Oral Answers to Questions

Philip Dunne Excerpts

Monday 27th June 2016 Commons Chamber

[Margaret Ferrier (Rutherglen and Hamilton West) (SNP)]

2. What steps he is taking to mitigate the effect of the extended timetable for construction of Type 26 frigates on maintaining skills in the defence industry.

[The Minister for Defence Procurement (Mr Philip Dunne)]

This Government are committed to sustaining shipbuilding skills on the Clyde. As we confirmed in the strategic defence and security review last November, we will build two additional offshore patrol vessels before build work starts on the Type 26. This will help sustain shipbuilding skills between the completion of major blocks of the Queen Elizabeth class carriers and commencement of the Type 26 build. That remains the case; the plan has not changed. Over the next decade we will spend about £8 billion on Royal Navy warships.

[Margaret Ferrier]

As my hon. Friend the Member for Argyll and Bute (Brendan O'Hara) pointed out, the pound is in freefall and every cent it falls against the dollar makes purchasing either the maritime patrol aircraft or the F-35 more expensive. The workers at the Clyde yards have already seen apprenticeship numbers cut by 80%, and the current crisis makes the situation worse. Can the Minister assure me and those on the shop floor in Govan and Scotstoun that the Type 26 programme will begin as soon as possible and not in 2019, as some have suggested?

[Mr Speaker]

Briefly, Minister.

[Mr Dunne]

We have already invested £1.6 billion in Type 26, including £472 million this March. I say to the hon. Lady as gently as I can that that commitment could not have been made if her friends had had their way and become independent, because shipbuilding would have ceased two months ago.

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

The Minister will remember that previous shipbuilding projects, in particular the carriers and the Type 45 destroyers, ended up being much more expensive because of delays. Does he accept that BAE Systems is ready to start cutting steel on the Type 26 programme relatively soon and that delays will cause our total number of warships to dip and the ones we eventually get to be more expensive?

[Mr Dunne]

I say to my right hon. Friend, who is knowledgeable about these matters, that this will be one of the largest defence programmes that this Government will enter. I am sure that he will agree that it is absolutely right to enter into a contract once we are confident of the delivery schedule and the ability of the contractors to meet that schedule on a cost-effective basis. Once we are in that position, we will be ready to contract.

[Kate Hollern (Blackburn) (Lab)]

The Clyde was promised a world-class frigate factory to build 13 new frigates for the UK. However, today we hear that work has been delayed by a year. Thousands of members of staff are on secondment around the country because there is not enough work in the shipyards, and the word “betrayal” rings around those shipyards because no factory has appeared and no work has started.

We have asked in the past for plans for the frigate-building programme, and for promises that all work will be carried out on the Clyde, but those questions have gone unanswered—[Interruption.]

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[Mr Speaker]

Thank you very much. A brief response from the Minister and we will move on.

[Mr Dunne]

As I have already indicated, this Government have already contracted significant sums into the programme. Once we are in a position to sign a contract, we will say what the duration of the build programme will be. We are not there yet.

[Craig Whittaker (Calder Valley) (Con)]

3. What recent discussions he has had with his international counterparts on progress in the campaign against Daesh.

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[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

7. What estimate he has made of the projected increase in defence spending during this Parliament.

[The Minister for Defence Procurement (Mr Philip Dunne)]

I will answer pithily. This Government are delivering stronger defence. The defence budget will rise by 0.5% above inflation every year to 2020-21, and we will access up to £1.5 billion a year from the joint security fund by the end of this Parliament. This is the first time in six years that the defence budget will increase in real terms.

[Lucy Frazer]

Given the vote last week, does the Minister agree that Britain should remain a key player on the international stage? Will Britain continue to use its influence to encourage our NATO allies to spend 2% of their GDP on defence?

[Mr Dunne]

As my right hon. Friend the Secretary of State said earlier, NATO is the cornerstone of our defence, and we are leading players in influencing fellow NATO members to meet the spending commitment. Allies have made welcome progress since 2014; five now spend 2% of GDP on defence, eight spend 20% of their defence budgets on major equipment and research, 16 have increased defence spending in real terms and 24 are now spending more of their defence budgets on equipment.

[Daniel Kawczynski]

With the increasing budget comes increasing responsibility for ensuring value for money for taxpayers. Has my hon. Friend learned the lessons of failed procurement under Labour of maritime patrol aircraft, which had to be cancelled because the programme was 10 years behind and £800 million over budget?

[Mr Dunne]

My hon. Friend and constituency neighbour is right that the Nimrod programme suffered repeated and unacceptable delays and cost overruns. The decision in 2010 to cancel it was difficult but the planned purchase of nine P-8 Poseidon aircraft for maritime patrol will give us the capability we need in the timeframe we want, and at best value for the taxpayer.

[Caroline Flint (Don Valley) (Lab)]

Part of making sure defence spending is adequate is making sure that we get value for money. The Public Accounts Committee was very disturbed when we looked recently at housing management for service families, which seems to be woeful. The contractor, Carillion, has not stepped up to the job. Will the Minister tell me how he will ensure that we get value for money and, more importantly, a better service for our service families?

[Mr Dunne]

I am pleased to confirm to the right hon. Lady that in the area of defence equipment procurement, for which I am responsible, the Public Accounts Committee has found that we have consistently brought programmes in within budget and with minimal time overruns. I accept we have more to do on housing.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

Where the defence budget is spent is absolutely crucial. Given the gross uncertainty for the British steel industry as a result of the EU referendum vote, what assurances on defence spending can the Minister give to steel manufacturers in this country to boost them at this crucial time?

[Mr Dunne]

We have adopted the Government’s policy to ensure that defence contractors make all steel procurement opportunities available to UK producers. The amount of steel expected to be available for tender for future work is much reduced, because the most substantial amounts have been in the aircraft carrier programme and we will not be building vessels as big as that for the foreseeable future.

[Sir Gerald Howarth (Aldershot) (Con)]

I warmly welcome the Government’s commitment to spend at least 2% of GDP on defence, but will my hon. Friend confirm that this year and next there will be no increase in cash terms, and assure me that we will not find ourselves in the same situation as we did this year, where in order to meet our 2% commitment money was transferred to the Ministry of Defence from other Departments?

[Mr Dunne]

As was made clear in last year’s comprehensive spending review at the same time as the strategic defence and security review, and as I have already said this afternoon, the defence budget is going up in real terms in each year of this Parliament.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

There has been much loose talk about the increase in the defence budget, but to be able to hit the target of 2% of GDP we now have to be very careful, as there may well be a recession given the Brexit vote. Will the Minister reassure the House, the public and the armed forces that the Government’s commitment on defence spending will be maintained not just in terms of GDP but in cash terms?

[Mr Dunne]

I am not going to join those in the Opposition who seek to talk the economy down. We have a clear commitment to meet the NATO defence spending pledge and that is what we will do.

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

8. What progress has been made on his Department’s naval procurement plans.

[The Minister for Defence Procurement (Mr Philip Dunne)]

The Department continues to develop our naval force structure, as we set out in the defence review. That will include completion of two new Queen Elizabeth class aircraft carriers, eight Type 26 global combat ships, new solid support ships and two new offshore patrol vessels.

[Chris Stephens]

Can the Minister confirm press reports today that leaked correspondence shows that the Ministry of Defence is looking for savings of £500 million in the Type 26 programme, and has refused an offer from BAE Systems that would bring savings of £270 million while starting the programme on time?

[Mr Dunne]

As I said in answer to other questions on the Type 26 programme, we will enter into a contract once we have established best value for the taxpayer, and a delivery schedule that can be met by the contractor.

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

After last week’s vote, these are uncertain times for UK manufacturing. One thing that the Government could do now to boost manufacturing and protect British jobs and skills would be to make a decision on Successor and bring it forward. Will the Minister say when that vote will be?

[Mr Dunne]

The hon. Gentleman will have heard the Secretary of State confirm that that will not take too long.

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

9. What discussions he has had with his Cabinet colleagues on preparations for the NATO Warsaw summit.

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[Chris Heaton-Harris (Daventry) (Con)]

13. What steps he is taking to increase the proportion of defence spending that goes to small firms.

[The Minister for Defence Procurement (Mr Philip Dunne)]

Small businesses are a crucial engine for growth and innovation in this country, and we are determined that they should play an increasing part in supplying defence. We are committed to achieving 25% of our procurement spend with small and medium-sized enterprises by 2020, and that target is 10% higher than the one set during the last Parliament. We recently refreshed our SME policy to show how we will work to achieve that.

[Chris Heaton-Harris]

What steps is my hon. Friend taking to make it as simple as possible for small firms to benefit from this increased spend?

[Mr Dunne]

We have already appointed a new network of supply chain advocates to provide a named point of contact for potential suppliers. We are providing a new online tool for suppliers to highlight opportunities, and we are simplifying our standard terms and conditions.

[Mr Speaker]

I call Ian Murray.

[Ian Murray (Edinburgh South) (Lab)]

I should maybe come to questions more often.

A former First Sea Lord told the Defence Committee that the delay in the Type 26 frigate programme was due to money problems in the Ministry of Defence budget. Will the Minister tell the House, and more importantly tell the workers on the Clyde, how many jobs will be lost and what the impact will be on its world-class apprenticeship programme?

[Mr Dunne]

Apprentices are very important to maintain the skills on the Clyde to complete the Type 26 programme. The intention is that once we have signed the contract we will have clarity on the best value for money for the taxpayer. That is our priority.

[Andy Slaughter (Hammersmith) (Lab)]

15. Whether the Government plan to publish a policy on the use of drones for targeted killing.

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[Deidre Brock (Edinburgh North and Leith) (SNP)]

T5. Following the questioning of Ministry of Defence officials at the Public Accounts Committee on infantry management, will the Minister tell us about the current state of the logistics commodities and services’ transformation programme? Is the super shed built, and how confident are the Government that the privatisation of logistics to support our armed services will not result in equipment shortages on the ground?

[The Minister for Defence Procurement (Mr Philip Dunne)]

I can confirm that the new MOD Donnington facility will be completed on schedule before the end of the year.

[Mark Spencer (Sherwood) (Con)]

T7. Will the Department update the House on the progress being made in increasing the number of cadet units in state schools so that more young people can benefit from the skills and experiences of those cadet units?

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[Mrs Madeleine Moon (Bridgend) (Lab)]

What percentage of the P-8 contracts will be offset to British companies and what maintenance work will take place in the UK? Will the Minister confirm that the sonobuoys and missiles will be procured from British companies?

[Mr Dunne]

The P-8 contract has not yet been let. We announced at the time our intention to procure P-8, and some $4.5 million per aircraft is UK-sourced. The support contracts will be let in due course.

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

Will my hon. Friend assure us that, despite Airbus trying to bully its employees to vote remain in the referendum last week, the wings of the magnificent A400 aircraft will still be made in Filton?

[Mr Dunne]

Airbus is an important defence contractor and a significant employer in my hon. Friend’s constituency for both civil and defence work. Where it chooses to locate wings in the civil contracts in the future will be a matter for Airbus.

[Alison McGovern (Wirral South) (Lab)]

Depressingly, UNICEF reported that 25 children were killed by airstrikes in Syria yesterday. Will the Secretary of State tell us what conversations he is having with our international partners to make sure that we take every necessary step to defend civilians?

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[Ann Clwyd (Cynon Valley) (Lab)]

Exactly what actions are the Government taking to protest about the use of phosphorous bombs and barrel bombs against the people of Aleppo?

[Mr Dunne]

We have a very clear policy in this country on the export of cluster munitions and the like. We have not sold cluster munitions since 1989. The right hon. Lady asks about phosphorous, and I will write to her about it later.