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Integrated Review: New Ships

Volume 809: debated on Monday 25 January 2021


Asked by

To ask Her Majesty’s Government, further to the statement on the Integrated Review of Security, Defence, Development and Foreign Policy by the Prime Minister on 19 November 2020 (HC Deb, cols 488–9), how many of the new ships have been ordered; and, if none, when the first orders will be placed.

My Lords, the department is currently developing plans for a new class of frigate and research vessel to support UK interests. Following the concept phases, yet to be launched, programme and procurement strategies will be determined. However, the Type 32s will be UK-built—a clear demonstration of both this Government’s and the shipbuilding tsar’s commitment to supporting UK industry and to ensuring the Royal Navy continues to have the modern ships it needs.

My Lords, I thank the Minister for her Answer. She will not be surprised that jam tomorrow has been a regular feature of defence reviews. I am concerned that the financial pressures the MoD is under, despite the welcome four-year settlement and additional funding announced last year, will affect build programmes and impact on the already small and ageing frigate force. The recent NAO review of the MoD equipment plan states that it remains “unaffordable”. The MoD estimates a £7.8 billion shortfall, but it could be as high as £17 billion. Leading up to the long-trumpeted integrated review, has there been any discussion about putting the capital costs of the deterrent submarine replacement once again outside of the defence budget, where it was until placed inside by Chancellor Osborne in 2010? It would resolve the MoD funding problem at a stroke.

My Lords, all MoD obligations and commitments, including the nuclear deterrent, are budgeted for in the MoD budget. While I understand the noble Lord’s concern about the cost of the equipment plan, I reassure him that the department is taking important steps to address that. I think he is looking through his glass half-empty, rather than his glass half-full. Quite simply, the recent financial settlement for the MoD and the Prime Minister’s commitment to new naval assets mean that not only will our fleet grow for the first time since World War II, but its high-end technological capabilities will allow it to provide a better contribution and to retain a first-class Navy up to 2040 and beyond.

My Lords, the Prime Minister in his Statement on the integrated review said that it will ensure a “renaissance of British shipbuilding” across the United Kingdom—in Glasgow and Rosyth, in Belfast, Appledore and Birkenhead—and it would guarantee jobs. This is most welcome, but how many jobs are guaranteed and, with 1.7 million unemployed, where is the focus on job creation?

My Lords, the scale of the shipbuilding capacity contemplated for the next decade and beyond is a very positive message for jobs. We all acknowledge that when shipbuilding orders are placed, the companies and communities around them benefit. We have seen that to good effect on the Clyde, the Forth and other shipyard locations south of the border, and that is very welcome. The estimate of jobs for the new craft is difficult to determine at the moment. There is an estimate that the Type 32, for example, represents an investment in UK shipbuilding of over £1.5 billion for the next decade and that would create and sustain roughly 1,040 jobs.

My Lords, defence is a reserved matter; shipbuilding is not. Will the Minister tell the House what is the likely impact on shipbuilding procurement on the Clyde and the Forth if Scotland were to become independent?

My Lords, our industrial partners in Scotland, principally BAE and Babcock, are trusted industrial partners doing what is acknowledged to be tremendous work in shipbuilding the Type 26 frigates on the Clyde and the Type 31 at Rosyth on the Forth. The plans for independence at the last referendum were shrouded in total uncertainty by those who advocated independence. The noble Baroness is right to raise the concern, because it is pretty clear that an independent Scotland would not be able to commission work to the scale that we currently see placed with yards in Scotland.

My Lords, defence’s integrated operating concept highlights the need to deploy fully our assets on a persistent basis. As we discussed last week in Grand Committee, this can only help defence’s contribution to global Britain. Given the obvious success of the deployment of HMS “Montrose” to Bahrain, where it will be for a number of years, does this mean that we will now see Royal Naval assets forward deployed, perhaps, to Gibraltar, Singapore or elsewhere?

My noble friend raises an important point, which effectively goes to the heart of why we have Royal Naval assets and what we think their primary purpose is. I reassure him that we are actively expanding the model of permanent forward deployment of ships such as “Montrose”. For example, HMS “Forth”, like her predecessor “Clyde”, is currently forward deployed to the Falkland Islands; a further Batch 2 offshore patrol vessel “Medway” is operating in the Caribbean region; and the recent operations of HMS “Trent” in the Mediterranean and Atlantic have been centred on our permanent joint operating base in Gibraltar. We intend to build on this model in the coming months and it is a key consideration for the role of the new Type 31.

My Lords, I draw attention to my relevant interests in the register. Despite the very welcome uplift in defence spending announced last year, the affordability of much of the new capability promised, such as new ships, rests on the need to retire current capabilities quite quickly—some arguably prematurely. Will the Minister inform the House of when such decisions will be made and which capabilities will be affected?

My Lords, in the timetabling of shipbuilding and the estimated dates for taking delivery and for vessels being in service, a close eye is kept on the need to maintain our key operational obligations. That eye is vigilant and I reassure the noble and gallant Lord that the issues to which he refers are very much at the forefront of MoD thinking. We consult our industrial partners frequently to ensure a smooth transition.

The Prime Minister said that he was breaking free from a vicious circle. He said that

“we ordered ever decreasing numbers of ever more expensive items of military hardware, squandering billions along the way”.—[Official Report, Commons, 19/11/20; col. 488.]

He now wants to spend an extra £16.5 billion in the “teeth of the pandemic”, as he put it. Given that the Conservative Party has been in control of defence spending for over 10 years, what “important steps”, to use the Minister’s words, have been made to date in procurement and auditing to avoid further squandering?

The noble Lord raises an important question. Of course, for five of those 10 years, his party was part of the coalition Government, sharing responsibility for the Ministry of Defence. His important point merits attention and we look carefully at how we now procure. For example, the model for the Type 31 procurement achieved a concept—a placing of order—extraordinarily quickly, because there had been a recognition that we needed to be much more effective and swift in our approach to procurement. The noble Lord raises an important point and I reassure him that it is very much before the MoD and we are applying measures to implement good practice.

My noble friend’s initial response referred to supporting UK industry. The fact is that the building of warships has been irregular and sporadic and it has been very difficult for companies to sustain a qualified workforce, because of the nature of the orders. Will the Minister assure the House that this time business and orders will be given and spread over the UK, including to Harland & Wolff in Belfast so that shipbuilding can be sustainable in the long-term, rather than reacting to sporadic and irregular orders?

It is right to refer to what the Prime Minister said because he recognised what had been, frankly, a corrosive problem in the way in which the procurment of Royal Naval assets was embarked on. The National Shipbuilding Strategy identified the challenges and weaknesses to which the noble Lord has referred, and the strategy was clear that a much more stable approach had to be adopted in respect of UK shipbuilders. What is happening currently is clearly good news for UK shipbuilders, and the noble Lord has rightly raised the matter of cross-UK activity. I am pleased to say that, with Harland & Wolff taking over the Appledore shipyard, the Government are working closely with the company to understand better how we might support our shipbuilding industry throughout the United Kingdom. That is the commitment made by the Prime Minister and it is one that we will see being sustained by the recently announced intentions for Royal Naval assets.