National Shipbuilding Strategy

Michael Fallon Excerpts

Wednesday 6th September 2017 Commons Chamber

[The Secretary of State for Defence (Sir Michael Fallon)]

With permission, Mr Speaker, I wish to make a statement. This Government are committed to a strong Royal Navy and a strong economy that benefits every part of the UK. Today I am publishing the national shipbuilding strategy, the means by which we plan to bring these two strategic goals together. Copies are being placed in the Library and on the Government website. This strategy will transform the procurement of naval ships, enable the fleet to grow by the 2030s, energise the United Kingdom’s maritime industry, and increase skills, exports and prosperity across our country.

In the 2015 strategic defence and security review we committed to developing a national shipbuilding strategy, because we acknowledged that previous procurement of surface ships had been problematic. Sir John Parker, a well respected expert in this sector, was appointed to produce an independent report to inform the strategy, and that report was published in full last November. Sir John analysed where previous approaches had fallen short, and identified a “renaissance” in United Kingdom shipbuilding. He made 34 recommendations in total. I am pleased to report today that we have accepted all of Sir John’s recommendations for the Government, and have either implemented them already or have a plan of action to do so. I would like to place on record once again my thanks to Sir John for supporting us.

The strategy focuses on surface ships and makes clear this Government’s commitment to an ambitious programme of investment in a growing Navy. In the post-Brexit world, the need for us to project our influence and to keep reaching out to friends and allies alike will be more important than ever. That is why we now propose to invest billions in the Royal Navy over the coming decade. Our future fleet will include our two mighty flagships, the Queen Elizabeth aircraft carriers; the next generation Dreadnought submarines; the Type 45 destroyers; and a phalanx of new frigates—not just Type 26 global combat ships, but a flexible and adaptable general purpose light frigate, the Type 31e—as well, of course, as the Astute class submarines and five new offshore patrol vessels.

I am pleased to announce in the House today that the Government plan to procure the new Type 31e frigates. We will order a first batch of five such vessels, with the first to be in service by 2023. The Type 31e will enable us to refocus offshore patrol vessels and other craft on their core patrol and protection roles, while the Type 31e ships will maintain and project the presence we require to deliver security in an uncertain world. In turn, that will allow the high-end capabilities of the Type 26 frigates and the Type 45 destroyers to focus on maritime task group operations—particularly carrier strike—as well as the protection of the nuclear deterrent. As its name implies, the Type 31e will be designed from the start as an exportable vessel, meeting global needs for a flexible and adaptable light frigate. We will test the concept of distributed block build during the procurement competition.

This procurement will be the first demonstration of our new strategy in practice. The new frigate will be procured competitively, providing an opportunity for any shipyard across the UK to bid for this programme of work. The strategy confirms, in the clearest statement of this policy for a decade, that all warships will have a UK-owned design and will be built and integrated inside the United Kingdom. Warship build will be by competition between United Kingdom shipyards. We will of course encourage United Kingdom yards to work with global partners, where they meet our national security requirements, to ensure that the vessel is fully competitive on the export market. We will also encourage UK yards to participate in the ongoing fleet solid support ship acquisition programme.

These several programmes will secure hundreds of highly skilled and well paid jobs on the Clyde and throughout the UK, bringing opportunities for high-wage and high-skill employment, growth and prosperity. Our research indicates that maritime industries in the UK employ about 111,000 people in nearly 7,000 companies, contributing £13 billion to our economy, of which the shipbuilding and repair element alone contributes about £2 billion.

This is a strategy for industry as much as for the Government. Delivering these new ships means that we will need a strong shipbuilding sector as part of a wider marine engineering sector. That includes the shipyards, their suppliers, those who manufacture and support the equipment for these ships, and the skilled workers who support those companies. Industry and the trade unions were involved as we developed the strategy, and I thank them for their contribution.

This programme of investment represents further opportunities for the sector to compete for and win work for the Royal Navy and for overseas customers, in turn enabling further investment, greater productivity and growth. The strategy makes it clear how the Government now intend to work with the marine engineering sector to support and enable that growth. In turn, we expect the industry to raise productivity and innovation, and to improve its competitiveness in domestic and overseas markets. That, in turn, should better insulate shipyards from the peaks and troughs of Royal Navy business, and bring more sustained growth and prosperity in the regions where those businesses are based.

The strategy makes it clear how the Ministry of Defence will grip and drive pace into ship procurement. We have already implemented a new governance structure that will ensure early and senior oversight of ship procurement programmes. Additional and expert external support will be provided to Navy Command and the Type 31e project team to ensure that they can execute their responsibilities at speed. There will also be a new structure to oversee the delivery of Type 31e and Type 26, building on the lessons learned from the carrier programme. We will reap the benefits of these changes as we build and support a modern Royal Navy that will grow in size by the 2030s. We are committed to meeting the undertakings set out in this strategy, but delivering its ambitious vision will require a joint effort between the Government and the industry. I commend this statement to the House.

[Nia Griffith (Llanelli) (Lab)]

I thank the Secretary of State for his statement, and for advance sight of it.

I welcome the fact that this strategy has finally been published—we all want a secure future for this country’s world-class shipbuilding industry, and this represents a step in the right direction—but may I ask the Secretary of State why on earth it has taken so long? He announced this strategy more than two years ago, and Sir John Parker’s report to inform it was out last November. We were told we would finally see the strategy in the spring, and back in May the defence procurement Minister, the hon. Member for West Worcestershire (Harriett Baldwin), said that it was ready, so why have the shipbuilding industry and its workers been kept waiting for so long?

The strategy repeats the Government’s stated aim of bringing the Type 31e frigates into service from 2023. As that is just six years away, will the Secretary of State set out more detail of the timetable? When will the contract be put out to tender, and when does he hope to announce the successful bidder? What discussion has he had with the industry about whether the £250 million cap for the Type 31e is achievable? We know that the defence budget is already under considerable strain, so what contingency is in place in case costs overrun?

The Government’s commitment to a shipbuilding strategy must be complemented by a comprehensive industrial strategy. We need more than warm words, so may I ask the Secretary of State how he intends to maximise opportunities for the UK supply chain? Will he, when determining best value, commit to giving weight to the positive impact on local economies and employment opportunities in awarding contracts?

The news that only 50% of the steel in the Type 26s is UK sourced is disappointing. How do the Government intend to improve on that for future contracts?

The strategy rightly focuses on the export opportunities for UK shipbuilding, and orders from overseas will be important in ensuring steady work for shipyards across the UK. Given the fierce global competition, what strategies will the Secretary of State implement to secure orders from foreign buyers?

We must ensure that uncertainty surrounding Brexit does not dissuade companies from operating here, or our allies from wanting to buy British. What active steps are the Secretary of State and his ministerial colleagues taking to facilitate the best possible operating conditions so that British and European defence companies are not deterred from investing here?

As well as investing in our naval fleet, we must invest in the men and women who serve in our Royal Navy. We know that there is a crisis in recruitment and retention across the three forces, with the Navy currently under strength and the Government on course to miss their target on personnel numbers. Will the Secretary of State set out specific steps to ensure that that sorry situation does not continue?

[Sir Michael Fallon]

I am grateful to the hon. Lady—I think that that was a welcome for the strategy, even though she had some detailed questions. Let me try to answer the, I think, seven of them.

First, Sir John Parker did report at the end of last November and we initially hoped to publish the strategy in early summer. The hon. Lady asked why it had been delayed. I think I recall a general election around that time—she may recall it, too. There was therefore necessarily a delay. We have now introduced the strategy—I wish it had been a few months earlier.

Secondly, the hon. Lady asked when we intend to start placing the orders. We will run the competition at pace next year. We hope to place the order by the end of next year and start the building programme in 2019.

The hon. Lady asked about contingency. The problem with naval procurement under successive Governments for many years has been cost overruns. The frigates will be procured in a completely different way. We are setting a price per ship and challenging the yards to come up with the right bids to match that price. It is a reasonable price and it is now up to industry to meet it.

I hope that the eventual winner—or winners—of the tender programme will be encouraged to show us how it proposes to involve its local supply chains, and certainly the British steel content it can provide. Not all specialist steels for shipbuilding are made in this country, but we certainly encourage the use of British steel. We now have the means to do that through the procurement policy, which enables us specifically to consider that factor when weighing up the different tenders.

The hon. Lady asked about exports. It is a sad fact that we have not exported a new warship from this country under any Government since the 1970s. The new frigate is specifically designed to be exportable—a ship that other navies want to use. We already have an intensive export campaign for the Type 26 frigate. I have been championing its case in Australia, which is about to purchase an anti-submarine frigate, and also in Canada. I assure her that the Type 31e will be designed for export and we will put the full weight of Government behind that campaign.

The hon. Lady asked what we are doing to secure British defence companies’ continued participation in the European market after Brexit. We will shortly publish how we see the future of foreign policy and of defence and security policy in the new partnership that we want with the European Union. That will include our view of future participation in European defence programmes and funding.

Finally, the hon. Lady asked about manning in the Royal Navy. It is currently over 97% manned. We are spending a great deal of money on recruitment marketing and improving retention in the Royal Navy. We have spent some £40 million a year on recruitment marketing for the Royal Navy. She will have noticed that unemployment in this country is the lowest for 40 years. The Royal Navy, like many other large organisations, has to compete with other sectors of the economy, but I assure her that we will ensure that it does so. She will recall from the strategic defence review of two years ago that we are increasing the number of personnel in the Royal Navy by 400 sailors to man the additional ships.

[Dr Julian Lewis (New Forest East) (Con)]

Where warships are concerned, quantity is a form of quality because even the most powerful warship can be in only one place at any one time. I therefore warmly welcome the strategy, particularly its acknowledgement, in the section on strategic context, that:

“There is a need for greater volume in the destroyer and frigate force if we are to deliver the required operational flexibility.”

The Secretary of State mentioned the 1970s. He will know that in the 1970s we had as many as 70 frigates and destroyers. In the mid-1990s, we had 35 frigates and destroyers, and successive Governments incrementally reduced that to 32, 31, 25 and our current total of 19, which the Select Committee on Defence described as “woefully inadequate”.

My right hon. Friend is entirely on the right lines in saying that we need to grow the fleet. Will he do everything in his power to ensure that what happened to the Type 45 destroyers, and to some extent to the Type 26 frigates—as the build went on, they became increasingly complex and expensive so that we ended up with fewer ships at the end of the process—does not happen to the Type 31e?

[Sir Michael Fallon]

The light, general-purpose frigate is specifically designed to avoid that fault, which, as my right hon. Friend said, has plagued previous programmes.

My right hon. Friend took us back to the 1970s. Perhaps only he and I now remember them and what happened then. I note his comments about the number of ships. I gently say that today’s ships are of course much more powerful than those that were involved in, for example, the liberation of the Falklands, and that although they can be in only one place at once, they can fight conflicts at different ranges at the same time.

It is my ambition to grow the fleet. We are expanding the Royal Navy. If industry can rise to the challenge and deliver the frigates to time and in the price cap that we specify, it will enable us to expand the Royal Navy beyond the numbers set out in 2015.

[Stewart Malcolm McDonald (Glasgow South) (SNP)]

I thank the Secretary of State for the statement and for advance sight of it. I welcome—finally—the publication of the national shipbuilding strategy. I had started to think that we would never get there.

However, the Secretary of State did not get off to the best start this morning. What is it with his interviews with Scottish journalists? He came out with a howler on “Good Morning Scotland”, claiming that there was already a frigate factory on the Clyde. That is quite something, because only three weeks ago my hon. Friend the Member for Glasgow North West (Carol Monaghan) and I met workers on the Clyde, who were asking for that very thing. Has not the Secretary of State reneged on his promise and should he not put that right at the Dispatch Box today?

Since 2005, we have had the defence industry strategy, the 15-year terms of business agreement with BAE, and a consolidated shipbuilding plan for the Clyde that led to many job losses. Workers there are asking whether the Ministry of Defence will see any of its promises through.

The Govan and Scotstoun yards were promised 12 Type 45 destroyers; we got six. They were promised 13 Type 26 frigates; so far, we have three. As for the world-class frigate factory which the Secretary of State seems to think exists, I can tell him right now that there are journalists in Scotstoun trying to find it. How can the workers in those yards believe the Secretary of State’s promise that there will be work for them until 2035?

More broadly, as was mentioned by the hon. Member for Llanelli (Nia Griffith), behind the historically low level of the escort fleet lies a low-manning crisis. Will the Secretary of State say more about what he is going to do to resolve that issue?

--- Later in debate ---

[Sir Michael Fallon]

First, let me make it very clear that it ill behoves members of the Scottish National party to pose as friends of the Clyde when they would decommission our nuclear submarines, which would halt work on the Clyde on the frigates that would protect those submarines.

Secondly, the hon. Gentleman is wrong about the frigate factory. There is a frigate factory on the Clyde, namely the Govan and Scotstoun yards, to which I gave 20 years of work back in July when I cut steel on HMS Glasgow, the first of the heavy anti-submarine warfare frigates. I gave 20 years’ worth of work to the Clyde, and, as a result of today’s announcement, it will be able to bid for the lighter frigate as well. He will clearly never be satisfied. There are 20 years of work and the contract for the first three frigates is worth £3.7 billion, but he is still not satisfied.

As for manning, I have already explained to the House that the Royal Navy, like the other two services, is just over 96%, or 97%, manned. We are spending a lot of money on recruiting to fill the remaining gaps, and to ensure that we can continue to offer a rewarding, highly valued career in the Navy.

[John Redwood (Wokingham) (Con)]

I welcome the statement. Will the Secretary of State confirm that the same model could be applied to other areas of defence procurement to ensure more British content and more export capability? Will he also confirm that when we are out of the European Union we may be able to spread the model beyond defence, because we shall be able to make up our own procurement rules across the board?

[Sir Michael Fallon]

We will indeed be able to set our own procurement rules, free of some of the constraints that have resulted from our membership of the European Union. It is true that we need to improve the way we have procured our naval vessels in the past, and to start sending new-build ships out across the world again. Many other navies in the world are looking for lighter frigates, offshore patrol vessels and new vessels of all kinds as the global picture darkens and they need to do more to protect their maritime interests. There is a huge opportunity, and we shall see now whether the English yards, alongside the yards on the Clyde, are ready to rise to the challenge.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

May I question the Secretary of State on recommendation 9 in Sir John Parker’s report, for the freezing of the design specification? Does it mean that a repeat of, say, the change in the design specification of the Astute class submarines in build to introduce special forces capability would be bindingly ruled out in future? Would it also rule out a repeat of the fiasco over cats and traps that took place when the coalition Government changed their mind not once but twice, and added to the cost of the carriers?

[Sir Michael Fallon]

I think that my right hon. Friend the Member for New Forest East (Dr Lewis), the Chairman of the Select Committee, was on better ground when he drew attention to the problems we had in the past when the design was constantly tinkered with, and indeed added to, and the ships that were planned became heavier and heavier and more expensive and late. There have been significant delays in the Astute class programme. I do not ascribe blame to those who work on the programme, but under previous Governments of both complexions there has always been a tendency for the military to add the very latest equipment, and we need to get away from that. We need to produce a frigate that has a basic design, but is sufficiently adaptable for foreign navies to be able to add to it and adapt it for their own particular purposes.

[Mr Mark Francois (Rayleigh and Wickford) (Con)]

As the son of a sailor, Reginald Francois, I welcome the Secretary of State’s statement, and particularly welcome the announcement about the Type 31e.

May I follow up the point made by my right hon. Friend the Chairman of the Select Committee about frigate numbers, and make a humble suggestion? Given that the Type 23 frigates will be gradually paid off over the next few years, has the Secretary of State given any consideration to the possibility of—rather than selling those vessels abroad, or even scrapping them—placing some of them in a state of extended readiness so that they could provide a rapidly mobilised war reserve?

[Sir Michael Fallon]

I congratulate my right hon. Friend on his election to the Select Committee; I look forward to discussing these matters when I am next summoned to appear before the Committee. I also thank him for the work that he has done, since leaving the Department, on the reserves, and the need for us to improve the offer that we make to them. We are studying that report.

I will certainly consider my right hon. Friend’s specific proposal: we have no immediate plans to sell off the Type 23s, and we have a bit of time in hand to consider whether there is sufficient merit in it.

[Frank Field (Birkenhead) (Lab)]

I welcome the Secretary of State’s announcements, which made it clear that the monopoly control that certain yards have exercised over the whole of his order book is now broken. Does he accept that Cammell Laird, with its workforce of expertise and loyalty led by an inspiring leader, John Syvret, is in pole position to win these orders, but that it will have to win them? May I invite him to visit the yard when his diary allows, so that he can give its entire workforce the good news that he has given to us today?

[Sir Michael Fallon]

I am grateful to the right hon. Gentleman. It is true that the monopoly that the Clyde has enjoyed for so long in warship building is ending, but, equally, the Clyde yards—we are talking not just about BAE Systems; there is the Ferguson yard as well—are perfectly free to compete for this work, in addition to the work on the heavy frigates that they are already building.

I, too, am aware of the renaissance of the Cammell Laird yard, which I visited during my time as industry Minister. I would have to be careful about visiting it again, because I am not sure that I can start to accept that it is necessarily in pole position, but I think that the renaissance of such yards in England provides opportunities not just for Birkenhead, but for A&P on the Tyne, Appledore in Devon, and Harland and Wolff in Belfast. There is now a huge opportunity for those yards to step forward and see whether they really can build the frigates on time and within budget.

[Colin Clark (Gordon) (Con)]

Does my right hon. Friend agree that the Government’s support for Clyde shipbuilding puts the Clyde in an excellent position to benefit from export opportunities, and that Opposition Members should celebrate this commercial opportunity for Scotland?

[Sir Michael Fallon]

Absolutely. As I have said, the Clyde already has 20 years’ worth of guaranteed work on the eight heavier anti-submarine frigates. When I was on the Clyde in July to cut steel on the first, HMS Glasgow, there was a unanimous welcome from the workforce for the commitment that the Government are following through in awarding that contract. Today, however, we are doing more than that, in both frigate factories. [Interruption.] Govan and Scotstoun will produce eight frigates over the next 20 years. But there is even better news for Scotland today: those yards—and, indeed, Babcock at Rosyth—will be able to bid for the lighter frigate as well. Scotland’s cup runneth over.

[Gavin Robinson (Belfast East) (DUP)]

In thanking the right hon. Gentleman for the honourable mention of Harland and Wolff in Belfast, retaining, as it does, the UK’s largest and second largest dry dock, I do not wish to draw him on pole positions, but in welcoming today’s advancement and the greater focus on regionalisation and competitiveness, may I ask whether the Secretary of State envisages a single tendering process to be met by joint venture, or will individual components be separately tendered for, and then collated together for the Type 31?

[Sir Michael Fallon]

I certainly hope that Harland and Wolff will participate in this competition and rise to the challenge. We retain an open mind as to what the final winning solution is likely to be. We have learned a lot from the block build construction of the aircraft carriers, but equally it might well be the case that one particular yard comes up with the best proposal, or that that comes from a consortium of one or two yards, working with international yards as well on some elements of the ships. So we have a completely open mind as to how this is going to be done. This is a challenge for all the shipyards in Britain and Northern Ireland.

[Jo Churchill (Bury St Edmunds) (Con)]

May I add my voice to those who welcome this announcement of our commitment to a growing Royal Navy, to high-skilled jobs right across the UK, and to more apprenticeships so that our young people are brought into this industry? Will the Secretary of State tell us how we will ensure that this strategy comes in both on time and to cost? How will we hold suppliers to account so that we optimise the number of ships in the water?

[Sir Michael Fallon]

The revival of naval shipbuilding, particularly in the English yards, will produce huge opportunities for apprentices to embark on highly valued skilled engineering careers. Indeed, in Scotland—I turn again to the opportunity here for Scotland—when I was at the Govan frigate factory on the Clyde, cutting steel on HMS Glasgow, I was able to point out to the workforce that the apprentices who will be working on the eighth of these eight frigates are yet to be born. That is the nature of our long-term commitment to the Clyde and, I hope, of our long-term commitment to our other, English yards.

My hon. Friend makes an important point about the delivery of this programme. Too many programmes in the past have ended up over budget and over time, leaving critical gaps. By setting a fixed price for these ships and putting in place a delivery organisation that will ensure that there will be penalties, we are determined this time that we will drive the procurement and delivery of these ships at pace.

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

As chair of the all-party group on shipbuilding, I welcome these orders for the UK shipbuilding industry, but may I ask the Secretary of State about two fundamental points? First, on military capability, will the Type 31 add to our defence capability? Will it be able to fulfil our full NATO maritime standing commitments? So far little has been said about its anti-submarine or war-fighting capabilities. Secondly, the last successful set of exports was in the early 1960s, with the Rothesay class of frigates. Is it realistic to underpin a strategy entirely on exports, particularly when the French and Italians have similar types of ships not only on the drawing board, but in the marketplace?

[Sir Michael Fallon]

First, in respect of the performance of standing tasks within NATO, I made it clear that they will principally be undertaken by the Type 26 anti-submarine frigates and Type 45 destroyers, releasing the Type 31s for other duties around the world where we need to project our presence and where we can work more closely with allies outside the NATO context.

On exports, I hope that the hon. Gentleman will not be as pessimistic as he appears to be about our prospects. There is growing international demand for lighter ships and ships that are adaptable for all kinds of constabulary work around the different coastal regions. I have every confidence that we can produce a ship that will outperform what can be produced by the Italian or French yards but, in the end, it is for British industry to rise to this challenge and produce a ship that is cost-effective and can compete in the world market.

[Tom Pursglove (Corby) (Con)]

When I recently wrote to my right hon. Friend, I included a prospectus of Corby steel products, which I obviously commend to him. Will he give an undertaking today that, whenever possible, we will use British steel in the building of these ships?

[Sir Michael Fallon]

As I have said, we will take a very close interest in the percentage of steel used in each of the bids—we will be watching that extremely closely. I remind the House that some specialist steels that are not produced in this country are needed for the hulls of our warships, but we will be looking to those who submit their bids to demonstrate just how much British steel they will use, as well as how they will fully engage their local supply chains, and, indeed, take the opportunity to refresh local skills in their area.

[Jo Swinson (East Dunbartonshire) (LD)]

The Secretary of State is right that the Navy needs to modernise—I welcome the strategy and the jobs, although I share the concerns expressed about the workers on the Clyde—but may I press him on the skilled personnel who will be needed to operate these vessels? In his answer to the hon. Member for Llanelli (Nia Griffith), he said that the low unemployment rate was one of the particular challenges, but armed forces data show particularly high rates of outflow for Royal Navy engineers and that only 33% of armed forces personnel feel valued by their service. What is he doing about the experience of people working in the armed forces to make sure they do not want to leave?

[Sir Michael Fallon]

To add to the answer I gave earlier, yes, the Royal Navy, like the Air Force and to some extent the Army, is increasingly competing with the rest of the economy for engineers, IT specialists and technicians of all kinds. These are exactly the jobs that are in such demand elsewhere across the economy. We have a growing economy now and, as I have said, very low unemployment, so this is not easy. This is not a unique feature of the Royal Navy or the Air Force; the same complaints can be made right across the engineering sector, as well as in the aerospace and automotive industries.

What are we doing about that? We must make sure that our offer to our people is as attractive as possible. We have legislation going through the other place to make employment in the armed services more flexible and to provide more opportunities, for example for women who want to return to the service, to move between the reserves and regulars more easily. That is a flexible employment measure and I hope it will have the support of the hon. Lady’s party when the Bill is considered by this House in due course. We need to continue to work away at the offer to make sure that we provide careers that are attractive, highly valued and, indeed, highly rewarded.

[Will Quince (Colchester) (Con)]

I greatly welcome today’s announcement. I recently wrote to the Secretary of State asking him to consider naming one of the Type 26 frigates HMS Colchester. I got a very pleasant and polite response from the Under-Secretary, saying no, but I am nothing if not persistent, so I will ask again. We have waited patiently since 1746 for another HMS Colchester, and I ask the Secretary of State to please consider naming one of the new Type 31e class vessels HMS Colchester.

[Sir Michael Fallon]

I will certainly bear that in mind, although if my hon. Friend has waited since 1746, perhaps he can wait a little longer. By the way, I am still waiting for any expression of gratitude—I know that does not come easily to those on the Scottish nationalist Benches—for choosing the name HMS Glasgow for the very first of these anti-submarine frigates, paying tribute to the previous holders of that name and also the role that Glasgow played in the last two world wars. I will, of course, bear my hon. Friend’s suggestion in mind.

[Mr Stephen Hepburn (Jarrow) (Lab)]

I welcome today’s statement, not least because it gives an opportunity to A&P Tyne in my constituency, which did fantastic work on the aircraft carrier. I am sure that A&P will be considered for further work, but will the Secretary of State assure me that that will be the case? Also, why does he not insist that British steel and components are used whenever possible, in order to create jobs and fly the flag for Britain? Is he looking at the loopholes and caveats, and is he going to put in any incentives to maximise the amount of British labour and apprenticeships involved in this excellent opportunity?

[Sir Michael Fallon]

I am grateful for the hon. Gentleman’s welcome. A&P has already made a contribution to the construction of the carrier and it is contributing to the construction of the Astute class submarines. I very much hope that it will be involved in the competition. This is an opportunity for the Tyne, which was previously shut out when the monopoly was granted in favour of BAE Systems in Scotland, so this is good news for Tyneside and the other English yards. So far as steel is concerned, we want to see greater use of British steel when possible, but we must also be alive to the need to achieve best value for the taxpayer.

[Robert Courts (Witney) (Con)]

I warmly welcome the Secretary of State’s statement, with its ambition to increase the Royal Navy’s platform numbers and our export possibilities. The hon. Member for North Durham (Mr Jones) mentioned the Rothesay class, which of course evolved into the excellent Leander class that was operated by eight navies worldwide because it was so adaptable and provided an excellent platform for all their needs. Will the Secretary of State assure me that the procurement process will ensure that the design that eventually emerges from the competition will have equal appeal so that our ambition to increase the Royal Navy’s surface platform numbers and wider export potential can be realised? That would help jobs, businesses and apprenticeships in the UK.

[Sir Michael Fallon]

My hon. Friend puts his finger on it. This design has to be adaptable and flexible. As international supply chains are now lengthening, I hope that the yards that enter this competition will consult not only with other yards across Europe, but with other navies that are looking to procure this type of frigate, so that they ensure that they design a platform that is sufficiently adaptable and flexible for different navies’ respective requirements.

[Lady Hermon (North Down) (Ind)]

The Secretary of State will be well aware that this year is the centenary of the formation of the Women’s Royal Naval Service—the Wrens. At the start of his statement, he said that “this Government are committed to a strong Royal Navy”. What is he planning to do to mark the centenary of the vital service of the Wrens, many of whom joined the service in later years and are still alive today? Many of them are quite offended that there has not been a brooch, a certificate or anything else to mark their service. It would be fitting, in this centenary year, if the Secretary of State were able to correct that omission, which I am sure was accidental.

[Sir Michael Fallon]

I certainly hope that it was accidental. I, too, would like to put on record my tribute to the women who have served in that branch of the Royal Navy for more than 100 years. Now, of course, our women are able to enter more and more roles in the Royal Navy. I will certainly check whether that centenary is being appropriately marked, and if we can pick up on any of the hon. Lady’s specific suggestions.

[Alan Mak (Havant) (Con)]

Havant has a strong engineering naval base, with three local supply chain partners involved in the Queen Elizabeth carrier project, which is securing local jobs. Does my right hon. Friend agree that, in designing a frigate for export, the potential for job creation among small and medium-sized enterprises is particularly significant?

[Sir Michael Fallon]

Yes, and we want to make it easier for more SMEs to participate in the supply chains of the major yards. Portsmouth and the surrounding area are now enjoying the challenge of completing the final fitting out of the two carriers and making sure that they are properly maintained and serviced, but there may well be further opportunities in the Havant area. I remember that the sector report that was produced for that area as part of the Solent local enterprise partnership specifically drew attention to the maritime strengths of the region, and I hope that it, too, can get involved.

[Chris Stephens (Glasgow South West) (SNP)]

As the hunt goes on for the mystical frigate factory, which the Secretary of State cancelled in June 2015, may I ask him what shipyard reconstruction investment he is going to make on the Clyde? Also, does he accept the criticisms in the Parker report that some decisions were based on historical wrong assumptions about the ability to build different types of ships consecutively, as has happened on the Clyde? Will he confirm that the Type 31 frigate is a complex naval warship and that it should therefore be built at the centre of excellence on the Clyde, as he and the then Prime Minister promised in November 2015? Finally, why are the fleet support ships being procured internationally when the UK shipyards could be building them?

[Sir Michael Fallon]

The hon. Gentleman is doing his best to turn sunshine into a grievance. Govan will build eight enormous frigates over 20 years. That is a frigate factory by any definition, and I hope that he is clear about the sheer weight of work that Govan and Scotstoun are now going to enjoy. So far as investment in the yard itself is concerned, yes, part of the £3.7 billion that I announced when I came to cut steel in Glasgow at the end of July is indeed investment to enable BAE Systems to build the final five of the eight-ship batch. That money includes the price of the first three ships as well as investment to ensure that the next ones are built as well.

On the question of the support ships, it is only warships that have to be built inside the United Kingdom, for security reasons, but there is absolutely nothing to prevent yards in England or Scotland from bidding for the fleet solid support ships as well. Indeed, there is every reason to encourage them to do so.

[Rebecca Pow (Taunton Deane) (Con)]

I welcome the approach that has been announced today. We are a maritime nation and we should be ambitious. This demonstrates that we are being ambitious with not only our security, but the economy, and I am delighted that there might be some spin-offs for the south-west. With 40 Commando in my constituency, may I highlight the need for the general purpose frigates to be designed with maximum utility in mind, so that they will be able to accommodate and project Royal Marines as and when necessary?

--- Later in debate ---

[Sir Michael Fallon]

I am delighted that my hon. Friend shares my ambition for the Royal Navy. I want it to be bigger and stronger, and to have the ships that it needs so that it can protect our trade routes, promote our prosperity and contribute to security on each of the seven seas. That is our ambition as a Government, and I am going to do everything I can to drive that forward with the new ships and submarines that we are now setting out to build.

I note my hon. Friend’s point about the Royal Marines. The frigate will have to be adaptable and flexible, and amphibious fighting capability is something that foreign navies might be looking for. I will certainly ensure that that is further considered.

[Dan Jarvis (Barnsley Central) (Lab)]

The Defence Secretary did not say much in his statement about the strategic context in which these decisions are being taken. Given that the Government have decided not to conduct a strategic defence review in this new Parliament, will he say more about the long-term planning assumptions that underpin the publication of this strategy?

[Sir Michael Fallon]

In the light of the deteriorating international situation and the intensification of the threats identified in the 2015 review, we have undertaken to look again at the specific capabilities available not just to the MOD but to the Home Office and the other Departments, to ensure that as the threats intensify we have the right capabilities in the right places to meet them. I hope to report further to the House on how that review develops later in the year.

[Rishi Sunak (Richmond (Yorks)) (Con)]

I commend the Secretary of State for his Department’s being the leader across Government in the employment of apprentices, especially at Catterick garrison in my constituency. Will he reassure the House that the use of apprentices will be a key factor in the procurement process to ensure that this exciting new national shipbuilding strategy can support the aspirations of young people across the UK?

[Sir Michael Fallon]

I can certainly give my hon. Friend that undertaking. We will be looking carefully at the commitment to apprenticeships from the yards that tender for this ship. He is right to remind the House that the armed forces are the single biggest employer of apprentices in the entire country. We play a huge role in developing apprenticeships as a fully valued alternative to more academic studies and as a pathway to a rewarding career.

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

I welcome the statement by the Secretary of State and, yes, even the naming of HMS Glasgow, but for the record in Hansard, I must point out that Glasgow is not the Clyde. As the son of a former shipyard worker at John Brown’s, the greatest shipyard ever to grace these islands, I will take no history lesson on the utter disinvestment in the Clyde since 1945 by every successive British Government. Given that the cost of the Type 31 has been capped at £250 million per frigate, before we take into account the depreciation of the pound, which the National Audit Office says poses a severe risk to the equipment plan, will the Secretary of State reassure the armed forces, especially the Royal Navy, that we will see a credible timetable for raising the Royal Navy from the position in which it now finds itself—with more admirals than frigates?

[Sir Michael Fallon]

Twenty years of guaranteed work—

[Martin Docherty-Hughes]

Forty five years of disinvestment.

[Sir Michael Fallon]

Twenty years of guaranteed work for the Clyde is a peculiar definition of disinvestment.

[Martin Docherty-Hughes]

Unbelievable!

[Sir Michael Fallon]

On the contrary, the Government are investing in the Clyde—

[Martin Docherty-Hughes]

A scandalous lack of historical knowledge.

[Sir Michael Fallon]

We invested £3.7 billion in July, and there are five more frigates to follow. This is a massive investment in the skills present on the Clyde. The Government are investing in the Clyde.

[Martin Docherty-Hughes]

Not in Glasgow.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The hon. Gentleman had his say when he was on his feet. He must not continue to try to have a say while sitting down.

[Sir Michael Fallon]

I think the hon. Gentleman is probably faintly embarrassed by the scale of our commitment to the Clyde and of the investment there.

The hon. Gentleman asked me a serious question about the affordability of the equipment programme more generally. Yes, part of the equipment programme will have to be funded through the efficiency savings that we in defence have to realise and put back into the equipment programme. That means being more efficient, modernising our processes—for example, getting rid of barracks and land we no longer need—and continuing to work more effectively. All of that gain will go back into the equipment programme and help to fund the frigate that his constituents are building.

[Mark Pawsey (Rugby) (Con)]

I welcome the Secretary of State’s announcement, particularly the commercial latitude of his Department in procuring a vessel that can compete in export markets. The issue of procurement has been raised many times by Members. Will he confirm that the high UK content of the vessels means that the cost will not be affected by the depreciation of the pound post-Brexit and that there will be benefits across the UK, including for manufacturers of propulsion systems, such as GE Energy in my constituency, which, incidentally, is as far from the sea as one can possibly get?

[Sir Michael Fallon]

It might be far from the sea, but it is a very important firm and a key maker of the propulsion systems we will need. Of course, by definition, the higher the British content of these frigates, the less the price will be affected by the depreciation of sterling, but I will not speculate as to where the level will eventually settle.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

I would like to entice the Secretary of State to the calm of the Scottish highlands. He referred to modular construction as having achieved value for money in the Queen Elizabeth-class carriers. The Nigg yard in my constituency, where I used to work, has great expertise in this field. Will he instruct his officials to consider the Nigg yard as and when these vital new contracts are drawn up?

[Sir Michael Fallon]

I am happy to agree to that. I hope that the Nigg yard will be included, and I will ensure that our officials include it in the discussions we will now begin on the technical details with the various yards and other companies involved. I well recall my own visit to Nigg when I was the oil and gas Minister, and I am well aware of the efforts it is making to diversify from the oil and gas sector. We will make sure that it is fully able to participate and receives all the information necessary for it to do so.

[Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)]

I warmly welcome today’s statement, as will my constituents who work at British Steel in Skinningrove. I am the deputy chairman of the all-party group on steel and metal related industries. With that in mind, I was hoping that officials from the Department might come to meet the APPG to discuss how we can deliver what has been rightly referred to as the pressing need to maximise the British steel content in the new vessel.

[Sir Michael Fallon]

I congratulate my hon. Friend on achieving the position of deputy chairman of the all-party group, and I am happy to agree to get an official or colleague to attend and make sure his group is fully aware of exactly how we will maximise the use of British steel in this procurement.

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

As the MP for Devonport, where half the nation’s frigates are currently based, I welcome this much delayed strategy. I am concerned, though, that the £250 million price cap for a Type 31e is an accountant’s answer to a general purpose frigate, not an answer to the military question. I doubt we will get a capable frigate for that much money with a full complement of offensive weaponry. Will the Secretary of State confirm, therefore, that the new Type 31e will be equipped with more than just one main gun?

[Sir Michael Fallon]

I cannot confirm the exact details of the armaments and weapons systems on the frigate. We think that £250 million per ship is the right kind of cap to aim for, and we will now go into intensive discussions with the industry, but yes this is a challenge to our yards—particularly to the English yards, as well as to BAE Systems and Ferguson’s on the Clyde and Babcock on the Forth—to meet for the first time a cap per ship. That is extremely important. We have seen far too many programmes where the cost has escalated year after year, to the detriment of the other parts of defence.

[Mr Philip Hollobone (Kettering) (Con)]

I commend my right hon. Friend for his statement and invite him to describe to the House the minimum armament of the vessel, the minimum capability requirement and the minimum size of ship’s complement.

--- Later in debate ---

[Sir Michael Fallon]

We will be officially launching the competition tomorrow and will be working on the technical details of the frigates, so I cannot confirm to my hon. Friend today the exact specifications that we will set out for the weapons system, but he and the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) are right that they will be a key part of holding the bidders to the overall price cap.

[Carol Monaghan (Glasgow North West) (SNP)]

As the MP for Scotstoun, I am beginning to see a familiar pattern here. Workers in Scotstoun and Govan were promised 12 Type 45 destroyers; they got six. They were promised 13 Type 26 frigates; we have got three so far. The Secretary of State speaks of this frigate factory on the Clyde. To be clear, a frigate factory is an indoor assembly hall; it is not putting ships together in the rain. So we see another broken promise there. Will he now keep a promise to the workers in Glasgow and give them a cast-iron guarantee that the current workforce levels will be maintained until 2035?

[Sir Michael Fallon]

I am not responsible for the overall number of Type 45 destroyers, and I am sure that the hon. Lady will recognise that that decision was taken by a previous Government. As for the number of Type 26 frigates, we have guaranteed the eight Type 26 anti-submarine frigates to the Clyde, and we are giving the Clyde the opportunity to tender for more. It is important, however, that other yards right across our United Kingdom are able to tender as well, and I hope she will recognise that. As for employment numbers on the Clyde, the actual number employed in either Govan or Scotstoun is a matter for BAE Systems.

[Wendy Morton (Aldridge-Brownhills) (Con)]

I join others in welcoming today’s statement, which is good news for our country, for industry and for jobs, but let us not forget that it is also good news for the Royal Navy and those who serve in it. Does my right hon. Friend agree that the construction of the new aircraft carriers demonstrates the skills and industries that exist right across the United Kingdom to build ships for our Royal Navy and, potentially, other navies around the world?

[Sir Michael Fallon]

I hope my hon. Friend is as proud of the two new carriers as I am. It is a permanent statement to the world of what we can make of our country’s manufacturing talent that the ships were put together across six different yards, including the Clyde, which shows what we can do in a huge and important national endeavour. They will sail the oceans of this world as a reminder not simply of Britain’s military power, but of what we can do with our industry and technology.

[Mr Paul J. Sweeney (Glasgow North East) (Lab/Co-op)]

I think I am one of the few Members who has actually built a ship, so I speak with some degree of understanding of the process. When I was with BAE Systems, we looked at multiple-site block builds, which we obviously used for the Type 45 destroyers, but a key component of the terms of business agreement that we had with the Ministry of Defence was to achieve upper-quartile status in world shipbuilding. Not only did the team and I carry out a worldwide benchmarking exercise to deliver a world-class shipbuilding capability on the Clyde, but we also developed the design of a shipyard that would deliver that world-class capability. That included an integrated fabrication or module hall, a paint cell and a 330 metre-long dock hall in a covered dock assembly facility, which have been quietly dispensed with. It is clear that even the plan B, which involved a module hall at Govan, has also been dispensed with. Is it still the Government’s intention to achieve upper-quartile status in world shipbuilding on the Clyde through facilities investment? Will the design of the Type 31 involve a consistent, integrated assembly site? Given the demolition of the Scotstoun site, is there the capacity on the Clyde to deliver that?

[Sir Michael Fallon]

I cannot answer the hon. Gentleman’s question about the upper-quartile position, but I can restate that we are open-minded about the winning solution for the procurement of this particular frigate. There are important, useful lessons from the block build involved in the construction of the two carriers, and I am sure that all those involved in the competition will want to pick up on those particular lessons and, indeed, on how the final assembly can be properly integrated, but we will not say now that there must be one solution rather than another; it is up to British industry to rise to this particular challenge.

[Kevin Foster (Torbay) (Con)]

Representing a part of south Devon that looks forward to seeing the ships ultimately refitted and based there, I welcome today’s statement, but will the Secretary of State reassure me that we have learned from past military procurement mistakes and the impact that they had on the size of the fleet, particularly during the Type 45 programme, when a £6 billion budget for 12 ships became a £6 billion budget for six?

[Sir Michael Fallon]

My hon. Friend is right. As I have said several times now, procurement programmes have overrun in time and in budget too often. We have to get a proper grip on that with a much more commercial approach to the delivery of such projects. We have now put that in place for the delivery of the Dreadnought and Astute-class submarines through the new Submarine Delivery Authority. We have also put it in place with BAE Systems for the delivery of the Type 26 ships, where we have a pain-share/gain-share arrangement by which the company must bear the cost if it runs behind schedule or over budget. We will do the same for the Type 31 ships, for which we will have a commercial delivery set-up to ensure that the taxpayers’ interests are properly protected.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

The Times reports today that the new Type 31e frigate will cost about a third of the Type 26 frigate, so will the Secretary of State provide a little more detail than he has to date about the difference in capability between the two frigates?

[Sir Michael Fallon]

The Type 31e frigate will be about half the size of the Type 26, but we hope that it can be produced for around a third of the cost. If we can produce these ships for that particular price, that is the prize that will enable us in the end to expand the size of the Royal Navy. The challenge that we are laying down to British industry is whether, for the first time, it can meet a particular price per ship. The difference is essentially in the weight and in the duties that the ship will carry out.

[Douglas Chapman (Dunfermline and West Fife) (SNP)]

The Secretary of State has triggered two search parties in Scotland today. The first relates to the mythical frigate factory referred to earlier and the second is this cup that runneth over. I am sure that people are out on the streets of Glasgow looking for them today. However, I am glad that he has at long last actually found the shipbuilding strategy and that it is a step in the right direction. As for the Type 31 frigates and the fleet support ships, what steps is he taking to ensure that the build programme is accelerated to guarantee a constant drumbeat of orders for UK shipyards? With the ageing Type 23s and the need for the UK to focus all its efforts on exports, time and tide wait for no man; we need to make progress as quickly as possible.

[Sir Michael Fallon]

I think that that is the nearest we are going to get to a welcome from Scotland today, so let us bank that and thank the hon. Gentleman for it. He is right about one thing: the Type 23s are beginning to age and we must ensure that the Type 31e and the Type 26 are ready to replace them to keep up the overall numbers of frigates and destroyers. That is why we aim to insert real pace into the programme through the new procurement process by accelerating the design phase, running the tender next year, placing the orders towards the end of next year and starting, as he says, the regular drumbeat of orders to replace the Type 23 frigates. He will know that they were not all built at the same time and that the older ones will soon need to be taken out of service. Our aim is to have the first Type 31e in service by 2023.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Last, but certainly not least, I call Alan Brown.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

They used to tell me that when I was the last pick at football as well.

In the 2015 strategic defence and security review, an extra £16 billion was found for the successor nuclear submarine project’s budget, which clearly led to a cut in orders for the Clyde and to the disappearance of the frigate factory. If the costs for the successor submarine programme continue to spiral, what effect will that have on the national shipbuilding strategy and on today’s promises?

[Sir Michael Fallon]

We have set aside some £31 billion for the construction of the four new Dreadnought submarines, but we have also put aside £10 billion as a contingency to meet any further requirement. With the greatest respect, I think the hon. Gentleman has this the wrong way around. If we had not set aside the money for the successor programme and if this Parliament had not voted to renew the Trident submarine programme, we would not need the frigates that we are already building on the Clyde.