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Procurement Contracts

6. Miss Anne McIntosh (Vale of York) (Con): If he will make a statement on the criteria used in awarding procurement contracts. [184473]

The Secretary of State for Defence (Mr. Geoffrey Hoon): Our procurement policy is driven by the need to provide the armed forces with the equipment they require at best value for money for the taxpayer. As set out in the Government's defence industrial policy, acquisition decisions are driven principally by cost, operational effectiveness and affordability.

Miss McIntosh: The Secretary of State knows that a £1.5 billion contract will be awarded for the Ministry of Defence support vehicle. I pay tribute to the work of our servicemen and women, especially in Iraq and Afghanistan. They should get the best vehicle that money can buy, which should have been battle tested in Iraq and Afghanistan and proven to have the highest reliability and technical capability. Why have none of the four main bidders' vehicles been trialled?

Mr. Hoon: A decision will be made soon on the support vehicle competition—the bids are in the final stage of their evaluation, and it would be inappropriate to say any more. As I indicated a moment ago, affordability is undoubtedly one of the key criteria for any equipment. No doubt the hon. Lady will make those representations to her Front Benchers, who propose to cut the defence budget by something in the order of £2.7 billion, which is rather more than the total cost of that project.

Mr. Stephen Hepburn (Jarrow) (Lab): Is the Secretary of State aware that the average age of a skilled worker on the Tyne is more than 50, so there is a lot of hope in the north that the proposed aircraft carrier project will do something to rectify that? Can he assure me that the aircraft carrier programme will go ahead on time and as the MOD originally specified?

Mr. Hoon: I can give my hon. Friend that assurance. I have set out in a written answer today our determination to proceed with the carrier contract. I am confident that the contract will provide a significant amount of shipbuilding work, not only for my hon. Friend's constituency, but for many other shipbuilding constituencies around the country.

Sir Sydney Chapman (Chipping Barnet) (Con): Will the Secretary of State confirm that the defence procurement budget is running at between £9 billion and £10 billion a year? Can he assure the House that the Defence Procurement Agency, which took over from the Procurement Executive in 1999, is meeting its main objective of buying weapons systems and platforms and delivering them on time, within budget, and to specific standards?

Mr. Hoon: I can give the hon. Gentleman that assurance. I regret to tell the House that, particularly in relation to some of the older contracts signed under previous Governments, there has been some slippage as a result of the poor financial standards that were
 
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imposed—poor financial standards of the kind that we get used to, unfortunately, from the hon. Gentleman's Front-Bench colleagues, who want to cut the total defence budget by roughly a quarter of the amount that he said was available for procurement. Perhaps he could ask them which particular projects they intend to cut.

Mr. Nicholas Brown (Newcastle upon Tyne, East and Wallsend) (Lab): What are the implications of my right hon. Friend's opening remarks for the shipbuilding programmes that are under way at Swan Hunter and at Govan, and for the proposed extensions to that work?

Mr. Hoon: We have a very extensive programme of new shipbuilding to provide the Royal Navy with the latest and best equipment for frigates and for carriers. Members of the Royal Navy are hugely enthusiastic about the forward programme, which, as I said to my hon. Friend the Member for Jarrow (Mr. Hepburn), will provide significant job opportunities right across the shipbuilding industry.

Mr. Edward Garnier (Harborough) (Con): May I ask the Secretary of State about military helicopter procurement? This time last year, the hon. Member for Glasgow, Anniesland (John Robertson) and I, under the auspices of the armed forces parliamentary scheme, spent the week with the joint helicopter force based at Basra airport, and learned at first hand how difficult it is to fly helicopters in the intense summer heat in that part of the world. What plans, if any, do the Government have to procure helicopters for use by the Iraq military, instead of by British and other coalition forces, so that they can patrol the skies of their own country without the need to use British helicopters?

Mr. Hoon: Extensive programmes are available to Iraq to provide the right kind of equipment for its armed forces once the training that they are receiving is of the necessary complexity to enable them to operate sophisticated equipment such as helicopters. At this stage, I cannot say precisely when those helicopters will be delivered to the Iraqis, but I know that that is in the programme.

Mr. Brian Jenkins (Tamworth) (Lab): Further to the question by the hon. Member for Chipping Barnet (Sir Sydney Chapman), when will my right hon. Friend come to the House to justify the continued existence of legacy projects that are running massively over-time and over-budget? We know that they were initiated under the previous Administration, but are they needed now, and at such cost?

Mr. Hoon: I will not give the House a long list of the various procurement projects that are under way, but I can say that, even allowing for certain of the legacy projects that were subject to significant delay before this Government were elected, we will continue with those that meet a justifiable military need. However, we have tried to get them under control in terms of cost and time, because that is crucial in delivering their capability to our armed forces.
 
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Future Strategic Tanker Aircraft

7. Mr. James Paice (South-East Cambridgeshire) (Con): What plans he has to reassess the contract for the future strategic tanker aircraft private finance initiative. [184474]

The Minister of State, Ministry of Defence (Mr. Adam Ingram): We are currently assessing whether placing a private finance initiative service contract with AirTanker Ltd. will provide the best value for money solution for the future strategic tanker aircraft project. No final decisions have been taken.

Mr. Paice: I thank the Minister for that answer. Can the House therefore assume that the question whether to go ahead with the project is still in the melting pot, as well as the decision on to whom the contract should be granted? If he intends to go ahead with the project, but is still considering who should do the work, I urge him to look again at the preferred option and to consider the alternative option of using refurbished aircraft adapted in Cambridge, in my constituency.

Mr. Ingram: As my right hon. Friend the Secretary of State announced to the House in January 2004, AirTanker Ltd. has been judged to offer the best prospect of providing a value-for-money PFI solution. However, several detailed issues remain to be resolved on this complex PFI project before a final decision is taken. We are resolved to proceed with it once that assessment is completed. Clearly, air refuelling is a key military capability and it is important to take the time necessary to make the right decision for the armed forces and the taxpayer. I would have thought that the hon. Gentleman agreed with that. We shall make further announcements when appropriate.

I am aware that Marshall of Cambridge and other companies have submitted unsolicited alternative proposals for future air refuelling capability. Our evaluation remains focused on securing a value-for-money private finance initiative contract with AirTanker Ltd. I hope that that answers the question.

Mr. Lindsay Hoyle (Chorley) (Lab): We are considering an important contract. Does my right hon. Friend appreciate that the location of the base, where maintenance will be carried out, is also important for supply and back-up to the fleet? I believe that Warton is the right place for maintaining and basing the aircraft.

Mr. Ingram: My hon. Friend can be assured of the importance with which we view the contract. The accompanying base and support mechanisms are clearly part of any solution, but my hon. Friend, like other hon. Members, will have to wait for the final announcement.

Wind Generators

8. Mr. David Heathcoat-Amory (Wells) (Con): What discussions he has had with the Department of Trade and Industry about the siting of electricity wind generators. [184475]
 
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The Parliamentary Under-Secretary of State for Defence (Mr. Ivor Caplin): The Ministry of Defence maintains an extremely close working relationship with the Department of Trade and Industry on wind energy issues. Both Departments are members of the wind energy, defence and civil aviation interests working group, which also includes representatives from the Civil Aviation Authority, the National Air Traffic Service and the British Wind Energy Association. We also work jointly with the industry on round 2 offshore wind farm developments. Later this week, the Minister for Energy, E-Commerce and Postal Services and I will meet representatives of the wind energy industry.

Mr. Heathcoat-Amory: I do not think that a working group measures up to the scale of the problem. Does the Under-Secretary realise that wind generators are ugly, unnecessary, expensive and a threat to everything that flies? I do not simply mean birds and bats but aircraft, especially military aircraft. They also interfere with military radar. Rather than objecting on a case-by-case basis, will the Department create a presumption against any more of those gimmicky contraptions on the ground of good defence as well as that of saving the environment?

Mr. Caplin: I assure the right hon. Gentleman that every proposal for wind farm development is considered on a case-by-case basis rather than according to an overall presumption. The Ministry of Defence does not have a policy of automatically refusing proposals and we encourage developers to work with officials from both the Ministry of Defence and the Department of Trade and Industry to determine whether a mutually acceptable solution can be found. That is a sensible and practical way forward.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich) (Lab): The Under-Secretary knows both that we are delighted to hear that and that the Energy Bill had to be amended to include another clause to ensure that wind farms were not built in shipping lanes. Wind farms at sea pose a genuine problem for radar. Will my hon. Friend assure me that the Ministry and the Department for Transport are consulting closely with the Department of Trade and Industry before making decisions that can be only inimical to defence and transport?

Mr. Caplin: I give my hon. Friend the commitment that she seeks.

Mr. Owen Paterson (North Shropshire) (Con): RAF Shawbury trains pilots from all three services. What threats do the huge new turbines pose to inexperienced junior pilots who are undertaking training?

Mr. Caplin: We have a proper, consultative process with the industry, which involves eight different tests, to ensure that such matters are considered before we agree to further negotiations about a wind farm. The Ministry of Defence is clearly committed to supporting the Government's renewable energy target of 10 per cent. renewables generation by 2010. We intend to play our part in that.
 
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