Ministry of Defence

John Hayes Excerpts

Monday 26th February 2018 Commons Chamber

[Mr Sweeney]

Absolutely. My hon. Friend has made an excellent and salient point. He and I are both members of the all-party parliamentary group on shipbuilding and ship repair, which is currently undertaking a study of that issue. According to another study, conducted by the Fraser of Allander Institute at the University of Strathclyde, the overall benefit to the UK economy per annum from the shipbuilding industry on the Clyde alone is £366 million a year, in purely multiplier effects. As for the idea that we can competitively tender programmes overseas, we are losing the opportunity of industrial benefit as well. We are not just talking about the loss of core capabilities; we are talking about the loss of revenue and economic potential for our country.

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

I know that the hon. Gentleman has no intention of being churlish or unhelpful. He will, I am sure, acknowledge that having a shipbuilding strategy, together with a maritime growth strategy, is a particular feature of this Government, which marks them out from their predecessors of all political persuasions.

[Mr Sweeney]

I do not accept that point. It was a Labour Government who, in 2005, introduced the first defence industrial strategy, which defined a far more robust way of delivering shipbuilding capability in the UK. It defined key industrial capabilities, and that is sorely lacking from the Government’s current shipbuilding strategy. I hope that there will be some improvement as a result of the ongoing discussions on the matter.

[Mr Hayes]

I cannot believe that the hon. Gentleman has misunderstood me. Perhaps I did not explain myself carefully enough. I commissioned the maritime growth study, and it was the first for donkeys’ years, so I am not quite sure what the hon. Gentleman means.

[Mr Sweeney]

That may have been a discrete maritime growth strategy, but the overall defence industrial strategy encompassed maritime aspects. However, I welcome the right hon. Gentleman’s efforts in that regard, and I hope that we can work constructively to improve the strategy in the manner that I suggested.

The funding of large-scale equipment programmes must be revisited as a matter of urgency, because it is not sustainable. The annual limits on key programmes that are multi-generational cannot be allowed to continue. When we were looking at the programme for the construction of the Type 26, we wanted to invest potentially half a billion pounds in reinvigorating the infrastructure that would support it, but because of the arbitrary in-year spending profile we could not invest in the infrastructure and facilities that would have benefited the programme throughout its life cycle, and we therefore lost that long-term benefit. For the sake of short-term savings, we are losing long-term efficiency in the generation of defence capability. That may be an answer to the question from the hon. Member for Gainsborough about whether we were receiving the maximum benefit. Perhaps if we sow the seeds of the maximum capability at the start of programmes, we will reap the benefits of efficiencies through the manufactures that result from those highly complex programmes.

Defence inflation and the need to pump-prime programmes at the start to ensure that they meet world-class standards are just a couple of the issues that we need to challenge if we are to get the most out of our industrial capability. I hope that the Secretary of State will take those comments on board.