Defence: Industrial Strategy

Lord West of Spithead Excerpts

Monday 27th February 2017 Lords Chamber

Asked by

[Lord West of Spithead]

To ask Her Majesty’s Government, in the light of their plans for a national shipbuilding strategy and significant investment in the United Kingdom defence nuclear enterprise, whether they intend to develop an overall defence industrial strategy.

[The Minister of State, Ministry of Defence (Earl Howe) (Con)]

My Lords, the Ministry of Defence is actively involved in the cross-government work on an industrial strategy. Many of the themes in this apply to defence, and we do not plan a separate defence industrial strategy. A substantial amount of work is already under way to encourage the growth and competitiveness of UK industry, including as part of the commitment in the strategic defence and security review to refresh defence industrial policy.

[Lord West of Spithead (Lab)]

My Lords, although I like the cut of the noble Earl’s jib, which is not surprising considering his naval pedigree, I am disappointed by the Answer. There is a complete absence of analysis of the defence industrial base and no proper study of its real costs. These were identified in the King’s College study instigated by the noble Lord, Lord Sterling, but nothing seems to have been done to focus on them. We know very well the value for this nation of things such as the agile supply cycle, but we also know their value in terms of jobs, through not having to pay welfare payments or unemployment benefit. There are all these benefits, yet we do a simple calculation of costs, which does not make sense. Does the Minister not agree that we have to look very closely at the real cost of equipment and weapons before we decide to buy from abroad, with a loss of jobs, a loss of agility and a loss of ability to keep running our systems here, and that we really must get the balance right rather than taking the simplistic approach of saying, “This costs £4 there and £5 here”?

[Earl Howe]

I agree with the central thrust of the noble Lord’s proposition. As I said, many of the industrial strategy themes, particularly around removing barriers for UK companies to do business with government are well aligned with our refreshment of defence industrial policy. It is all about updating our terms of trade with industry to continue to deliver the best equipment for the Armed Forces at the best value for money, but in a way that supports UK industry to grow and compete successfully. That is the balance we are trying to strike.