Good afternoon, Mr Speaker. Since our last questions, I have been delighted to welcome to the Government Front Bench my hon. Friend the Member for Aldershot (Leo Docherty) as our Veterans Minister and my hon. Friend the Member for Havant (Alan Mak) as our Defence Whip. I also welcome the hon. Members for Portsmouth South (Stephen Morgan) and for Islwyn (Chris Evans) to their new Front-Bench posts. I look forward to debating with them over the next few months—and years, hopefully.
The Ministry of Defence spent £20.3 billion with UK industry and commerce in 2019-20, safeguarding and supporting jobs throughout the United Kingdom. Our defence and security industrial strategy sets out several initiatives to support a thriving UK defence sector, including implementing the social value model within defence procurement.
The Boxer mechanised infantry vehicle programme is creating and securing jobs in my Colne Valley constituency. Will the Secretary of State please make sure that companies across Yorkshire continue to have the opportunity to join the UK defence supply chains to help to level up regional economies?
Yes, I can tell my hon. Friend that it is incredibly important that we can do that. Boxer, for example, will play a crucial part in the Army’s heavy brigade combat teams. We have been clear that we expect over 60% of the contract’s value to be delivered in the UK with suppliers such as the one in my hon. Friend’s constituency. As part of our defence and security industrial strategy, we will pilot a revised industrial participation policy to promote UK supply chain opportunities to companies bidding for MOD contracts.
I am particularly interested in the smaller companies getting in on the ground. In line with the Government’s commitment both to levelling up and to strengthening our sovereign capabilities, will my right hon. Friend assure me that innovative UK companies such as Kromek in Sedgefield will be fully considered in the next radiation detection equipment procurement?
Yes, my hon. Friend makes an important point about small and medium-sized companies and their role in the supply chain; I see it as part of my job as Defence Secretary sometimes to protect them from the big primes and make sure that their voice is heard. As for the competition that he mentions, I obviously cannot pre-empt the results of the contract, but all bids will be properly considered. I know Kromek by reputation and congratulate my hon. Friend on being a champion of it.
I went recently to Telford to launch the Challenger 3 contract, which will grow to a significant number of jobs—nearly 200 to 300 from that alone. The Boxer coming on stream, which my hon. Friend the Member for Colne Valley (Jason McCartney) mentioned, will produce up to another 400 to 600 jobs. The Type 31 contract up in Rosyth is now moving apace, with the buildings now in place and the steel-cutting due; that will also unlock, and is delivering, hundreds of new jobs. Across the board, as we have said, there will be thousands of new jobs because of the increase in funding that we have received.
The right hon. Member for Wentworth and Dearne (John Healey) often comes to the House to say that we are cutting defence and tries to focus on the resource departmental expenditure limit, even though that itself is not a cut. With the capital departmental expenditure limit, the significant increase for capital spending will go on our equipment programme: vast amounts will be made in the United Kingdom, which means more jobs in their thousands.
The Secretary of State will need a better answer than that, because it is down to him to deliver the Prime Minister’s “10,000 jobs every year”, yet since he has been Defence Secretary, the black hole in the budget has grown to £17 billion, only three of the MOD’s 30 major military projects are on time and on budget, and he has agreed to a real funding cut in revenue spending over the next four years. What is he doing to fix what has been the long-running Achilles heel of the MOD: delivery, delivery, delivery?
The £17 billion that the right hon. Member refers to is the sum that was identified by the National Audit Office before the defence settlement. So what have I done? I have got a £24 billion defence settlement over the next four years. I am sure the right hon. Member, having previously worked in the Treasury, can do the maths. He will see that that is the first thing I have done, and it is something I do not think anyone else has achieved since the cold war. It is the highest settlement since the cold war. But he is right to highlight the concerns on major projects. Major projects are always the Achilles heel for the Ministry of Defence, and it is important that we keep an eye on this in full and drive through, ensuring that we deliver efficiencies, but also ensuring that we cross every t and dot every i. The reason that he knows they are the Achilles heel is that in 2010 the NAO report identified that his Government at the time also had a major black hole in the equipment programme, which grew at one stage to £3 billion in a single year.