AUKUS Defence Partnership

Lord Stirrup Excerpts

Thursday 16th March 2023 Lords Chamber

[Lord Stirrup (CB)]

My Lords, the AUKUS programme, if executed well, will be very good news for this country. If executed badly, it could be a disaster. The Minister has given us some comforting words on reforms to procurement processes and engagement with industry, but it must be said that the performance of BAE Systems Submarines has been pretty woeful in recent years. Of course, it is not for the Government to run private companies, but industrial performance in this programme will be of strategic importance to this country. What long-term mechanisms and processes are in place to monitor and audit industrial performance, and what leverage will the Government have over the industries concerned? Industrial underperformance in this programme will need to be dealt with swiftly and ruthlessly—something that has not happened before.

The Minister said that the senior responsible owner would be in place for a “meaningful period”. What does she mean by a “meaningful period”? With regard to skills, which are a crucial area in this programme, she talked about what the Ministry of Defence is doing, but this is surely a nationwide issue requiring a nationwide effort. If this ambitious programme is to succeed, we will need all sorts of skills and all sorts of different people. Industries across the country are suffering from shortages—they cannot find sufficient welders—so is there not a case for a government-wide approach to ensure we have a sufficient skills base for such ambitious programmes as this?

[Baroness Goldie (Con)]

The noble and gallant Lord makes a number of important points; let me try to deal with them.

On the management of contracts and the willingness to have teeth and bite where that is necessary, I think the noble and gallant Lord would be encouraged to see the complete difference in approach in the MoD now compared with some years ago. That is partially because the MoD has woken up to the need to be much more effective in how it manages these enormous contracts with vast sums of taxpayers’ money. To be honest, it is also because we felt the bite from teeth—from your Lordships in this Chamber, from our friends in the other place, and from entities such as the National Audit Office and the Public Accounts Committee. These were unpleasant experiences for the MoD but what they signalled was an absolute need to radically reform and revise what we were doing.

In addition to all that, the one word of comfort I can offer to the noble and gallant Lord is this: bear in mind that this is a trilateral arrangement and agreement. There is, therefore, a triumvirate interest in ensuring that nobody is slipping and everybody is keeping up to the mark. That will be an added enhancer to how we monitor and regulate the performance of the contract.

On the important matter of skills, industries are already engaged—I have seen it at first hand—in really imaginative programmes in their communities with young people. I have been hugely encouraged when I have seen how they operate in different parts of the country. They are engaging with both primary and secondary schools. They are making these critical connections with young people, many of whom then make the choice not only to follow a career in technology but to do it with a particular company. That is one very positive way of trying to increase the skills base available to our industry partners.

At government level, particularly in the Department for Education, there is a recognition of the unrelenting need to reappraise constantly how we seek to improve the provision of skills and ensure that education is aligned with what the economy and industry are asking for. I do not have at my fingertips the details of what we have done so far but I would be happy to write to the noble and gallant Lord about that.