Defence Procurement and Supply Chains

The defence industry faces significant challenges due to the ongoing pandemic and Brexit. The end of the transition period will impact skilled labour movement, collaborative spending programmes with EU allies, and supply chains. ADS reports that almost 30,000 jobs are at risk due to these factors. Crawley also highlighted concerns about the future maritime support programme on the Clyde.

I note the importance of local procurement and advocate for more transparency in the allocation of defence contracts to support regional businesses.

Aerospace and defence are vital for Wales' economy, employing 23,000 people before the pandemic. The announcement of a new £2.4 billion contract with BAE Systems will sustain 4,000 jobs over 15 years. The Welsh Government supports innovation in this sector through initiatives like the MOD Sealand R&D centre and Thales' NDEC in Ebbw Vale.

Defence contracts represent an opportunity for job creation and retention in the UK. However, Rolls-Royce is cutting 350 jobs at its Barnoldswick site and offshoring them to Singapore. This undermines the viability of the site and raises concerns about the protection of critical technology. The Barnoldswick workforce helped set up the Singapore site but were given assurances that it would not put their own site at risk. Asked the Minister to ensure Government direction for companies such as Rolls-Royce to carry out work in the UK for fleet solid support ships, STOL engines for F-35 Lightning fighter, and lift-fan blades.

The UK has a strong defence industry, with significant spending on equipment and jobs. However, there is a need to develop a longer-term strategy for designing and building UK equipment to avoid substandard commercial off-the-shelf solutions. This includes investing in the British defence industry, relinquishing EU competition rules, and planning ahead for export potential.

I emphasised the importance of Northern Ireland benefiting from defence procurement opportunities. I welcomed the Prime Minister's commitment to a £16.5 billion spend on various sectors, including shipbuilding and space research. I asked about Bombardier in Northern Ireland and whether they have been engaged for potential contracts. I also highlighted the need for apprenticeship opportunities through this programme. Thales in Belfast is involved in cyber-security and the Minister should consider it for future cyber-security contracts.

Mr. Spellar argued that there is a 'deep sickness' within the civil service's disregard for manufacturing, highlighting examples from France and Italy where shipyards were mandated to build ships using foreign designs but in their own yards. He criticized the UK government's reluctance to use state aid powers under EU regulations to support domestic industries. The Government's delay on procurement decisions, particularly regarding warship designations, is absurd. Companies are ready to bid and start production but face uncertainty due to indecision.

Ms. Johnson called for a multibillion pound boost to British jobs by placing delayed defence orders, emphasizing that spending by the Ministry of Defence supports 119,000 UK jobs and nearly 4,500 apprenticeships.

I call upon the government to ensure that small and medium-sized enterprises in North East Derbyshire are given a fair chance to compete for contracts within the defence supply chain, highlighting concerns about the dominance of large conglomerates. Defence procurement is crucial for levelling up in communities like Barrow and Furness, where BAE Systems supports over 10,000 skilled workers building submarines. The company's investment in local education and skills training sustains the supply chain that contributes £1 billion to Cumbria's economy annually.

Welcomed the four-year funding settlement for defence but expressed concern over flatlining of day-to-day revenue funding, leading to cuts in personnel and service jobs. Noted the importance of placing service personnel at the heart of defence operations and avoiding past mistakes like efficiency savings that led to a £13 billion budget black hole. Raised concerns about subcontracting practices affecting working conditions at HM Naval Base Clyde.