Commons Urgent Question
The following Answer to an Urgent Question was given in the House of Commons on Friday 18 November.
“On 16 November, my right honourable friend the Secretary of State announced that Team Resolute—consisting of Harland & Wolff, BMT and Navantia UK—has been appointed as the preferred bidder in the competition to build the fleet solid support ships. Having appointed Team Resolute as the preferred bidder, the Ministry of Defence expects to award it a contract around the end of this year. That appointment follows on from the award to BAE Systems in Glasgow of the £4 billion contract for five Type 26 frigates earlier this week. Both are excellent news for UK shipyards and the shipbuilding skills base in our country.
Those crucial vessels will provide munitions, stores and provisions to the Royal Navy’s aircraft carriers, destroyers and frigates deployed at sea. Ammunition and essential stores will ensure that the mission can be sustained anywhere around the world. The contract will deliver more than 1,000 additional UK shipyard jobs, generate hundreds of graduate and apprentice opportunities across the UK, and a significant number of further jobs throughout the supply-chain. Team Resolute has also pledged to invest £77 million in shipyard infrastructure to support the UK shipbuilding sector.
The entire final assembly will be completed at Harland & Wolff’s shipyard in Belfast to Bath-based BMT’s British design. The awarding of the contract will see jobs created and work delivered in Appledore, Devon, Harland & Wolff, Belfast, and within the supply chain up and down the country. This announcement is good news for the UK shipbuilding industry. It will strengthen and secure the UK shipbuilding enterprise as set out in the national shipbuilding strategy, and I commend this decision to the House.”
My Lords, the Defence Select Committee said that Ministers should ensure that warships are built in UK yards and that this designation continues to include fleet solid support ships. Welcome as these new ships are, why did the Government not accept the Team UK bid? Team UK’s bid showed 6,000 more UK jobs. How many jobs have been lost as a result of not accepting that bid, and how many of the ships will be made and associated work done in Spain? Time and again, Parliament has called for the UK Government to fully support our sovereign defence capability. Is not this just another missed opportunity to fully support the British defence industry?
I do not agree with the noble Lord’s assessment of a very exciting opportunity for British shipbuilding. The bulk of these ships are going to be built within the UK, particularly in the shipyard of Harland & Wolff. It is a tremendous coup for Team Resolute that they have succeeded in this. There will be extensive investment in infrastructure in Harland & Wolff’s yard. They are warships, but that is precisely why the majority of these ships will be built in the UK. He suggests that all these complex programmes and platforms are built entirely in a single country, but that is not the case, such is the technical complexity nowadays. For example, the F35, a US aircraft, is partly built in the UK. Our Dreadnought submarines and the US Columbia-class submarines will share a common missile compartment, built in both the United States and the UK. We should be celebrating what is very good news for the British shipbuilding industry.
The Minister in the other place put great emphasis on the extent to which the partnership with the Spanish shipbuilder would provide technological transfer and additional skills for Harland & Wolff and other British shipyards. Can the Minister here say a little more about that? If that is indeed part of the package, that is useful for the British in rebuilding our shipbuilding capacity. If it is not, we are perhaps being sold a pup. She said that in future we have to build things jointly with our partners. The Commons Minister went further than that and said that an obsessive and excessive concern with sovereign capacity and sovereignty as such—Britain doing everything alone—is
“some sort of prehistoric antediluvian approach”.—[Official Report, Commons, 18/11/22; col. 965.]
Does the noble Baroness agree? If so, would she perhaps like to say that to a few members of the European Research Group?
What I would say is that Navantia is a globally acknowledged shipbuilding expert. We are very pleased to be able to draw on its skills. For example, the agreement we have reached with Team Resolute means a vital skills and technology transfer. A small team of Spanish shipbuilding experts will transfer to Belfast, and Harland & Wolff will benefit from that. On the wider issue of how we build warships there is a desire to ensure that, where there are sensitive security issues, the majority of warships will be built in the UK. That is what is happening here. The majority of the blocks and modules from which the ships will be assembled will be built in the UK at Harland & Wolff’s facilities in Belfast and Appledore. Interestingly, some components will be manufactured at its sites at Methil in Fife and Arnish in the Isle of Lewis. I hope they have got their thermal vests out to prepare for the Isle of Lewis.
The ships have been designed in the UK by BMT, a leading firm of naval architects. Intellectual property in the design rests with it. The Ministry of Defence does not generally seek to acquire ownership of intellectual property created by contractors undertaking work for the department. Rather, we seek to acquire free user rights that permit the department to use, modify and manage equipment as it sees fit through life, without infringing IP rights or incurring fees.
My Lords, while I am always pathetically grateful when we get an order for some ships, there are some real risks here. How big is the workforce at Harland & Wolff at the moment? When did it last build a ship there for the Royal Navy? Is it true that 60% by value of this contract will go to the Spanish firm, which effectively established its UK office just a matter of months ago?
As far as I understand it, Harland & Wolff currently expects the contract to support 1,200 shipbuilding jobs across its yards in Belfast and Appledore. As everyone is aware, Harland & Wolff has a strong reputation. It has been having a challenging time. As I said earlier, the extensive £77 million infrastructure investment will make a big difference to it and put it in a position where it will be poised to bid for future contracts.
My Lords, before leaving the European Union and since, we have been told repeatedly that one of the advantages of coming out is that British ships will be built in British yards. The use of the active verb in these sentences is important. I looked closely at the Minister’s answer to this Question in the House of Commons. He said that the ships would be assembled at Harland & Wolff. Where are these ships to be built? They are built in modules. Is the work to be in Britain or elsewhere? Is the bulk of this contract going to be abroad? The £77 million is welcome, as are the jobs, but what proportion of the contract is coming to the United Kingdom and what proportion is going to Spain? What other G7 country does this? None.
I can only repeat what I said in response to earlier questions: that the majority of these ships will be built in the UK. As I understand the technical situation, the majority of the blocks and modules from which the ships will be assembled will be built at Harland & Wolff’s facilities in Belfast and Appledore. Again, I repeat that this is very good news for British shipbuilding, particular on the back of the recently announced Batch 2 of the five frigates at Govan. This is all indicative of the very good state of the British shipbuilding industry. I refer the noble Lord to what the chief executive of Harland & Wolff had to say:
“I am pleased to see the Government seize the last opportunity to capture the skills that remain in Belfast and Appledore before they are lost for good.”
That is testament to the strength of this decision.
As the noble Lord is aware, when it comes to the procurement of complex contracts such as those in which the MoD is frequently engaged, what matters is who has the skills, what the design looks like, and what offers to deliver well for the MoD and as a warship for the British shipbuilding industry.
I observe to my noble friend that the vast majority of the build work will take place in the UK. There will be an element of the aft blocks built in Spain, but by far the majority of the shipbuilding work will be here. We should celebrate this. It is a matter of commendation not depression.
I thank the noble Baroness for her encouraging remarks and for accepting the real world in which we live. Her aspiration is laudable. It is always our intention in the MoD to support the indigenous industry as best we can. We have a good reputation and record for doing that. Let us see what the future holds.
My Lords, it behoves us all to share the Minister’s view at the outset that this is very good news for British shipbuilding. We can nibble around the edges about what might be but we have to start from where we are. We have a national shipbuilding plan now; we are taking steps; we have had important new orders announced in recent weeks. This is all part of the strategy, and I hope the Minister will agree with me that the Royal Navy’s part in developing the ship- building industry is very welcome, as indeed are the growing links between commercial maritime and the Royal Navy that we have seen across the land.
I thank the noble Lord for his contribution. He identifies the underpinning wisdom and strength of the shipbuilding strategy, which Sir John Parker originally conceived with the specific intent of creating a sustainable indigenous British shipbuilding industry. We are now well on the way to doing that, and I thank the noble Lord for his recognition of that progress.