UK Defence Industry: Procurement

Marcus Fysh Excerpts

Wednesday 22nd June 2022 Westminster Hall

[Fay Jones]

I completely support my hon. Friend’s point, and I am delighted that Compact Orbital Gears in my constituency works closely with MIRA in his constituency. That is the type of arrangement that the Government should be facilitating, and I fully endorse his words.

I firmly believe that, as my hon. Friend pointed out, that if we support the UK’s small and medium-sized enterprises and harness our international influence, the UK has the potential to be the defence marketplace for our NATO partners. We have the intellectual prowess and manufacturing capability to become the hub for defence innovation globally. I understand from Charcroft Electronics that it has seen an increase in trade with our European partners due to its profile in UK markets, and it is looking to expand its production due to demand. To quote its director, orders from German and UK customers

“have gone through the roof”,

and it is at capacity until the end of next year.

Charcroft has demonstrated to me that there is a clear sense of security in a country knowing that its parts are not stored or being built abroad, and therefore potentially subject to disruptive geopolitical shocks. It is harnessing its influence at home and abroad to work closely with other UK defence businesses and those in our neighbouring countries. It is engaging in research and development for future defence programmes. Charcroft’s success is obvious and well deserved, and I am grateful to the Government for committing to supporting SMEs across the UK via the SME action plan, so that we can improve engagement and ensure that the whole defence supply chain is guaranteed the quality and service delivered by our UK businesses.

While I commend Charcroft, Compact Orbital Gears, and other businesses across Wales that are supplying the defence sector, there are limitations on procurement in UK defence. To continue the success and development of those businesses, we need to ensure that our skills-based economy is up to scratch, so that it matches our intellectual capacity. It is apparent that there are limitations on growth due to the difficulty in hiring highly skilled individuals in rural areas. I welcome the Government’s commitment to investing in our defence sector, and recognise their commitment to apprenticeships, which will combat skilled jobs shortages. I understand from ADS Group, a trade organisation for companies in the UK defence sector, that around 5,000 apprentices are employed in that sector. That is evidence of a budding workforce.

However, in constituencies such as mine, the picture is different. There are myriad reasons for that; in rural communities, problems include inaccessibility and a lack of connectivity. Charcroft told me that despite its best efforts,

“apprentices are hard to come by.”

We need to be committed to nurturing our home-grown talent, so that we can strengthen our defence industry, and so that businesses can expand and develop easily without that anxiety.

[Mr Marcus Fysh (Yeovil) (Con)]

Does my hon. Friend agree that the new medium helicopter programme is a very good example of how we can support skills development, and the sustainment of those skills—particularly design skills—in the defence manufacturing sector? My college in Yeovil works closely with Leonardo to provide apprenticeships in exactly the sorts of areas that my hon. Friend is describing, and if the MOD becomes the reference customer, there is a massive opportunity for major export business to be done off the back of that in future. That would sustain jobs throughout Wales and the south-west, as well as the wider UK.

Defence Supplementary Estimate 2021-22

Marcus Fysh Excerpts

Wednesday 9th March 2022 Commons Chamber

[Mr Marcus Fysh (Yeovil) (Con)]

As we have heard time and again today, we need to spend more on defence. This really could not be a graver time for the world. I do not think any of us in the House imagined that we would be in such a position, discussing this issue in these circumstances. Sadly, I think our armed forces are going to have a lot more to do over the coming years so we need to make sure that we fund and equip them appropriately. As a House we need properly and diligently to shoulder that massive responsibility.

One thing on which people have not yet focused very much but which I fear will be very much the focus of discussion in the coming years is just how difficult an economic situation the world is going to be in. Because of the sanctions and everything that has been going on in respect of our not wanting to engage with Russia and its exports of energy, materials and agricultural products, there is going to be massive food-price inflation throughout the world and in some of the world’s poorest areas, including the middle east, central Asia and north Africa. I am afraid that will almost certainly cause grave circumstances for the people who live in those areas, meaning we will be called on to help in all sorts of different ways, including from a humanitarian point of view and from a climate point of view. There will undoubtedly be lots of disputes and arguments about such matters over the coming years. We need to be clear-eyed about the economic damage that is going to be done to the world and to our economy because of this situation. As a result, we need to look at absolute numbers in respect of what we need to invest in defence to achieve the things we want to achieve: we must not be hung up on a particular percentage-of-GDP target, because that is going to be a moving feast and I think we will, unfortunately, be in a fairly major recession before too long.

I wish to focus on one procurement issue that, in the context I have set out, we need to accelerate: the procurement of the medium-lift helicopter requirement that was identified in the defence review. It has been put out to competition, but the context has changed—we are not in Kansas anymore—and we need to accelerate the procurement process and demonstrate to the world how the UK can procure in a more agile and nimble way than it has done in the past. In particular, if we want to get the helicopters into service by 2024, and given the various stresses on global supply chains, it makes sense to get a decision as soon as possible.

[Mark Tami (Alyn and Deeside) (Lab)]

May I quickly make the point that competition is still important, because experience has shown us that, when there been no competition, we have ended up with poor procurement?

--- Later in debate ---

[Mr Fysh]

The right hon. Gentleman makes an important point, but it is also important that that happens in a timely fashion. A capable machine is proposed to be made in my constituency. Leonardo’s AW149 is not only the best helicopter for the military purpose, but the best in terms of delivering jobs and delivering on that strategic asset that we have in the UK, through Leonardo’s facilities in Yeovil, for end-to-end helicopter production. It is also the only candidate for that requirement, which will deliver exports and jobs into the future. We do need to get that done as soon as possible and to support our people with the best possible equipment.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the SNP spokesperson.

Oral Answers to Questions

Marcus Fysh Excerpts

Monday 5th July 2021 Commons Chamber

[Leo Docherty]

Addressing this injustice will be at the heart of the veterans strategy action update plan, which I will announce in the winter. I thank the hon. Member for his sustained interest in the issue. I cannot pre-empt the findings of this workstream, but I assure him that we will address this matter with compassion, humility and urgency.

[Mr Marcus Fysh (Yeovil) (Con)]

What contribution UK armed forces are making to counter-Daesh operations in Syria and Iraq.

[Royston Smith (Southampton, Itchen) (Con)]

What contribution UK armed forces are making to counter-Daesh operations in Syria and Iraq.

[The Minister for the Armed Forces (James Heappey) [V]]

Our armed forces continue to provide support to the Iraqi Government in tackling the threat posed by Daesh. The RAF has flown more than 8,700 sorties and released more than 4,300 precision weapons to target Daesh in Iraq and Syria. On the ground, we have trained in excess of 120,000 Iraqi and Kurdish personnel in everything from engineering to countering improvised explosive devices. We remain wholly committed to the coalition and supporting our ally Iraq in countering Daesh.

[Mr Fysh [V]]

Yeovil and the south-west are proud of the contribution we make to supplying our service personnel with the best possible equipment on their forward operations in risky environments, such as the fight against Daesh. We are also proud of the apprenticeships and skills that are sponsored through such industrial connections—for example, the 500 apprentices that Leonardo helicopters has recruited over the last decade. Will my hon. Friend confirm that this partnership will be at the forefront of his mind when making the choice of the next new medium helicopter?

[James Heappey]

My hon. Friend is right to raise the importance of rotary aviation in support of operations around the world. He knows from our exchange in the debate last week that I am not able to comment directly on the point that he makes, but I hope he knows that we always want to provide our armed forces with the very best equipment.

UK Defence Spending

Marcus Fysh Excerpts

Thursday 24th June 2021 Commons Chamber

[Mr Marcus Fysh (Yeovil) (Con) [V]]

It is a great pleasure to take part in this fascinating debate and a pleasure to follow the right hon. Member for Islington North (Jeremy Corbyn), who made a very eloquent plea for his version of what peace looks like around the world. I would not disagree with him at all, in that I think the UK does have a big role to play in trying to establish it and maintain it. I think we may disagree on some of the particular details on how to get there, but I think the whole House could agree that that is what we are trying to do.

I have always thought that a proper commitment to defence and defence spending is an essential part of that. I have been a champion of the Government’s commitment to the 2% minimum of GDP spending on defence, but I also agree with Members who made the point that that has to be the minimum and, in fact, we could do with spending more. The fact is that we face many threats around the world. There are lots of nations with lots of nuclear weapons and designs on their neighbour’s territory. We have a role to play—absolutely not as an imperial power, but as a concerned global citizen—in trying to make sure those strategies and weapons are never used. That means we have to be part of the balance in the world that others respect.

When it comes to world security and the ability to work with partners and insert ourselves into places to help with humanitarian missions for example, many people are rightly very proud of the great role our armed forces play in disaster situations around the world. These are things we simply cannot do to the extent we do now unless we have a fully functional and capable armed forces that is able to be flexible and have the capacity to act in multiple areas at the same time. That is how we can help our partners in need, whether it is with their security or with their response. I would love to see us spending 3% of GDP on defence—maybe that is something to work on for the future.

I want to talk about a couple of ways in which our defence spending is integral to our strategy for shared prosperity, both in the UK and abroad, and about how the budget needs to be used wisely. We have heard about the problems in procurement that have existed over many years, with budgets moving to the right and being delayed, which can end up costing more. I agree that we need to focus much more on how we get the best bang for our buck out of procurement spending. Some very big procurement items are moving through the budget at the moment, such as the nuclear deterrent. How they are paid for is a massively important part of the overall picture, but we need to make sure that procurement focuses properly on prosperity for British industry and British jobs here in the UK and that it helps to develop skills and opportunities for young people and support the technologies of the future. With reference to my constituency of Yeovil, there are two critical things that illustrate that very well.

The first is the unmanned aerial vehicle programme that Leonardo has been working on in conjunction with the MOD. It is very important that that goes to the next stage, because the military very much see it as the medium to longer-term replacement for existing vertical lift programmes such as the Wildcat and the AW101 Merlin, which our commandos operate out of. However, my understanding is that the MOD does not yet have the next stage of the programme budgeted and funded. I would like Ministers to please look at that, because it is also essential to the perpetuation of engineering skills in the UK for vertical lift, which Leonardo really embodies—a key sovereign capability that we should preserve and enhance.

The second big opportunity, as the right hon. Member for North Durham (Mr Jones) mentioned, is the potential identified in the integrated review for a medium-lift helicopter to be built in the UK. There is a Leonardo product called the AW149, which is an extremely capable vehicle. I must briefly correct the hon. Member for Angus (Dave Doogan): he said that it was not a British design, but actually it was originally. The helicopter was designed in Yeovil, but as it was not being used militarily, it was given as a civil idea to the Italians, who have been making it as the AW189.

The AW149 could deliver our capability in a very cost-effective manner, because it is off-the-shelf—it is an existing civil product. It can be made very cost-effectively and can deliver a very manpower-centric type of capability. It has all of the automation suite that is so well loved on the AW101 and that makes that product such a success in search and rescue, because it gives the pilots much more ability to focus on the mission and on supporting the men under their charge without having to fly the aircraft. That makes it a very modern capability, which I believe is much better than anything else potentially on the market. Also, from an industrial point of view, it would unlock a big opportunity for foreign direct investment from the Italian parent, to invest in the UK, to really make Yeovil and Leonardo the centre of its military excellence when it comes to vertical lift. That is a real prize worth having. It can also make an important contribution to the UK’s export performance, because medium-lift helicopter requirements around the world could amount to as many as 500 aircraft of that type. That is a massive opportunity for the south-west and the entire supply chain in the south-west to participate in economic recovery and exports for the whole of the UK and really sustain the prosperity.

The hon. Member for Angus mentioned a disparity in his mind between Scotland and the south-west, but actually Leonardo is a living example of a Scotland and south-west co-operation, because Leonardo has massive operations in Edinburgh and is very proud of them, so it is an ideal example of how these slightly parochial, shall we say, interests can be bridged and are not what they might first seem.

These are crucial programmes to the sustainability of the workforce and the sovereign capability in vertical lift in the UK, and it would be a huge missed opportunity not to take advantage of that for recovery and exports. I consider that in the UK we suffer from not having direct Government involvement in export, as the US does, for example, through its foreign military sales programme. I agree with the right hon. Member for North Durham (Mr Jones) that companies such as Boeing have done very well out of the UK in recent years. They have just had a massive procurement of Chinook to add to the Wedgetail, the P-8 and so on. Chinook was done on a sole-source basis, so there was not a competition. Leonardo could not bid for any of that work—not even any of the maintenance.

Given that the medium-lift requirement for the MOD is for 2024 and 2025, there is a very strong case for saying that, as that is such a short timeframe, it makes eminent sense for that to be a sole-source procurement process, and for Leonardo to be chosen to work with the Government on that. Those machines will need to be in the factory in 2022 and 2023 to make the timetable, so the decision must be made pretty much immediately. I hope that Ministers will look at that.

To conclude, defence spending is admirably supported by this Government and is a key pillar of the outward-looking global Britain that we seek to build, but we need to ensure that it delivers for hard-working people at home. We need to buy British and support our industries and their world-leading products.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I know it seems like we have a lot of time for this debate, but I need colleagues to speak for about 10 minutes maximum to get everybody in without a time limit.

Oral Answers to Questions

Marcus Fysh Excerpts

Monday 21st September 2020 Commons Chamber

[Mr Marcus Fysh (Yeovil) (Con)]

What steps his Department has taken to support Government procurement during the covid-19 outbreak.

[The Minister for Defence Procurement (Jeremy Quin)]

Throughout the pandemic, orders have continued to be made and placed and suppliers paid. The MOD has to date paid £123 million in interim payments to ensure that critical defence outputs can continue uninterrupted, and engaged directly with 600 of its critical suppliers. In addition, as part of the Treasury fiscal stimulus programme, an additional £200 million of funding has been allocated to improve the defence estate accommodation.

[Mr Fysh [V]]

Short-term support is great, but companies such as Leonardo in my constituency need long-term certainty on programmes as they fight back from covid. What can the Minister do to provide such certainty?

[Jeremy Quin]

My hon. Friend is a great advocate for Leonardo and for military helicopters. The publication of the integrated review and, in particular, the defence and security industrial strategy will provide a great deal of certainty. In addition, in the case of Leonardo, through our strategic partnering arrangement we are establishing a joint working group to support future capability and understanding.

Oral Answers to Questions

Marcus Fysh Excerpts

Monday 3rd February 2020 Commons Chamber

[Mr Wallace]

The hon. Lady makes very genuine and good observations about these defence reviews. I was a soldier serving under defence reviews that never translated into either money or the funding. The first thing that we can do is be honest with the men and women of our armed forces about what we can afford and what we will give them, and at the same time be honest with the public about what our ambitions are globally, and make that honesty not hunkered in sentimentality but based on financial reality, making sure that the whole Government buy into that, and that we explain that fully across the House and to all Members, including the hon. Lady’s Committee.

[Mr Marcus Fysh (Yeovil) (Con)]

11. What steps his Department is taking to maintain the capabilities of UK defence manufacturing.

[Robert Courts (Witney) (Con)]

17. What steps his Department is taking to maintain the capabilities of UK defence manufacturing. [R]

[The Parliamentary Under-Secretary of State for Defence (James Heappey)]

The MOD is committed to supporting the UK defence manufacturing industry. Since 2015, we have published a national shipbuilding strategy, launched the combat air strategy and refreshed our defence industrial policy. Through the defence prosperity programme, we are working to sustain and develop an internationally competitive and productive UK defence sector.

[Mr Fysh]

The help that the Government give to our indigenous exporting firms is of huge value. I thank the Minister for the Department’s help with exports of the Leonardo AW159 Wildcat helicopter, and I note that the Republic of Korea has an opportunity to increase its world-leading Wildcat capability, built in Yeovil, to give its people maximum protection and forge an increasingly significant and dynamic relationship with the United Kingdom.

[James Heappey]

The Wildcat, designed and built in my hon. Friend’s constituency, and with the sweat of my own constituents, has been tried and tested on operations with the Royal Navy. The Government will continue to do all that we can to support the export of Wildcat to South Korea, including making a Royal Navy Wildcat available for it to test and evaluate in the coming months.

Defence: Rotary Strategy

Marcus Fysh Excerpts

Wednesday 29th January 2020 Westminster Hall

[Mr Marcus Fysh (Yeovil) (Con)]

It is a great pleasure to serve under your chairmanship, Ms McDonagh. I thank my hon. Friend the Member for Witney (Robert Courts) for securing the debate. He gave a thoughtful outline of some of the high-level strategic issues we need to consider. I welcome the Minister to his place. It is a great honour to have a Somerset colleague performing such an important role for the country at this time.

I absolutely agree that we need a helicopter strategy, or a rotary-wing strategy. I have been championing the issue with the Department for some time. My hon. Friend the Member for Witney made some of the arguments for that very eloquently. In my constituency, we have probably the biggest centre of helicopter manufacturing operations in the UK. It is the only end-to-end design and manufacturing aerospace capability left in the UK. It is really important for the community and, I think, the country that we preserve those design skills, for some of the reasons that my hon. Friend mentioned.

It is massively important that we have the capability to make the most of the advances that are coming with autonomous vehicles in the aerial space. Unless we preserve some of those skills and invest in them for the future, it is difficult to see how we will play a full part in the development of new technologies. As my hon. Friend also said, if we want to be global Britain, have more of an industrial footprint in the world and have more influence with our NATO allies and others, it is massively important that we have a contribution to make in the technology sphere. I welcome the Government’s focus on more spending on R&D, skills and infrastructure, and their focus on investing in regional areas such as Somerset in order to level up and take advantage of some of the installed base we have.

I thank the Ministry of Defence for its support for the helicopter industry in the UK. It does a lot of work on export promotion and on helping to demonstrate the current capabilities that we build in Yeovil. My hon. Friend mentioned some of the platforms produced there, including the Merlin, which is a heavy-lift helicopter, and the Wildcat, which is a much smaller helicopter but is very well regarded around the world. I know how much the company appreciates the MOD’s help in demonstrating what a great aircraft that is to some of its export opportunities around the world. The company currently estimates that there is potential for £11 billion of export sales. This is a real opportunity to utilise what we do well in Yeovil to advance the nation’s export interests.

It is fair to say that the Wildcat is integrated in the Navy’s defence systems. The Navy has been more inventive and creative in thinking about how that platform can be integrated in its systems, and there are opportunities for the Army to use the Wildcat creatively. If it can get a missile, it would be brilliant to have it working in tandem with the Apaches to increase frontline capability. It is worth looking at that properly.

My hon. Friend also mentioned the potential for thinking about what replaces the Puma. Leonardo has a civil helicopter platform in Italy, the AW189, which it would like to militarise, and it has suggested that it might use Yeovil for its global centre for military excellence should sufficient orders come through for the AW149—the AW189’s militarised variant. It would be worth the MOD conducting a capability review to see whether that helicopter might form part of the solution.

I completely agree with my hon. Friend that we need to look at all these things in the round, and a formal helicopter strategy would be an ideal way of conducting that. The defence industrial policy was welcome, but we must focus on rotary wing. We have heard about some of the possibilities with using autonomous vehicles on our aircraft carriers. We welcome the MOD’s collaboration with Leonardo on unmanned aerial vehicles to investigate capabilities and potential solutions to needs in that area. That, however, is a long-term programme, and unless we invest now, we cannot expect the UK’s industries to be leaders. I therefore welcome that collaboration.

We should look more at how we procure, because, as my hon. Friend said, when procurement is done reactively, there is a need to look only at headline price, which does not necessarily take into account the gross value added to an economy by long-term programme development. Leonardo, for example, has nearly 3,000 employees at its Yeovil site, but there are about 10,000 people in the supply chain, and for every £1 of headline direct value added, 2.4 times that is added through consequential impacts on the rest of the economy.

This is a really important industry. The capability it provides for our forces is important, and we really need that sovereign capability. We also need to get better at innovation. It is therefore worth looking at how we certify, because some of the certification processes take so long. In other industries in the modern world we see shortening product development cycles, so we need to ensure that certification burdens and bureaucracy do not interfere with the swift development of our military capabilities. The ability to commercialise products depends on that. Often, a defence industry skunkworks—that is the technical term for a little company trying to do something unusual—will not know whether a product may be regarded as a dual-use product until five or six years into the development cycle, by which time it may have had to spend up to £10 million getting a working prototype up and running. That is a huge risk to take before knowing what its marketability will be. There are ways in which we could change the procurement process to make the system more innovative and easy to commercialise.

On foreign military sales, we should think about whether the UK should have its own sales programme. We hear a lot about what the US does in that regard, and it is quite attractive, but the US should not be the only country able to deal Government to Government. It might be worth thinking about whether the UK should offer similar deals to friendly allies, whether France or others, and how such a scheme could work.

I absolutely agree that we must make the most of our opportunities. I support the call for a formal helicopter strategy to complement the combat air strategy, as it would help enormously our long-term decision-making processes and justifications. On that basis, I absolutely welcome the debate and thank my hon. Friend for bringing it about.