Defence Spending (Wales)

I congratulate my hon. Friend the Member for Swansea East (Mrs James) on securing the debate. Even in a debate about defence spending, we cannot talk about defence without paying tribute to our brave men and women fighting overseas. I stood, like many other hon. Members, at cenotaphs in St Fagans, Pontllanfraith and Cefn Fforest in my constituency, and Maes-y-cymer, where we paid tribute to our war dead. We should always keep them in mind when we talk about defence. I want to focus on the effect of defence spending on the wider economy. The defence footprint in Wales is massive and hugely underestimated. I often liken it to the car industry. There is no Welsh car but our supply chain, which manufactures components for cars, has a massive effect on the car industry. About 2,300 people work in defence in Wales; £250 million is spent by the Ministry of Defence with firms in Wales. My hon. Friends the Member for Swansea East (Mrs James) and the Member for Ynys Môn (Albert Owen) discussed St Athan, the training college, and made an important point about RAF Valley. A delay in one thing has a knock-on effect on the economy. With the promise of an MOD contract, firms ask to borrow money from banks. The bank manager will ask when the contract is arriving. They wait and wait, but still nothing. What happens is that the firm goes to the wall, the contract is eventually awarded by the Government, but there is no firm to produce the components needed. That strikes at the heart of the problem with this Government at the moment: a real lack of understanding of economics. The idea that the public sector and the private sector should be separate is absolutely wrong, and if anywhere that can be shown to be the case, it is in the defence industry. Ian Godden, the chairman of ADS, the British aerospace and defence industry body, has warned that the British defence industry will halve in size from 10% to 5% of the UK's manufacturing output. The main customer for the defence industry is the Government, who have the power to shrink or grow the sector. Unfortunately, they have made the decision to shrink it. It is not about cutting an aircraft carrier or a tanker; it is about cutting investment for the future. That is the problem with defence cuts.