National Shipbuilding Strategy — House of Lords, 2022-03-15
Topic: Defense
Denis Tunnicliffe (Labour, Centre-left): My Lords, the latest iteration of the Government’s shipbuilding strategy is overdue. Funding contained in it was first announced two years ago. However, it is welcome, and I am grateful to the Minister for coming to the House this evening to answer our questions The Defence Select Committee’s report last December highlighted how stretched the Navy’s capabilities are, with a danger that it will not be able to cope with the increasingly complex international security environment. It warns that an unexpected crisis could break it. It is vital that the Government do what is needed to avoid that dire outcome. The report urges collaboration with the UK shipbuilding sector by providing an assured pipeline of work and actively intervening to support the modernisation of yards to support the delivery of new vessels into an expanded fleet capable of fulfilling the ambition of the integrated review However, the strategy does not confirm the total number of ships the Royal Navy will receive. Can the Minister confirm today how many Type-32 frigates and multi-role support ships will be built and delivered? Does the "more than £4 billion" of government investment over the next three years cover any of the cost of the 150 ships in the 30-year pipeline to which the Statement refers? How much of this is new money Beyond this, there are two major problems with the strategy. First, why does the strategy not promise a British-built by default approach to procurement? This, as the GMB and Unite have highlighted, will kill investment and put UK jobs and skills at risk. A commitment to ensure that ships are built in UK yards, with targets for using UK steel, would build resilience in our supply chains and protect our security Steelmaking is a crucial component of our national security and our ability to act in our own interest. What steps will the Government take to improve the public procurement of UK-made steel in shipbuilding in order to preserve and promote jobs that are of vital importance to steel communities and the UK’s strategic independence? What is more, with foreign bidders supported by their own Governments, British shipyards are not even able to compete on a level playing field. None of this feels in line with the Government’s levelling-up strategy We know that a British-built by default strategy would create more jobs, but frankly, we do not know how many new jobs there will be a result of the strategy as it is. Can the Minister tell us? The Government seem to keep updating their excuses as to why we continue to procure from elsewhere, such as with a £10 million contract awarded to a Dutch yard last week. No other shipbuilding nation would act in this way. What the Defence Secretary has said is that fleet solid support vessels will be built by "British-led teams" following the decision to award the competitive procurement phase design contracts earlier this year. How is "British-led" defined? What percentage of the construction and manufacture of fleet solid support vessels will take place in British shipyards Secondly, the strategy does not tackle long-lasting issues of mismanagement and delivery at the Ministry of Defence. As it stands, no major shipbuilding programmes are rated on time or on budget by the National Audit Office. The number of projects rated amber or red is increasing. We know from previous experience how easy it is to underestimate both the resources and time needed for large contracts to be delivered. Can the Minister tell us what specific initiatives will be put in place to achieve on-time and on-budget outcomes? Moreover, while on the subject of contracts, I am curious about the minimum 20% weighting for social value that the strategy says will be applied for MoD shipbuilding competition. Can the Minister explain what this means in more detail? How will social value be assessed On a wider point, the strategy assumes a level of investment from the private sector into research, development and manufacturing. The mood seems to be that a forward-looking strategy providing a glimpse of the future to the sector will be enough to generate investment. I find this optimistic. Can the Government confirm their belief that the private sector will invest at the levels necessary without direct funding from Government? As I mentioned earlier, not having a British-built by default strategy makes this optimism even more farfetched. Is the Minister not concerned Those are my two main areas of concern, but I have some further questions on other aspects of the strategy. The strategy establishes the Maritime Capability Campaign Office within the Department for International Trade as the export arm of the National Shipbuilding Office. This will supposedly turbocharge UK shipping exports. Given that this has such a prominent role in the strategy, it is neither unexpected or unwelcome, but without a commitment to using UK materials and shipyards, it seems hollow. Can the Minister therefore indicate what role she expects exports to have in maintaining our shipbuilding industry? Without a commitment to using British materials, does she see the UK as simply a processing centre, to import materials from abroad and sell them on as finished vessels; or perhaps the idea is to contract foreign shipyards and then sell their finished products elsewhere, with the UK acting only as an intermediary? Finally, with the Spring Statement now only eight days away, can the Minister confirm a big boost for defence funding, both to fulfil the ambition of the integrated review and to respond to the growing threat of Russian aggression?