National Shipbuilding Strategy — [Mr Nigel Evans in the Chair]

Part of the debate – in Westminster Hall at 2:48 pm on 8th February 2017.

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Photo of Kevan Jones Kevan Jones Labour, North Durham 2:48 pm, 8th February 2017

It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate Douglas Chapman on securing this very important debate. He raises some very interesting points. Certainly I have been trying to get answers to them through parliamentary questions, but we are getting the usual stonewalling from the Ministry of Defence, which has become a habit in recent times.

The important thing is to ask this question: what is the status of Sir John Parker’s report? It was announced in the 2016 Budget, which stated:

“The government has appointed Sir John Parker to lead the national ship building strategy, which was confirmed in the Strategic Defence and Security Review 2015.”

It also stated that the report would be published in the autumn of 2016, which in MOD-speak means anytime between December and the following June. The press release stated that it was a Treasury-led, not a MOD-led review. That is important. It was announced by Mr Osborne when he visited Portsmouth naval base.

The report was published, strangely, not as a Government report but as Sir John Parker’s own report. The jungle drums in the MOD tell me that there was a bit of concern about whether the Secretary of State would put his name to this report, and he decided not to. That has left the report in limbo in terms of what influence and status it will have in the forward thinking about not only our naval shipbuilding strategy, but our wider industrial strategy.

I am also concerned about how this matter fits into broader defence industrial strategy. I asked the Minister on 12 January when we would publish a defence industrial strategy, only to be told that there are no plans to publish a separate defence industrial strategy, but that the national shipbuilding strategy—Sir John Parker’s report—would be added into a broader cross-Government piece of work on industrial strategy. That is important because we have basically abandoned having a separate industrial policy and strategy in this country. That is important because of the jobs that are relied upon and the important capabilities that we need in this country. The Government seem to have just mashed that into the rest of wider industrial policy.

A basic question needs to be asked about shipbuilding: do we want sovereign capability to produce complex warships in this country—yes or no? It is a very simple question that the Government need to answer to give reassurance about the future of the jobs—which the hon. Member for Dunfermline and West Fife raised—and the technical expertise. The problem is that people look at a warship and think that the bulk of the cost and expertise has been met on the outside. It has not. The main value and technology in it are the skills that go into designing it and into systems integration. Our supply chain goes way beyond the Clyde—there is a national footprint of companies in leading-edge technologies. We need to ask whether we want those skills in this country or whether we will just buy from abroad.

When I was first involved in shipbuilding in the late 1980s, the then Government competed at different yards. We had Swan Hunter, Yarrows and Cammell Laird around the country and the Government used to compete contracts between them. At the end of the day, it was pork barrel politics as to who got the contract and that ultimately meant that Swan Hunter closed. Clearly, the strategy after that was to concentrate complex warship building in one yard. That made absolute sense. That one yard is on the Clyde, whether we like it or not. There is no other way of doing it.

The concern I have about Sir John Parker’s report—there are some points in it that I agree with—is that it is a bit naive. It has looked at building the carriers, which are on a huge scale in terms of block modular build, and then more or less said that we can start building Type 26s and others in a modular format. Well, I am sorry but I do not think we can—no disrespect to my hon. Friend Mr Hepburn. These ships are on a different scale. We need one yard to do the integration—the actual build. The idea that we are going to build them around the country to try to get some competition goes back to an argument we had in the late 1990s. I come back to the basic question of whether we actually want complex warship building in this country.

The issue is not just the capability. There is naivety among some people who think that they can order these ships like ordering their next car. They decide what colour they want, go to the showroom and say, “I will have a blue one and we will have a yellow one next year.” That is not how this happens. These are very complex warships and pieces of defence equipment. We need to retain not only the technological capability but the skill base in the yards and in industry, and we need a drumbeat of work going through to ensure that we do that. A classic example of when we got that wrong is when the Conservative Government in the 1990s took us out of submarine building. That led to all the problems we had trying to regenerate the capacity in Barrow for the Astute programme. Unless we keep that drumbeat going, we will get into a situation whereby we cannot rely on the fact that when we need a complex warship, there is one there to be delivered. We cannot turn these skills and capabilities on and off like a tap when they are needed.