New Medium Helicopter Contract

(Urgent Question): To ask the Secretary of State for Defence if he will make a statement on the delays to the awarding of the new medium helicopter contract and the potential closure of Leonardo helicopter site in Yeovil.

I thank the hon. Member for Yeovil (Adam Dance) for this urgent question and thank you, Mr Speaker, for allowing me to provide an update on the current status of the Ministry of Defence’s new medium helicopter procurement.

Earlier this afternoon, I spoke with the CEO of Leonardo UK and the managing director of Leonardo Helicopters to continue our conversations around NMH exports and autonomous helicopters, and stressed that Leonardo remains an important strategic partner for the MOD. In fact, I had to leave that meeting early to get to this UQ. It is something that remains on my priority list.

The NMH programme was first announced in March 2021 by the previous Government, with competition opening nearly three years later in February 2024. The Government will make a final decision on the award of the NMH contract through the wider defence investment plan. As the Defence Secretary has said in this House, we are working flat out to deliver the DIP, which will deliver the best kit and technology into the hands of our frontline forces and, importantly, will invest in and grow the UK economy. It will be published as soon as possible and is backed by the Government’s largest sustained increase in defence investment since the end of the cold war, spending £270 billion on defence in this Parliament alone.

Thank you again, Mr Speaker, for granting me this urgent question. I also thank the Minister for his response.

Leonardo in Yeovil, the home of British helicopters since 1915, has been the only bidder for the UK’s £1 billion new medium helicopter contract for over a year now. It is clear that the current bid will not be sustainable past March. If this contract is not awarded by then, we will lose over 3,000 manufacturing jobs in Yeovil, support for over 12,000 jobs in the regional supply chain and the £320 million that Leonardo contributes to local GDP. We would also lose our country’s ability to produce our own helicopters end to end here in the UK at a time of serious global tensions and insecurity.

Will the Minister please reassure us that the Government plan to go ahead with this contract and that the delays do not mean that the funding for the contract is not available? Can the Minister commit today to protect the future of the site in Yeovil? Will he state that the new medium helicopter programme is vital to our national defence? Finally, with the defence investment plan now seemingly in limbo, can the new medium helicopter programme be separated from the plan and awarded today—yes or no?

I thank the hon. Member for his questions. He will have heard my first answer, which answers some of his questions, which said that the NMH decision will be made as part of the defence investment plan. That will be announced shortly, so I will not be able to give him an answer today. I continue those conversations with Leonardo, as indeed I have today. It is important that we continue having those constructive conversations because I understand the importance of Yeovil not only to his constituency, but to our wider defence ecosystem and, as a south-west MP, to the wider region as well. Leonardo is expert in not only building helicopters but servicing them, and I am excited about some of the work it is undertaking on autonomous helicopters, as well as its wider business interests across the UK, especially in electronics and other areas. I am happy to continue conversations with the hon. Member about this, as I will do with the company and with the trade unions representing the workforce.

It is not only the highly skilled jobs and sovereign capability brought by Leonardo’s investment in Yeovil that are at stake; we must also recognise the opportunities for social mobility that industries such as this create for young people from across the country and from every background. I note that the NMH programme existed in the previous Government’s unfunded £29 billion equipment plan. Their failure to prioritise the programme and deliver the defence funding that such hard decisions need—[Interruption.] It is in the National Audit Office report. That failure means that we need the defence investment plan to make the decisions necessary to secure our country and European security.

My hon. Friend is right about two things. First, defence is an engine for growth. That is why we are investing more of the increasing defence budget in British companies. Secondly, the Conservatives left huge swathes of their equipment programme unfunded—a problem that we are sorting out because of the mess that the hon. Member for South Suffolk (James Cartlidge) left.

I congratulate the hon. Member for Yeovil (Adam Dance) on tabling this urgent question. It was a real pleasure to visit the Leonardo factory last September and witness how critical it is to employment in his constituency. Visiting the factory, one gets a powerful sense of Britain’s rotary history, but we want it to have a brilliant future too. That is why it is so worrying that the CEO of Leonardo recently warned that at least 3,300 jobs could be at risk if the NMH procurement does not go ahead. It was with those jobs in mind that when I announced the formal tender of the new medium helicopter as Defence Procurement Minister in February 2024, I took the decision to give a much stronger weighting to two key areas of the tender: first, the commitment of bidders to delivering high-skilled rotary work in the UK; and secondly, exportability, so that the supply chain could endure. All that will count for nothing if the procurement is cancelled.

Can the Minister confirm whether there is still a military requirement for NMH? If so, is he still committed to procuring NMH? After all, when I asked the question last April, I was told I would get the answer in the strategic defence review, but the SDR document never mentioned NMH at all. Instead, when the Secretary of State announced the SDR to Parliament last June, he said that the detailed decisions would be covered in the defence investment plan, which he said then would be published in the autumn of 2025. Given that it is now 2026, and that promise has clearly been broken, can the Minister tell us in which month he will finally publish the DIP? Can he confirm reports from multiple sources that the reason the DIP is delayed is that there is now a £28 billion black hole in the MOD budget?

Finally, the Budget Red Book shows exactly what Labour will spend on removing the two-child benefit cap right up to 2031, but does not say what the defence budget will be that year. Can the Minister tell us? Is the reality not that by prioritising welfare over going to 3% on defence this Parliament, Labour are paralysing decision making in the Ministry of Defence and putting thousands of jobs at risk in our defence industry at Yeovil and across the UK?

Deary me. It is this Labour Government who are increasing defence spending to the highest level since the end of the cold war. It is the Conservatives who hollowed out and underfunded our armed forces. In their first year in government, they cut defence spending by £2 billion. In their first five years of government, they cut defence spending by £12 billion. In their 14 years, they never once hit 2.5% of GDP on defence.

I remind the House that as the Defence Procurement Minister until the election, the hon. Member for South Suffolk (James Cartlidge) left a defence programme that was overcommitted and underfunded. He left 47 of 49 major defence programmes over budget and delayed. He left forces families in terrible housing and our warfighters with broken kit. We are clearing up his mess while he focuses on gaslighting the public about the Tories’ record on defence.

I support calls by my union, Unite, for a speedy decision on crewed helicopters. I hope soon for good news on that front in the defence investment plan, which we all look forward to so very much. Might the Minister have any news on the manufacture of autonomous helicopters here in the UK, and on the good jobs that will come with them?

As a fellow Unite member, I recognise the importance of good, well-paid, unionised jobs in our defence industry. The opportunities in autonomy were set out clearly in the strategic defence review. We believe that a mix of crewed, uncrewed and autonomous systems—for not just some but all units of our armed forces—is the right future, in which we can increase our lethality and move towards warfighting readiness faster. When we do that correctly, as we will set out in the defence investment plan, more jobs will be created in British companies—and, potentially, at Leonardo—as they consider autonomous helicopters and uncrewed platforms working together to increase our armed forces’ lethality and ability.

I call the Liberal Democrat spokesperson.

I thank my hon. Friend the Member for Yeovil (Adam Dance) for securing this important urgent question on behalf of his constituents.

The UK has retired Puma early, leaving a medium-lift helicopter capability gap. At the very moment our allies are accelerating procurement because the threat picture has worsened, the Government are still dithering on the replacement of that critical sovereign capability. Ministers keep hiding behind the forever-delayed DIP—the defence investment plan—but if they do not get on with it, they will be dealing with two more dips: a big dip in employment and investment in Yeovil and across the UK when Leonardo leaves because of Government inaction, and a dip in the capability of our armed forces, which will be left without a modern medium helicopter to call upon. Once an end-to-end helicopter-manufacturing workforce has drained away, we cannot magic up a new one when another crisis hits. Does the Minister recognise that if Yeovil is not sustained, we will lose those skills for a generation? Given that Leonardo is the only remaining bidder, will the Government stop dithering and get on with it now? Will the Minister commit to a new contract today?

I thank the hon. Gentleman for his questions. They are, I am afraid, the same questions that his hon. Friend asked, so I will have to give him the same answers. All decisions on the new medium helicopter contract will be made as part of the defence investment plan. We continue those conversations with Leonardo. I recognise the importance of the skilled workforce. I will continue speaking to the company, as well as to the trade unions, about that—I am meeting Unite later in the week to have further conversations. I want to see more of the increase in the defence budget spent with UK companies, as we set out clearly in the defence industrial strategy and as the Prime Minister and the Defence Secretary have said we will continue to do. I recognise and share the hon. Gentleman’s passion about renewing our armed forces. We will make those decisions as part of the DIP, which will come shortly.

As the Member of Parliament for Bournemouth East, I am passionate about renewing British military aircraft. After all, my constituency hosted the Bournemouth air festival until it was scrapped by the Liberal Democrat-led council, with no plans to return it—something that I am trying to reverse.

I welcome the award of 1,000 major contracts since July, and the defence spending bumps of £5 billion this year and £270 billion over the lifetime of the Parliament. Like me, the Defence Minister is a south-west MP. Will he set out how the Government are investing in defence across Bournemouth, Christchurch and Poole and the broader south-west?

Constituencies across the south-west of England and around the country stand to benefit from the increase in defence spending set out by the Chancellor: £5 billion for the defence budget this year, which will rise to 2.5% and then onwards. We know that we are living in a new era of threat, and we are renewing our armed forces as a result. Many of the contracts that we are placing now are for the newer end of technology—autonomous systems and latest capabilities. That retires some of the old capabilities we inherited from the previous Government, who would not give our warfighters the fighting advantage that they need—especially given the lessons learned from Ukraine. Later this month, we will stand up the Office for Small Business Growth, which will help to support more small businesses and procurement in defence. There will be advantages, given the number of small businesses around Bournemouth that have huge potential to contribute to our defence and national security.

Leonardo is an important company for Somerset, Dorset and the wider south-west. The Minister will know that corporate decisions are competitive, and his Department plays a key part in shaping what those decisions will be. The defence investment plan is now long overdue. I appreciate that he probably cannot give us a specific date, but it would be helpful if he could tell the House whether we will see the plan in this financial year or the next.

I thank the hon. Gentleman for his question and for the tone in which he asked it, and he is right to say that corporate decisions about where investment goes are important. That is one reason that we have continued dialogue with Leonardo, not just in the UK but also with its parent company in Italy, to ensure that it is kept abreast of our challenges with the DIP, and with the military need and procurement strategy. I am afraid I will not be able to give a date for the DIP. We are working flat out to get it, and it will be published shortly when ready.

Issues such as these are why the new defence industrial strategy is so welcome, and it places a prioritisation on British firms. That is welcome news to local Rolls-Royce, which has been awarded billions of pounds of contracts under this Government. What more will that investment do to support neighbouring areas such as mine in Burton and Uttoxeter?