National Shipbuilding Strategy

Nia Griffith Excerpts

Wednesday 6th September 2017 Commons Chamber

[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.