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Mr. Davidson: I have already made my position clear on where the orders should have gone. I seek clarification on a matter that I have pursued in some detail for some time. The Conservative Government placed the invitation in the European Official Journal. When did the Conservative party decide that that was not the route to follow? This is the first that I have heard about any change of mind. Had I known about this before, I would of course have been better armed when I went to pursue Ministers. I wonder whether this is a debating trick being produced out of a hat, or whether it is a genuine change of mind. If it is, why did the hon. Gentleman not tell us about it ages ago?

Mr. Duncan Smith: I have talked to colleagues of the hon. Gentleman about this matter--one, in particular, who is not present in the Chamber today--and expressed that view to them. It was not possible to raise the matter in the House, because no announcement was made by the Government. My comments are also on record in the Scottish press. In my view, the requirements of the tender have always made the ships military vehicles with a commercial aspect, not the other way round. I am not making a party political point. This is a national issue on which I fundamentally disagree with the Government's interpretation. I am sorry that those who would have built the ships in Govan will not necessarily do so, not only because of jobs but because that would have benefited the United Kingdom.

Mr. Hoon: The hon. Gentleman's last remarks will help the House to make a judgment on who exactly lives in cloud cuckoo land. He is entitled to his view, which he has emphasised, but he supported the previous Government, who took quite a different view and placed the invitation in the Official Journal. Had the requirement been for a warlike, military vessel, they would not have had to do that.

I accept that the hon. Gentleman was well known in the previous Parliament for disagreeing with the then Government on Europe, but it is not enough for him to say that we are now blaming the Europeans. We are all Europeans. We are subject to the rules of the European Union, to which, incidentally, and however much he may regret it, that Government signed up. We are simply applying the rules in accordance with our legal advice. It is not enough for him to substitute his own view--

Mr. Deputy Speaker: Order. I am reluctant to interrupt the Secretary of State, but he spoke for an hour earlier, and those on both Front Benches must realise that, although they have important contributions to make--indeed, they are the centrepiece of our debate--we also have an awful lot of Back Benchers here who want to say something.

Mr. Duncan Smith: We can go round and round the fence debating what was the previous Government's intention, but the key fact remains that the Government have chosen today to announce in essence that orders for four ships that should have been placed with a British

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yard will go to a foreign yard. The prime candidate would have been Govan, but any British yard would have done. I disapprove of the Government's shameful action and, if we were in government today, I would not be doing as they are.

Mr. Bercow: Given the Secretary of State's earlier disingenuousness, does my hon. Friend agree that the very least that the right hon. Gentleman owes the House is that he should urgently initiate a full leak inquiry to establish precisely how his intentions got out earlier than he supposedly intended? Should not that inquiry involve full interrogation of senior members of the Ministry of Defence press office and of--

Mr. Deputy Speaker: Order. We have already more than adequately dealt with that subject.

Mr. Duncan Smith: I will not answer my hon. Friend, Mr. Deputy Speaker, but I hope that he can pursue the matter directly with the Secretary of State.

It is probably best to move on now from the roll on/roll off saga. We have not had a good day on that in the House, so let us move on and hope that there will be deeper and further investigations, both up in Scotland and in other shipyards, as well as here in Parliament, where I hope that we can return to the matter, perhaps even next week.

I turn now to the main issue of smart procurement, around which the debate revolves.

Mr. Davidson: I am conscious that the hon. Gentleman wants to move away from the question of the ro-ros, and I am happy to do so, but will he clarify the Opposition's position with regard to the other orders for landing ships? Where would the hon. Gentleman place the orders for those four ships?

Mr. Duncan Smith: I meant no discourtesy to the yards that have received the orders, and I am glad that the hon. Gentleman has given me the opportunity to congratulate them. Clearly, I congratulate the Govan yard on the order that it has been given, and I sincerely hope that it is enough to get the yard through a difficult time. The other yard to have secured orders is Swan Hunter, and I congratulate it too. The hon. Gentleman is right: I should have said something about the matter, and I apologise to the House for not doing so.

However, I have visited the yard at Appledore, and I am distinctly worried that we could lose the key shipbuilding expertise of what is one of the few remaining yards in the south-west region of the country. I am not about to shed any crocodile tears: I am the first to accept that previous Governments have made many mistakes, but we are at the point where we must decide what we feel about our national shipbuilding capability.

I hope that there will be an opportunity to debate such matters. The Swan Hunter yard is sitting on an order for type 45 vessels, but the Secretary of State today did not mention a matter about which the Govan yard is also waiting for news. If the Secretary of State had said that type 45 orders were to be placed, I should have liked to know exactly when that would happen.

Mr. Burnett: The hon. Gentleman mentioned the Appledore yard, which is in my constituency. It is a very

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competitive yard, with an outstanding work force. Does the hon. Gentleman agree that, if the orders about which he has spoken had gone there, they would have allowed it to enlarge its covered yard? That would have increased Appledore's capacity and competitiveness and allowed it to offer greater value for money--for the Ministry of Defence as for others.

Mr. Duncan Smith: I recognise that. As I said, I visited Appledore, and happen to think that, as well as having a brilliant work force, it has a brilliant chief executive. I wish that the Secretary of State would meet him. He would be persuaded that there is a man who knows about shipbuilding. He is quite superb--as I am sure are the chief executives of other yards.

However, taking four ships away from British yards means that there are fewer to spread around. If those four vessels were ordered to be built in this country, shipyards such as Appledore might, if not prosper, at least find life a little easier.

I now move on to the broader subject of smart procurement. First, I want to say that I welcome the Government's measures, arising out of the SDR, to improve the streamlining and efficiency of acquisition procedures. That is the benefit that smart procurement has brought, and it is not a question of party politics. However, before Ministers glow too warmly and get too happy about that compliment, I have to say that that streamlining followed a lot of work by the previous Government, who recognised that change was necessary. Smart procurement may be a new initiative in terms of language, but all its components were gestating in the Ministry of Defence before this Government took over.

In that regard, I wish to give credit to Sir Robert Walmsley, who has played a huge role in driving smart procurement along. Credit is also due to Sir Sam Cowan's work at the Defence Logistics Organisation. I am sure that the Secretary of State and the House will agree that, although civil servants elsewhere in government have been criticised today, those two are shining examples of how best to make departments work.

It has been clear for a long time that procurement procedures had to be reformed. I am the first to admit that. It was encouraging that the Government began with a logical and rational procedure, aligning equipment needs to future military strategy. Smart procurement's reduction of input resources in terms of staff and its transfer of responsibility to industry, alongside the rationalisation of the Defence Procurement Agency, was a good start, as was the creation of the DLO.

However, I want to turn to the budgetary element of the smart procurement strategy. The Secretary of State dealt with that aspect, but it deserves examination. The Government claim that smart procurement will achieve savings of about £2 billion over 10 years. Everyone hopes that smart procurement will live up to that aspiration. If it does not, our armed forces could be left dangerously under-equipped.

However, the National Audit Office review "Major Projects Report 1999" stated


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What assurance can the Secretary of State and his Ministers give that the Government's future equipment programme is affordable, if so many existing projects are over budget? How can that be squared? If that cannot be done now, I hope that the Under-Secretary, when he winds up the debate, will give the House some answers in absolute terms. I hope that he, or the Secretary of State, will say which programmes will have to be cut if smart procurement does not meet the ambitions savings targets that have been set. Much of the Ministry of Defence's budget rests on three elements, one of which is achieving the savings targeted for smart procurement. Some of the equipment programmes may be in difficulty if the savings are not achieved.

Other difficulties associated with smart procurement need to be raised. For example, will the Secretary of State say why the recently appointed smart acquisition team has been given a life of only one year? Does the Ministry have a longer-term commitment to making smart acquisition work? I hope that the Under-Secretary will answer that question when he winds up. Why has the team been given only one year, rather than longer? What is the plan?

Does the Secretary of State have any plans to merge the DPA and the DLO? That merger is beginning to look logical, and I hope that the Under-Secretary will deal with that when he winds up.

The role of smart procurement in collaborative programmes is also important. I shall make some observations on that matter later, but what steps is the Ministry taking to ensure that smart processes are employed in some of the worst ventures with international partners? Later on, we shall examine some individual cases but, although Ministers are always keen to lay blame at the door of the previous Government, they may be stumbling into some of the same errors themselves.

Despite the progress made in procurement procedures under smart procurement, problems with equipment acquisition continue, especially in terms of programme slippage. Over the summer, the National Audit Office found that the average in-service date delay had increased by four months to 47 months since its previous report was issued in 1998.

For the smart procurement initiative to be a success, the Government must resist the temptation to make changes to programmes for purely political purposes. That is the critical element in the debate. Previous Governments have fallen into that fault, and this Government appear about to do the same in a number of cases.

That is especially true in relation to collaborative programmes. Smart procurement should be about letting industry get on with such programmes. The Government are part of the contract, and must adopt a self-denying ordinance in that regard.

For example, there is the Brimstone missile programme, about which I have some concerns that I hope that the Under-Secretary or the Secretary of State will answer. The Government were rightly keen to trumpet the

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announcement of new, precision-guided weapons. The Secretary of State did so again today. However, he neglected to mention that the Government appear to be cutting back on the Brimstone programme.

Brimstone is a superb, all-weather, precision-guided missile. It would have been ideal for use in poor weather in places such as Kosovo, and was due for service with the Royal Air Force next year. I think that the due date was March, but I stand to be corrected on that.

However, the Select Committee on Defence has reported that it believes that the RAF will order 25 per cent. fewer missiles than originally planned. Why? In addition, I understand that the Government have asked contractors to delay delivery by up to one year.

The Government say that they want smart procurement to achieve improvements in procurement, but are beginning to take decisions--cutting programmes, introducing delays--that will create a problem for industry.

The Government have an opportunity today to put all those rumours--if they are rumours--to bed. Will the Secretary of State tell us what is correct? Are the Government cutting the programme in terms of numbers of missiles, and are they planning to delay the programme? I am happy to give way at this point--however, I see from the Under-Secretary that he will answer that point specifically in the winding-up speech.


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