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Defence Industry

Volume 634: debated on Monday 15 January 2018

2. What steps his Department is taking to increase defence exports and protect defence industry jobs. (903256)

The strategic defence and security review created a national security objective to promote our prosperity, supporting a thriving and competitive defence sector. We have now published our national shipbuilding strategy and refreshed defence industrial policy; industry has welcomed both. Exports are now also a defence core task, and I was delighted last month to sign the biggest Typhoon order in a decade, worth £6 billion.

Our NATO allies should be living up to their commitment to spend 2% of gross domestic product on defence, including 20% of defence expenditure being on major equipment, as agreed at the 2014 NATO Wales summit. Does my right hon. Friend agree that, if all members of NATO lived up to their commitments, there would be a boost to the British defence manufacturing sector and therefore to high-skilled British jobs?

My hon. Friend makes a valuable point. He is right that, if everyone lived up their commitments on NATO spending and capital equipment, Britain could be a major beneficiary. I have made that point repeatedly to NATO Defence Ministers. It is about making sure that we have the right product on offer, so that we can sell it around the globe. That is something we in this country can be proud of as we continue to make significant and important deals across the globe.

Will the Secretary of State confirm that, by 2020, 20% of our defence budget is set to be spent in the United States, not supporting UK jobs in design, engineering and manufacturing? Will he look again at defence procurement policy, which currently excludes social, economic and employment policies?

We are proud that we continue to sell more and more to the United States that is British designed, manufactured and built, and we will continue to do that. We have some world-leading companies that continue to lead the way in this field.

The defence industrial policy refresh was extremely disappointing, particularly in its failure to include a change to how the Ministry of Defence calculates value for money to include employment and economic impacts in cities such as Portsmouth, despite many defence companies urging the Ministry to make that change. Can the Secretary of State explain why?

The refresh has broadly been welcomed by industry. I am sure that it will be followed by further refreshes, and we will be happy to look at different options.

One way to support defence exports is to make more of the “Five Eyes” relationship and the sharing of platforms. A great way to do that would be to have three, or perhaps four of the “Five Eyes” powers operating the same platforms, potentially on the same frigates. Will my right hon. Friend assure me that every effort will be made at the top of Government to support Type 26 exports?

My hon. Friend makes an important point about exploiting the “Five Eyes” relationship in terms of defence exports. I have raised that with my Australian and Canadian counterparts. We need to create a platform that uses not just British products, but Canadian and Australian products, to encourage them to purchase the platform.

In any defence contract, what conditions do the Government put in to ensure the use of British labour, new apprenticeships and British components?

The Ministry of Defence has created 20,000 apprenticeship places in the past few years. Everything we do in our negotiations with firms, both UK based and international, aims to bring as much work content as possible into the United Kingdom.

Will my right hon. Friend welcome the often innovative work done in this field by smaller UK companies? Does he agree that they have a valuable role to play in procurement?

We need to work out how to bring more small and medium-sized businesses into the MOD supply chain. Sterling work has been done in the past few years, but we have to double down on that and make sure that more small and mid-sized businesses benefit from MOD contracts.

As the Defence Secretary will know, the Government recently signed a letter of intent with the Qatari Government for six new Hawk aircraft, but workers at the BAE Brough plant say that, even if that deal goes through, there will still have to be a headcount reduction in line with future aircraft production rates. What can the Government say to reassure these workers about their jobs?

Later this afternoon, I will be meeting the Qatari Defence Minister to try to push the issue of making sure that we deliver on the statement of intent and the deal in terms of the purchase of the six Hawk aircraft. I have also taken the opportunity to meet the Emir of Kuwait, as well as the Prime Minister and the Defence Secretary, to push the 12 Hawk aircraft that we are desperately hoping the Kuwaitis will look at purchasing. This will have an important impact on the hon. Lady’s constituency and so many others.

I congratulate the Minister with responsibility for defence procurement, the Under-Secretary of State for Defence, the hon. Member for Aberconwy (Guto Bebb), on his new job. I am sure he will do his best to ensure fairness in defence procurement. I very much hope that the Defence Secretary will dispel the rumours regarding the £3 billion contract for the new mechanised infantry vehicle. Will he take this opportunity to give a commitment that there will not be a cosy deal with the Germans, but a fair and open competition for the prime contract?

What we have been doing is working to get a clear idea of what the Army needs going forward. The Under-Secretary of State for Defence, my hon. Friend the Member for Aberconwy, is new to the job. He will be looking at the options as to how we take this forward and making sure that we get the best deal and the best value, as well as the right equipment for the British Army. He will be looking at the details as he gets his feet under the desk.