- 11:00 am
- It is almost a shame to interrupt the flow of the hon. Member for North Dorset (Simon Hoare). With permission, Madam Deputy Speaker, I would like to update the House on an important development relating to our Royal Navy submarine fleet that will boost national security and economic growth, and deliver savings to the taxpayer.This morning, my right hon. Friend the Defence Secretary is visiting the Rolls-Royce nuclear skills academy site in Derby to announce our new Unity contract with Rolls-Royce Submarines. Unity is worth around £9 billion over eight years and, as its name implies, brings together eight contracts into one, covering the research, design, manufacture and in-service support of the nuclear reactors that power the current and planned Royal Navy submarine fleet, which helps to keep the nation and our allies safe.This is the biggest contract that Rolls-Royce has ever had with the UK Ministry of Defence. The contract will help Rolls-Royce to operate in a more integrated and efficient way, driving efficiencies, reducing waste, saving more than £400 million and delivering on the Government’s commitment to provide value for money for the taxpayer. It will ensure that our committed submariners, who, alongside their families, sacrifice so much to keep us all safe, can continue to protect us around the clock, every minute of every day.Not only is this new deal a boost for our national security, but it underpins the Government’s triple-lock guarantee to our continuous at-sea nuclear deterrent and our important AUKUS defence and security partnership with the United States of America and Australia by enabling the development of our next-generation SSN-AUKUS nuclear powered, conventionally armed submarines.The Unity contract is also a boost for British industry, for the resilience of our defence supply chains, and for jobs, skills and economic growth in communities in the east midlands and across the country. The Unity deal will create more than 1,000 new jobs, sustaining around 5,000 skilled and well-paid roles in total—the majority in Derby, but also around 200 in Glasgow and Cardiff. The deal will also help to deliver the next generations of skilled workers we need in our nuclear defence enterprise, with the Rolls-Royce nuclear skills academy offering 200 apprenticeships each year. Unity also paves the way for the use of safer and more sustainable materials in our fleet, supporting the commitment made by defence to better environmental performance.The new contract with Rolls-Royce—an historic British industrial success story—comes as we consult industry partners and trade unions on our new defence industrial strategy, and as we seek to create a new partnership with Government fit for our more uncertain age. The Government recognise not only that defence is critical for our national security, but that it is a key driver for economic growth. It makes the UK more resilient. Through our defence industrial strategy, we aim to strengthen the virtuous circle that connects a more resilient UK-based defence sector and economic growth across the country. That virtuous circle will enhance our military capabilities and in turn make them more resilient, which not only deters our enemies but acts as an engine of growth for opportunities, skills and well-paid jobs across our devolved nations and regions.By onshoring and putting British manufacture first wherever it is in our national interest to do so, we will build on the 200,000 skilled British jobs currently sustained by MOD expenditure, delivering on the Government’s plan for change and our primary mission to kick-start economic growth, while simultaneously delivering on the first duty of any Government: to keep their people safe.We in this House are all passionate about defence. The defence of our nation should be too important for political point scoring, and I hope we have a consensus on that. It is in that spirit that we are consulting on our strategic defence review, so that we have a national plan for defence—not just a Labour plan for defence—that will inform our path towards spending 2.5% of GDP on defence. In that spirit, I thank my predecessor in the role, the current shadow Secretary of State for Defence, the hon. Member for South Suffolk (James Cartlidge), for the groundwork he put into this deal. What he started, we are finishing.On Wednesday, the Defence Secretary updated the House on the key role of our submarine fleet and the role it plays in deterrence. We all saw it warding off the Russian spy ship Yantar from UK waters. We should be under no illusions: this was just the latest example of growing Russian aggression targeting the UK and our NATO allies. In our increasingly dangerous world, the UK’s nuclear deterrent is our ultimate insurance policy that protects our freedoms and our way of life.This deal underpins that insurance policy for the next eight years, as we begin to phase in our new fleet of Dreadnought nuclear-powered and nuclear-armed submarines. This deal also foreshadows a brighter future for the UK defence sector, guided by our defence industrial strategy, which will make us more secure and prosperous at home and strong abroad. I commend this statement to the House.
- I call the shadow Secretary of State.
- 11:06 am
- I thank the right hon. Lady not only for early sight of her statement, but for her kind words in recognising my contribution to delivering this deal—Unity by name and by nature. As with the Annington deal and the UK-Germany barrel-making deal, I can safely say that this deal is profoundly to the benefit of our country. While I would have dearly loved to conclude those deals while in office, it is better that such deals are delivered under any Government than not at all, and I am delighted to be responding to the statement today.While it is unusual to have statements on a sitting Friday, I thank the Government for announcing this deal to the House today, because it speaks to its huge importance to our national interest. Before explaining why the deal is so important, may I first thank all those involved in bringing it forward: those at the Ministry of Defence and the Royal Navy, and in particular the commercial teams, who have worked so hard to iron out all the complex details needed to get it over the line, and of course Rolls-Royce itself? On that note, I thank everyone in the defence nuclear enterprise, and, as the right hon. Lady said, we give particular thanks, as we always should, to those who crew our nuclear submarines, and in particular the 24/7 continuous at-sea deterrent.My personal experience—I am sure the right hon. Lady will have discovered this in the many international engagements in the export role that is so important to any Ministry of Defence procurement—was that Rolls-Royce was the single UK defence company, possibly only matched by BAE, that seemed to have greater success in penetrating major export markets. Visiting Raynesway last April to keep this project moving forward, I saw the sheer scale of Rolls-Royce’s commitment to apprenticeships and manufacturing excellence. That underlined how it is a domestic and international industrial success story for UK plc, and we should do everything possible to support it. The deal is economically crucial, helping sustain our sovereign defence nuclear industry, as the right hon. Lady said, and in turn sustaining thousands of skilled jobs.
- I find myself agreeing with a lot of what the shadow Defence Secretary said—unity, indeed. He asked about 2.5%. I think we all agree that defence spending needs to increase, and he knows well that we have just increased it by 5.9% in real terms this coming year—it is up by £2.9 billion—as a step on the way to getting to 2.5%, which is a cast-iron guarantee.The hon. Member referred to the strategic defence review, which as he knows we said will be coming in the spring, and that is still the plan. He will have to wait a little longer to see the precise details of the threats that that identifies and, therefore, the capabilities we need to develop.I think there is general agreement across the House about the dangers of things like the Yantar incident, which the Secretary of State spoke about on Wednesday, and we will all have noted that it was dealt with by one of our nuclear submarines. That reinforces the point that the hon. Member made about the importance of our deterrent.
- The contract that our Defence Secretary has announced at Rolls-Royce in Derby today is the biggest Ministry of Defence contract in its history. It will make a major contribution to the long-term investment in our city that I and neighbouring MPs have been calling for, creating 1,000 jobs and protecting 4,000 more. It is an investment not only in industry and nuclear, but in the skills and expertise for which our city is famous. Does the Minister agree that this represents a landmark deal for British defence?
- I thank my hon. Friend for making that point. She knows a lot about the subject, and she is correct that it is a landmark deal. It is particularly beneficial for Derby. As she said, there are many skills there already, but the Nuclear Skills Academy will be creating 200 apprenticeships and opportunities a year for young people to get into nuclear skills. Of course, those are transferable skills that are relevant not only on the military side but on the civil side, which will give young people with those skills great opportunities in life. That is one of the most important parts of the deal.
- I call the Liberal Democrat spokesperson.
- I welcome this announcement of the UK’s new Unity contract with Rolls-Royce Submarines. This £9 billion investment will create 1,000 new jobs in the industry, and this sort of investment represents a boost for not only our national security but communities across the UK.It is right that we celebrate this success for British industry and its skilled workforce. However, while we welcome this development, the Government must go further to create the stability and certainty that businesses need to thrive. Long-term growth requires an industrial strategy that incentivises investment in ethical, inclusive new technologies such as artificial intelligence and clean energy. We must position the UK as a global leader in these sectors, so that we tackle the climate crisis while creating good jobs and driving economic growth.Furthermore, we urge the Government to work in closer partnership with businesses of all sizes. Small and medium-sized enterprises are vital to the defence supply chain, yet too often they are left out of the major procurement processes. What are the Government doing to ensure that SMEs are included in the MOD procurement process? We also want to unlock British businesses’ global potential by bringing down trade barriers and building stronger relationships with our closest trading partners, including by fixing our broken relationship with Europe.Universal liberal principles are at the core of what we believe as Liberal Democrats, not least among them internationalism, human rights, the pursuit of peace and the rule of law. That is why we continue to champion the liberal, rules-based international order, which provides a strong basis for multilateral co-operation to address the world’s biggest problems.The Liberal Democrats believe in a policy of pursuing global disarmament. However, in the meantime, and in the light of all the current threats, we call on the Government to maintain a minimum credible nuclear deterrent and maintain the current posture of continuous at-sea deterrence.
- Order. The Liberal Democrat spokeswoman will be aware that she is allocated two minutes, which she has already exceeded significantly.
- I welcome the hon. Lady’s support for the deal and for our continuous at-sea deterrent; that has not always been the Liberal Democrats’ position, so I welcome the fact that consensus has increased in this House.The point that the hon. Lady made about enabling SMEs to get involved in the defence supply chain is tremendously important. We are currently consulting on the defence industrial strategy, and I am particularly keen to ensure we take steps to make that better, because the potential for innovation, agility and pull-through of new technologies is tremendous. I invite her to contribute to the consultation and to watch out for the defence industrial strategy when it is published.
- I very much welcome this statement. As the hon. Member for Epsom and Ewell (Helen Maguire) said, we need SMEs to support our defence sector. One of the key challenges facing our defence sector, as Ukraine has shown, is that we need to speed up the pace of innovation in this new era facing defence. In Stevenage, we have many excellent SMEs supporting our local defence primes, Airbus and MBDA. Will my right hon. Friend show her support for what SMEs are doing and support them in the future?
- I completely agree with my hon. Friend’s point, which is that SMEs form a central part of our industrial base and can do more, if we encourage and enable them to do so, to boost our defence, boost jobs and boost economic growth in all regions and nations. I invite him to get involved in our defence industrial strategy consultation, which is ongoing.
- I welcome the Unity contract and the work done by the previous Government to initiate it. It is a critical step in maintaining our submarine fleet and facilitating our continuous at-sea nuclear deterrence. The Minister recently confirmed to me that, excluding Trident, our defence spending as a percentage of GDP is actually only 1.9%. That puts the UK 23rd of 32 NATO countries, below North Macedonia, Montenegro, Albania and others. Our non-nuclear NATO partners currently spend proportionally more than we do on conventional forces, while Trident is a measure of last resort. To ensure that we are properly resourced for high-intensity, multi-domain collective defence, should our NATO spending commitment not be to meet that target on conventional forces, with our nuclear capability in addition to that?
- I am not sure that is even the policy of the Conservative party—the shadow Defence Secretary can confirm whether that is the case. If I may say so, it is a bit sleight of hand to say that taking out a big chunk of our spending, which we are actually spending, will leave us well in deficit. Of course it would. However, I understand the point that the hon. Gentleman makes and the importance he attaches to spending on conventional defence. That is an important point, and once the strategic defence review is published he will be able to see the threats it identifies and how we will improve our capability to deal with them.
- I congratulate the Government and Rolls-Royce on their fantastic and innovative Unity project. As today’s welcome announcement shows, defence is a fantastic pipeline for building skills and refining the jobs and growth that this country needs. That is felt and needed nowhere more than in my constituency, the home of the Royal Navy and of so many defence companies, be they national or SMEs. Alongside my hon. Friend the Member for Portsmouth South (Stephen Morgan), I intend to hold a roundtable later this year on growth strategy. Can the Minister assure the House that the defence industrial strategy will have a focus on training and skills and will promote and prioritise British industry?
- I commend my hon. Friend for holding a roundtable; I have done a few of those around the country lately. It is quite illuminating to hear what comes back, particularly from small firms, and it will be informing our defence industrial strategy. I agree that there is much potential in all our constituencies across the nations and regions to get economic growth and jobs from boosting SMEs.