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Defence Procurement: Steel Industry

Volume 614: debated on Monday 12 September 2016

7. What steps he is taking to ensure that the British steel industry and its workers benefit from current and future defence procurement. (906245)

We positively encourage bids from British companies to ensure they are in the best possible position to win future steel contracts. We have issued new policy guidance to address the barriers which might prevent UK steel producers from competing effectively in the open market.

Now that Government Departments are mandated to provide information about the proportion of UK steel used in the Crown Commercial Service, will the Minister please tell the House what percentage of UK steel is used in current defence projects and what percentage will be used in future?[Official Report, 11 October 2016, Vol. 615, c. 4MC.]

The hon. Lady rightly speaks up for steel production in her constituency. She will be very pleased to know that, for the largest project that the UK Government have ever procured that uses steel—she will be aware that that is the carrier programme currently under construction on the Clyde—the vast majority comes from Tata Steel. I believe it is 94%.

I wholly support the increasing use of small firms for defence procurement, but will the Minister undertake to encourage those small firms to use British steel wherever possible?

My hon. Friend is absolutely right that it is a process of encouraging competition not only within the procurement process, but where there are long lead-time items. In our strategic defence and security review, we clearly set out the largest programme of investment in ships for some time, and there will be a lot of long lead-time items. Small business and producers will be able to work with those who are procuring contracts with prime contractors to find a place in that supply chain.

Recent defence procurement decisions have failed to take into account the benefits to the UK economy gained by manufacturing domestically. A growing number of products, particularly steel, are procured abroad. Will the Minister therefore commit to assess the wider economic and social benefits derived from building the three new solid support vessels in the UK with British steel, and to share that information with the House?

The hon. Lady is right again to highlight the fact that, in our strategic defence and security review, we set out a programme in which we are investing in more ships and more aeroplanes, and there is more cyber-investment. She mentions the solid support ships. They will not be procured until later in the Parliament, but I assure her that we will do everything we can with those long lead-time items and the programmes that have been set out in advance to ensure that British companies, including British steel companies, have all the information they need to be successful.