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Dr. Moonie: The hon. Gentleman is wrong.

Mr. Keetch: If I am wrong, as the Minister says, I am happy to give way to him. Perhaps he will explain why the Secretary of State has not had the courtesy to reply to my letter of two weeks ago to explain why I am wrong.

Mr. Burnett: My hon. Friend has given a cogent list of delays. Is he going to get on to the matter of delays in the construction of landing platform docks?

Mr. Keetch: I am grateful to my hon. Friend, but to ensure that other Members have an opportunity to contribute to our debate, I cannot cover the whole range of delays.

I want to return to the important system that I was discussing which will be carried in the rear of a fleet of military cargo vehicles. It appears that the DPA has released the purchasing authority for the provision of the new vehicles, and that contract is worth some £8 million to the companies supplying the electronic hardware. In other words, we are tendering on the hardware, but not the vehicles that will carry it. It has emerged that both possible contractors want to use the same vehicle, the Duro, which is manufactured in a country that is not in the European Union, not in NATO and not even in the United Nations. I am referring to the Swiss company, Bucher-Guyer.

The development of the vehicle was subsidised by the Swiss Government and it is not in service with any other army. Are we going to buy a piece of equipment that will be carried in Swiss trucks, not UK-manufactured vehicles? Why was no UK, NATO or EU supplier asked to tender for the vehicle and why did the Government choose it? Was there any tender competition at all? The British Army has a system generally described as the green fleet, which means that every vehicle must undergo arduous programmes of development and trial. There is benchmarking for reliability in battlefield situations, and the trials cost millions of pounds and can take several years. All the vehicles are fully supported with logistics and spares, are part of an integrated fleet and can be maintained effectively at a level of operational readiness. Vehicles produced by British companies, such as Land Rover, Leyland Daf, Alvis and others, could fulfil the role for which the Duro vehicle is being purchased.

How can the Government justify a potential requirement to support a new, unknown vehicle that is untested, untried and unproven for service in the British Army green fleet and which will be entrusted to carry one of the Army's most important communications? I am compelled to ask that, if has not already done so, the Secretary of State undertake a full and thorough investigation into why that vehicle will be purchased by the British Army, as we do not regard that as smart procurement.

We must ensure that our procurement strategy provides the very best for our armed forces. As far as implementing procurement strategy that is fit for the 21st century is

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concerned, we believe that smart procurement is a step in the right direction, but a substantial improvement must be made if it is to mean anything at all. Procurement is not getting faster or cheaper and, regarding the standard of delivery and equipment, it is not getting better.

Mr. Robert Key (Salisbury): The hon. Gentleman has made some important points. One problem is that we look at all those programmes, but not at the philosophy of the procurement or acquisition itself. Does the hon. Gentleman think that there is any reason why contractors who make things that go on platforms, but not the platforms themselves, should not be prime contractors? That is an important matter. What does the hon. Gentleman think about partnering as a means of procurement that can exclude competition?

Mr. Keetch: I want to ensure that our armed forces have the best equipment. Indeed, some things that have been suggested today may bring that about, as long as they can be seen to provide what they are meant to do. My concern, especially about Duro, is that we are likely to purchase a vehicle that no one else has apart from the Swiss. It was developed with Swiss Government money and there was no way that Land Rover or anyone else could get involved in tendering. Clearly, that should not be the case.

Mr. Burnett: Will my hon. Friend give way?

Mr. Keetch: Yes, for the last time.

Mr. Burnett: Does my hon. Friend agree that the hon. Member for Salisbury (Mr. Key) made a very good point? Direct contracts save money because main contractors will invariably take something out of a sub-contract. Furthermore, and importantly, the degree of monitoring that the main contractor performs on the subcontractor's work is incredibly inefficient and expensive.

Mr. Keetch: As always, my hon. Friend makes an important contribution.

We must make sure that the British armed forces are provided with resources to retain their excellent reputation for serving the interests of the UK and the international community of which we are part. It is now up to the Government to fulfil their part of the bargain and serve the interests of those who work in the armed forces by ensuring that faster, cheaper and better procurement translates from soundbite into positive action. I have asked specific questions tonight, and I had hoped that the Secretary of State would be here to hear them. As he is not, I look forward to the eventual reply of the Under-Secretary.

4.39 pm

Mr. Alan Campbell (Tynemouth): I hoped to catch your eye, Mr. Deputy Speaker, to raise some issues about naval procurement, but I now have the opportunity to respond to what the Secretary of State said earlier. I speak as someone who has a constituency interest in the defence and maritime industries, but also as the chair of the north-east maritime and offshore cluster--a role for which I receive no remuneration.

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I welcome the decision to place the alternative landing ships logistic order with Swan Hunter on Tyneside. It is excellent news for the north-east and a huge boost not only for the river but for the whole region. It is a tribute to the hard work and investment of the owner of Swan Hunter, the management, and of the work force. It is also just reward for the efforts made across the community in the north-east by employers, employees and trade unions--especially the General, Municipal, Boilermakers and Allied Trades Union and the Amalgamated Engineering and Electrical Union--and political representatives from the region, who have campaigned so hard for the orders. I am delighted with the way in which the Government have responded to those calls.

Mr. Burnett: I do not want to be churlish, but when was the last time that Swan Hunter built a warship?

Mr. Campbell: In the early 1990s. The failure of the previous Government to put work into Swan Hunter and Tyneside led to the collapse of Swan Hunter. It is only due to the faith of the new owner and his investment that Swan Hunter is the success that it is today.

The decision on landing ships, which I welcome, is about value for money. It is in the interests of taxpayers, as it should be, but it is also an act of faith in the north-east by this Labour Government. I say in response to the hon. Member for Torridge and West Devon (Mr. Burnett) that it is an act of faith in the north-east which stands in direct contrast to the active betrayal of Swan Hunter by the Conservative Government.

I see that the shadow Defence Secretary is no longer in his place. He stumbled today in remembering the name of Swan Hunter. He really should not have done so because he was a member of the House when his Government were responsible for killing off Swan Hunter in the first place. Now it falls to the Labour Government to bring military orders back to that yard. However, even as we do so, there is a question mark over future orders because we do not know the effect of the £16 billion of cuts that would be made by--let us hope that it does not happen--a future Conservative Government. Until the Conservatives start to put some figures into the public domain, there must be question marks against such orders.

We are constantly told that the Government will be judged not by their words but by their actions. That is why the ALSL announcement is important. It begins the process of reinvesting in defence shipbuilding on Tyneside after decades of under-investment by the previous Government. It brings the very real prospect that a warship will be built again on Tyneside. That is not merely an economic boost for the region; it is a psychological boost. I welcome it.

I have said from the outset that the work on the roll on/roll off ferries should be done in British yards, and I stand by that today, so I can welcome only in part the announcement today. But if we are honest we will admit that the route chosen for the procurement of the vessels meant that it was likely that, if the decision had been made earlier this year, which could have happened, all the work would have gone abroad. We should reflect on that and on the jobs that will be created at Harland and Wolff. It was a difficult decision for the Government, and I know for a fact that the Secretary of State and the Minister for Defence Procurement have done a great deal within the rules to keep the work in British yards.

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I am all in favour of looking at new ways of procuring vessels and equipment. After all, we are defenders not only of the nation but of the interests of the taxpayer. When the procurement process begins, the designation of vessels is crucial. It cannot be too difficult to ensure that Ministry of Defence ships, including ferries, are designated as warships. We know that it happens in other countries. By doing so, we could avoid many of the problems that we have faced.

Ministry of Defence orders are an important part of the future of shipbuilding in the north-east. They are a valuable way of boosting public spending in the region and creating employment both directly and indirectly. They are also a way of ensuring quality and value for money, not only for taxpayers but for service personnel. However, MOD orders cannot be a cushion to protect British yards from facing up to some hard questions about competition with Europe. I accept that there is a case for looking at hidden subsidies for overseas yards and I am sure that the MOD takes it seriously, but surely subsidies cannot account for the differences in competitiveness between some of the yards in Europe and some of our yards.

We shall be competitive only if we are given the opportunity to compete for quality orders. Only with continuity of orders can we move towards economies of scale. The Government are committed to building about 30 warships in the next 15 to 20 years. It is important that, where possible, orders are brought forward to create a firmer and more secure context for investment and continuity of employment, especially for apprentices.

I welcome the award of the contracts to Swan Hunter. We are making progress in the region. Companies and agencies are working together increasingly in the way that I called for in a debate on 4 April. The clusters that are operating on the Tyne are the way forward, as is greater co-operation between yards to maximise for the whole of the United Kingdom the benefits of the orders that we receive. We also need a Government who are committed, as this Government are, to backing our efforts.

I extend to the Secretary of State an invitation to visit Tyneside in the near future to see the excellent work that we are doing. There is a long way to go to secure shipbuilding and ship repair on Tyneside, but the award of the contracts today is a welcome boost for that process, and I am grateful for it.

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