National Shipbuilding Strategy

Debate between Lord Beamish and Stuart Andrew

Thursday 11th July 2019 Westminster Hall

[Stuart Andrew]

If the hon. Gentleman will forgive me, I will come on to that point a little later, because I accept that it is an important element of where we need to get to to try to support our shipbuilding industries.

I was glad that the APPG’s report recognised the contribution from the UK’s shipbuilding and ship repair industry to the UK economy of over £2 billion; we should be mindful of that. I am fully cognisant of the need to obtain the right capability for our Royal Navy, at the same time as trying to ensure that we get good value for our taxpayers. That is why we are helping the industry to grow, compete and successfully win bids in the global market, as well as just in the UK market. That is part of our objective, and we will be looking at that more widely when we consider our approaches to a potential defence industrial strategy.

In my time in post, there has been a huge amount of focus on the fleet solid support ships, which I understand, but in terms of a successful UK shipbuilding industry, we should be looking much more widely, and the right hon. Member for North Durham made that point powerfully. All of our vision is for a shipbuilding sector that does not need a contract for a couple of non-complex warships; it could also work in the civil sector.[Official Report, 17 July 2019, Vol. 663, c. 10MC.] It is a globally competitive sector that is looking at how it can export high-value designs, systems, sub-systems, and integration work, so it can win commercial and defence contracts on its own merits.

[Mr Kevan Jones]

I understand the point that the Minister is making, but it is important that investment in Ministry of Defence contracts for ships in this country has a spin-off into the civilian sector, in terms not just of producing complete ships, but supporting marine engineering, architects and everything else. If we are to keep that leading edge, which feeds into civilian work both in this country and abroad, including in ship repair and refurbishment, that steady drumbeat of work and investment is needed.

[Stuart Andrew]

I said that I would come on to those issues a little later, and I promise I will—I will not hide from them.

The strategy is important for the Ministry of Defence, but I am keen that we look at this across Government too. For that reason, I have asked to meet the Minister for Business and Industry and the relevant Parliamentary Under-Secretary of State at the Department for Transport so that we can discuss how best to support UK shipyards, from the perspective of not only defence, but the opportunities that may exist for the commercial maritime sector and whether it is ready and prepared for them. I want this to be a cross-Government approach to securing the future of the industry.

The strategy sets out an ambitious plan to put the UK at the forefront of the technologies of the future. That is why investment in science, technology, and innovation is key, as they have the potential to drive improvements in productivity, to grow prosperity in the UK and to build an internationally competitive industry that is resilient to the peaks and troughs of both military and civil shipbuilding.

We have heard today about the success of the BAE Systems approach when it comes to the Australian and Canadian work; the company has also been successful in terms of the Royal Thai Navy’s offshore patrol vessel requirements. My right hon. Friend the Secretary of State has had conversations with both the previous and the current Secretary of Defence in the United States about whether the Type 26 and Type 31 might be appropriate and suitable for their requirements. That is something that she will continue to pursue, as will we all.

Of course, there are all sorts of other investments happening, such as the Royal Navy’s new autonomy and lethality accelerator. This £45 million programme will deliver rapid and ongoing transformational change across the maritime environment. The Royal Navy is also forging ahead with things such as the 3D printers that the right hon. Member for North Durham sent me a question about recently. There is a lot of work going on in that innovation area that will continue to support the wider supply chain to our industry.

A few hon. Members have mentioned the Type 31e programme, so I will give an update. It is, of course, a pathfinder for the delivery of the new shipbuilding and capability vision set out in the strategy. We announced the award of contracts for the competitive design phase in December. I am pleased to say that the competition is still on track, and it is our intention to announce the outcome of the competition for the design and build of the ships by the end of the year. It has been a vibrant and healthy competition.

I take the point that the hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones) made regarding the value. I have been checking throughout the price we have, which is £250 million per ship. We made some initial adjustments to make it tie in with the way we have procured other warships in the past, so we have taken costs such as Government-furnished equipment out of that £250 million. The Royal Navy assures me—both I and the Secretary of State have been quite robust with it—that the capability we will receive will meet its requirements; it has given us that absolute reassurance, and it is looking forward to receiving the ships.

I will go over some of the other points that have been made. In opening the debate, the right hon. Member for North Durham rightly talked about the skills agenda—I will come on in a minute to the points about the supply chain. He is absolutely right that we must ensure that we learn the lessons from the submarine programme. It has been blindingly obvious to me, as I have been learning this job, that ensuring that Barrow is right up there again and capable of delivering our submarine programme has been a major challenge.

Coming on to the drumbeat, it is our intention to ensure that the industry has that 30-year plan of what the Royal Navy’s requirements will be, so that it can see where the opportunities will arise and where there may be potential gaps that it may need to fill. That said, we have of course provided 20 years’ worth of work on the Clyde. I will comment in a minute on what my right hon. Friend the Secretary of State is doing in this area, because it will be incredibly important.

[Steve McCabe in the Chair]

I have heard a number of people say that the FSS are warships, and that no other country in Europe buys its support ships or other ships from international orders. That is not quite true: for example, Germany had an international competition for its multi-purpose frigate, Norway has procured a support ship from South Korea and five frigates from Spain, Australia has had two support ships from Spain, and New Zealand has an auxiliary ship from South Korea. It is not true to say that all those countries always have their ships built in their home countries.

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[Mr Kevan Jones]

rose—

[Stuart Andrew]

I will give way to my right hon. Friend, but there will be a fixed budget, and we must get the best we can out of that money.

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[Stuart Andrew]

I had better give way to the right hon. Member for North Durham first, and then I will come back to my right hon. Friend.

[Mr Kevan Jones]

On the MARS tankers, when the Minister is asking for the costings, could he ensure that the costs of the assessment phase, which I think were nearly £100 million, are included? I am also led to believe by industry that some of the costs were incurred because of the poor workmanship and other issues that surrounded it, so what was seen, on ticket price, to be very competitive was overall quite expensive.

[Stuart Andrew]

I assure the right hon. Gentleman that the report we commissioned will look at every single aspect of that, including the benefit to the supply chain in the United Kingdom. There is some evidence that a number of UK supply chain companies have seen their international work increase as a result of being part of that. We are formulating our response to the review of the strategy.

Oral Answers to Questions

Debate between Lord Beamish and Stuart Andrew

Monday 8th July 2019 Commons Chamber

[Stuart Andrew]

I recognise the important role that my hon. Friend played in ensuring that the GE facilities were maintained in Rugby. I agree that it is absolutely vital to ensure that the defence sector has the right skills to meet all our needs. Many of our suppliers have well established programmes and schemes to ensure that that happens, and we continue to work through the Defence Suppliers Forum and the Defence Growth Partnership to ensure that those skills and training are maintained.

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

rose—

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[Mr Jones]

The Secretary of State highlighted in an earlier answer the importance of the prosperity agenda for defence contracts. I know that the Minister has read the recent report on shipbuilding and ship procurement in the UK by the all-party parliamentary group on shipbuilding. Will he tell the House what weighting will be given to prosperity in awarding the fleet solid support contracts?

[Stuart Andrew]

I was looking at the two right hon. Gentlemen and wondering whether it was more like Waldorf and Statler, but I will not be so rude—although I have just have been. The right hon. Gentleman is absolutely right: when we look at the contracts, not just for the shipbuilding but for the content within, there are huge opportunities for the UK supply chain, where much more of the value exists. I recognised that in his all-party group’s recent report, and his and other right hon. and hon. Members’ work will inform much of the decision making on our future policy.

Oral Answers to Questions

Debate between Lord Beamish and Stuart Andrew

Monday 20th May 2019 Commons Chamber

[Stuart Andrew]

I thank my hon. Friend for her question. She will be aware that Sir John Parker is currently doing a review of his initial report. International competition is also about encouraging UK industry and UK shipyards to be as competitive as possible, so that they can not only maximise the opportunities that UK defence offers, but take advantage of competition around the globe, too.

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

The Minister said that this is to make UK yards more efficient, but what they need is throughput of work. His Department has chosen to put the contract for the fleet solid support vessel into international competition. What weight was given in that decision to his Government’s prosperity agenda, our sovereign capability and the need to protect UK shipbuilding?

[Stuart Andrew]

That is precisely why the Type 26s, Type 31s and aircraft carriers were built in the UK, so that we could maintain that capability here in the United Kingdom. The right hon. Gentleman might be aware of the speech that the Secretary of State recently made, and part of what she is doing is a review into the MARS—military afloat reach and sustainability—tankers, to ensure that we look at the exact experiences with that and take lessons from it.

UK Sovereign Capability

Debate between Lord Beamish and Stuart Andrew

Tuesday 20th November 2018 Westminster Hall

[Stuart Andrew]

There were issues with the start of the procurement process. We have reset that, and I reassure the hon. Gentleman that we are sticking to delivery of the first one by the end of 2023. We have made that commitment; this is an ambitious project, and we are determined and working incredibly hard to ensure that we catch up any time that may have been lost. Each time I have updates, I get more optimistic about how we are progressing.

Many Members have talked about the FSS. It is not quite true to say that the Norwegians are building theirs—they are not, actually. They are being put out to international competition and are being built in South Korea. Australia and New Zealand have taken the same approach as us. We have been clear that a warship is as characterised in the national shipbuilding strategy.

[Mr Kevan Jones]

You are hardly making a warship, though.