Mr.
Jenkin: Can the Minister answer the point made by the
right hon. Member for East Kilbride, Strathaven and Lesmahagow? He
said,
we do not
believe that the benefits that might result from introducing a specific
defence procurement directive are sufficient to offset the
drawbacks.[Official Report, European Standing
Committee, 8 February 2005; c.
5.] What has
changed?
Mr.
Davies: What has changed is that we now have a directive
that we did not have in 2005. My right hon. Friend the Member for East
Kilbride, Strathaven and Lesmahagow could not have been talking about
the directive in any remarks he made in 2005 because it did not exist.
The directive was promulgated and drafted by the Commission in 2007.
That is the answer, which was contained in the question itself. If the
hon. Gentleman had thought it, he would have found the answer buried in
his own
question.
Mr.
Jenkin: May I explain what the right hon. Member for East
Kilbride, Strathaven and Lesmahagow said? He said that he did not see
the need for any directivenot this one or any other. The
Governments policy seems to be to present us with a directive
and to think that even if we are against it, we will support it in the
end.
Mr.
Davies: The Governments position would never be to
say that we will not consider anything pragmatically and that we have
no interest in the ideas that someone might have. We do not conduct our
relations in any international grouping on that basis. We do not
conduct ourselves in such a way in the World Trade Organisation, NATO,
the United Nations or the European Union. The Conservative party, if it
ever by some mishap came to power, might well start conducting our
international relations on that basis. What disaster would flow from
that? If only the wider public had the opportunity to listen to the
debate, they would learn a lot about the true nature of the modern
Conservative party.
I shall deal
with one final point made by the hon. Member for Westbury. I am not
sure why I should be particularly charitable to him this evening, but
let me be charitable and say that there was a misunderstanding, which I
shall try to correct. The Government have never said that the directive
is irrelevant for SMEs, let alone that it is damaging. We have said,
and I said earlier in these proceedingsbefore the hon.
Gentleman looks through his notes for the referencethat we do
not think that increasing the threshold for advertising contracts from
€250,000 to €1 million would be helpful for SMEs. Indeed,
it would be damaging. The only mentions of SMEs in the directive are in
that context. Business supports the Governments attitude.
Business generally realises that the present Government are most likely
to understand their needs, both at present and going forward.
Dr.
Murrison: The Minister has made a number of assertions.
Will he evidence his latest one on business supporting the
directive?
Mr.
Davies: I am happy to evidence my
assertions.
Dr.
Murrison: Give us some
examples.
Mr.
Davies: The two business organisations that articulate the
interests of the defence sector are the Defence Industries Council and
the Society of British Aerospace Companies, and, I am informed, they
both support the Governments position on the
directive.
Dr.
Murrison: The Minister supposes that to be the case, but
we spoke to those organisations this morning and they have strong
reservations about the directive. The Minister has not dealt with any
of those reservations this afternoon.
Mr.
Davies: I have made it clear that I have not been dealing
directly with the matter, as the hon. Gentleman well knows. I am
reporting conversations [Interruption.]
I am making it clear that I am not personally testifying to
conversations that I have not been party to. I am assured that those
conversations have taken place and we have been informed that the
industry supports the directive.
I have had
many meetings with the defence industry since I started my present
role. I can testify that on not one occasion has any industrialist, or
any industrialist concerned with the defence industry, expressed
reservations, worries or concerns about the directive, which I imagine
they could have done because I am, for most purposes, even if not for
that purpose, the natural interlocutor of the defence industry. If the
hon. Gentleman tells me something, I will not say that it is untrue,
but I am interested to know what reservations he is referring to. It
does not reflect the position as I understand it, and I am
surprised. The
hon. Member for North Devon generously welcomed the Governments
progress with the directive. I am grateful for his considered support.
I take on board what he says about SMEs, since he takes a generally
positive attitude towards the directive. I am interested to know what
more he thinks the directive could do for SMEs. We have already
explored the advertising threshold and I have expressed my views on it.
I hope that the presidency of the EU will reconsider its views, and
that those will perhaps be reflected in the next presidency draft,
which neither I nor anyone else here has seen. I am informed that it
may be issued at the end of this week.
The hon.
Member for North Essex and I have debated European issues before and I
see that he has not changed his attitude on those subjectsnot
to my immense surprise. He makes the mistake of supposing that the
directive reflects any kind of EU political agenda. It does no. It is a
pragmatic measure designed to clarify a regime that has existed for a
long time[Interruption.]
I shall come
directly to the issue of security of information, which the hon.
Gentleman raised. I understand entirely where he is coming from. He
read out an extract from article 296 about security of information and
asked where the directive leaves us now. While enshrining
the principles of article 296, the directive makes the position much
clearer and, therefore, strengthens the regime. I hope the hon.
Gentleman does not wish to turn his eyes away from the facts that are
presented to him. I am sure he would not want to conduct a political
argument on that basis. I shall read to him the relevant measure in the
draft directive, article 9(a), which states:
This
Directive shall not apply to the following
cases: (a)
public contracts for which the application of the rules of this
Directive would oblige a Member State to supply information the
disclosure of which it considers contrary to the essential interests of
its
security. That
protection, which is of the kind that he wants, is clear and more
copper-bottomed than that in the original regime. I repeat, however,
that the original regime is not being
changed.
Mr.
Jenkin: We have moved to the next classic defence of a new
European directive. Having started by opposing it in principle, the
Government now support it on the basis that it does not change
anything, but makes everything clearer. That always happens. The hon.
Gentleman is the victim of the latest throw of the European
dice.
Mr.
Davies: Making something clearer reduces
uncertainty. I hope the hon. Gentleman will think about that. The
directive will reduce legal uncertainty and the danger of abuses of the
regimea regime that was already, and is intended to remain, in
place. That is very
useful. I
shall make a few final, essential points about the essence of the
directive.
Mr.
Jenkin: Will the Minister give
way?
Mr.
Davies: Once more, and then I shall wind
up.
Mr.
Jenkin: The Minister read out an article 9(a) that is not
in my version of the directive. Will he read it again so that we can
understand exactly what it
means?
Mr.
Davies: I am afraid that I have no time to do that. We are
expecting a vote in the House and I do not wish to impose on the
Committee the need to return in order for me to reread something that I
have just read to the hon. Gentleman. [Interruption.] Not for
the first time, he is not being entirely reasonable.
I intend to
press on with some important points. The directive will reduce
uncertainty in the current regime and reduce substantially, if not
remove, opportunities
for cheating. We have always taken the most liberal approach to defence
procurement without misusing the provision about essential security
interests. When something is essential to our security interests, we
are prepared to buy from the cheapest source. That is essential if we
are to use our defence budget to maximum effect and in the interests of
our defence capabilities. There are some well known examples. The
roll-on/roll-off ferries were controversial. I dare say that the
Conservative party opposed us taking the best price, rather than
procuring them on a protectionist basis from within the UK. However,
ours is the right approach.
It is
important to ensure maximum liberalisation of trade in the area of
defence where EU Defence Ministers are concerned. That is consistent
with the true spirit of article 296 and, as I said, will benefit us
disproportionately. However, others will also benefit from using price
competition in the single market more effectively, because their
defence budgets will go further and they will be able to spend more of
it on key capability measures. It will also be good for industry, as
has been acknowledged by the major trade associations representing the
interests of the defence industry. With very considerable conviction,
therefore, I commend the directive to the
Committee. Question
put: The
Committee divided: Ayes 8, Noes
4.
Division
No.
1] Question
accordingly agreed to.
Resolved,
That
the Committee takes note of European Union Document No. 16488/07 and
Addenda 1 and 2, draft Directive on the co-ordination procedures for
the award of public contract in the fields of defence and security; and
endorses the Government's approach to the negotiations and its view
that if, following European Council agreement on a text and
negotiations with the European Parliament, the document remains within
the UK's negotiating position, the Commission draft Directive could be
supported. Committee
rose at ten minutes to Seven
oclock.
|