Defence Spending (Wales)

The Labour Government held a number of reviews, but not full defence and security reviews. There was a constant review of our capability, which had to take place because of our involvement in Afghanistan. I do not think anyone can say that the Labour Government failed to review and assess constantly the needs of our armed forces. I want to focus on the issues of sovereign capabilities and skills capabilities in the defence industry in Wales. I am particularly concerned that we are not looking at the impact of cuts on our long-term capacity to protect our troops with the equipment and the platforms that they need. Prime contractors are represented in Wales, as colleagues have mentioned. Defence manufacturers based in Wales include EADS in Newport, General Dynamics in Islwyn and Thales Optics in St Asaph. For every job created by the industry, 1.6 jobs are created elsewhere in the economy. It has been calculated that a £100 million investment in the industry creates 1,885 jobs throughout the UK economy, 726 of which will be directly in the defence industry. I want to focus on the role of SMEs in the defence sector in Wales, and to make the case for supporting and nurturing them in the months and years ahead. According to research from the Defence Industries Council, there are more SMEs in the UK defence industry than in the French, German, Italian and Spanish industries combined. Interestingly, General Dynamics—in the constituency of my hon. Friend the Member for Islwyn (Chris Evans)—said in evidence to the Select Committee on Defence:"““GDUK believes passionately in building a strong supply chain based on British companies, and in particular SMEs; and we practise what we preach. 70% by value of our work on Bowman is undertaken by British companies.””" The Bowman programme is based in south Wales. In the same evidence, GDUK stated:"““We took a deliberate decision to concentrate that growth on south Wales. Following the recent signature of the contract for the Demonstration Phase of the Scout Platform, we expect the size of our work force to grow steadily over the next three years, again with much of that in south Wales.””" We have to remember that the impact of the growth of General Dynamics will rely strongly on 70% of SMEs being financially capable of surviving the current round of cuts and insecurity around contracting coming out of the MOD.