Defence Industries: North-East

Jonathan Brash Excerpts

Tuesday 13th May 2025 Westminster Hall

[Luke Myer]

I agree. The increase in defence spending an opportunity to uplift regional economies and tackle regional inequality. However, I do not want to talk down our region because we do have firms, large and small, that are contributing to our national security and industrial resilience, including Babcock in Newcastle, Nifco in Stockton, Merlin Flex in Hartlepool, Draken at Teesside airport, Tees Components in my constituency, and many others. I am proud to champion Tees Components, a family-run business based in the small village of North Skelton. It delivers world-leading precision engineering for projects including our Astute-class submarines. That is our region in action.

[Mr Jonathan Brash (Hartlepool) (Lab)]

I thank my hon. Friend for mentioning Merlin Flex from my constituency. I had the pleasure of visiting Merlin Flex recently, and people there have talked in such positive terms about the growth and expansion that they are seeing. Does he agree that the unprecedented, record injection of cash that the Labour Government are putting into defence has the ability to transform regions such as ours? Does he also think that it is critical that we support the small and medium-sized enterprises that need help to access those funds?

[Luke Myer]

I completely agree. I have one note of caution for our region: although we have fantastic manufacturers and SMEs, it is important for our regional economy—the one my hon. Friend and I share—to have a proper skills pipeline. There is a real job for our combined authority and our mayor to step up and work with education providers to ensure that proper planning is in place. My hon. Friend has a fantastic college in his constituency—Hartlepool college, which has inspirational leadership from its principal, Darren Hankey—but such colleges need to be joined up with local manufacturers, so that there is a proper skills pipeline.

All those manufacturers are vital for delivering local skills. Many of them offer advanced training and apprenticeships and ultimately provide high-quality, well-paid jobs in the areas that need them most. I recently met various manufacturers, both prime and SME, to discuss the issues that they face. They strongly welcome the Government’s decision to identify defence as one of the eight growth sectors in the industrial strategy. One manufacturer told me that it “puts defence in a different place” from where it was before. Manufacturers also welcome the decision to increase defence spending to 2.5%, the strategic defence review, the progress on trade with the US and the decision to step in to save British Steel. This Government are stepping up, not stepping back, and putting our strategic industries on a secure footing.

Just four months ago, I spoke in this Chamber during a debate secured by my hon. Friend the Member for Newton Aycliffe and Spennymoor (Alan Strickland) on the challenges that SMEs face in defence procurement. I called for better access for SMEs to the pipeline. I was therefore pleased to see the Government’s recent commitment to set direct SME spending targets, and I hope that the Minister will provide further clarity on when those will be published. As it stands, SMEs in the defence sector are often contracted for one-off, short-term jobs, and that can create challenges. The unpredictable, project-based nature of the contracts makes it difficult for companies to commit to the up-front capital investment needed to grow.