Defence Sector Competitiveness

1. What steps he is taking to increase the competitiveness of the UK’s defence sector.

Last month, the Prime Minister confirmed that this Government are committed to increasing defence spending to 2.5% of GDP, with a fully funded plan. Obviously, the public want to know that we will deliver value for money. That is why, in parallel, we are delivering a fundamental reform of acquisition through our new integrated procurement model.

Last week, we heard an announcement about the development of a radio wave drone killer. How is the integrated procurement model encouraging and accelerating the development of that novel technology?

My hon. Friend highlights the fantastic news, confirmed last week, that we are developing a new radio frequency directed energy weapon. It is an extraordinary capability that with one strike can inflict hard kill on multiple drones, at a cost of about 10p a shot. As for how that exemplifies the new approach, it is about the close relationship between industry, our scientists, and the Defence Science and Technology Laboratory. It is through the strength of the industry that we drive innovation and get the best kit into the hands of our armed forces.

We are pleased that there was an announcement from the Prime Minister, and that the Department has plans, but what we actually need is industrial capacity. When the Department is handing out orders for fleet solid support ships to Spain; when it has taken 18 months to order munitions; when The Times today shows a significant drop in the number of apprenticeships; and when the Department admits that it still will not take past performance into account when awarding future contracts, what confidence can we have that there will be the industrial capacity, and the real orders, to enable our defence industry to be competitive and supply our forces?

We are massively ramping up defence capacity. The right hon. Gentleman spoke about 155 mm shells; that issue is precisely why we have reached a contractual agreement with BAE Systems, and it will be ramping up production in Wales and north-east England. We are doing the same with ships, complex weapons and, as I said earlier, novel weapons and our science base. This is all about giving our armed forces the capability that will give them the cutting edge.

I call the Chair of the Defence Committee, Jeremy Quin.

The global combat air programme will be a terrific boost to our defence and aerospace industries. To maximise success, we must keep the Typhoon production lines going until it comes on board, so what are Ministers doing to ensure that we maintain exports?

The Chair of the Select Committee asks an excellent question, and I assure him that there is an effort across Government to promote key defence exports, not least the Typhoon. A key factor in our new integrated procurement model is the need to drive exportability. That will not only ensure industrial resilience, but give us protection against overly exquisite requirements from the domestic side, which can result in delayed procurement. It is a good question, and we are focused on delivering greater defence exports.

Somerset is home to several organisations in the defence sector, such as Thales and Leonardo. However, companies in defence are concerned about the shortage in science, technology, engineering and maths skills in the UK; 48% of defence employers report a shortage of workers with engineering skills. What steps is the Minister taking, alongside Cabinet colleagues, to remedy those shortages and ensure that the UK defence sector remains competitive?

The hon. Lady asks a good question. There was a previous question about defence capacity; a key part of that is not just industrial capacity and buildings, but people. She is absolutely right. I visited Yeovilton in Somerset, where I met apprentices who are involved in the programme for our helicopters. We saw a demo of artificial intelligence that is helping us to improve the availability of our helicopters. Work is happening across defence and across Government, but we want to do more to ensure that we have the necessary apprentices and key skills in our defence sector.

I call the shadow Secretary of State, John Healey.

Since the new shipbuilding strategy was launched two years ago, Ministers have given new build defence contracts to the Netherlands, Spain and, last week, France—just two days after the Defence Secretary declared that he was “determined” that new Navy vessels would be built “here in the UK.” He is the Government’s shipbuilding tsar; why will he not back UK shipbuilding?

I point out that a shipbuilding strategy costs money, and that is why we are committed to spending 2.5% of GDP on defence, unlike the right hon. Gentleman. On his key point about the shipbuilding strategy, I have been to Scotland and seen the amazing yards where we are building the Type 26 and the Type 31. I have been to Appledore, which is contributing to fleet solid support. We are committed to a UK shipbuilding sector. As the Secretary of State confirmed in his speech last week, by value of the future order book, this country is now No. 1 for naval exports.