HC Deb 01 August 1984 vol 65 cc333-4
12. Mr. Grylls

asked the Secretary of State for Trade and Industry if he will make a statement on the current proportion of public procurement going to small and medium enterprises.

Mr. Kenneth Baker

Records are not kept on the proportion of Government procurement contracts that go to small and medium-sized firms. However, the Ministry of Defence is currently collecting information on the value of its direct contracts placed with smaller firms in the present financial year.

Mr. Grylls

In view of the fact that in Britain smaller firms get a lesser proportion of Government orders than in almost any other industrial country, will the Department of Trade and Industry, and especially the small firms' division, play a co-ordinating role between Government Departments to raise the proportion going to small and medium-sized enterprises? The matter is important, as I am sure my hon. Friend will recognise. Will he examine in particular the procurement policies of the Ministry of Defence and the Department of Health and Social Security?

Mr. Baker

The Government's policy is that contracts must be won on merit, irrespective of company size. However, we are anxious to see, if possible, that smaller companies are put on a more equal footing to enter the competition. I welcome the work that the MOD is doing on that. The Government have taken various measures to help small companies. Recently we raised to £10,000 the threshold for contacts below which firms are normally exempt from approved procedures. We standardised the financial and general information procedures for companies to qualify as Government contractors, and we shall also standardise technical qualifications. All that will help small companies to get into the race.

Mr. Conway

When my hon. Friend considers the method of awarding public procurement orders, will he pay special attention to those orders placed with firms operating overseas? Will he seek an urgent meeting with the Minister of State for Defence Procurement to urge that orders for MOD supplies are placed within the United Kingdom?

Mr. Baker

A large proportion of public procurement generally is placed in the United Kingdom. That is particularly true of the Ministry of Defence. However, I shall draw my hon. Friend's views to the attention of my hon. Friend the Minister of State for Defence Procurement.