Defence Industry and Shipbuilding

Kevin Foster Excerpts

Wednesday 11th July 2018 Commons Chamber

[Kevin Foster (Torbay) (Con)]

Thank you, Mr Deputy Speaker—it makes quite a change to be called early in a debate. It is a pleasure to follow the hon. Member for Glasgow South (Stewart Malcolm McDonald).

Some people will be wondering, “Why is the MP for Torbay rushing to speak in a shipbuilding debate? Surely the south-west is just about tourists, fishing, farmers and a few other bits.” Well, I know that the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) will be talking about the huge importance of the Devonport naval base. If we look at the figures from the House of Commons Library on employees in shipbuilding in 2016, we see that there are 12,000 in the south-west—even more than in Scotland or the north-west, which we might traditionally associate this industry with.

It is wonderful to note the new-found enthusiasm of the leader of the Labour party for the defence industry in the UK. I will leave those comments there, because I would rather we had a more positive debate, but it is certainly a contrast with some of the views he has expressed over the last three decades.

[Simon Hoare]

Will my hon. Friend give way?

[Kevin Foster]

I will not, because I am conscious that there is quite a queue of Members wishing to speak. While this is an Opposition day debate, there are many Members with significant constituency interests who would like to speak.

In terms of the investment, it is welcome to see the new carriers coming into the fleet and the new Dreadnought-class submarines already under construction, which will hopefully be refitted in Devonport in the years to come, when they have entered the main service of the fleet. It is good to hear about other investment projects. We are seeing our Royal Navy become more competent and capable, with even more of a global reach. It is welcome to see that we are back in the South China seas, looking seriously at the British national interest out in the Pacific region.

While I have some sympathy with one or two parts of the motion, which I will come to, we have to think coherently about what we are saying. If we keep saying that these contracts—contracts that are not internationally recognised as something that should be national only—should be UK-only, we start to go down the path of the nonsense arguments that have been used in the steel industry in the United States. Donald Trump has used a nonsense argument about national security to put tariffs on Canadian and European steel. Let us be quite candid: Canada and the UK are some of the strongest allies of the United States. We share the most sensitive intelligence with one another, so it is an absolute nonsense to suggest that there is a national security angle to who sells steel from this country to the United States. That is where I part company with some of the Labour party’s arguments.

The part of the motion on procurement criteria is perfectly reasonable, and I will come to that, but if we keep saying that certain contracts must be UK-only, we begin a trend of protectionism. We cannot on the one hand rightly say that Donald Trump is talking absolute nonsense about steel, but on the other adopt a policy like that ourselves, potentially against foreign—

[Mr Kevan Jones]

Will the hon. Gentleman give way?

[Kevin Foster]

I will, but very briefly.

[Mr Jones]

Could the hon. Gentleman give me an example of a single country in the world, including the United States, that would have procured these naval ships from overseas yards?

[Kevin Foster]

I thank the right hon. Gentleman for his intervention. Sadly for him, if he had waited until I got to a later part of my speech, he would have heard me talk about the Republic of Ireland, which is building naval ships at the Appledore shipyard in North Devon. He asked me to name one country in the world, and he has got one: the Republic of Ireland. I do not think I will take another intervention if knowledge is so limited that even our closest neighbour is not known about.

[Mr Ellwood]

I just want to make a technical point. One reason why we are in this situation is that the Royal Fleet Auxiliary, as I mentioned, is made up of civilians. Most nations that have advanced naval capability have support vessels that are part of their naval fleet; it is for sovereign capability that those ships are built in that way. They do not have even the freedom to offer that elsewhere.

[Kevin Foster]

I thank the Minister for his intervention.

The part of the motion I have sympathy with is about ensuring that when we engage in procurement exercises the criteria take into account the wider benefits of using particular contractors. One of the things I am slightly concerned about is the idea that buying from the UK is something we are only going to do if we have a protectionist policy in place. As is shown by the example I have just been able to give of Babcock building ships for the Irish navy, our industry is perfectly capable of winning contracts in the international market. That is because of the quality of the teams, the quality of the product and the cutting-edge nature of some our technology. The recent Australian navy contract won by BAE, which has already been mentioned, will see the export of our knowledge and expertise—many small and medium-sized enterprises in the UK will get jobs and contracts out of that decision—and it is a sign of the quality we can offer.

It is almost doing down our industry if we stand up in the House and say to its potential international customers that the only reason we would want to buy from it is if we were required to do so, because that is simply not the case. Our industry has moved on hugely, and it is a cutting-edge and competitive one. It is disappointing that more Members have not got up and said that in this debate. I must say that Members on both sides of the House have implied there would be a massive cost to buying here in the UK, whereas we can actually win contracts overseas.

For me, it is clear that our industry can go out and compete properly for work, based on criteria that take into account the wider benefit of delivering a particular contract in a UK yard. I want to see these ships built in the UK and I want a yard to win that contract. I want us to be able to go out and say to our international competitors that that was done because our shipbuilding industry put in a good bid, at a good price, and could deliver exactly the right product and one that they would want as well. Let us be candid: if global Britain is about saying, “We want to sell everything to you, but there is no way we’re going to buy anything in return,” it will not be particularly successful.

In every trade deal we sign, we should rightly look to include protections against subsidy or state aid. In the same way that we would look to stop the dumping of steel via tariffs, we should make sure that a procurement contract deals with any nation wanting to subsidise it with a view to having an unfair competitive advantage. Again, fair criteria would deal with that.

[Mr Sweeney]

The hon. Gentleman has perhaps heard of learning curves, which drive efficiency and productivity improvements, but that relies on a consistent drumbeat of work in order to hone efficiencies. His prescription militates exactly against such efficiencies being achieved.

[Kevin Foster]

I completely and utterly disagree. We can have such criteria, but I am saying that telling everyone else in the world “You can buy from us, but we aren’t going to buy from you” is absolute nonsense.

The idea that our industry is unable to drive efficiencies, deliver savings and, on contracts, deliver good-quality products at the right price for customers who want to buy them is actually doing down the industry. We did not win the contract at Appledore because the Irish navy said it could buy only from shipyards located on the Irish sea; we won it because it was right, Babcock having put in an excellent bid for the contract. Sadly, the right hon. Member for North Durham (Mr Jones) could not himself name one country that would bid for such a contract—for a naval ship—abroad.

For me, it is absolutely right that we encourage people to put bids together. It is right that we have criteria—this is where I have sympathy with a lot of the Labour motion—that look to deliver products from companies based in the UK. However, I would say to Members that we cannot come to the Chamber one day and whine about the nonsense arguments about the steel industry in the United States, and then pop back here the next day and use almost the same arguments, in another context, about one of our own industries.

I believe that our shipbuilding industry will benefit from the fact that we have a big supply line order for the Navy, and that it will strongly benefit from long-term maintenance as well. I am the son of dockyard worker. My father did not build ships, but he spent 37 and a half years maintaining and repairing them. It is quite sad to hear people dismiss the after-work as something rather minor, because it is actually a massive part of a contract. The vast majority of the money spent on the Dreadnought class will be in the maintenance and refitting of the submarines over their whole lifetimes.

For me, this debate is welcome, and we agree with elements of the motion. There will now be some pretence that I have argued such ships should be built abroad. No, I have argued that we need to have a consistent policy as a nation, because if we are not consistent, we cannot expect others to be consistent when they are dealing with our industries.