PARLIAMENTARY DEBATE
New Medium Helicopter Contract - 12 January 2026 (Commons/Commons Chamber)

(Urgent Question): To ask the Secretary of State for Defence if he will make a statement on the delays to the awarding of the new medium helicopter contract and the potential closure of Leonardo helicopter site in Yeovil.

I thank the hon. Member for Yeovil (Adam Dance) for this urgent question and thank you, Mr Speaker, for allowing me to provide an update on the current status of the Ministry of Defence’s new medium helicopter procurement.

Earlier this afternoon, I spoke with the CEO of Leonardo UK and the managing director of Leonardo Helicopters to continue our conversations around NMH exports and autonomous helicopters, and stressed that Leonardo remains an important strategic partner for the MOD. In fact, I had to leave that meeting early to get to this UQ. It is something that remains on my priority list.

The NMH programme was first announced in March 2021 by the previous Government, with competition opening nearly three years later in February 2024. The Government will make a final decision on the award of the NMH contract through the wider defence investment plan. As the Defence Secretary has said in this House, we are working flat out to deliver the DIP, which will deliver the best kit and technology into the hands of our frontline forces and, importantly, will invest in and grow the UK economy. It will be published as soon as possible and is backed by the Government’s largest sustained increase in defence investment since the end of the cold war, spending £270 billion on defence in this Parliament alone.

Thank you again, Mr Speaker, for granting me this urgent question. I also thank the Minister for his response.

Leonardo in Yeovil, the home of British helicopters since 1915, has been the only bidder for the UK’s £1 billion new medium helicopter contract for over a year now. It is clear that the current bid will not be sustainable past March. If this contract is not awarded by then, we will lose over 3,000 manufacturing jobs in Yeovil, support for over 12,000 jobs in the regional supply chain and the £320 million that Leonardo contributes to local GDP. We would also lose our country’s ability to produce our own helicopters end to end here in the UK at a time of serious global tensions and insecurity.

Will the Minister please reassure us that the Government plan to go ahead with this contract and that the delays do not mean that the funding for the contract is not available? Can the Minister commit today to protect the future of the site in Yeovil? Will he state that the new medium helicopter programme is vital to our national defence? Finally, with the defence investment plan now seemingly in limbo, can the new medium helicopter programme be separated from the plan and awarded today—yes or no?

I thank the hon. Member for his questions. He will have heard my first answer, which answers some of his questions, which said that the NMH decision will be made as part of the defence investment plan. That will be announced shortly, so I will not be able to give him an answer today. I continue those conversations with Leonardo, as indeed I have today. It is important that we continue having those constructive conversations because I understand the importance of Yeovil not only to his constituency, but to our wider defence ecosystem and, as a south-west MP, to the wider region as well. Leonardo is expert in not only building helicopters but servicing them, and I am excited about some of the work it is undertaking on autonomous helicopters, as well as its wider business interests across the UK, especially in electronics and other areas. I am happy to continue conversations with the hon. Member about this, as I will do with the company and with the trade unions representing the workforce.

It is not only the highly skilled jobs and sovereign capability brought by Leonardo’s investment in Yeovil that are at stake; we must also recognise the opportunities for social mobility that industries such as this create for young people from across the country and from every background. I note that the NMH programme existed in the previous Government’s unfunded £29 billion equipment plan. Their failure to prioritise the programme and deliver the defence funding that such hard decisions need—[Interruption.] It is in the National Audit Office report. That failure means that we need the defence investment plan to make the decisions necessary to secure our country and European security.

My hon. Friend is right about two things. First, defence is an engine for growth. That is why we are investing more of the increasing defence budget in British companies. Secondly, the Conservatives left huge swathes of their equipment programme unfunded—a problem that we are sorting out because of the mess that the hon. Member for South Suffolk (James Cartlidge) left.

I congratulate the hon. Member for Yeovil (Adam Dance) on tabling this urgent question. It was a real pleasure to visit the Leonardo factory last September and witness how critical it is to employment in his constituency. Visiting the factory, one gets a powerful sense of Britain’s rotary history, but we want it to have a brilliant future too. That is why it is so worrying that the CEO of Leonardo recently warned that at least 3,300 jobs could be at risk if the NMH procurement does not go ahead. It was with those jobs in mind that when I announced the formal tender of the new medium helicopter as Defence Procurement Minister in February 2024, I took the decision to give a much stronger weighting to two key areas of the tender: first, the commitment of bidders to delivering high-skilled rotary work in the UK; and secondly, exportability, so that the supply chain could endure. All that will count for nothing if the procurement is cancelled.

Can the Minister confirm whether there is still a military requirement for NMH? If so, is he still committed to procuring NMH? After all, when I asked the question last April, I was told I would get the answer in the strategic defence review, but the SDR document never mentioned NMH at all. Instead, when the Secretary of State announced the SDR to Parliament last June, he said that the detailed decisions would be covered in the defence investment plan, which he said then would be published in the autumn of 2025. Given that it is now 2026, and that promise has clearly been broken, can the Minister tell us in which month he will finally publish the DIP? Can he confirm reports from multiple sources that the reason the DIP is delayed is that there is now a £28 billion black hole in the MOD budget?

Finally, the Budget Red Book shows exactly what Labour will spend on removing the two-child benefit cap right up to 2031, but does not say what the defence budget will be that year. Can the Minister tell us? Is the reality not that by prioritising welfare over going to 3% on defence this Parliament, Labour are paralysing decision making in the Ministry of Defence and putting thousands of jobs at risk in our defence industry at Yeovil and across the UK?

Deary me. It is this Labour Government who are increasing defence spending to the highest level since the end of the cold war. It is the Conservatives who hollowed out and underfunded our armed forces. In their first year in government, they cut defence spending by £2 billion. In their first five years of government, they cut defence spending by £12 billion. In their 14 years, they never once hit 2.5% of GDP on defence.

I remind the House that as the Defence Procurement Minister until the election, the hon. Member for South Suffolk (James Cartlidge) left a defence programme that was overcommitted and underfunded. He left 47 of 49 major defence programmes over budget and delayed. He left forces families in terrible housing and our warfighters with broken kit. We are clearing up his mess while he focuses on gaslighting the public about the Tories’ record on defence.

I support calls by my union, Unite, for a speedy decision on crewed helicopters. I hope soon for good news on that front in the defence investment plan, which we all look forward to so very much. Might the Minister have any news on the manufacture of autonomous helicopters here in the UK, and on the good jobs that will come with them?

As a fellow Unite member, I recognise the importance of good, well-paid, unionised jobs in our defence industry. The opportunities in autonomy were set out clearly in the strategic defence review. We believe that a mix of crewed, uncrewed and autonomous systems—for not just some but all units of our armed forces—is the right future, in which we can increase our lethality and move towards warfighting readiness faster. When we do that correctly, as we will set out in the defence investment plan, more jobs will be created in British companies—and, potentially, at Leonardo—as they consider autonomous helicopters and uncrewed platforms working together to increase our armed forces’ lethality and ability.

I call the Liberal Democrat spokesperson.

I thank my hon. Friend the Member for Yeovil (Adam Dance) for securing this important urgent question on behalf of his constituents.

The UK has retired Puma early, leaving a medium-lift helicopter capability gap. At the very moment our allies are accelerating procurement because the threat picture has worsened, the Government are still dithering on the replacement of that critical sovereign capability. Ministers keep hiding behind the forever-delayed DIP—the defence investment plan—but if they do not get on with it, they will be dealing with two more dips: a big dip in employment and investment in Yeovil and across the UK when Leonardo leaves because of Government inaction, and a dip in the capability of our armed forces, which will be left without a modern medium helicopter to call upon. Once an end-to-end helicopter-manufacturing workforce has drained away, we cannot magic up a new one when another crisis hits. Does the Minister recognise that if Yeovil is not sustained, we will lose those skills for a generation? Given that Leonardo is the only remaining bidder, will the Government stop dithering and get on with it now? Will the Minister commit to a new contract today?

I thank the hon. Gentleman for his questions. They are, I am afraid, the same questions that his hon. Friend asked, so I will have to give him the same answers. All decisions on the new medium helicopter contract will be made as part of the defence investment plan. We continue those conversations with Leonardo. I recognise the importance of the skilled workforce. I will continue speaking to the company, as well as to the trade unions, about that—I am meeting Unite later in the week to have further conversations. I want to see more of the increase in the defence budget spent with UK companies, as we set out clearly in the defence industrial strategy and as the Prime Minister and the Defence Secretary have said we will continue to do. I recognise and share the hon. Gentleman’s passion about renewing our armed forces. We will make those decisions as part of the DIP, which will come shortly.

As the Member of Parliament for Bournemouth East, I am passionate about renewing British military aircraft. After all, my constituency hosted the Bournemouth air festival until it was scrapped by the Liberal Democrat-led council, with no plans to return it—something that I am trying to reverse.

I welcome the award of 1,000 major contracts since July, and the defence spending bumps of £5 billion this year and £270 billion over the lifetime of the Parliament. Like me, the Defence Minister is a south-west MP. Will he set out how the Government are investing in defence across Bournemouth, Christchurch and Poole and the broader south-west?

Constituencies across the south-west of England and around the country stand to benefit from the increase in defence spending set out by the Chancellor: £5 billion for the defence budget this year, which will rise to 2.5% and then onwards. We know that we are living in a new era of threat, and we are renewing our armed forces as a result. Many of the contracts that we are placing now are for the newer end of technology—autonomous systems and latest capabilities. That retires some of the old capabilities we inherited from the previous Government, who would not give our warfighters the fighting advantage that they need—especially given the lessons learned from Ukraine. Later this month, we will stand up the Office for Small Business Growth, which will help to support more small businesses and procurement in defence. There will be advantages, given the number of small businesses around Bournemouth that have huge potential to contribute to our defence and national security.

Leonardo is an important company for Somerset, Dorset and the wider south-west. The Minister will know that corporate decisions are competitive, and his Department plays a key part in shaping what those decisions will be. The defence investment plan is now long overdue. I appreciate that he probably cannot give us a specific date, but it would be helpful if he could tell the House whether we will see the plan in this financial year or the next.

I thank the hon. Gentleman for his question and for the tone in which he asked it, and he is right to say that corporate decisions about where investment goes are important. That is one reason that we have continued dialogue with Leonardo, not just in the UK but also with its parent company in Italy, to ensure that it is kept abreast of our challenges with the DIP, and with the military need and procurement strategy. I am afraid I will not be able to give a date for the DIP. We are working flat out to get it, and it will be published shortly when ready.

Issues such as these are why the new defence industrial strategy is so welcome, and it places a prioritisation on British firms. That is welcome news to local Rolls-Royce, which has been awarded billions of pounds of contracts under this Government. What more will that investment do to support neighbouring areas such as mine in Burton and Uttoxeter?

My hon. Friend is right to say that the defence industrial strategy is a key piece of the puzzle in building up our new armed forces. It was published last year—[Interruption.] The shadow Minister is asking where it is, but it is on the internet because it was published a number of months ago, so if he has not read it, he should have a read. My hon. Friend’s question about Rolls-Royce is important. We have given Rolls-Royce a £9 billion contract for new nuclear reactors to support the SSN-AUKUS work. That Unity contract is an important part that enables Rolls-Royce to invest in its infrastructure and, perhaps most importantly, in its skills base. I recently met Rolls-Royce, and I know it has plans to go even further with its product offer and employment opportunities, and I will continue to keep the House informed about those developments.

The Secretary of State promised long-term partnerships with our domestic defence industry, but when the Government dither and delay in giving primes confidence with their big contracts, that directly impacts the ecosystem of brilliant British subprimes across our country. Those include StandardAero at Fleetlands in Gosport, which has the opportunity to provide the assemble and inspect test on the GE motor in Leonardo’s AW149. Fleetlands has been a key player in our country’s defence rotary wing history for 100 years. Does the Minister see how delay in that decision is not only holding back our world-class industry, but delivering uncertainty to key companies across our country and all the people they employ?

The hon. Lady is absolutely right to say that there are important defence companies in her constituency, and across the country. We continue to place contracts with the defence industry, with more than 1,000 placed since the general election, and over 80% of those with UK firms, and that is an important continuation of our efforts to renew our armed forces. I entirely understand her argument that we want more investment and certainty, and when the defence investment plan is published—shortly, I hope—that will provide clarity on the kit we are buying, and in what order and sequence. That will help to support the growth of British businesses both large and small.

I thank my hon. Friend the Member for Yeovil (Adam Dance) for securing this urgent question on behalf of his constituents, as well as mine in Glastonbury and Somerton. Alan from Keinton Mandeville, a Leonardo employee, recently wrote to me to stress how securing the new medium helicopter contract would protect jobs, support growth, and maintain the UK’s sovereign capability in military aviation at a time of growing global instability. In addition, as the Minister will know, Leonardo supports Yeovil College in developing apprenticeships to the tune of over £1 million a year, and many of those apprentices live in my constituency. Does the Minister recognise the impact of his Department’s delay in compromising not just regional development but national protection?

I met the chief executive of Yeovil College briefly at the Great South West conference last year, and I understand its involvement and partnership with the private sector in that locality, including Leonardo, but not only that. I want to provide certainty for businesses, which is why I also want to ensure that the defence investment plan is got right. For far too long industry has had promises of funding when the equipment programme has been unfunded, and there has not been money to support those jobs or that certainty. We inherited a programme in which huge amounts were unfunded, so our objective is to ensure that all our defence programmes are sustainable. We must ensure that we are clearing up the mess. Industry must have full certainty that when something is in the programme, it will be funded, rather than the previous situation when industry saw the press releases and soundbites but not the cash. We are addressing that with the new defence investment plan.

The Minister knows that I have a high regard for his commitment and integrity, and that I have pressed successive Governments for more defence investment, so leaving aside the party politics, will he confirm whether or not the Government accept what the hon. Member for Yeovil (Adam Dance) has estimated, which is that, if this contract is not concluded successfully by March, then it will be too late to secure the future of Yeovil as a helicopter centre of excellence?

I thank the right hon. Gentleman for his question and the tone in which he asked it. I have a lot of time for him and his arguments. In fact, I think that “Shifting the goalposts?”, which talks about the rise and fall of defence spending, is one of the very best Defence Committee reports and it was issued when he was Chair of that Committee. I certainly recognise what the hon. Member for Yeovil said about timings. The contract in the procurement of the new medium helicopter included a period where the prices were guaranteed; we are keeping that in mind, because we want to make a decision and not to be timed out.

I congratulate my constituency neighbour, my hon. Friend the Member for Yeovil (Adam Dance), on securing this important urgent question. Leonardo may be based in Yeovil, but many of its 3,000 employees live in my West Dorset constituency, which is why, when I was elected, one of the first meetings I had was with Leonardo and it was about the new medium helicopter. The Minister has said today that the decision will be made “as soon as possible”, but on 10 February, in response to my question in the Chamber, his predecessor told me that the decision would be made “swiftly”. Given that every single defence manufacturer, SME and even the military personnel I meet say that we need to speed up defence procurement decisions—even the SDR itself urges the speeding up of defence procurement decisions—how much confidence can British industry have that the Government are listening to that need, when a decision about something as simple as a single contractor bid is taking so long to decide?

I thank the hon. Gentleman for his advocacy for his constituents who work at Leonardo. I entirely understand what he says. We are already taking steps to reform defence procurement to speed up decisions, but I am clear that a big decision about the future of the NMH and the funding for it needs to be taken as part of the whole programme. The defence investment programme is so important and it is important that we get this decision right, so that everyone can have certainty and confidence in every single line item in the DIP, which is something they have not been able to have with the equipment programme that we inherited.

The delay in the DIP and the procurement of these helicopters has been unexplained and is causing a great deal of concern in my constituency, which is heavily dependent in the south on Yeovil and Yeovilton. Will the Minister do everything in his power to get a move on? A Government who want growth cannot afford this kind of delay. Will he confirm or refute the rumour going around that the one of the reasons for the delay is that he is descoping the number of AW149 airframes that he originally envisaged under this contract, and that there will now be significantly less than the figure of 24 that was originally booted about?

As the right hon. Gentleman was a Defence Minister in the last Government, he will understand the challenge of having an unfunded equipment programme that we are seeking to address in the defence investment plan. In relation to those he represents who work in Yeovil and Yeovilton—and indeed perhaps also in Culdrose, on the wider servicing of helicopters that Leonardo does, not just the building of them—we will be making a clear decision on the NMH in the defence investment plan. He will be aware that this procurement was bounded by the process. We will make a decision, we will not be timed out and we will not be altering the contract.

Obviously, the biggest impact will be felt in the constituency of the hon. Member for Yeovil (Adam Dance), but there will be an impact on businesses that are in the supply chain across the UK, and most people will be asking how on earth the procurement process has taken so long. Focusing on the military impact, how much have the repeated delays cost the taxpayer through failure demand—through the extended use of existing helicopters, long past their sell-by date, with ever-increasing maintenance costs—and has any assessment been made of future failure demand costs? What impact has the increased downtime of ageing helicopters had on operational risks?

The hon. Gentleman is certainly right that we inherited a number of very old helicopters. That is one of the reasons that we made the decision to retire Puma—a helicopter that had in many cases been flying for many, many decades. We will continue to look at the military needs and to match those with the capabilities from a rise in the defence budget, but the NMH decision will be made in the DIP.

The Minister said that he welcomed the questions from my hon. Friend the Member for North Dorset (Simon Hoare) and my right hon. Friend the Member for New Forest East (Sir Julian Lewis), but he did not answer either; he did not tell us whether the defence investment plan will be published this financial year and he did not speak to the critical nature of a decision before going into the next financial year. He has explained missing multiple deadlines by simply refusing to give any further deadlines. Does he accept that this is a choice of this Government, without blaming the previous Government? If this Government can find additional funding for welfare, they could find additional funding to meet this contract.

The right hon. Gentleman knows that we have found additional funding for defence; there is £5 billion extra in our defence budget this year. We have an increasing defence budget for every single year of the decade ahead. Let me challenge his point, as I did answer the questions to which he referred; I just was not able to give the answer that he wanted. The NMH decision will be made as part of the defence investment plan, which will be published shortly.

I congratulate my constituency neighbour, my hon. Friend the Member for Yeovil (Adam Dance), on bringing this vital question to the House. As a fellow south-west MP, the Minister will know the massive impact that this issue has not just on Somerset, but across the whole south-west. Given the answers to earlier questions and the fact that he seems unable to confirm that this matter will be decided before the next financial year, do the Government recognise that they are putting into doubt not just the NMH, but the very ability to produce uncrewed helicopters in the future? In other words, if we do not get the NMH, we will not have uncrewed helicopters in this country any more, because Leonardo will have gone. Is that a risk worth taking?

The hon. Gentleman is certainly right that it is really important to have an industrial base that can build autonomous helicopters and autonomous lift, and a number of players are already developing in that space. I want to be able to provide certainty to the workers at Leonardo on the future of the NMH, and that decision will be made in the DIP.

Rotary is obviously a vital element of military logistics. I know from my own experience in Afghanistan how much operations can be hampered by the inability to field a full suite of rotary assets in order to move troops around. With that in mind, and following the retirement of Puma for obvious reasons, can the Minister outline the rotary requirements for the armed forces at present and confirm whether the new medium helicopter is still a military requirement?

The hon. Gentleman comes from a background of knowledge in this respect. As part of the defence investment plan, the military have set out their needs, and they are being matched against the funding of the platforms that we have and the platforms that we want to purchase. As part of that, he will be aware of the SDR objective to move to greater autonomy in our platforms; indeed, a number of projects—including ones by Leonardo—are working to build that up. The new picture of crewed and autonomous platforms will be published as part of the defence investment plan.

Can the Minister confirm whether the rumours are true that one reason for the delay in the medium-lift helicopter is that there has been a rearguard action in the Army to buy US Black Hawks instead? If he will not give a timeline for the defence investment plan, will he at least confirm that it will include a medium-lift helicopter—yes or no?

We have been very clear in the defence industrial strategy and the strategic defence review that we want more of a rising defence budget to go to British companies. That is changing the way in which defence procures, and it is the right change that we need to see as we bring more strategic autonomy back to the UK and as we friendshore and onshore more capabilities in these more difficult times. I am afraid that I will not be able to give the hon. Gentleman the full details, because they will be set out in the defence investment plan, as he has heard from my previous answers.

Disregarding the Minister’s comment that we have to wait for the investment plan, most people in this Chamber know that that is because the Treasury is letting him do it. Further to the points made by my hon. Friends the Members for North Dorset (Simon Hoare) and for Gosport (Dame Caroline Dinenage), I am concerned about supply chain security. We have seen China, for example, put America over a barrel by dropping off renewables and making it reverse. Having supply chains in the United Kingdom is vital. Will the Minister really emphasise to the Treasury that it is a key strategic defence requirement that we are able to supply our military needs from within these borders? Maybe that will get the Treasury to sign off on what he clearly wants to tell us but cannot.

The right hon. Gentleman is absolutely right to talk about small businesses and the wider supply chain. A large component part of the defence industrial strategy talks about those things as well; I am sure he has read that strategy, so he will be familiar with it. We want to see our suppliers in the UK expand. We also want to see more of them selling to the UK military; indeed, lots of our small companies sell to foreign militaries, but not yet to the UK military. We are launching the office for small business growth later this month. That will enable an easier route for UK SMEs to sell their products and services into the UK military—something that, time and again, they have said has been hard in the past. We are making it easier for the future.

I, too, am concerned about the potential loss of jobs in Yeovil and the wider south-west if we do not see a positive decision on the production of the new medium helicopter at Yeovil. Late last year, we learned that the Government had failed to negotiate access to Security Action for Europe, a €150 billion defence fund. Leonardo is an Anglo-Italian company, and was also supportive of UK access to SAFE. Can the Minister reassure us that this lack of a decision on the new medium helicopter is completely divorced from access to SAFE?

Yes, I can. We were very clear that we wanted to explore the options for the UK participating in SAFE, but we were also clear that we would not join at any price. Unfortunately, we were not able to make the value for the UK taxpayer and for UK industry match in those discussions with SAFE. We continue to co-operate very closely with not just the European Union, but our European allies—that can be seen from the new agreements we have signed, such as the Trinity House agreement with Germany and more collaboration and co-operation with Poland—and there is more to come.

I congratulate my hon. Friend the Member for Yeovil (Adam Dance) on securing this important urgent question. There is a resounding threat on our doorstep from Russia and international order rests on a knife edge; at this time, the efficiency of the UK’s defence procurement process must be a priority. Businesses simply cannot afford to wait while the Government dither and delay on contracts. Thousands of jobs are at risk. That is the exact opposite of what this Government say they want to deliver, so can the Secretary of State provide UK business with confidence that the defence investment plan will be announced this year?

I thank the hon. Lady for her question, as well as for the promotion she has given me!

Since the general election, we have signed over 1,000 defence contracts, and more than 80% of those contracts have gone to UK companies. We will continue to use more of that increasing defence spending with UK firms, procuring with them wherever we possibly can. That is an important part of meeting the new threats we are facing as a nation and as a NATO alliance. We need to renew our armed forces, retiring old capabilities and bringing on new ones. The defence investment plan will set that out, and implement the approaches that were laid out so clearly in the strategic defence review.

On 26 March last year, three RAF Pumas performed a final fly-past of Aldergrove in my constituency. What urgency is there to fill that capacity gap of medium-lift helicopters and to secure a full utilisation of what used to be Joint Helicopter Command Aldergrove?

The hon. Gentleman and I have had a number of conversations about Aldergrove, and I suspect we will continue to do so. It is important that, as part of the defence investment plan, we continue to maintain lift capabilities across our armed forces. That will include a mix of crewed and uncrewed, and will lead into autonomous systems, as will be laid out in the defence investment plan when it is published shortly.

We all know that the Minister is a very honourable man, and we like him for the answers he gives us, but today we need confirmation of the dates—everybody has asked similar questions. He will be aware that delays in UK Ministry of Defence contracts create cash flow challenges, forcing delays in the MOD’s own operations. I know that from experience; 95% of defence companies in Northern Ireland are small and medium-sized enterprises, which are less equipped to absorb the financial strain of prolonged procurement cycles. Will the Minister please agree to an overhaul of the contractual system so that it acknowledges those who are dependent on contracts and makes the right decisions in a more efficient way, and will he begin the overhaul by making the decision that we have clearly and very much demanded to hear today?

I thank the hon. Gentleman for his advocacy for the defence industries in Northern Ireland. He will know that this Government placed a £1.6 billion order for new missiles from Northern Ireland. Those are a key component of our efforts to keep our friends in Ukraine safe. We will continue to procure from Northern Ireland businesses. Indeed, we are looking forward to the development of the defence growth deal for Northern Ireland, which I hope will enable us to take a substantial step forward shortly.