Defence Industrial Strategy: SMEs

10. What steps he plans to take through the defence industrial strategy to increase support for defence sector SMEs.

We are delivering for defence, boosting spending by £3 billion in real terms this coming financial year. I hope that more of our procurement spend can go to SMEs. The defence industrial strategy will set the conditions to unlock the full potential of SMEs, to seize future opportunities and ensure the growth and resilience of our defence manufacturing base, providing more good jobs in every nation and region.

The North East Technology Park in Sedgefield is home to many innovative defence businesses, producing satellite technology and biological and radiation detection equipment that is used by our allies across the world. Those businesses proudly contract directly with the Defence Advanced Research Projects Agency, NASA, the American Defense Department and other allied Governments, but too often they struggle with MOD procurement rules, which exclude SMEs. Will the Minister meet me and NETPark businesses to discuss how to remove the red tape that hits small businesses in my constituency and across the country that are designing and producing innovative defence supplies?

First, I would be happy to meet my hon. Friend and his North East Technology Park businesses as soon as possible. The Government recognise that SMEs face particular challenges, which I want to address. Through the defence industrial strategy we will reduce barriers to entry and foster a more diverse community of suppliers, including non-traditional SMEs and those that are developing future technologies. We will also send a clear market signal about our preference to grow onshore production capability.

As part of the defence industrial strategy, does the Minister of State recognise the link between successful defence vehicle manufacturing, such as Rheinmetall BAE Systems Land manufacturing the Challenger 3 tank in my constituency, and the onshoring of barrel technology and defence engineering? Does she recognise the link between that skills cluster and the importance of companies such as RBSL having a future in manufacturing not just vehicles but barrels? I look forward to her visit to my constituency in the coming days.

I do not disagree at all. I look forward to visiting the right hon. Gentleman’s constituency and to seeing the potential of firms. He is completely correct that clusters of excellence and skill are the way forward. I look forward to visiting his constituency shortly.

The defence sector supports one in 60 of our jobs in this country—more than 400,000 well-paid jobs that are central to this Government’s growth mission and to our nation’s security. However, the majority of those jobs are outside London and the south-east. Therefore, growth and—crucially—engagement with defence and security are inhibited for young people in constituencies such as mine. Will the Minister confirm that the key ambition of our defence industrial strategy will be to broaden access to the defence sector in every region, including constituencies such as mine?

I am happy to accept that point, and I agree. Plenty of jobs and skills will be needed around the country in every nation and region, so that we improve matters everywhere.

Christmas came early for the UK defence industry when Spain placed an order for 25 Eurofighters on 20 December, and Italy followed suit on the 24th. But there is still nothing from the UK Government on the 25 Typhoon jets that are needed for the RAF. Will the Minister spread some festive cheer into the new year, and give us an update on where the Government are with placing that order for 25 Typhoon fighter jets—a delayed Christmas present for the UK defence industry and the RAF?

I recognise the hon. Gentleman’s point. It is certainly true that exports are important, in addition to production for our own use. We are working very hard on the export campaigns. I cannot say any more than that at present, but I can assure him that we are working very hard. The rest of our spend on such matters is part of the SDR. Once that is completed, there will be conclusions. It might not be a Christmas present—I do not know when his birthday is—but a present some time later.

I call the shadow Minister.

On defence industrial strategy, the new amphibious multi-role support ships are several years away—a point the Armed Forces Minister obviously appreciated when, in opposition last January, he wrote to his local paper to say that scrapping HMS Albion and Bulwark would be bad for our national security, for the Royal Navy and for Devonport. When the Defence Committee looked at this issue a few years ago, it firmly concluded that the decision would be “militarily illiterate”, yet today the Ministry of Defence is all for it. Even if the Minister for Defence Procurement and Industry does not agree with the Defence Committee, does she at least agree with the Armed Forces Minister that these vital ships should be retained?

Neither of the ships has been at sea for years—one since 2022 and the other since 2017—and neither was due to go back out to sea before their out-of-service date. The question of who might be said to have scrapped them is moot; the ships have not been scrapped, but we took the tough decision in November to retire ageing capabilities, so that we can save the money for dealing with the threats that we will face in future.