon. Friend tempts me to offer an answer now, but I am sure he understands that it would be remiss of me to make such a commitment now, especially as we are still awaiting the completion of the Modernising Defence Programme. However, I stress again that we are looking at the issues seriously, including training, force generation and cost. We will certainly make an announcement before the end of the year. I anticipate that we might be able to make announcements before then, although I would not want my hon. Friend to come away thinking that the intention is to have an early decision. We are trying to ensure that we make a decision based on the facts of the situation, and I assure my hon. Friend that the support that Plymouth is showing for the campaign is being taken on board. Plymouth’s capability and the capacity as a naval base is also understood by the Ministry of Defence. I hope that gives some reassurance, if not the exact dates that he was looking for.

[Wayne David (Caerphilly) (Lab)]

Has the Minister given any consideration at all, on a slightly longer time scale, to where the new Type 31s may be based?

[Guto Bebb]

Ultimately, we are looking very carefully at the rebasing; the fact of the matter is that we are building an enhanced Royal Navy. We will have more surface ships in the Royal Navy than we have had for a long time. We have seen the Royal Navy grow for the first time in a long time. All these decisions are under review. That is why it is important to understand that the decision on the Type 26 is not being taken in isolation. We are making decisions in the context of a growing Royal Navy. I suspect that every Member who has spoken in this debate would welcome the fact that the Royal Navy is growing. The reason for that growth is the new challenges that we face and the demand that we respond to them, and some of those were articulated by the hon. Member for Plymouth, Sutton and Devonport.

We are aware of the long-standing support offered to the Royal Navy by Plymouth and the Devonport base since 1691. There is a 300-year history. It is very difficult to visit Plymouth without being moved by the contribution that the city has made to the prosperity and the protection of this country over 300 years. Clearly, the size of the estate is unique. It is the largest base of its kind in Europe, stretching over 940 acres, and has more than 100 listed buildings and 3.5 miles of waterfront. This is a base that has been providing support for our Royal Navy for a very long time. That history is clear from visiting the city of Plymouth.

The Government’s commitment is clear: to enhance the Royal Navy—the surface fleet and the submarine fleet. It is important to understand the context of this debate, which is the growth in the Royal Navy. We are committed to building our eight anti-submarine warfare Type 26 frigates. The hon. Gentleman’s support for our export campaigns in Australia and Canada is appreciated. We have run a fantastic campaign in Australia and we are running a fantastic campaign in Canada. The capability of the platforms that we are building, with the support of our fantastic shipbuilders on the Clyde, is something that we take very seriously. It is great to see this unified approach to highlighting the capability of the Type 26.

The contract to build the Type 26 was awarded in June 2017. We have already cut steel and are building the first blocks on HMS Glasgow, which is very good news. Some people have claimed that it is nothing more than a paper ship; any hon. Members who have been to the Clyde will be able to say quite categorically that that is not the case. The work is being undertaken and the quality of the work is excellent.

The hon. Member for Plymouth, Sutton and Devonport highlighted the long-term commitment to shipbuilding on the Clyde that that order represents in his comments about the apprenticeships opportunities. The last of the apprentices who will be involved in the Type 26 programme have not yet been born. The Type 26 programme shows our commitment to long-term shipbuilding. I make no apology about the fact that we are also looking at the Type 31e. It is a case of identifying our capability need and what the Navy needs. The Type 31e is welcome from a procurement point of view. It is a general-purpose frigate being built to a cost limit, but it is also a new way of doing procurement.

When I travel around the world in my role—when the parliamentary arithmetic allows such travel to occur—I find it fascinating to see how closely defence departments in other countries are watching our Type 31 procurement. The capability and the cost of the Type 26 are recognised and have been recognised in the debate. Not many countries have the capability or the financial power to purchase such a high level of capability as the Type 26, but they are interested in what we are trying to achieve with the Type 31. The combined effort is showing a degree of confidence in our shipbuilding strategy, but it is also showing a confidence in our Royal Navy.

It is important to highlight that the Type 23 frigates have been and remain a significant part of the activities in Devonport. The decision to base the eight anti-submarine Type 23s in Devonport was correct. That decision has resulted in more coherence in our basing. I share the hon. Gentleman’s admiration for the crews of the Type 23; I have also flown on to Argyll and have enjoyed Thursday war games with the crew. The professionalism and the commitment of the crew was something to behold.

I take exception to the comments that the hon. Member for Plymouth, Sutton and Devonport made about defence cuts. We have to acknowledge this issue on a cross-party basis, and it needs to be very carefully articulated, because it contributes to a false impression of what is happening in defence. The Government are committed to increasing defence spending. We have a protected budget of £37 billion. That budget is increasing by half a per cent above inflation year in year out for the lifetime of this Parliament. That commitment needs to be understood.

We talk about cuts, but it is important to put that in context. We are increasing defence spending. The challenge is to manage that increased spending. When we casually use the word “cuts”, we are sending a message—often a false message—that is a reassurance to our opponents and that causes distress and concern for some of the people working in our armed forces. I understand the context in which the comment was made, but I want to put it on record that we are expanding and extending our defence capabilities and are spending more on defence. My own equipment budget is £180 billion over the next 10 years, which by any stretch of the imagination is a significant budget. That includes a £63 billion commitment to enhancing the Royal Navy. I am sure that most Members will acknowledge that that is a significant commitment.

[Johnny Mercer]

I welcome the Minister’s comments. Clearly, we have to conduct the debate from a position of truth. We have a growing defence budget, but in Plymouth we have seen things like the defence rebasing strategy that have put people’s livelihoods and jobs in that city under threat. It has kind of paused; it is not going anywhere. We need the commitment. Will the Minister take back to the Department that we need something firm to deliver for the people of Plymouth in the very near future?

[Guto Bebb]

At the risk of repeating myself, I think the message has been heard loud and clear from the three Members from Plymouth and from other Members. The Ministry of Defence has heard that message. We have to put things in order, because we have to do things in the context of the Modernising Defence Programme, but I assure my hon. Friend and other colleagues that the message about the importance of this decision for Devonport has been understood.

[Wayne David]

Will the Minister give way?

[Guto Bebb]

For the final time, I will.

[Wayne David]

I thank the Minister for his generosity. He talks about cuts, but I would argue that the position is not quite as he painted. Can I infer from what he has said that HMS Albion and HMS Bulwark are now safe?

[Guto Bebb]

The hon. Gentleman should be aware that HMS Albion and HMS Bulwark are safe until 2033 and 2034, which is the current situation. Those are the decommissioning dates for both vessels.

The situation in Plymouth and Devonport is still a significant success story. I acknowledge that there are challenges, but the activities taking place there—the flag officer sea training, Royal Marines Tamar and the commitment for the new oil jetty that has been built at Thanckes—are commitments and expenditure that highlight the fact that there is a very positive future for the base at Devonport. That positive future is not because we owe anything other than the right decision for the people of Plymouth, but that right decision will reflect the history of service and support that has been offered to the Ministry of Defence and the Royal Navy by the people of Plymouth and the people involved in the bases in Plymouth. We should be very proud of the fact that it is a key component of our defence infrastructure. The continued added investment made by the Ministry of Defence highlights the fact that there is a bright future for the base in Devonport.

I will close by thanking all hon. Members who have contributed to what has been a constructive debate. It is important to put everything into the context of a growing Royal Navy, for the first time in decades—we all welcome that. The context is an enhanced and increasing defence budget, but one that is still challenged, for the reasons that the hon. Member for Plymouth, Sutton and Devonport highlighted, such as the changing threat environment.

I stress to all hon. Members, especially the three hon. Members representing the city of Plymouth, that we have heard the message very clearly. That message will be conveyed back to the Department. I look forward to the result of the Modernising Defence Programme and, in due course, a decision being made on the basing of the Type 26 frigates, which are a world-class capability.

Question put and agreed to.

Grant-in-kind

Guto Bebb Excerpts

Wednesday 16th May 2018 Written Statements

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

I have today laid before the House a departmental minute describing a package of spares for Challenger 2 Tanks that the UK intends to provide to the Royal Army of Oman. The value of the package is estimated at £0.997 million.

The provision of equipment is being made as a grant-in-kind. Following correspondence from the Chair of the Public Accounts Committee in 2016, Departments which previously treated these payments as gifts have undertaken to notify the House of Commons of any such grant-in-kind of a value exceeding £300,000 and explaining the circumstances: following Treasury approval the House is duly notified of this intention.

The grant-in-kind in this case is to the Royal Army of Oman. The equipment being granted by the UK will comprise surplus assemblies and line replaceable units for the repair and maintenance of Challenger 2 tanks. The provision of this equipment is a direct response to a request made by the Royal Army of Oman to the UK defence attaché in Oman and is in support of National Security Council objectives. Releasing this surplus equipment is consistent with wider defence policy to reduce the number of Challenger 2 in service.

The total cost of the proposed UK package is £0.997 million, including some minor transportation costs within the UK. Delivery from the UK to Oman will be conducted by the Royal Air Force of Oman and will be at no cost to the UK.

The UK is committed to assisting the Royal Army of Oman and the Government of Oman as it remains a key ally in the Gulf region. Contributing to the development of capable and well-led armed forces in Oman supports the Government’s aim of enhancing regional stability, developing permanency in Oman and the wider Gulf and cementing our relationship with Oman for the future; this relationship is critical to UK national security.

All export and licensing requirements have been met and the equipment is expected to be delivered in May 2018.

[HCWS687]

Contingent Liabilities

Guto Bebb Excerpts

Wednesday 2nd May 2018 Written Statements

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

I am today laying a departmental Minute to advise that the Ministry of Defence (MOD) is retrospectively notifying Parliament about contingent liabilities not previously disclosed, due to procedural errors. Her Majesty’s Treasury has retrospectively approved these contingent liabilities.

The Minute describes the contingent liabilities that the MOD holds against 10 Defence Equipment and Support contracts (DE&S). It is usual to allow a period of 14 sitting days prior to accepting a contingent liability, to provide hon. Members an opportunity to raise any objections. Regrettably, this was not done ahead of contract award in these cases and I sincerely apologise for our failure to do so. The purpose of the Minute is to regularise the position with Parliament. The contracts remain fully enforceable and the associated contingent liabilities will be reported in the 2017-18 Defence Equipment and Support (DE&S) annual report and accounts.

Failure to notify these contingent liabilities prior to the award of the associated contracts has been reported to the Public Accounts Committee. The Department has noted the Committee’s concerns about this situation and fully accepts the need to follow the correct approvals and reporting procedures. DE&S has put in place a series of measures to address this issue including staff briefing; mandated training; improving the clarity of internal guidance and procedures; and additional controls in the approvals process, to ensure compliance.

The following contracts have a very low risk of the contingent liability being incurred. The liability is assessed as unquantifiable due to the nature, scope, range and scale of possible scenarios that might occur, which means that it is not possible to provide a realistic estimate of cost:

Supply of Cased Telescopic Cannon and ammunition—liability against consequential and indirect losses until 9 July 2018.

CTAI Common Cannon and ammunition project—liability against consequential and indirect losses until 3 June 2019.

Design authority support for Cased Telescopic Cannon—liability against consequential and indirect losses until 31 March 2019.

Supply of 40mm Cased Telescopic Cannon—liability against consequential and indirect losses until 15 July 2022.

BAE Systems Dreadnought design contract—liability against submarine design work until 26 April 2023.

Babcock design contract (submarines)—liability against contractor’s personnel at defence establishments until 26 April 2023.

UK/France test facilities (2010) and sub contract—UK liability for dismantling and decommissioning costs until 2065.

The following contract has an agreed amount of contingent liability up to £1.4 million against a breach of intellectual property rights which expired on 31 March 2018 and a further unquantifiable element against a breach of environmental liability until 31 March 2025:

Land equipment service provision and transformation contract.

If the liability is called against any of these contracts, provision for any payment will be sought through the normal supply procedure.

The following contract had an agreed amount of contingent liability up to £7 million against damage to Ministry of Defence property which expired on 28 February 2018. No liability was called against this contract.

Support to combined arms tactical training system.

[HCWS664]

Oral Answers to Questions

Guto Bebb Excerpts

Monday 23rd April 2018 Commons Chamber

[Paul Blomfield (Sheffield Central) (Lab)]

6. What the timetable is for the commissioning of the new Type 26 frigates.

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

The Secretary of State for Defence visited the Clyde last Thursday to witness the completion of the first Type 26 units. This unit will form part of the first ship, HMS Glasgow, which is due to be accepted by the summer of 2025. The Royal Navy will then train and prepare her and she will enter service in 2027. HMS Cardiff, HMS Belfast and the remaining five ships will then follow.

[Paul Blomfield]

The Minister will know that Sheffield companies have been key to the Royal Navy’s supply chain since we provided the tools to build wooden battleships such as HMS Victory. He will also know that there have been three HMS Sheffields, serving with distinction from the Arctic to the Mediterranean in the second world war, but the last was decommissioned in 2003. Does he agree that it would now be right to recognise the city’s contribution to the Navy by naming one of the Type 26 frigates, “HMS Sheffield”?

[Guto Bebb]

I thank the hon. Gentleman for his question. Indeed, he has written on this issue to the Secretary of State. The process by which ships are named is understood by the hon. Gentleman, and I agree entirely that the city of Sheffield has every right to be considered as a potential city to be named after in terms of the Type 26s, but the process will be followed as per the usual manner.

[Johnny Mercer (Plymouth, Moor View) (Con)]

The Minister will be aware that, on Monday, after much talk between Plymouth and Portsmouth, I launched a campaign to have the Type 26s port based in Plymouth. Will he meet me and a leadership team from Plymouth to outline why this key city in the nation’s crown deserves to have the ships port based there?

[Guto Bebb]

I would of course be more than delighted to meet my hon. Friend and a delegation from Plymouth. I was very pleased to visit Plymouth and was very impressed with what I saw—for example, the work on the refurbishment of the Type 23—so it would be a pleasure to meet that delegation from the great city of Plymouth.

[Chris Stephens (Glasgow South West) (SNP)]

Given that the Type 26s are currently being built by the greatest shipbuilders in the world, at the Govan shipyard, will the Minister also confirm the timetable for the Type 31 frigate and whether that will be built in Govan, too?

[Guto Bebb]

The Type 31 process is well under way. We are pleased with the number of consortia that have shown an interest in the Type 31, and I hope that the Clyde shipbuilders will be putting in a very good price, which will ensure that the Type 31 will be delivered on time and on schedule.

[Andrew Percy (Brigg and Goole) (Con)]

If we are to have an HMS Sheffield, we must certainly have an HMS Goole, because we are, after all, a port. More importantly, with Australia and Canada both likely to make decisions on the Type 26 this year—in the coming weeks or months—does my hon. Friend agree that getting those contracts will ensure we have sea-to-sea-to-sea interoperability? Does he also agree that having four of the “Five Eyes” powers on the same platform—New Zealand might also get it—would send a powerful message?

[Guto Bebb]

I agree entirely with my hon. Friend. The Type 26 presents us with an important opportunity for partnership working with Australia, Canada and perhaps New Zealand. The campaign in Australia has been strong, positive and upbeat, and I sincerely hope it will be successful.

[Judith Cummins (Bradford South) (Lab)]

7. What recent steps his Department has taken to develop the future accommodation model.

--- Later in debate ---

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

8. What assessment he has made of the effect on the defence and military aerospace industry of the UK leaving the EU.

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

The Ministry of Defence is working closely with the defence industry to understand the implications and opportunities presented by the UK’s departure from the European Union. Through our future partnership with the European Union, we want to explore how our industries can continue working together to deliver the capabilities that we need. It is, however, worth noting that current major European collaborative capability projects, such as Typhoon, are managed bilaterally or with groups of partners rather than through the EU.

[Mr Bailey]

Last month, we heard that the UK could no longer participate in the Galileo satellite programme post Brexit. That is a huge blow for our industry as a whole and our defence capabilities in particular. Will the Minister tell us exactly what he is doing about it?

[Guto Bebb]

I agree that the issue of Galileo is concerning. We have made representations at the highest level to both the European Union and the French Government. We believe that this is an important issue and that the UK’s contribution to the Galileo programme is significant. I think the hon. Gentleman will agree, however, that the European Commission’s comment that the UK would be a security risk is simply unacceptable.

[Richard Benyon (Newbury) (Con)]

Does my hon. Friend agree that it is crucial that any synergies in terms of industrial strategy across military expenditure should be concentrated on NATO, where there is a plethora of different weapons systems and pieces of equipment? It is much more important to concentrate on the fact that Britain is remaining a key player in the NATO alliance.

[Guto Bebb]

I entirely agree with my right hon. Friend that NATO is the mainstay of our defence capabilities, and I also agree that the relationship with NATO partners is significant and important for the future. From an industrial capability perspective, however, I think that the Prime Minister made a clear commitment to our willingness to work with our European partners in the future, and I hope that they will demonstrate the same good will in return.

[Graham P. Jones (Hyndburn) (Lab)]

Protecting our sovereign military aerospace capability is very important. However, the Typhoon orders will last only until 2026; we have no new orders for the Hawk until the Qatar deal comes through; and Taranis is being kept in a big hangar and we do not really know what is happening with it. What is the position of our UK aerospace defence industries? The lead time is at least 10 years. What discussions has the Minister had about the sixth-generation strike fighter, for example?

[Guto Bebb]

The hon. Gentleman will be reassured to know that my right hon. Friend the Secretary of State will meet the Qatari Defence Minister later this afternoon to discuss the Typhoon and Hawk orders. However, the hon. Gentleman is right to highlight the long time that it takes to develop new capabilities. We launched the combat air strategy so that we would have an idea of how we should proceed. The United Kingdom has a huge capability in this sphere and we need to build on it.

[Stephen Kerr (Stirling) (Con)]

The United Kingdom’s defence expenditure accounts for about 20% of total EU defence expenditure. What is being done to encourage our allies to up their defence spending?

[Guto Bebb]

I entirely agree with the sentiments expressed by my hon. Friend. I think it is fair to say that when Ministers—including me—meet our opposite numbers from the European Union, they stress the need for other EU countries that are in NATO to fulfil the 2% obligation. It is interesting to note that some of the Baltic states, for example, are very clear about their commitment, but we need some of the larger players in Europe to fulfil their obligations as well.

[Bambos Charalambous (Enfield, Southgate) (Lab)]

9. What recent discussions he has had with the Chancellor of the Exchequer on the adequacy of funding for his Department.

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[Julie Elliott (Sunderland Central) (Lab)]

T6. Although ships are no longer built in the north-east, many companies in the engineering supply chain are based there. What steps will the Government take to ensure that work comes to the north-east in future defence contracts?

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

I thank the hon. Lady for her question. One example we can offer is the current Boxer programme, which is at the assessment phase. Currently, we expect more than 60% of that to be onshore and going to the UK, but there are opportunities to increase that further. I have already had discussions with several companies based in the north-east on that very project.

[Andrea Jenkyns (Morley and Outwood) (Con)]

Following on from what has been said earlier about the cadet force, does the Minister agree that the cadets are a great introduction to military life, because as well as giving children positive role models, they help to promote social mobility? Will he update the House on what steps the Department is taking to encourage the participation of state schools in the cadet movement?