I am pleased to report that throughout the covid pandemic, Defence has continued to maintain a steady drumbeat of orders. Those include recent orders to enhance F-35, a project that particularly benefits the north-west of England, and the next generation munitions solution, which saves £563 million over the course of its contract and supports jobs in Glascoed, Tyne and Wear, and Stoke-on-Trent.
Beautiful Hastings and Rye has a number of excellent small to medium-sized manufacturing businesses serving the defence industry. What steps is my hon. Friend taking to ensure that, as part of defence procurement and the levelling-up agenda, those small companies are given the opportunity to benefit from any increase in defence procurement spending, thereby increasing jobs and helping to turbo-charge our local economy?
My hon. Friend has discussed the brilliance of her small and medium-sized enterprises with me in the past, and I expect I will be hearing a lot more about them in the future. The good news is that with our SME action plan in place, which I would encourage them to look through, SMEs are now accounting for nearly 20% of all defence procurement expenditure. With a £24 billion investment in defence to come forth, there is plenty for them to go at.
What progress has been made with the upgrade of the British armoured vehicle capability? What are the Government doing to ensure that those contracts are fulfilled by British-based manufacturers such as David Brown Santasalo, which is based in my constituency?
It was a great pleasure for me and the Secretary of State to join my hon. Friend in visiting David Brown last year to discuss its vital work on Type 26 frigates not only for us, but for our allies. Investment in UK armour, as I think my hon. Friend knows, is ongoing with the Boxer programme and Ajax. Other projects are also under active consideration.
So many industries have been hit hard by the pandemic, including aerospace and engineering companies in Wolverhampton North East. I am delighted to hear about more and more procurement contracts. What steps is the Minister taking to start as many of those contracts as quickly as possible, so that we can really help our industrial economic recovery?
I understand my hon. Friend’s question. Throughout the pandemic, we have made certain to maintain the drumbeat of existing orders so that they have continued. Through the interim payments scheme, we have helped to support defence companies with cash where that has been required. It is right that core defence decisions are taken on an holistic basis in the context of the integrated review. However, we have, where possible, advanced procurement in particular on improvements to the defence estate, where tens of millions of pounds of improvements are ongoing as we speak.