National Shipbuilding Strategy [Mr Nigel Evans in the Chair]
2.30 pm Douglas Chapman (Dunfermline and West Fife)
(SNP) I beg to move, That this House has considered
the National Shipbuilding Strategy. It is a pleasure to
serve under your chairmanship, Mr Evans. I stand before you with
the...Request free trial
National Shipbuilding Strategy
[Mr in the Chair]
2.30 pm
-
(Dunfermline and
West Fife) (SNP)
I beg to move,
That this House has considered the National Shipbuilding
Strategy.
It is a pleasure to serve under your chairmanship, Mr
Evans. I stand before you with the sense that we have been
here before, and indeed we have. It is déjà vu on a grand
scale, because at Defence questions, during Westminster
Hall debates, in answers to urgent questions and in
ministerial statements, the Government have had the chance
to put at rest the minds of the various parties interested
in the shipbuilding strategy. Yet again, we find ourselves
hoping that the Minister will give us something more than
the usual scorn that is reserved for SNP Members.
Any time I tire of waiting for answers, I simply remind
myself that many people have been waiting much longer,
whether they be the men and women who serve us in the Royal
Navy or those in the yards on the Clyde and at Rosyth. That
is not to mention the average taxpayer, who demands nothing
more from the Government than that their money is well
spent on equipment that actually works and the assurance
that the Government are doing their utmost to fulfil their
most basic duty—defending our homeland.
In 2021, it will be two decades since HMS St Albans slipped
from Yarrows on the Clyde and became the last-of-class Type
23 frigate, meaning that the state that has always prided
itself on being a maritime power will not have built a
single frigate for the best part of 20 years. Furthermore,
as the first-of-class Type 23, HMS Norfolk, left that same
shipyard in 1990, it found that the mission for which it
had been specifically designed had all but ended. It is
quite incredible that in 2017, we are still unable to see a
signed contract to begin the replacement of the Type 23s,
which are a cold war platform. No one I have spoken to
through my work on the Select Committee on Defence, whether
fellow members, academics, shipbuilders, trade unionists or
even civil servants, sees that as an acceptable way
forward, yet here we are.
Its cold war mission may have ended, but the Type 23 has
certainly done all that was asked of it, and more. Let us
not forget that the range of tasks the Royal Navy has
undertaken in the post-cold war era has dramatically
increased, yet paradoxically, as the senior service’s task
list is increasing, the number of frigates and destroyers
available to it has sunk to an historic low. It is that
paradox that I hope the Minister will help me with today.
The Ministry of Defence has long been able to exploit the
convoluted and confusing history of the Type 26s and Type
31s to hide from its failings. I will make it easy for the
Government by posing three straightforward questions that I
hope they will take in good faith and respond to
appropriately.
First, and most simply, when will we see the national
shipbuilding strategy? Secondly, the MOD has made much of
2017 being the year of the Navy, but 2023 is a much more
appropriate choice, as that is when the MOD completes the
purchase of 24 F-35B planes to fly from the carriers, and
when HMS Queen Elizabeth becomes fully operational. Will
the Minister reassure us that the Royal Navy will be able
to form a fully functioning carrier group with Type 26s,
Type 45s and the requisite Royal Fleet Auxiliary Service
ships? Thirdly, on a related note, various media outlets
have reported in recent days on the bandwidth problems in
the procurement budget, which were highlighted in a
National Audit Office report. So far as the equipment plan
is concerned, how will the shipbuilding strategy ensure
that surface naval ships are prioritised in procurement
decisions?
When the Government committed to the national shipbuilding
strategy as part of the 2015 strategic defence and security
review, many of us thought we were reaching the end of a
long journey, with respect to the modernisation of the
Royal Navy. How wrong we were. Early studies of what in
1994 was called the “future surface combatant” certainly
thought outside the box. A whole range of options were
considered, including a radical trimaran hull design. After
a decade, the FSC had become the “sustained surface
combatant capability”, which had as many as three designs.
It was not a concept that would survive the financial
crash. Indeed, by 2009, it was possible for my friend, the
right hon. Member for New Forest East (Dr Lewis), who
chairs the Defence Committee, to call for a future surface
combatant that was as “cheap as chips”. How did we get from
as “cheap as chips” to building £1-billion frigates in less
than a decade?
I contend that the blame lies squarely at the door of the
MOD. One thing has become clear from the numerous
conversations I have had with both management and unions at
BAE Systems: it is a global company with a world-class
workforce that is able to turn its hand to whatever design
and specification is provided by the MOD. Up to this point,
it has done that. Quite simply, the MOD’s unerring ability
to change horses midstream has added to the cost,
timescales and uncertainty of the ongoing naval procurement
programme.
That continued after the shipbuilding strategy announcement
in 2015. The initial reassurances we were given were
replaced with disquiet last spring, when no contract for
the Type 26s was signed. When The Guardian broke the story
in April about potential job losses at the Clyde yards,
there was a crushing realisation that, yes, it had happened
again. Any hope that a refreshed team in the main building
over the summer would lead to clarity on the Type 26 or the
shipbuilding strategy did not last long. When the Minister
repeatedly assured us in the Chamber that we would see a
strategy by the autumn statement, we knew she was using
alternative facts. When my colleagues and I on the Defence
Committee released a report that concluded
“it is now time for the MoD to deliver on its promises”,
I imagine we already knew that it had no intention of doing
so—although I am interested to know if that report played
any part in delaying the strategy, or if Ministers simply
chose not to tell Parliament of their intentions.
It was not entirely clear, when Sir John Parker’s
independent report was announced, whether informing
Parliament was part of the original strategy. When the
report was finalised, we thought that it would be the
formal strategy going forward. There is plenty to agree
with in Sir John’s report. Many of its findings chime with
my experiences of MOD procurement, namely that there was a
“vicious cycle of fewer and much more expensive ships being
ordered late and entering service years later than first
planned”,
and that,
“The Government must drive cultural and governance changes
in Defence that inject genuine pace into the procurement
process with a clear grip over requirements, cost and
time.”
However, we are now getting to a stage at which the report,
far from being too little, too late, is too much, much too
late. It will once more allow Ministers to take us around
the houses and hope that we forget that they are running
out of time to fulfil previous promises made to the House,
the Royal Navy and the men and women on the Clyde.
While there is
“no precedent for building two ‘first of class’ RN frigates
in one location in the UK”,
there appears to be no real alternative to the Clyde, as I
am sure we will hear from my hon. Friend the Member for
Glasgow South West (Chris Stephens). Let us get on with
signing the Type 26 contract and ensure that the Type 31 is
ready to go as soon as possible.
-
Mr (North Durham)
(Lab)
Can the hon. Gentleman shed any light on what the Type 31
is? There have been generalised views of what it will do
and what it will be, but I understand that there are no
plans and no actual specification. Is the Type 31 not one
of those pipedreams that seems to be put out there to
reassure the industry, when actually there is a lot of work
to be done not only to design it, but to find out where it
fits into the broader naval strategy?
-
The hon. Gentleman makes a good point. We are constantly
told that the Type 31s are also for the export market. I
have asked parliamentary questions on whether the
Government could provide details of their homework on what
that export market might look like. I am afraid that, to
date, there are no answers. We need to make progress with
the information we have, which is why we are questioning
the Minister today.
Anyone who has taken an interest in this matter will know
that BAE Systems has two possible designs. It is important
that we get on with picking one, so that we can ensure—to
follow up on the hon. Gentleman’s point —that we have an
exportable product that we can take to market. However, we
are falling behind. The Franco-Italian Aquitaine class
frigates are already in service with La Royale and have
been exported to Egypt and Morocco, so we are already
missing the export boat with regard to the Type 31s.
-
(West
Dunbartonshire) (SNP)
My hon. Friend should also note the Danish Absalon class
frigates, which have proved to be very versatile, reliable
and affordable ships for a valuable ally’s navy.
-
Of course. That just makes the point that while the
Government sit back, dither and try to work out what the
strategy might be, we have great examples of other
countries—small countries—that are able to export their own
products into the markets that they want to serve.
Quite simply, we have been waiting for the future surface
combatant, be it the Type 26 or the Type 31, since 1994.
Sir John’s report may seek a “sea change” in naval
procurement, but the fact is that we had a defence industry
strategy in 2005, a 15-year terms of business agreement
signed by BAE Systems in 2009 and a consolidated
shipbuilding plan for the Clyde, with support from the
Government and the trade unions, in 2013. How on earth has
it taken the Government so long to get to a strategy? Why
do they still not have one by 2017? Surely that is a
damning indictment of their competence to run the country.
Again, I plead with the Minister: let us get on with it.
My second question for the Minister is about ensuring that
when HMS Queen Elizabeth enters service, it will do so with
a carrier group worthy of a next-generation Navy. Those
carriers—the largest ships ever built for the Royal
Navy—are being built on time and on budget in my
constituency by the superb workforce in Rosyth. It would be
a great disappointment to those workers, those men and
women—
-
Mr (Jarrow)
(Lab)
I congratulate the hon. Gentleman on securing this debate
on a very important issue. He mentions the aircraft
carriers. Let me respectfully advise the Minister that
shipbuilding and ship repairs are still very much alive on
the Tyne and that my local yard, A&P Tyne, has played a
key role in getting those ships on time, within budget and
with excellent quality. In the light of John Parker’s
report, which identified that commercial yards have a great
role to play in supporting traditional naval yards in
providing the MOD’s requirements, I ask the Minister to
ensure that when any lucrative contracts come forward in
the future, commercial yards such as A&P are taken into
consideration, bearing in mind their record.
-
I thank the hon. Gentleman. That is a bit of a non-question
for me, but I am sure the Minister will be happy to add it
to her extensive list of questions already put.
The ships in Rosyth are the biggest that the Royal Navy has
ever built, and various people have been involved in
building them from day one and bringing the parts from all
areas of the UK to Rosyth, but we must ensure that when
those ships sail down the Forth, they are adequately
protected. At the moment, I struggle to see how that battle
group will fit together.
As I said, although 2017 may be the year of the Navy, 2023
will be far more significant, because in 2023 we will know
whether the strategy has done what it set out to do in the
first place. By 2023, the initial tranche of 24 F-35Bs
should be in place to fly operations from the carriers, and
the first Type 26 should be entering service to replace HMS
Argyll, which will be the first Type 23 to leave service.
The Defence Committee highlighted the question of the
carrier group in our November report and I hope we will
press the Minister further on it, but quite simply the
Government are running out of time to uphold their end of
the bargain. Quite honestly, I am not holding my breath.
I expect many right hon. and hon. Members will talk today
about the state of the Navy, but going over some of the
history again might be worthwhile. At the time of the
infamous Nott report, the Royal Navy had 60 frigates and
destroyers, and even by the end of the Falklands conflict,
it still had 50. In the 1998 strategic defence review, long
after the cold war had ended, a floor of 32 ships was
constructed. However, the Government now crow about their
commitment to 19 frigates and destroyers.
Even as we move to an era of fewer and more powerful ships,
19 is still too low a number and has seen the UK fail in
many of its commitments to its allies. I am not alone in
finding it unacceptable that the UK has often been unable
to provide a ship for NATO’s standing maritime groups; that
we had to miss the recent anniversary celebrations of the
New Zealand navy because a suitable ship was not available;
and that offshore patrol vessels are having to fill in on
tasks relating to the fleet ready escort and the Royal
Navy’s presence in the Caribbean.
-
My hon. Friend makes a good point about the
75th-anniversary celebrations for the royal navy of New
Zealand. In November, our allies the United States, Canada
and Australia sent ships to the international naval
review—even Tonga and the Cook Islands sent ships to the
naval review—but the United Kingdom Navy sent nothing. That
is not exactly the best start to a brave Brexit diplomatic
offensive, is it?
-
Again, I cannot help but agree with my hon. Friend. He
makes a very valid and good point, but if our backs were to
the wall and we needed to provide ships for NATO, that
would be a much more serious commitment that the UK would
have to make. If we do not have enough ships to fulfil
those commitments, that is even more concerning.
I said that the current fleet was 19 in number. Two ships,
HMS Diamond and HMS Lancaster, are being used as training
ships, so that reduces the number from 19 to 17 usable
frigates and destroyers.
I hope that the Minister will break the habit of a lifetime
today and actually give us the answers to the questions
that we have asked. Quite simply, the Royal Navy and the
carrier programme demand that. It starts with a contract
for the Type 26 programme being signed, so let me
reintroduce an old slogan: “We want eight and we won’t
wait!” If we were to add anything to that, it would be that
we cannot afford to wait any longer.
I hope that the Minister can also answer my last question.
How can we ensure that surface shipbuilding does not suffer
as a result of the proliferation of big-ticket items going
through the order book over the next decade? The headline
from Monday’s Financial Times says it all: “Spiralling cost
of UK defence projects signals hard choices”. I raised this
issue at the most recent Defence questions. With the years
2020 to 2023 being the most critical in the equipment
procurement plan, I fear what Professor Malcolm Chalmers of
the Royal United Services Institute highlighted in the FT
article:
“the historic response at MoD has simply been to push
programmes to the right and allow service dates to slip.”
That story followed last month’s excellent National Audit
Office report, which highlighted, among other things, that
the “headroom” used to account for any potential overspend
had already been spent. The report stated that
“any further capability requirements during the lifetime of
the Plan period will have to be met through a
reprioritisation”.
I know that all those situations put the Minister in a
really difficult position, but the clear questions that I
must ask again are these. When will we see the national
shipbuilding strategy? Can the Minister assure us that, by
2023, the Royal Navy will be able to form a fully
functioning carrier group, with Type 26s, Type 45s and the
requisite Royal Fleet Auxiliary ships? Finally, how will
the shipbuilding strategy ensure that surface naval ships
are prioritised in future procurement decisions? Let us
hope that today we get some answers and that 2017 does
become the year of the Navy, not the year that the Navy
wants to forget.
-
Several hon. Members rose—
-
Mr (in the Chair)
Order. I remind everyone that the winding-up speeches will
start at half-past 3. That should give Members an idea of
how much time they have to speak.
2.48 pm
-
Mr (North Durham)
(Lab)
It is a pleasure to serve under your chairmanship, Mr
Evans. I congratulate the hon. Member for Dunfermline and
West Fife (Douglas Chapman) on securing this very important
debate. He raises some very interesting points. Certainly I
have been trying to get answers to them through
parliamentary questions, but we are getting the usual
stonewalling from the Ministry of Defence, which has become
a habit in recent times.
The important thing is to ask this question: what is the
status of Sir John Parker’s report? It was announced in the
2016 Budget, which stated:
“The government has appointed Sir John Parker to lead the
national ship building strategy, which was confirmed in the
Strategic Defence and Security Review 2015.”
It also stated that the report would be published in the
autumn of 2016, which in MOD-speak means anytime between
December and the following June. The press release stated
that it was a Treasury-led, not a MOD-led review. That is
important. It was announced by the right hon. Member for
Tatton (Mr Osborne) when he visited Portsmouth naval base.
The report was published, strangely, not as a Government
report but as Sir John Parker’s own report. The jungle
drums in the MOD tell me that there was a bit of concern
about whether the Secretary of State would put his name to
this report, and he decided not to. That has left the
report in limbo in terms of what influence and status it
will have in the forward thinking about not only our naval
shipbuilding strategy, but our wider industrial strategy.
I am also concerned about how this matter fits into broader
defence industrial strategy. I asked the Minister on 12
January when we would publish a defence industrial
strategy, only to be told that there are no plans to
publish a separate defence industrial strategy, but that
the national shipbuilding strategy—Sir John Parker’s
report—would be added into a broader cross-Government piece
of work on industrial strategy. That is important because
we have basically abandoned having a separate industrial
policy and strategy in this country. That is important
because of the jobs that are relied upon and the important
capabilities that we need in this country. The Government
seem to have just mashed that into the rest of wider
industrial policy.
A basic question needs to be asked about shipbuilding: do
we want sovereign capability to produce complex warships in
this country—yes or no? It is a very simple question that
the Government need to answer to give reassurance about the
future of the jobs—which the hon. Member for Dunfermline
and West Fife raised—and the technical expertise. The
problem is that people look at a warship and think that the
bulk of the cost and expertise has been met on the outside.
It has not. The main value and technology in it are the
skills that go into designing it and into systems
integration. Our supply chain goes way beyond the
Clyde—there is a national footprint of companies in
leading-edge technologies. We need to ask whether we want
those skills in this country or whether we will just buy
from abroad.
When I was first involved in shipbuilding in the late
1980s, the then Government competed at different yards. We
had Swan Hunter, Yarrows and Cammell Laird around the
country and the Government used to compete contracts
between them. At the end of the day, it was pork barrel
politics as to who got the contract and that ultimately
meant that Swan Hunter closed. Clearly, the strategy after
that was to concentrate complex warship building in one
yard. That made absolute sense. That one yard is on the
Clyde, whether we like it or not. There is no other way of
doing it.
The concern I have about Sir John Parker’s report—there are
some points in it that I agree with—is that it is a bit
naive. It has looked at building the carriers, which are on
a huge scale in terms of block modular build, and then more
or less said that we can start building Type 26s and others
in a modular format. Well, I am sorry but I do not think we
can—no disrespect to my hon. Friend the Member for Jarrow
(Mr Hepburn). These ships are on a different scale. We need
one yard to do the integration—the actual build. The idea
that we are going to build them around the country to try
to get some competition goes back to an argument we had in
the late 1990s. I come back to the basic question of
whether we actually want complex warship building in this
country.
The issue is not just the capability. There is naivety
among some people who think that they can order these ships
like ordering their next car. They decide what colour they
want, go to the showroom and say, “I will have a blue one
and we will have a yellow one next year.” That is not how
this happens. These are very complex warships and pieces of
defence equipment. We need to retain not only the
technological capability but the skill base in the yards
and in industry, and we need a drumbeat of work going
through to ensure that we do that. A classic example of
when we got that wrong is when the Conservative Government
in the 1990s took us out of submarine building. That led to
all the problems we had trying to regenerate the capacity
in Barrow for the Astute programme. Unless we keep that
drumbeat going, we will get into a situation whereby we
cannot rely on the fact that when we need a complex
warship, there is one there to be delivered. We cannot turn
these skills and capabilities on and off like a tap when
they are needed.
-
(Glasgow North West)
(SNP)
One of the real dangers is exactly what the hon. Gentleman
describes. As the yards in Glasgow await the commencement
of the Type 26 project, engineers—highly skilled workers
who can work in many different fields—will not wait around
forever.
-
Mr Jones
The hon. Lady makes a very good point. The issue is not
just about generating the skills in the first place—the key
investment that companies need to make in apprenticeships
and other things. This is now an international market.
There are perhaps engineers working on the Clyde who, if
there is no work, will move elsewhere in the world. In some
cases, they will not come back to the industry. We found
that with the Astute programme; nuclear engineers left and
trying to get them back, or regenerating those skills and
expertise, was very difficult.
-
The hon. Gentleman is making an excellent point.
Critically, the Canadian suppliers were actually in Glasgow
the other week looking for such people to take them to
north America.
-
Mr Jones
Again, the hon. Gentleman makes a very good point. This is
an international market and these skills are very sought
after. This comes back to my point that if we want this
capability in the UK, we have to nurture and protect it and
the only way to do that is by having a throughput of work.
The hon. Member for Dunfermline and West Fife raised the
issue about the Type 26. The delay is adding to that
uncertainty. The wider piece really concerns me. To give
the impression that we are going to have that drumbeat of
work, we have had the Type 31 inserted into the programme.
I have studied in detail to try to find out what the Type
31 actually is; no one has been able to tell me yet what it
is. It is a bit like the mythical unicorn—everybody thinks
it exists, but no one has ever seen one. If the MOD can say
that there is a budget line for it, it should please
identify that—in the current procurement there is no budget
line for it at all in the programme.
-
(Glasgow South West)
(SNP)
Was the hon. Gentleman concerned, as I was, to read in an
article in The Daily Telegraph a suggestion from a Ministry
of Defence source that there is no budget for Type 31s and
that they might not even happen?
-
Mr Jones
As people know, I am a bit of an anorak on this subject and
I actually study the MOD accounts, but I still cannot find
where this budget line is. Another point that has never
been answered is what this ship will actually be used for.
I am not sure where it fits into any naval strategy. Will
it be able to meet, for example, Britain’s NATO
capabilities? Will it have capability to fulfil those
roles? If it has not got the air defence capability, it
will not. The other thing that people have completely
missed is that this is about not just building the ship,
but running it afterwards. We all know that there is a
crisis in recruitment and manpower in the Royal Navy.
Again, where is the budget line for not only building, but
running this generation of ships?
The hon. Member for Dunfermline and West Fife makes a very
important point. The Government say that the great thing
about the ships is that they are exportable, but I am
sorry, we are bit behind the game on this. He rightly
identifies at least two other nations that have product out
there.
There is another point about strategy. This is about not
only skills, but the defence of our country, because if we
have the gap between the Type 23s going out and the Type
26s coming in, there will also be a gap in the nation’s
capability. I understand that there is an ongoing extension
programme for some Type 23s, but we need clarity, because
if there is a gap, we will not be able to protect the
carrier groups or some of our other capabilities.
That leads me to the wider piece about the Government’s
strategy in this area. The Prime Minister argues that she
is batting for Britain and that Britain is the key market,
but we have a situation in which the Ministry of Defence,
obviously leant on heavily by the Treasury, is happy to
have multimillion-pound contracts with the United
States—the Apache and P-8 contracts, to name just two—with
no commitment whatever that proportionate workshare will
come back to the UK economy. I asked the Minister a written
question about the Apaches, and I think Boeing said that 5%
of the programme’s value will come back into our supply
chain. That point is important not just for the number of
jobs, but to keep the capability that we need in this
country. I cannot imagine for one minute the United States
doing something similar, even before President Trump took
office, and things will get even worse now. Exporting
highly paid jobs and capability from this country is
inexcusable. I do not want to see the same thing happening
in shipbuilding, so that we will perhaps just buy ships off
the shelf from the United States or anywhere else.
A few weeks ago I asked the Minister in a parliamentary
question what she was doing to monitor whether Boeing, for
example, would put enough jobs into the economy. She fudged
the answer, saying, “We don’t monitor this area.” I am
sorry, but that is inexcusable. What really irritates me is
that if a British company sold a piece of defence kit to
the United States of America, there is no way that we would
not have to give guarantees about workshare and jobs in the
United States. My fear is that without joined-up thinking
on shipbuilding, if we are not careful, a time will come
when the Treasury says, “Isn’t it cheaper just to buy these
from abroad—from the United States or somewhere else?” We
would then lose not only the sovereign capability that is
so important to this country, but the skill base and jobs
that come with that.
I come to my final point. It is about time that the
Ministry of Defence fessed up that it has a huge problem,
which is only partly of the MOD’s making, because this is
actually a Treasury issue. The National Audit Office report
is clear about the procurement budget. The Ministry of
Defence is falling into an old habit—as a former Minister
in the Ministry of Defence, I know this is easy to do—of
just pushing the budget sideways, which is what has
happened with the defence budget. However, there are other
pressures on the day-to-day in-service budgets. Ships are
being laid up, for example, because the cash is not
available to run in-service services. In addition, there is
a huge black hole—it was highlighted in the NAO report—that
the MOD has to deal with. We are not talking about separate
money; it will have to find £8 billion over the next 10
years for the defence estate. All that falls within the
defence budget, so if does not come out of one place, it
will come out of another.
The Government need to be honest about where they are with
the equipment budget. The Opposition got lectures from the
incoming coalition Government about how frugal they would
be, in terms of ensuring that they did not over-commit on
defence, but they are clearly doing that now. The
shipbuilding strategy needs to be published soon. If we are
going to answer yes to the question, “Do we want a
sovereign capability for shipbuilding in this country?”, we
will have to put the money behind it and ensure that the
work is of a nature that allows the industry to develop its
skills and retain that capability.
3.04 pm
-
(Glasgow South West)
(SNP)
It is a pleasure to follow the hon. Member for North Durham
(Mr Jones) and to have listened to his technical expertise
in this area. I very much appreciated his speech and
particularly his support for the Clyde shipyards. I
congratulate my hon. Friend the Member for Dunfermline and
West Fife (Douglas Chapman) on securing the debate, and it
is always a pleasure to see you in the Chair, Mr Evans.
I shall start, as the hon. Member for North Durham did,
with the extraordinary process regarding the strategy. He
is not the only one who thought that Sir John Parker’s
report would be the national shipbuilding strategy; I and
other hon. Members of the House did too, as did trade
unions and the defence industry.
-
The Minister said that a signed copy would be sent to my
hon. Friend the Member for Argyll and Bute (Brendan
O'Hara), but we are still waiting for it. Clearly that
means that the actual statement has not been produced.
-
I remember that exchange, and there was clearly confusion
about the report. I also find it extraordinary that
although Sir John Parker’s report was sent to the Ministry
of Defence on 3 November 2016, this is the first
opportunity that hon. Members have had to discuss it in
detail. In November or December, there should have been a
debate, or a series of debates, on the report, so that hon.
Members could give their views on it and feed into the
process. I shall come to that later.
I was very concerned when it was pointed out to me that on
2 January in The Daily Telegraph—not necessarily a
newspaper that I subscribe to—MOD sources were not only
saying that there is no budget for the Type 31, but that it
will not happen and the plan will not be realised. We need
to go back to the former Prime Minister’s announcement on
the Clyde in my constituency in 2014, when he promised that
13 Type 26 frigates would be built on the Clyde. We were
then told that there would be eight Type 26 frigates and
five general-purpose frigates. As the hon. Member for North
Durham outlined, we do not know exactly what that
capability is, but we were told, “It’s okay; relax, because
eight plus five equals 13.” We are still waiting the final
sign-off, not only for the eight Type 26 frigates but for
the five general-purpose frigates. I hope that the Minister
will tell us, if there is indeed a budget for Type 31
frigates, what it is and what the procurement timetable is
for Type 26 and Type 31 frigates.
-
If what my hon. Friend is saying is anywhere near the truth
and the Type 31s will not exist, what does that say about
the drumbeat for Govan and Scotstoun?
-
I would be very concerned about that, and I will come to
the effects of that later. Sir John Parker’s report is an
honest attempt to end the “feast and famine” procurement
processes by the Ministry of Defence that have often
plagued the shipbuilding industry. If any other public
services carried out procurement processes in the way that
the Ministry of Defence does, there would be uproar in the
streets—imagine if it was equipment for the health service
or education, and so on.
I am pleased that Sir John Parker’s report also recognises
the capability and skills of shipyard workers on the
Clyde—in my constituency, in the Govan shipyard, and in
Scotstoun, in the constituency of my hon. Friend the Member
for Glasgow North West (Carol Monaghan)—working on digital
technology adapted from the automotive sector and with new
working practices that have increased productivity. It is
an honour and a privilege to represent them in this
Parliament. The shipyard workers are also supported by
trade unions and are represented at shop-floor level by
representatives who have campaigned tenaciously over the
years to ensure that future work is secured. Any
announcements that come from the Government are a victory
for them more than anyone else. However, as someone who had
family members in Yarrows who were made redundant under a
Tory Government, I always view such commitments from this
Government with suspicion when it comes to shipbuilding.
Sir John Parker’s report also recognises that the Royal
Fleet Auxiliary ships should be assembled in the UK. It
really is a nonsense that that work has been farmed out
elsewhere. I would hope that Rosyth, to cite one example,
would have that opportunity. Failure to ensure that Royal
Fleet Auxiliary ships are built in the UK will make the
report fall at the first hurdle. An award to a UK yard for
Royal Fleet Auxiliary ships would demonstrate that the
Government are serious about ensuring that an export model
can be achieved and that investment in technology can be
kept.
-
My hon. Friend is talking about Type 31s, but given the
fact that the Secretary of State and also the leader of the
Conservative party in the Scottish Parliament have said
that there will be work on the 13 Type 26s, where is that
guarantee from the Government?
-
I hope we will get that today. I hope the Minister will
give us that commitment.
There is one fatal flaw, however, in Sir John Parker’s
report, which needs to be tackled. His assumption that
there is no precedent for building different first-class
naval ships concurrently is wrong. In the 1990s, Yarrow
shipyards were building and constructing Royal Navy ships
as well as exporting ships to Malaysia. This precedent was
envisaged by the Clyde shipyard taskforce in 2002, chaired
by the then Scottish Executive Minister, , and the former
Scottish Office Minister, , which ensured that
the Govan shipyard was responsible for the steelworks and
that Scotstoun was to become the centre for excellence.
There is therefore reason to argue that Govan could
construct the Type 26 frigates and Scotstoun could develop
the new Type 31 frigate, using the specialist design
capability to ensure that it could be exported to other
countries. Such technical expertise to carry out the work
is already there on the Clyde, but it will require
investment. MOD pressure not to invest in the frigate
factory—promises that led to the demolition of the covered
berth and module hall at Scotstoun—has meant that we still
have a constrained capacity and that the full potential for
shipbuilding on the Clyde has not yet been realised. I want
to hear from the Government about progressive plans with
respect to shipyard reconstruction to unlock significant
long-term advances and savings for the industry so that it
can win more orders, not only here but from overseas.
Sacrifices have been made by shipyard workers on the Clyde.
Let us not forget that to get to where we are now, workers
on the Clyde took redundancy to ensure that the rest would
be kept and that they would be match-fit to build the 13
Type 26 frigates. I hope that today the Minister will
confirm procurement processes for the Type 26 and Type 31
frigates. The trade unions have said that failure to ensure
that the Clyde leads on the general-purpose frigates would
be a betrayal.
3.13 pm
-
(Strangford) (DUP)
It is a pleasure to speak in this debate, Mr Evans. I am
conscious of the time and will make sure that we all get a
chance to participate.
I thank the hon. Member for Dunfermline and West Fife
(Douglas Chapman) for bringing the issue forward today. He
spoke very well, as he always does. He has been an advocate
for shipbuilding across the United Kingdom of Great Britain
and Northern Ireland, where we are all better together, as
I often say, Mr Evans—I am sure that in this case you would
probably say, “Yes, you’re probably right on that.”
[Laughter.] I digress slightly, Mr Evans; I apologise for
doing so.
This is an issue that I have given much thought to and had
much discussion about, having just come off the Select
Committee on Defence. I am pleased to see my hon. Friend
the Member for Belfast East (Gavin Robinson) here. He took
over my position on the Defence Committee and is already
much involved in the issues. It is good to see him here and
involved in the work on that Committee.
We have what is undoubtedly the finest Navy in the world.
That is a recognised fact. That is no surprise, given that
we are a small group of islands. At one stage we were
described as the empire on whom the sun never set, as we
controlled so much of the world. Our Navy was a major
reason for that and our Navy retains a major role in the
strength of the United Kingdom of Great Britain and
Northern Ireland today.
A strong army needs a strong fleet, and this is where the
national shipbuilding strategy must play its part in the
process. These are the facts: the Ministry of Defence is in
the middle of an ambitious recapitalisation programme for
its naval surface fleet. The Government plan to spend some
£19 billion over the next decade on surface ships for the
Royal Navy and Royal Fleet Auxiliary.
The Royal Navy designates a class of frigates and
destroyers as a Type. The Navy has a fleet of 13 frigates,
all Type 23s, which will begin to leave service from 2023
onwards. Hon. Members who have spoken so far have expressed
concern—it is my concern as well—about the delays and the
timescale, and about the quantity and numbers as well. We
look to the Minister today for a response that can put our
minds at ease and allay our fears.
Plans to replace the fleet changed significantly in 2015,
when the Government dropped proposals to replace it on a
one-to-one basis with the yet-to-be-built Type 26 frigates.
Only eight Type 26 frigates will be ordered, and a new
class of general-purpose frigate, unofficially known as the
Type 31s, will be developed. We spoke on the topic of the
Type 26 in October, and my stance today is as it was then,
when I said:
“It is my desire...to see the new British fleet built in
Britain. As we have said, we are marching to the steady
drumbeat of orders, and that must be the way we
move.”—[Official Report, 18 October 2016; Vol. 615, c.
308WH.]
Hon. Members have suggested that although the drumbeat of
orders is on paper, we need to have it confirmed and the
timescale needs to be in place.
BAE Systems is the prime industry partner for naval
warships and submarines. I welcome the Government’s
confirmation that the steel is to be cut on the Type 26 in
summer 2017, although as the hon. Member for North Durham
(Mr Jones) said earlier, summer can develop into autumn—or
indeed winter, whatever the case may be. The work will be
at BAE’s two remaining shipyards, both located on the
Clyde. Again, I can say it is within the United Kingdom of
Great Britain and Northern Ireland. I welcome the
commitment, but the Government have not gone far enough and
there is much uncertainty about what the highly anticipated
report will bring.
I read an interesting report—Members have referred to it—on
a website called Save the Royal Navy. Its opinion on the
Parker report states:
“On 29th November Sir John Parker’s report to inform the UK
National Shipbuilding Strategy...was published.
Commissioned by the Treasury, exasperated with decades of
continual delays and cost increases to warship
construction, the report is concise and written in clear
layman’s language. The 34 recommendations are eminently
sensible and the report has generated at least temporarily,
a warm and fuzzy feeling of consensus and optimism.”
That is a positive response looking towards the future.
However, that report goes on to say:
“Amongst independent observers there is cynicism about
whether any of the recommendations of the report will be
implemented at all. Most of the issues highlighted have
long been known but nothing has been done for years. By
commissioning the report, the Treasury has at least created
a roadmap to escape the current shipbuilding malaise which
will be difficult to ignore.”
Perhaps the Minister will respond to that. The report
continues:
“It is now up to government to properly fund, endorse and
enforce the recommendations when it formulates and
implements the actual shipbuilding strategy next year.
Should those in power be bold enough to do so, it would go
a long way to reviving the RN and have great benefits to UK
industry.”
This is exactly the phrase we want to see:
“It is now up to government to properly fund, endorse”
and fulfil the recommendations—and, I would say, their
obligations as well. That is why we are here this
afternoon. These are matters of national importance and we
need to impress upon our Ministers, particularly the
Minister who is here, the importance of implementing the
review and incorporating the recommendations for
shipbuilding for our Navy.
We do not always get full details from the Library, but on
this occasion we have oodles of information, which has been
very helpful to inform our speeches. One thing that has not
been mentioned is the issue of logistics ships. We have
heard much about frigates, but I want to mention logistics
ships on the record, because—the Minister will know this—it
seems that South Korea is going to build them, and I want
to know: why are we not building them here? I mean no
disrespect to South Korea—it has a lot to do and is very
expert in what it does—but I would like our people to have
the opportunity.
There has been a suggestion that conversions from
commercial shipping might be the right solution. If it is
the solution, let it happen at home, using our own
shipbuilding expertise. We have shipbuilders throughout the
UK and they must benefit from Government contracts. A
Ministry of Defence principle ensuring that only home firms
get the work is a must. It is important to entire
communities that rely on the work and the money. More
importantly, however, we do not ask for ships to be built
only to save jobs; we need those ships for the security of
the nation. Sometimes that point is lost in the debate. We
are thinking about the security of the nation, to make sure
that we are okay. We have a duty and responsibility. I
should like to say that I have every confidence—provided
that the Minister gives a good response today. We must
impress on her how vital it is to have a strong, fully
functioning Navy. That can happen only with proper frigates
and the right types of ships.
I implore the Minister to set our minds at ease and ensure
that the report takes into consideration all that has been
said, in the valuable contributions made by all Members to
the debate. Certain things cannot be scaled back, and one
of those is our defence capability. The Navy is an
essential component of that, which must be recognised in
the forthcoming national shipbuilding strategy. I thank the
hon. Member for Dunfermline and West Fife for setting the
scene, and all other hon. Members who have spoken. We look
to the Minister for the response that we need.
3.21 pm
-
(Stirling)
(SNP)
It is a pleasure to serve under your chairmanship, Mr
Evans. I congratulate my hon. Friend the Member for
Dunfermline and West Fife (Douglas Chapman) on securing
this important debate. The timing could not be better,
given the revelations about the cost of UK defence projects
in all forces, not only the Navy. I want to raise two
points. The first is about our priorities. They are set in
the national security strategies and should flow into the
strategic defence and security review and the Government’s
priorities in this area. The second is the effect of the
recent National Audit Office report on procurement for
large defence projects and the affordability of the
national shipbuilding strategy that we anticipate.
The national security strategy and the SDSR should inform
the procurement process and, because of that, the national
shipbuilding strategy. However, there seems to be a logical
inconsistency in how that is applied. In paragraph 75 of
the SDSR, the Ministry of Defence is quoted as saying that
the document will
“determine priorities for investment to ensure that the UK
has a full suite of capabilities with which to respond to
defence and security threats”.
Page 67 identifies the three tiers of domestic and overseas
risks, grading them as tier 1, 2 or 3 threats,
“based on a judgement of the combination of both likelihood
and impact.”
Taking that at face value, the National Security Council
has identified terrorism, international military conflict,
cyber, public health, major natural hazards and instability
overseas as the tier 1 threats facing the UK. That exercise
having been undertaken, one would have thought the
resources would follow the perceived threats and their
perceived likelihood, but that does not seem to be the
approach followed by the Ministry of Defence, particularly
in the present case.
-
Does my hon. Friend feel that the amount of resource going
into the Dreadnought programme is skewing all other budgets
and making the Minister’s job of preserving our surface
ship fleet much more difficult?
-
Yes, I think that is a concern that many of us have—that
the priorities identified in the risk assessment done for
the document I have quoted are not being followed in
Government spending. Perhaps that is why there has been
delay after delay in the project.
-
Mr
Does the hon. Gentleman also recognise that the Dreadnought
programme is putting money into the Scottish economy? A
success story in that regard is that Babcock is doing the
missile tubes at Rosyth.
-
If we are going to take the SDSR process seriously and look
at the assessment of what we need for the defence of the
country, we must deal with tier 1 threats first—that is why
they are tier 1 threats. Clearly, if we are to meet the
threats identified, the shipbuilding programme is
essential.
As my hon. Friend the Member for Glasgow South West (Chris
Stephens) noted, the Government promised that 13 Type 26
frigates would be built on the Clyde, then revised that
substantially, to eight, with five multi-purpose frigates.
At paragraph 90 of its report on the 2% level of spending
by the Government, the Defence Committee correctly
identifies the risk to the Type 31 programme:
“Should...the ‘concept study’ to investigate the potential
for a new class of lighter, flexible general purpose
frigate be unsuccessful, we wish to be informed at the
earliest opportunity of the MoD’s contingency plans to
deliver the extra ships to satisfy the total originally
promised.”
The Government’s response to those concerns merely
indicates a willingness to keep the Committee informed. We
are looking for some more concrete answers from the
Minister today. Furthermore, we still await confirmation
that the frigates will be built on the Clyde. Should that
not occur, it will be a betrayal of the Clyde workers, as
my hon. Friend said. They would be entitled to feel
betrayed; it would threaten the yards’ capacity to deliver
complex warships in the future and would undermine the UK’s
ability to meet the challenges identified in its own
national security strategy and the SDSR.
My second concern is that the shipbuilding strategy will
not be affordable. I am concerned that there will be
further backtracking on the commitments. It is fine to have
a strategy, with many large new procurement projects, but
if there is no money to actualise the strategy, what is the
point in the exercise? According to the National Audit
Office’s report, “The Equipment Plan 2016 to 2026”—which
the hon. Member for North Durham (Mr Jones), among others,
has already alluded to—the price of the plan has ballooned
by 20%, to £82 billion, in a single year. That means that
the Department has allocated all headroom previously set
aside in the plan, removing all the flexibility to
accommodate additional capability requirements. That is why
we need reassurance today.
Given that the Type 26 project started at a projected cost
of £343 million per hull, according to the 2015 major
projects report, and is now £1 billion per hull, according
to oral evidence to the Defence Committee, the MOD does not
have, and never has had, a proven track record of acquiring
big-ticket items on time and on budget. Rather than dealing
with those pressures in the past, it has pushed the
programmes further down the list and allowed service dates
to slip, exactly as has been described today.
-
Mr
Does the hon. Gentleman agree that there is added pressure
on the defence budget because of Brexit, in terms of the
value of the dollar, which is made worse when we procure
large-ticket items from the United States?
-
The hon. Gentleman must have read my mind, because I am
coming on to say that point 18 of the NAO report summary
states:
“Changes in foreign exchange rates, such as those that
happened after the EU referendum, can pose a significant
risk to the Plan’s affordability in the future. As at 10
January 2017, the pound was 21.4% below the exchange rate
with the US dollar and 4.2% below the exchange rate for the
euro used in the Department’s planning assumptions.
Approximately £18.6 billion of the Plan is denominated in
US dollars and £2.6 billion in euros over 10 years.”
That will have a major impact.
I understand that the Department has a certain amount of
protection against foreign exchange rates in arranging its
finances, but does not it worry the Minister that such a
large amount of the plan is predicated on foreign exchange
rates, with the Government appearing to be gambling that
the rate will not go up further? Given the Government
position that economists cannot be trusted, which is what
many current Ministers said during the recent
referendum—and going by even a cursory look at the
financial predictions before Brexit—can we really have any
confidence that the envisaged programme can be afforded?
That is why we need reassurance today.
The shipbuilding strategy is long overdue and, given the
current state of the Department’s books, it is badly needed
to provide clarity for those working in shipbuilding and
those monitoring our national defence readiness going
forward.
-
My hon. Friend will correct me if I am wrong but, to take
F-35s as an example, they are 85% built in the United
States, and therefore bought in dollars. That is critical
when we reflect on the impact of the fall in the pound
compared with the dollar.
-
Absolutely. That illustrates the point very well. I hope
that the Minister will reassure us today about the Type 26
programme and the Type 31 programme, about the ships being
built on the Clyde as promised, and on the affordability of
the shipbuilding strategy that the Government will
hopefully soon present. Finally, I hope that by the end of
the debate we shall know with certainty when the overdue
shipbuilding strategy will be published.
3.29 pm
-
(Argyll and Bute)
(SNP)
It is a pleasure to serve under your chairmanship, Mr
Evans. I sincerely thank my hon. Friend the Member for
Dunfermline and West Fife (Douglas Chapman) for securing
this important debate.
I am pleased to see that all the constituent parts of the
United Kingdom are represented here today, but I have to
ask: with the honourable exceptions of the Minister and the
hon. Member for Bury St Edmunds (Jo Churchill), where are
all the Government Members? On the day we debated the royal
yacht Britannia, one could not get one’s nose through the
door for Government Members wishing to contribute. Yet here
we are, discussing the national shipbuilding strategy, and
apart from the honourable exceptions I mentioned, not a
single Government Member is here to take part or even
listen.
I commend my hon. Friend the Member for Dunfermline and
West Fife; as always, he has hit the nail on the head. I
join him in seeking an assurance from the Ministry of
Defence that it will be able to form the functioning
carrier group that he mentioned. I also join him in seeking
a cast-iron guarantee that the building of surface ships
will not suffer as the big-ticket items begin to come on to
the books over the next decade or so. I look forward to the
Minister addressing those questions.
I recognise the contribution of my hon. Friend the Member
for Stirling (Steven Paterson), who questioned—rightly, in
the light of the National Audit Office report—how the
Government intend to pay for this equipment, given that we
have been told that there is no headroom whatever, the
contingency funds have gone and the costs are ballooning.
I commend the tenacity of my hon. Friend the Member for
Glasgow South West (Chris Stephens), who has been a
tireless campaigner on behalf of the shipbuilders of his
constituency and of workers the length and breadth of the
country. I hope the Minister was listening carefully when
he articulated the fears of workers on the Clyde at
Scotstoun and Govan.
The hon. Member for North Durham (Mr Jones) was correct to
refer to the status of Sir John Parker’s report. We were
told that the strategy would be delivered; then, after it
was not delivered, we were told that Sir John Parker’s
report was merely for information. I would like to know
when that was decided—I will return to that point in a
moment. The hon. Gentleman also raised the vital question
of the status of the Type 31s. I hope that the Minister
will clarify the exact role that the Type 31s will play.
Will she give cast-iron guarantees that they will actually
happen?
My hon. Friends the Members for West Dunbartonshire (Martin
Docherty-Hughes), and for Glasgow North West (Carol
Monaghan) raised an incredibly important point: the delays
and uncertainty caused by holding back the national
shipbuilding strategy are in danger of producing a skills
flight from Scotland, particularly from the Clyde. As we
have heard, Canadian shipbuilders are already advertising
locally in and around Glasgow, promising jobs in Halifax,
Nova Scotia. That is deeply worrying.
The contributions from Scottish National party Members can
be summed up with a single question: when will the
Government finally publish the national shipbuilding
strategy? As so many of us have said, it has been much
discussed in this House. It has been talked about, promised
and threatened; as my hon. Friend the Member for West
Dunbartonshire said, we were even told on one occasion that
it had actually been published, only for it to disappear
again. The hon. Member for North Durham described the
national shipbuilding strategy as a unicorn, and in many
ways he is right. However, I tend to look at it as the
Maris Crane or the Mrs Mainwaring of UK politics—a central
character in a long-running series who is much talked about
and around whom entire storylines may be based, but who is
never, ever seen. Sadly, while Maris Crane or Mrs
Mainwaring are cleverly constructed comedic devices, the
national shipbuilding strategy is descending into farce.
I look forward to the Minister’s attempt to use smoke and
mirrors to explain why the House and the people whose
livelihoods depend on the report are still waiting for it
in February 2017, when it was promised many times that it
would be here before the autumn statement. My first memory
of the national shipbuilding strategy being promised goes
back to 12 September, when the Minister said that it would
be delivered in November. In an answer to my hon. Friend
the Member for Glasgow South West on 18 October, she
repeated that
“the national shipbuilding strategy will report by the
autumn statement.”—[Official Report, 18 October 2016; Vol.
615, c. 318WH.]
There were no caveats, qualifications or
stipulations—nothing to suggest that that would not happen.
It was a clear and unequivocal promise that the
strategy—not a report that would inform the strategy, but
the strategy itself—would be delivered before the autumn
statement.
The Minister then told me at Defence questions on 7
November that
“the national shipbuilding strategy…will be announced
nearer to the autumn statement…I am sure that there will be
great news for shipbuilding across Scotland and the whole
of the UK.”—[Official Report, 7 November 2016; Vol. 616, c.
1237.]
How would we know? We have never seen the strategy. It has
not appeared.
We were given false hope on 12 December when I asked the
Minister directly why the national shipbuilding strategy
had not appeared, despite all the promises. She told me
that I was
“complaining about the lack of publication of a report that
has been published”.—[Official Report, 12 December 2016;
Vol. 618, c. 485.]
She even offered to send me a signed copy of it. Needless
to say, signing, gift-wrapping and sending something that
did not actually exist proved a step too far, even for the
not inconsiderable skills of the Minister.
-
(Caerphilly) (Lab)
Has the hon. Gentleman received a copy of it?
-
Sadly, it is a will-o’-the-wisp—it does not exist. Perhaps
it will come when Brigadoon next appears.
The rest of the country and I remain without the national
shipbuilding strategy, signed or unsigned. Five months
after the first recorded promise that it would be
delivered, we are still waiting. I fully concur with my
hon. Friend the Member for Dunfermline and West Fife that
our frustration at being led a merry dance by the
Government over the shipbuilding strategy must be nothing
compared with the frustration of the shipbuilding workers
and the servicemen and women of the Royal Navy who depend
on the strategy for their livelihoods. We may poke fun at
the Minister, but let us never forget that we are dealing
with people’s lives and people’s jobs. Those people deserve
respect, and when their Government say that something will
appear on a given date, they should be able to trust that
it will.
The Minister has a lot to address in her reply, but I ask
her to address the following questions in particular. When
will we see the national shipbuilding strategy? Will there
be a full carrier group capability in 2023, as my hon.
Friend the Member for Dunfermline and West Fife asked? Can
she guarantee that surface shipbuilding will not be
squeezed as the cost of Trident soars, the economy shrinks
and the pound loses value? What is the status of the Type
31 frigates, as the hon. Member for North Durham asked? Can
the Minister guarantee that they will be built? Will she
give a timetable for the construction of the Type 26, as
she has been asked? Is she aware of the levels of concern
that have been caused by these delays, and will she act
accordingly?
There is so much about the national shipbuilding strategy
that needs to be discussed. At the risk of repeating
myself, I am sorry that so few Government Members are here
to listen to this vital national debate. I look forward to
the Minister’s reply.
3.39 pm
-
(Caerphilly) (Lab)
It is a pleasure to serve under your chairmanship, Mr
Evans. I congratulate the hon. Member for Dunfermline and
West Fife (Douglas Chapman) on securing this debate; it is
on a very important subject and, as has been said, it has
given us a first opportunity to discuss Sir John Parker’s
important report.
I welcome the contributions of Scottish National party
colleagues, the hon. Member for Strangford (Jim Shannon)
and my hon. Friend the Member for North Durham (Mr Jones),
who showed his expertise in this area. However, it is a
great shame—a crying shame—that there are no Conservative
Members of Parliament present, apart from the Minister and,
rather belatedly, somebody else who I think has come in for
another debate. It is a great shame that we have not had a
full Chamber and that we have not all been able to debate
collectively what is a fundamentally important issue for
this country.
I will focus my comments on the situation regarding the
strategy from the Ministry of Defence. My starting point,
of course, is what the Government themselves declared in
2015 in their strategic defence and security review. They
said that they were committed to maintaining a fleet of 19
frigates and destroyers, and that they intended to
complement that force with a new class of lighter and
flexible general purpose frigates. At that time, they
correctly made the link between the need to develop our
national security and the promotion of our domestic
prosperity. The Government proudly announced then that a
new national shipbuilding strategy
“will lay the foundations for a modern and efficient sector
capable of meeting the country’s future defence and
security needs.”
In the Budget of 2016, the Government proudly announced
that they had appointed the eminent Sir John Parker to lead
and write a national shipbuilding strategy, and it was
promised that a report would be prepared and presented to
this House in 2016.
However, there has been genuine confusion and I hope that
the Minister will take this opportunity to clarify the
situation. On 29 November 2016, we had a report from Sir
John Parker, but it was not, as we had been promised, the
Government’s national shipbuilding strategy. Many people
thought that it was—some Ministers thought that it was—but
it was not. Instead, we had an “independent report” on the
UK’s national shipbuilding strategy from Sir John Parker.
My questions are quite simple. How did that metamorphosis
take place; why did it take place; why is there confusion;
what contact was there between the different Departments;
and who is taking the lead on this issue? Those are very
important questions about something as fundamental as the
strategy for our future warships, which is not an issue
that can be lightly dismissed. I echo what other Members
have said: we would all like answers from the Minister
about what on earth has happened and what on earth is going
on.
Of course, Sir John’s report is very radical and extremely
scathing about how things work, or rather do not work,
within the Ministry of Defence regarding Royal Navy
programmes. The report has a very interesting, informative
and worrying chart about the length of time it takes for
projects to develop to fruition. For example, Sir John
points out that it was in 1967 that the conceptual start of
the Type 21 frigates began and they were delivered nine
years later. As for the Type 23 frigates, the conceptual
start date was in 1978, but it took 17 years for that
project to come to fruition. Goodness knows how long it
will take for the Type 26 frigates.
Sir John asks why there have been such long delays. Why has
this process taken such a long period of time? In some
ways, the demands upon the frigates have changed. The world
has changed and defence requirements have changed, but
there is still that laborious project time before us. Why
has that happened?
-
Does the hon. Gentleman agree that these delays not only
impact on the Royal Navy but on the local economy in
Scotland? He may be aware of the GMB report on Scottish
shipbuilding and the value of shipbuilding to the Scottish
economy.
-
Indeed, I fully support those points. The situation is very
worrying for all concerned, not least the people who are
employed in the shipbuilding industry and the local
communities from which they are drawn.
Sir John gives a number of reasons why the long delays have
occurred. He makes 11 points. I will not go through all of
them, but will just pick out some of the reasons he
suggests. He says that there has been
“A lack of assured Capital budget per RN ship series,
subject to annual arbitrary change, with accumulative
negative impact on time and cost with accompanying
increased risk of obsolescence”.
That is very worrying. He also says that there have been
“Poor linkages across the ‘Total Enterprise’ including
industrial capability and capacity”.
He goes on to say:
“Senior decision-makers have, previously, been engaged too
late in the process and not always with high quality
information and costing data”.
He adds:
“The MOD has lost expertise in both design and project
contract management”.
He says that there has been
“Inadequate evaluation of risk contingency in each
project”.
Those are some of the damning reasons why Sir John says
there have been delays. I suggest that they are an
indictment of the MOD, which really must sort things out
once and for all regarding its procurement and governance
strategy for warships.
Once the strategy has been written by the Government, when
will it be published? I will not ask for the exact day or
week, but will it be published in March, April, May, or
whenever? We would like some sort of indication. Once it is
published, we would like to know what sort of consultation
there will be and how long it will last. I ask that because
we want to have a full debate on every dot and comma of
that important policy document.
I recognise that the Minister will not say very much about
what might or might not be in that report. Nevertheless, I
have a number of questions for her. First, will the
Government sort out, once and for all, their procurement
and governance systems for warship construction in this
country? There really ought to be a masterplan that should
be reviewed at each SDSR, and as part of that approach
there should be a partnership with both the industry and
the trade unions. As Sir John has suggested, a shipyard
trade union representative ought to be appointed to attend
regular meetings, to enhance the transparency and
efficiency of the processes that are under way.
Secondly, will the Government commit to working with their
industry partners and trade unions to enhance the training
and educational capabilities and facilities, so that there
is the correct mix of skills and competence, particularly
with regard to the new digital systems that are coming on
stream?
Thirdly, will the Government commit to having a small but
highly specialised virtual innovation centre to force
through, among other things, advances in design, new
materials and productivity improvements? As Sir John has
argued, such an innovation centre is necessary if we are to
oversee the new “global competitiveness plans”, which I
believe the Government want to see being created.
Finally, will the Government commit to placing a greater
emphasis on the exporting of British-built ships, as well
as British project management, design, equipment and
sub-systems? Will they not only engage in general rhetoric,
but commit to specifics, as part of a great national effort
to ensure not just that British-built ships are used for
British defence, but that the expertise in this country is
sold for the benefit of navies throughout the world?
I look forward to hearing the Minister’s response to my
questions.
3.49 pm
-
The Parliamentary Under-Secretary of State for Defence
(Harriett Baldwin)
In the short time available to me—I want to leave a bit of
time for the hon. Member for Dunfermline and West Fife
(Douglas Chapman) to say a few more words at the end of the
debate—I will attempt to answer all the questions that hon.
Members have put this afternoon, to the extent that I can.
The 2015 strategic defence and security review set out a
clear plan for the Royal Navy. For the first time in a
generation, we are growing our Royal Navy, and this major
programme of investment will increase our nation’s power
and reach. There seems to have been quite a lot of
discussion in the debate about the exact timings for
various different documents. We made it clear in the Budget
last year—I will quote the exact wording—that:
“The government has appointed Sir John Parker to lead the
national ship building strategy, which was confirmed in the
Strategic Defence and Security Review 2015. He will report
by Autumn Statement 2016.”
In the end, it was 29 November. My office assures me that a
copy of the report was sent to the hon. Member for Argyll
and Bute (Brendan O'Hara). I am happy to take bids on
whether it has been suitably autographed. If he has not
received it, he should have, by this stage.
-
Will the Minister give way?
-
I will, if he has not received a copy.
-
I have not received a copy. I look forward to a signed
copy; it would be far more valuable. If what she is now
saying is right, why did she say on no fewer than four
occasions that the national shipbuilding strategy will be
delivered by the autumn statement? It was unequivocal.
-
It is about the distinction between the report and the
Government’s publication of the national shipbuilding
strategy. A range of people raised this issue, so I make it
clear that we are considering Sir John’s recommendations,
and we will provide a full response, which will be what we
can all call the national shipbuilding strategy. It will be
published in spring 2017. I am sure Members will appreciate
that I cannot be more precise than that in terms of a
specific date.
-
rose—
-
(Belfast East)
(DUP)
rose—
-
(East Renfrewshire)
(SNP)
rose—
-
If Members want to take up my time, I will give way.
-
Will the Minister outline the process? A few Members have
mentioned that, including the hon. Member for Caerphilly
(Wayne David). Once the Government publish the national
shipbuilding strategy and its response to Sir John Parker,
what is the process? Who feeds into that response?
-
I will be talking a little more about that in my speech.
-
In previous engagements at the Defence Select Committee,
the Minister has indicated her willingness to travel
throughout the United Kingdom to see the other
opportunities that are available. Given that the largest
dry dock and the second largest dry dock in the United
Kingdom are in my constituency at Harland and Wolff, I look
forward not only to the Minister visiting, but to
formulating plans that can feed in to her final report and
considerations.
-
I thank the hon. Gentleman for an obviously irresistible
invitation. I hope I will be able to take him up on it in
the not-so-distant future. For the record, I say to the
hon. Member for Jarrow (Mr Hepburn) that I am in Newcastle
tomorrow. I look forward to meeting a range of
manufacturers. I will not specifically be meeting A&P
Tyne on this occasion, but I met A&P in Falmouth only
last week.
In the SDSR we announced our plans for a naval programme of
investment. We are investing in two new aircraft carriers,
which are currently being completed at Rosyth. We are
investing in new submarines to be based in Scotland at
Faslane. We have announced our plans for frigates. We are
building five new offshore patrol vessels on the Clyde at
the moment. We have ordered new aircraft, including the
maritime patrol aircraft, the P-8, which will be based at
Lossiemouth. Scotland is clearly doing well out of defence,
and the UK is doing well in defence with Scotland, and 2017
is the start of a new era of maritime power, projecting the
UK’s influence globally and delivering security at home. I
do not have time in this debate to list all the different
ships we have deployed across the world’s oceans.
I know the appetite of Members for publications. They will
have all read the 2016 equipment plan, which we published
last month. It laid out the plans in more detail and
announced that the total amount that will be spent on the
procurement and support of surface ships and submarines
over the next decade amounts to some £63 billion. It is all
part of the continued modernisation of the Royal Navy in
the coming years, which will be underpinned by our national
shipbuilding strategy. It is very much our intention that
the strategy will be a radical, fundamental reappraisal of
shipbuilding in the UK, with the aim of placing UK naval
shipbuilding on a sustainable long-term footing. It will
set the foundations for a modern, efficient and competitive
sector, capable of meeting the country’s future defence and
security needs.
-
Mr
Can the Minister point out in the Budget where the budget
line is for the Type 31?
-
The hon. Gentleman will have read the equipment plan. I do
not have the exact quote here, but clearly we have a very
ambitious equipment plan. We are expecting to spend some
£63 billion on ships, support and submarines.
I want to convey to Sir John Parker the thanks of all
Members who have spoken today for his excellent report. He
is clearly a highly respected expert. Importantly, he has
taken an independent approach to the report. He has had a
high level of engagement with stakeholders. Members asked
about his engagement. He has visited all key industry
leaders and all the companies across the UK that design and
build ships, including in Northern Ireland. He has visited
small and medium-sized businesses in the supply chain.
Industry stakeholders were engaged at all levels. He
brought strong strategic direction and guidance to the
work, for which we are immensely grateful. He also met
trade bodies, trade unions, Ministers, civilian and
military officials and, indeed, the hon. Members for
Glasgow North West (Carol Monaghan) and for Glasgow South
West (Chris Stephens). He has been thoroughly engaged with
everyone.
I have not got much time left, so I will speak very briefly
about exports, which a range of Members raised. The report
makes an important recommendation about exports. We have
already started that work, working closely with the Defence
and Security Organisation in the Department for
International Trade. Members can expect to hear more about
that in the coming weeks and months.
The Type 26 programme is a key element of our investment
plans. To meet our needs, we require eight to replace the
eight anti-submarine-focused Type 23 frigates. Members will
be aware that the Defence Secretary announced in November
last year that, assuming successful completion of the
negotiations, we expect to sign a contract for the first
batch of the eight planned Type 26s and cut steel on the
first ship this summer. That would give BAE Systems on the
Clyde work until the early to mid-2030s. Commercial
contract negotiations are intense and ongoing, so I cannot
make any more information available to the House today. The
investment will sustain shipbuilding skills at the
shipyards on the Clyde and continue to provide
opportunities in the wider supply chain around the UK. The
ships will provide an anti-submarine warfare capability,
which is essential for the protection of our nuclear
deterrent. SNP Members had a bit of a political pop at me,
but they would do well to remember what I have just said.
Their two political obsessions—Scottish independence and
ending our continuous at-sea nuclear deterrent—would be two
of the worst things that could befall the Scottish
shipbuilding industry.
Briefly on the Type 31e, Sir John recommended that a new
class of lighter general purpose frigate should be given
priority. He was clear that it should be designed to be
exportable, but capable of incorporating the needs of the
Royal Navy. A lot of work is under way on that in the MOD.
It is in the pre-concept phase, and further information
will be made available in the national shipbuilding
strategy.
In summary, the MOD is working with colleagues across
Government and with industry to examine Sir John Parker’s
report and its recommendations in full. I recognise that
Members value the shipbuilding jobs in their
constituencies, and I assure them that the Government are
committed to an industrial strategy that will increase
economic growth across the country and refresh our defence
industrial policy.
3.59 pm
-
I opened the debate by talking about déjà vu, but the debate
has been déjà vu writ large. I asked when we could expect an
announcement on the national shipbuilding strategy. There was
no reply from the Minister. We asked how the carrier group
will be secured when it is at sea. There was no reply from
the Minister. We asked whether surface ships would be
prioritised in the budget, and again, there was no commitment
from the Minister. What we did discuss was whether a
signature was on a document. What we really need to see is
her signature on contracts to ensure that jobs on the Clyde
are safe and secure for the years to come.
Question put and agreed to.
Resolved,
That this House has considered the national shipbuilding
strategy.
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