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Written Statements

Volume 721: debated on Wednesday 2 November 2022

Written Statements

Wednesday 2 November 2022

Defence

Type 26 Batch 1

Today I wish to provide an update on the progress of the first batch of Type 26 frigates.

The Type 26 frigate is an advanced anti-submarine warfare warship designed for the critical protection of the continuous at-sea deterrent and carrier strike group. The manufacture of ship 1, HMS Glasgow, is progressing in BAES’s Govan shipyard and is expected to be in the water by the end of 2022. The manufacture of ship 2, HMS Cardiff, commenced with a steel-cutting ceremony in August 2019, and the manufacture of ship 3, HMS Belfast, commenced with a steel-cutting ceremony in June 2021 conducted by HRH The Prince of Wales.

The Type 26 reference design has been successfully exported to Australia and Canada, which are developing the Australian Hunter class and Canadian surface combatants respectively. Winning these export deals has demonstrated the world-class credentials of the Type 26 design, as well as further securing thousands of highly skilled UK jobs and strengthening strategic alliances with our close allies.

HMS Glasgow’s Royal Navy ship’s crew have already started to join. They are providing vital Royal Navy expertise to deliver the ships and have already met HMS Glasgow’s sponsor, HRH The Princess of Wales.

Type 26 production is well under way as evidenced by completion of the platform design, joining the fore and aft sections of HMS Glasgow, successful gearbox installation and shaft alignment work in readiness for float off to the Scotstoun yard around the end of this year. The gearbox for HMS Cardiff (ship 2) has been successfully tested at the factory, delivered and installed, along with the major propulsion components (e.g. diesel engines, electric motors, gas turbines) and the fore and aft sections are on track to be joined together early next year.

BAES, the Type 26 prime contractor, and the MOD are also working on improving ship build productivity through the introduction of updated welding machines and technology, digital ways of working to enable the workforce timely access to build data, and more efficient sequencing and automation of production line work for block construction. As a result, significant improvement has already been witnessed in ships 2 and 3.

Due to the impact of covid-19, where the Govan yard was required to shut down for a number of weeks, and challenges typical of those experienced with the first of class ship, including finalising the ship design and timely delivery of key new to service equipment, the Department is forecasting a 12-month delay to the Type 26 initial operating capability (IOC) from October 2027 to October 2028. A proportion of the associated cost growth will fall to the contractor as part of the target cost incentive fee (TCIF) commercial arrangements. The resultant cost growth for the MOD is 4.2% over forecast, which is £233 million over the life of the programme.

Work is already under way to increase productivity and improve on the revised forecast IOC date. In addition, an investment in a new shipbuilding hall to build ships undercover and to further improve build efficiency is in progress, with the planning application submitted to the local authorities. BAES is also working closely with DE&S and the Royal Navy to streamline the trials, testing and acceptance into service plans. Examples include using Royal Navy procedures and ways of working during shipbuilder acceptance trials to avoid the need to repeat these activities after vessel handover to the Royal Navy. Plans are also in place to have DE&S and Royal Navy personnel present and engaged with test and commissioning activity to grow Type 26 ships’ staff experience and de-risk the successful in-service operation and maintenance of the class, providing another opportunity to bring forward the IOC date.

The Type 26 programme remains on track to meet all user requirements and deliver world-class anti-submarine warfare frigates in time to replace the anti-submarine warfare Type 23s.

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Defence Electronics and Components Agency

I am today confirming the Department’s intention to merge two of Ministry of Defence’s (MOD) arm’s length bodies (ALBs), which will see the Defence Electronics and Components Agency (DECA) merge into Defence Equipment and Support (DE&S).

This follows the UK Government Investments (UKGI) tailored review of DECA, 2021. The review confirmed the continuing value and need for DECA to be retained within MOD as a strategic second source, in-house provider of maintenance, repair, overhaul and upgrade (MRO&U) services. This decision reflects the need for the MOD to widen DECA delivery across defence to achieve even greater savings.

Consistent with the Government’s public body reform agenda, we have investigated a number of potential governance and operating models and concluded that merging DECA into DE&S provides best overall value to the taxpayer. This will be achieved through improved governance structures and an operating model better aligned with Government policy and defence planning outputs. This will put DECA on a stable, sustainable footing and achieves greater savings through increased utilisation of DECA across defence.

The merger option has been developed with a wide range of defence stakeholders, with other Government Departments, and with the two ALBs themselves. A key aspect has been to protect those elements of DECA’s current operating model that have proven valuable in the delivery of defence outputs.

The merger will also sustain and grow highly skilled jobs at DECA’s main site at MOD Sealand, north Wales, its other existing locations across the UK, and provide further opportunities to develop a DE&S hub in support of wider defence work.

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International Trade

International Trade Week

On Monday, I launched International Trade Week 2022, which will run until Friday with events taking place across the United Kingdom. Now in its second year, International Trade Week is my Department’s largest showcase of trade, exporting and investment potential in the UK.

The week is designed to inspire businesses throughout the UK to pursue global opportunities, understand the UK’s investment potential and connect directly with trade industry experts. It will showcase key initiatives from my Department’s export strategy and provide an opportunity to hear from business about its work to support the UK’s race to £1 trillion worth of exports by the end of the decade. This Government continue to be committed to championing businesses to grow internationally and my Department will evidence this through our events throughout the week.

With more than 10,000 business registrations to over 120 events across the week, there is clear appetite among British businesses to take advantage of the growing demand for UK goods and services, particularly from some of the world’s fastest growing economies. UK exports were £728.1 billion in the 12 months to end of August 2022, up £116.0 billion (19.0%) compared to the previous 12 months.

Last year, the Department for International Trade also launched our export strategy and the “Made in the UK, Sold to the World” marketing campaign. One year on, we will celebrate successes to date and further promote our new products and services to business, as part our continued effort to deliver through the export strategy framework.

On Tuesday, as part of the week, I also hosted the green trade and investment expo (GTIE) in Gateshead. The expo will inspire and encourage more high-quality, sustainable investment into UK businesses creating jobs and generating growth to benefit people across the UK.

With increased investment in UK businesses, and by supercharging our exports, we will create jobs, increase energy security and resilience, boost productivity and build the expertise that will benefit the world. The expo will also demonstrate how the UK is bringing innovation and creativity to life, and how the ingenuity of British inventors, innovators and entrepreneurs is unlocking new growth, new jobs and new investment in clean and renewable technologies.

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