HC Deb 26 March 1985 vol 76 cc203-5
10. Mr. Thurnham

asked the Secretary of State for Defence what measures will be taken by his Department following the conclusions of the recently-published report by the Management and Personnel Office on Government purchasing.

Mr. Lee

Action documents have been prepared and will be submitted to Ministers shortly. It is still too early to say what changes may be made in the organisation or management of our procurement branches as a result of this process.

Mr. Thurnham

Will my hon. Friend do all in his power to simplify Government purchasing procedures, and so encourage small firms to play their part in achieving savings?

Mr. Lee

I am grateful to my hon. Friend for his comments. We are doing everything possible in this regard. Our competition policies allow greater opportunities than ever before for small firms, and 40,000 copies of the booklet "Selling to the Ministry of Defence" have been distributed. We are relaxing our specifications wherever appropriate.

Mr. Gordon Brown

In avoiding conflicts of interest in Government purchasing, what role will the new Chief of Defence Procurement play in vetting and awarding contracts to his friends in the Defence Manufacturers Association, in which he was until recently a senior office bearer? Why was it that while still an arms salesman the new Chief of Defence Procurement spent a large part of last year hawking the possible Government franchise for the royal dockyards around his friends in the Defence Manufacturers Association?

Mr. Lee

Having been chairman of the Defence Manufacturers Association, Mr. Levene is extremely well qualified for the job of Chief of Defence Procurement and he has an outstanding record in the private sector. I emphasise that he has severed all connections with his former companies and has divested himself of all shareholdings. Arrangements have been made within the Department to ensure that Mr. Levene will have no access to the Department's business with his former companies.

There is a precedent for this appointment. The Labour Administration in 1969 appointed Mr. Leslie Norfolk, a former director of the heavy organic chemicals division of ICI, as chief executive of the royal dockyards at a salary of £11,000 a year. That salary was considerably higher than the then going rate for a permanent secretary at £8,600 a year. The right hon. Member for Plymouth, Devonport (Dr. Owen) was then the Under-Secretary of State for Defence for the Royal Navy, and he took a close and supportive interest in that appointment.

Mr. Sayeed

Does my hon. Friend agree that often the best gamekeepers are ex-poachers? Is it not, therefore, interesting that the Opposition have never said that Mr. Levene will not make a good Chief of Defence Procurement?

Mr. Lee

Yes, Sir. The shooting metaphor is well known and apposite in this case. We spend about £1 million an hour on defence procurement. Only a small improvement in our purchasing through Mr. Levene's involvement is needed to more than recoup his salary.

Mr. Campbell-Savours

In relation to Government purchasing, are not the Government concerned about the activities of Messrs Aish and Co. of Poole and Messrs Dowty Rotol and Co. of Cheltenham, because both those companies fired employees who refused to keep quiet about cheating by the MOD over defence contracts? Does the Minister intend to intervene and personally secure the position of those two employees who were serving the national interest?

Mr. Lee

I have looked into both those cases personally. I visited Dowty about a week ago and raised the matter. Negotiations with both companies are proceeding. In the latter case, the Ministry of Defence police are examining papers.

Mr. Latham

Will it be this report on Government purchasing, or a separate one, which will identify responsibility for the disastrous position over the Nimrod aircraft and sort everything out as quickly as possible?

Mr. Lee

I have already acknowledged in the House that the question of the Nimrod AEW is not a matter about which our Department or Defence Ministry contractors should be particularly proud.

Mr. Denzil Davies

Is the hon. Gentleman aware that his attempts to try to justify the Levene appointment—in which he does not believe—are frankly pathetic? The real problem is that there is a basic difference between business and Government ethics. That is why we totally object to the attempt to bring into Government an arms salesman — no doubt a very good one — when the relationship between Government and defence manufacturers, at the best of times, is so close and symbiotic.

Mr. Lee

It is pathetic that the Opposition are not prepared to support the payment of a relevant and attractive salary to ensure that we bring into Government the people whom we believe will do a first-class procurement job.