Examination of Witnesses (Questions 60
TUESDAY 12 DECEMBER 2006
Q60 Chairman: I was interested in
your observation that the government was not looking at whole
life costs when it procured. If true that is an important assertion.
Can you produce evidence to support it?
Mr Temple: There are examples
of companies but I cannot immediately identify them. We can supply
you with examples.
Q61 Chairman: You have talked about
how the public procurement process is difficult for companies.
The point that I was going to make about office chairs was that
sometimes a contract would be let once and a few months later
they would want it again and because of the risk-averse culture
the whole process would have to be gone through again from the
beginning rather than just buying them off the shelf from the
same company that met the test the first time. But if one does
make it easier for companies it will not necessarily help British
businesses; it will help everyone who applies. There is no particular
advantage to British companies from that change.
Mr Temple: We think that the value
to British companies very often arises from the bigger projects
when one is talking about early involvement and information. Typically,
that is what one comes across in other countries. After that,
having had access to early information it is up to them to win
the contract in a competitive way. One can give advantage only
so far and there are very strict rules about it which we must
Q62 Chairman: The question of taking
advantage is one that Lindsay Hoyle often raises. One cannot imagine
the Italian police force buying a British car, if there were such
a thing. Somehow, miraculously they always use Italian cars; the
French use French cars and the Germans have German cars. What
are they doing differently that we are not doing?
Mr Temple: I think there is a
cultural as well as a procurement element here.
Q63 Chairman: They are supposed to
observe the same procurement rules that we do but we seem to get
a different result from the rest of Europe.
Mr Temple: We would certainly
encourage people to look to stuff made in the UK as a general
principle. We would ask them to look favourably in that area.
One has that point in the back of one's mind all the time but
obviously there are limits to which one can take it.
Q64 Chairman: We have often heard
from manufacturing companies that in some sense the British Government's
procurement processes are much fairer, even-handed and open than
that of other Member States of the European Union or other countries
like the United States of America.
Mr Temple: We would say that in
general it is very easy to do business with government here compared
with some overseas countries.
Q65 Chairman: America keeps complaining
about subsidies to the aerospace sector in Europe but subsidises
it like crazy itself. Do you support the view that anecdotally
in other countries of the world there seems to be a greater willingness
to procure the national champions' products rather than go for
Mr Temple: I do not want to get
trapped in a debate about protectionism. A fundamental part of
our continued success will be free and open markets. We compete
on that basis and can win on that basis. Yes, we accept that we
can also be challenged and lose on that basis, but without free
and open markets we will have real problems with the development
of vibrant and strong international manufacturing. I must make
that point very clear to begin with. That is not to say that we
do not wish sometimes for what might be called a legal un-level
playing field which looks with favour on companies that base their
operations in the UK no matter where their ownership may lie as
long as that is a process which takes into account all the parameters
that one must to get fair purchasing. Certainly, there are countries
which start with a basic predilection to buy from companies based
there, and that is why you see the sort of cars of which you spoke
earlier. People are culturally more inclined to buy from home.
We do not have that culture to the same extent.
Rob Marris: To ask a simple question,
you are sitting on the fence. Where was it madein the UK
Q66 Chairman: That is a rhetorical
question. I am not sure that it is capable of an answer.
Mr Temple: Perhaps we may just
make a point about the Wood review.
Mr Radley: An important point
to make is that a few years ago a review of this issue was made
by Alan Wood. Not surprisingly, it showed that there was very
limited evidence about breaches of procurement rules in other
countries, but there were lots of shades of grey. One thing we
need to do it was a recommendation of that review is help UK companies
compete more effectively for public procurement contracts abroad.
In some cases that may involve them in setting up an operation
there to give themselves a better chance, but in many cases it
is about developing a better understanding of the practices in
Q67 Roger Berry: Do you not accept
that on the one hand you cannot assert the need for free and open
markets and, on the other, have a whole range of interventions
by government in skills, procurement and so on, as we have been
discussing in the past hour? Is not the issue: in the real world
where government should intervene and where it should not? But
a dogmatic statement that we believe in free and open markets
but on the other hand culture may determine whether or not our
police forces buy British cars is an attempt to sit on the fence,
is it not?
Mr Temple: I do not see the contradiction
in terms of the skills debate that we have had. There are issues
about society and what we provide to society through government.
We are talking here about an entirely different area. What we
have to use is intelligent procurement that works to proper rules
and gives people a real opportunity to do their jobs professionally.
We are saying that professional procurement in other parts of
society outside government works very well, delivers well and
is not so bureaucratic and difficult to deal with. I cannot see
why that cannot be translated more into government procurement
than it is today.
Roger Berry: I think that is an answer
to a different question. I do not disagree with what you have
just said. I simply note that I think it answers a question I
did not ask.
Mr Hoyle: What benefit does the UK taxpayer
get from buying Mitsubishi four-wheel drive vehicles operated
on motorways when we build the finest four-wheel drive vehicles
under the badge of Land Rover? For the life of me I cannot understand
why we should waste taxpayers' money supporting Japanese industry.
Chairman: I believe that is a rhetorical
question although a very important one. It is also an important
philosophical point which I suspect the next witnesses will explore
with us. We have run out of time. I know it is frustrating. We
would like to ask you more questions, but we are grateful to you
for your oral evidence and very good written evidence. Some of
the points that colleagues may believe have not been made in this
oral session are very firmly dealt with in written form, for which
I thank you very much. We look forward to further dialogues in
future on other subjects in this ongoing inquiry into manufacturing