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Shipbuilding

Volume 773: debated on Tuesday 14 June 2016

Question

Asked by

To ask Her Majesty’s Government what policies they have to invest in and promote both defence and civil companies in the United Kingdom shipbuilding industry.

My Lords, the Government’s Ministerial Working Group for Maritime Growth is driving forward the priorities of the maritime sector, promoting the UK’s competiveness in the international market and supporting export campaigns where UK Trade & Investment has identified key priority markets for the ship design, marine engineering and manufacturing sectors.

My Lords, how will the technology and skills developed for the Trident project in conjunction with regional EC funds re-energise the industry, which needs long-term planning that has been somewhat lacking in the last 30 years?

My Lords, the noble Lord, Lord Hunt, is quite right that long-term planning is needed. This is why the national shipbuilding strategy, which is chaired by Sir John Parker, is looking at putting warship building on a sustainable, long-term footing and building a new complex warship on a regular basis— I am told the term is “regular drumbeat of production”. However, at the moment, our order book for the construction of warships is full for the foreseeable future with the Queen Elizabeth-class aircraft carrier. We are third in the world behind the USA and Japan when it comes to tonnage under construction.

My Lords, the noble Lord is possibly referring to the Type 26 warship. At the moment, as for bringing that into construction, we are extending the life of the Type 23, which will ensure that the Royal Navy continues to have a quality anti-submarine capability until the Type 26 enters service—new radar and missiles, improved sonar systems, upgraded boats, improved command and control systems, and more efficient power generation equipment.

My Lords, the Minister will be aware that there is a huge difference between the order book and actual orders. In the early 1990s, we failed to order the Astute-class submarines; the end result was that it took 20 years to get our submarine building back on track, because of loss of skills. When will we actually order the Type 26 frigates? They have already been delayed. Govan, instead of taking on 100 apprentices this year, is taking on 20, and trades are already beginning to go. They will cost a lot more money, because they have been delayed. Can we not persuade the Treasury to let the MoD have some money, because it is broke, and start building them and ordering them? It is no good having them on the books and not ordered.

My Lords, we are continuing to work with BAE Systems to further mature the Type 26 design, including our March investment of a further £472 million. Our total investment so far is £1.6 billion into the Type 26 frigates, which is hard evidence of our commitment and real progress. In common with all equipment procurement programmes, the schedule is set at the main investment decision, and we have not yet reached that decision point.

My Lords, the manufacture and sale of ships is by nature an international endeavour. Is not the worst thing that we could do for the shipbuilding industry and other industries to cut ourselves off from our largest trade partner? Has the Minister made any assessment of the impact that leaving the EU would have on our shipbuilding industry?

My Lords, our shipbuilding industry, as the noble Baroness is undoubtedly aware, is confined mostly to warships. However, we are very successful in some of our export systems, throughout the whole world and not necessarily just to Europe. We are specifically exporting electronics, optronics and weapons handling systems. Current programmes include Australia, Norway, Germany and Poland.

Does the Minister agree with me that maintaining a steel industry with the capacity to supply the shipbuilding industry is essential to the shipbuilding strategy? The long products division of Tata Steel was sold to Greybull Capital earlier this year; long products are essential for shipbuilding contracts and for rail. Can the Minister confirm that the new owners have been offered the range of support that other bidders and Tata Steel have been offered as well?

My Lords, I know that my colleagues and other Ministers have been working as hard as they can to give support to these various projects. I should add that 95,000 tonnes of British steel have gone into the construction of the Queen Elizabeth-class aircraft carrier. The Government are doing everything they can to help the industry to secure a long-term viable future and are supporting Tata to find a buyer for its entire UK operations. The steel industry is vital to the United Kingdom.

What is the cost of the upgrades, special maintenance and refits to the Type 23 class, which will be required to keep them in service much longer than was originally anticipated because the Type 26 will not be available on time? In other words, what are the incremental costs of the Government’s failure to deliver the Type 26?

My Lords, the commitment by the Conservative Government to spend 2% of GDP on defence covers the extra costs involved in upgrading Type 23.

My Lords, we plan to spend £55 billion so that people can get from Euston to Birmingham half an hour earlier. Would that not be better spent on warships?

I know that it has been raining a lot, my Lords. As far as that is concerned, we have a commitment on those Bills, and we will continue to go forward on them.

The Minister earlier used the phrase that the Government were consulting to further mature the design of these destroyers. What does that rather carefully chosen piece of jargon actually mean?

Plain English is not always easy. I have got something here—I just have to find it. We are also looking at shore-based testing facilities as part of the finance that is going into this project in conjunction with BAE Systems.