HC Deb 15 April 1986 vol 95 cc718-20
7. Mrs. Ann Winterton

asked the Secretary of State for Defence if he will make a statement on future defence procurement policy.

Mr. Norman Lamont

We shall continue to seek to procure the equipment the services need at a price that gives the taxpayer value for money. To this end we shall pursue vigorously the twin aims of competition and collaboration.

Mrs. Winterton

Does my hon. Friend not consider that small arms procurement policy is inequitable and one-sided, given that our market is open to overseas competition while overseas markets remain firmly closed to us? Bearing in mind the recent redundancies at Radway Green in my constituency, will my hon. Friend give an assurance that all future orders will be placed in Britain and not abroad, because of the obvious absence of a free market?

Mr. Lamont

I cannot give my hon. Friend the assurance she seeks. She knows that it has always been our policy that to a certain extent we should open up to competition the market for ammunition. Last year we put only 10 per cent. of orders out to competition and we intend to increase that slightly. Following the order for 17 million rounds of 7.6 mm ammunition placed at Radway Green, and the overhang from last year, I am satisfied that the factory has a firm and good production order book.

Mr. Duffy

What specific steps has the Minister taken to enable defence procurement policy to take advantage of the United States 1986 Defence Authorisation Act, which establishes the groundwork for greater co-operation and collaboration between allies?

Mr. Lamont

We are considering a number of projects for joint collaboration. As the hon. Gentleman is aware, the Nunn amendment requires us, in consultation with our European allies, to develop a list of projects that can be developed on a collaborative basis, not just in Europe, but across the Atlantic.

Mr. Soames

What steps is my hon. Friend taking to transfer to civil research the large amount of money he spends on military research under the defence procurement policy?

Mr. Lamont

Our research in military establishments is carried out for military purposes and military reasons. We are doing everything possible to encourage spin-offs. My hon. Friend will be aware that we helped to set up a company called Defence Technology Enterprises, which enables private firms to have access to some of the research work carried out in our military establishments. That is a modest step, but it is a step in the right direction.

Mr. Douglas

Can the Minister give us an assurance about future procurement for the type 23? When is the order for 02 to be firmed up and the orders for 03 and 04 confirmed? Can he give us an assurance that Yarrow will be sustained as the lead yard for the type 23?

Mr. Lamont

The 02, 03 and 04 are being evaluated, but no decision has been made on the size or timing of the order. I am sure that Yarrow will remain as it is.

Mr. Robert Atkins

Is it not a fact that the Belgian, German and French Governments will not allow Royal Ordnance to tender for equipment in those countries, whereas we, under our policy of competitive tendering, allow them to tender for equipment for use by our armed forces?

Mr. Lamont

My hon. Friend knows that Royal Ordnance is successful in penetrating foreign markets. We need to get better value for money in the defence budget. If the price of our ammunition is 50 to 60 per cent. higher than it is elsewhere, to take the modest step of looking only at 10 per cent. of our requirements on a competitive basis is a matter of common sense. Anybody who feels that his budget is constrained is bound to do that.

Mr. Ashdown

Among the procurement decisions that the Minister is currently considering is an order for 15 Westland Sea King helicopters, which are much needed by our defence forces. Will he give an undertaking to the House that that decision will not be delayed? If it is, it will create further problems for Westland and may risk interrupting the Sea King production line, which would cause the taxpayer to have to pay more in the long run, for those aircraft.

Mr. Lamont

I note what the hon. Gentleman has said. However, he knows that it has been made clear to the House on several occasions that there can be no guarantee of those orders. I cannot add to what has already been said.

Mr. McWilliam

When the Minister considers his future defence procurements, will he consider restoring from Germany to the Royal Ordnance Factory, Birtley the FH70 orders, since the Germans have been unable to supply them for over a year?

Mr. Lamont

The implication in the hon. Genleman's question is not quite right. He knows that the ammunition for the FH70 is governed by the terms of the memorandum of understanding. It is a shared project. In this instance the product has to come from the German factory.

Mr. Nicholas Winterton

Will my hon. Friend now do the House the courtesy of answering the question of my hon. Friend the Member for Congleton (Mrs. Winterton)? My hon. Friend asked whether the Ministry of Defence would seek to place orders with countries whose markets are not open to us. Will he please answer that question? It is vital that this country should engage in free trade, but it should do so only with those countries which are prepared to open their markets to our royal ordnance factories.

Mr. Lamont

I thought that I began my answer to the hon. Member for Congleton (Mrs. Witnerton) by saying that I could not give her an undertaking. When my hon. Friend next sees the hon. Member for Congleton, perhaps he will ask her to confirm that that is what I said. I emphasised that our policy is to get the best value for money, and this modest opening up of the ammunitions market to foreign competition is one that we should continue to pursue.

Mr. Campbell-Savours

Has the Director of Public Prosecutions reported on whether he intends to bring an action against Dowty Rotol of Cheltenham for cheating on defence contracts?

Mr. Lamont