Iain Dale told Channel 5's Jeremy Vine programme that a firm in the UK should be able to manufacture the yacht. Jeremy Vine stated that the building of the Royal Yacht demonstrates an important Brexit principle that the UK should be able to build its own stuff after leaving the European Union.
Mr Dale said: "The controversy now is will it be designed by a British company, will it be built in Britain?
"The Government is saying yes we want it to but they are not guaranteeing it.
"You would have thought there was somebody in Britain who could do this.
"People are saying it if is not British designed what is the point of it?
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"I cannot get too excited about the royal yacht I have to say."
He added: "I wonder whether it has had its day and we should just move on."
Jeremy Vine replied: "Isn't this principle really important that having left the EU we can build our own stuff now?"
Conservative MP Tobias Ellwood has called for the yacht to be built in the UK.
He told the Express: "It must be built in the UK.
"This is all about showcasing cutting-edge British design, engineering and green technology.
"That's what this flagship is designed to do.
"To go around the world and be a statement about global Britain.
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"It doesn't start off well if you design or build the ship overseas.
"So let's make sure that we produce something which is British to its core."
The cost of building the ship is estimated to be around ￡200million.
Boris Johnson would prefer if the flagship was built in the UK, but the first phase would be open to "international competition to ensure that we can procure a world-class design".