Defence Capability

Paul Sweeney Excerpts

Thursday 19th October 2017 Westminster Hall

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

It is an honour to serve under your chairmanship, Mr Bone. I thank the hon. Member for Yeovil (Mr Fysh) for securing the debate.

I will constrain my remarks to a specific element of defence policy, which is the recently published national shipbuilding strategy, in the context of previous policy with regard to the shipbuilding strategy in the United Kingdom and, in particular, the terms of business agreement signed between the Ministry of Defence and what was then known as BVT in 2009 and subsequently known as BAE Systems Surface Ships Ltd. I would appreciate it if the Minister made specific reference to how that terms of business agreement has been formulated into the current national shipbuilding strategy.

I was alarmed to read that document and learn of key omissions that have not been carried over from the TOBA to the national shipbuilding strategy—most notably, the definition of any key industrial capability with regard to the shipbuilding industry. The key industrial capability for shipbuilding is defined as being to

“design, build and integrate…a complex warship of up to 5,000 tonnes deep displacement at an interval of 1 shipbuild every 12 months and a design interval of every 6 years”

and to

“contribute to the sustainment of sovereign capability”

through the provision and maintenance of facilities and key post workers in the shipbuilding sector.

I was alarmed to learn that the Type 31 frigates should be competitively tendered, which essentially breaks clause 39 of the TOBA between the Ministry of Defence and BAE Systems because it jeopardises that long-term drumbeat of work. It also makes no reference to the achievement of upper quartile performance in the national shipbuilding industry. That upper quartile performance was defined as a benchmarking exercise that would determine the optimal design, build, combat systems integration and through-life support infrastructure in the UK that would be in the upper quartile of all firms engaged in the industry worldwide. I would like to know why those terms and definitions have not been sustained in the current national shipbuilding strategy.

I had the privilege of working in the shipbuilding industry, following in the footsteps of my grandfather and father, and was heavily involved in the development of the benchmarking exercise during my time at BAE Systems. That included development of the design of a shipyard on the Clyde that would deliver exactly what I have referred to: the key industrial capability at an upper quartile performance level. I was rather alarmed to learn that that will no longer be invested in. That means that we will no longer be able to achieve a build interval of one shipbuild every 12 months or a design interval of every six years. That capability has now in effect been surrendered by the Ministry of Defence, as is clear in the current shipbuilding strategy. I would like to know why that has happened and why the business case demonstrating that delivery of that capability was perfectly financially viable has not been upheld. What long-term financing options have been considered beyond current in-year spend to deliver that long-term build capability? I would be grateful if the Minister elaborated on those issues.

[Mr Peter Bone (in the Chair)]

We have six minutes and three people.