National Shipbuilding Strategy

Question

15:18:00

Asked by

To ask His Majesty’s Government what assessment they have made of the National Shipbuilding Strategy.

My Lords, the Government are committed to delivering a thriving shipbuilding sector across the UK, supporting companies and skilled jobs across the whole supply chain—from full vessel builds through to design, repair systems and integration. The Ministry of Defence and the wider Government continue to support the sector through a 30-year pipeline of shipbuilding projects, and we are closely considering shipbuilding as part of our long-term industrial strategy development.

I thank my noble friend for that Answer. In 2017, Sir John Parker produced the national shipbuilding strategy, which was a good vision for the future of shipbuilding in the UK. It was refreshed in 2022 by the previous Government, who, ironically, six months later awarded a contract to the Spanish state-owned shipbuilder Navantia. Today, we have tenders for ships for Trinity House and Border Force, the concern being that they will go to foreign yards. Also of concern is that the National Shipbuilding Office, in its latest bulletin, talks about UK content not UK build. Why is shipbuilding not part of the national growth strategy? Those ships should be built in the UK.

Certainly, the shipbuilding strategy is part of the industrial strategy going forward, but my noble friend is absolutely right to highlight the importance of shipbuilding to our country and to growth. I will continue to say at this Dispatch Box that the manufacturing industry of this country needs to be rebuilt, and part of that rebuilding has to be ship- building. We look not only to the Ministry of Defence but to departments across government to do as much as they can to ensure that British ships are built in British yards. That is an important principle that they should adhere to if they possibly can.

My Lords, we are awaiting the strategic defence review and, I believe, a defence industrial strategy. Will national shipbuilding be part of that and if so, when can we expect those documents and some real progress?

We will see those documents in due course. Of course shipbuilding is going to be a part of future defence growth strategies. These are really important points, and I say again—because we are going to have to reiterate this—that this Government, the next Government and the Government after that are going to have to rebuild the ability of this country to build ships in shipyards in different parts of the country. That cannot be changed overnight: those shipyards will have to be rebuilt, and the apprentices trained. That is fundamental, and fundamental too to our national security going forward is sovereign capability; that is everything.

My Lords, in pursuit of the Minister’s laudable objectives, when will our successor shipbuilding tsar be appointed and what shipbuilding orders has the National Shipbuilding Office been involved in since July last year?

The shipbuilding tsar will be appointed as soon as possible—I cannot give the noble Baroness a date. The National Shipbuilding Office has been involved in a number of projects, not least, as I mentioned yesterday, the five Type 31s being built in Rosyth and the eight Type 26s being built on the Clyde. The National Shipbuilding Office has also been ensuring that the various departments across government recognise that they also have a responsibility to ensure that the ships they want are built as far as possible in British yards.

My Lords, I welcome much of what the Minister has said, but turning to the commercial side of shipping, the Parker report drew attention to the potential of and importance of commercial shipbuilding in growing skills and capacity throughout the land. As has been noted, very little has happened from the NSO on that. I do not blame it because I know that a great deal of effort has been made by some of the officials; indeed, there are people in the Gallery today who put tremendous effort into this. Can the Minister try to unfreeze funds for export credit guarantees for merchant ships where there is potential, we have orders and people want to build here? Also, have the Government decided where they want to locate the National Shipbuilding Office? Which ministry will it be attached to? Perhaps the Minister could enlighten us.

The National Shipbuilding Office is based in the MoD but works across government. There is a review of the export guarantee, the fundamental point of which is that, where we have exports and ships that need to be built, there is access to finance. We are not satisfied with how that is working at present, and the review is going on to see if we can do better.

My Lords, a shipbuilding strategy is meaningless unless there are not just orders for ships, but a drumbeat of orders. I spent 15 years on the Opposition Benches pointing out to the then Government that we needed to get some orders going and get them in quickly, so that there was a programme of build; otherwise the Navy would be decimated—which it has been. There is now a threat to the continuous at-sea deterrence, for the same reason. Will the Minister speak to the right honourable John Healey and the Treasury? We must have a sequence of orders, a drumbeat of orders, or we will not get the shipyards and SMEs to recruit people, invest and get apprenticeships. It will be meaningless unless we manage to do this.

The Government are seeking to do exactly what my noble friend points out. The important point he makes is the necessity for a drumbeat: you cannot build a ship in one place and then, three years later, go back and try to build another ship; you have to have a continuous programme. The shipbuilding pipeline that has been outlined was partly intended to address that. We are already starting to see the MoD place orders for ships. I have mentioned Rosyth and the Clyde, and other shipbuilding orders are being made at various shipyards across the country. I say to my noble friend that I will be one of those advocating to make sure that, as far as possible, orders for ships required in the UK are built at British yards. I take the point he is really making, which is about the need for more ships.

My Lords, there has been a huge growth in world cruising over recent years. Can the Minister tell us why we as a country have totally failed to participate in the construction of cruise liners?

I have to say that I am not an expert on cruise liners, but the noble Lord makes a serious point: why are we not involved in cruise liners and in various other shipbuilding projects? The answer is that we have allowed ourselves, as a country with a proud manufacturing history, to see many of these industries as the industries of the past. What we have seen happening recently has been a wake-up call for our country that these are not the industries of the past. They are the industries of now, and maybe we will see cruise liners built again in this country.

My Lords, following the question of the noble Lord, Lord West, will the Minister come back to the House with a proportionate number for the increased scale-up of naval procurement for this country’s defence?

If I have understood the noble Baroness’s question correctly, figures have been published on that. If we are talking about Royal Navy ships, as I have already outlined, eight Type 26s are being built —started, to be fair, under the previous Government, of which she was a supporter—by BAE on the Clyde, and five Type 31s are being built at Rosyth by Babcock. Those are the starting points of real improvement and of increases in the number of ships being built. Of course, we need to do more, and we will try to do so.

My Lords, my noble friend the Minister mentioned the supply chain, which can be incredibly important for companies in areas such as Yorkshire and the Humber, and crucial for growth. Too often they have complained that the process of tendering and finding out what is available has been incredibly difficult. Does the MoD have a clear strategy to address the problems previously faced by small supply chain companies, so that they can benefit from the orders that are placed?

My noble friend makes a really important point. Part of what I and the Government are trying to do is to ensure that the increase in defence spending is felt across the regions and nations of this country, whether it be the Yorkshire and Humber region and other regions of England, or Wales, Scotland and Northern Ireland. But my noble friend is also right to point out that this cannot be just the huge primes; it has to be small and medium-sized industry as well. We have many such programmes and projects within the MoD that seek to ensure that smaller and medium-sized enterprises benefit. I want to know, not why we do not have another project to encourage small and medium-sized businesses, but why, over the last 10, 15 or 20 years, we have had project after project trying to generate more activity and support for such businesses. The truth is that we have not managed to achieve what we wanted. So I will go back to the MoD and say, “Why will the projects that we’re now introducing work, when they perhaps haven’t worked as well as they might have done in the past?”