HC Deb 14 January 1986 vol 89 cc911-2
6. Mr. Douglas

asked the Secretary of State for Defence if he will make a statement on the placing of orders for conventional and nuclear submarines in British shipyards.

The Parliamentary Under-Secretary of State for Defence Procurement (Mr. John Lee)

Orders were placed on 3 January 1986 for three Upholder class submarines and one Trafalgar class SSN. A tender has been received for the first of the Trident boats and is being evaluated. The precise order date has yet to be determined.

Mr. Douglas

I am disappointed that the Secretary of State is not answering this question. When he was Secretary of State for Scotland he gave a clear indication during Scottish Question Time, just before the recess, that a Scottish yard would receive a submarine order. We in Scotland are extremely disappointed that the Ministry has left itself open to a monopolistic supplier, which is conducive to the privatisation of that yard. Will the Minister give us an undertaking about what value we can put on the Trafalgar House bid for some of the Trident steel work?

Mr. Lee

The hon. Gentleman is very wrong in his first suggestion, and totally wrong in his second suggestion. The placing of the order had nothing to do with the privatisation programme.

The competition was a great success. There was a saving of about £20 million—about half because of batch ordering and about half because of the competition. We hope and believe that at least one other yard will be able to compete for future SSK orders.

Mrs. McCurley

I acknowledge that the acceptance of the lowest tender for any contract is a good principle, but, in the case of Cammell Laird, will my hon. Friend carefully scrutinise the rather over-optimistic prices that have been offered for the award of the submarine contract? Will he carefully study that contract over the next few years?

Mr. Lee

I understand my hon. Friend's deep anxiety over the Scott Lithgow yard, but all tenders are and will be carefully scrutinised. Cammell Laird won the competition on a true and open basis.

Dr. Godman

Is the Minister aware that on 26 November 1985 his hon. Friend the Minister of State for Defence Procurement told the House that it was the Government's intention that there should be a number of submarine yards and that Vickers had a monopoly not of conventional but of nuclear submarines? Does he agree, in the light of the placing of the order with Vickers, and hence the conferment of monopoly powers on that company, that that decision sharply contradicts what the Minister of State said on 26 November?

Mr. Lee

With respect, while I understand the hon. Gentleman's anxiety, that does not contradict what my hon. Friend the Minister of State said. I repeat that; there has been competition for the SSK orders. We believe that there will also be satisfactory competition in the future, so there is no question of a monopoly.

Mr. Forth

Will my hon. Friend assure the House that in the placing of such orders, and, indeed, orders for all military equipment, overriding importance will be attached to quality and price and that there will be no artificial constraints placed on orders, geographically or in any other way?

Mr. Lee

I can assure my hon. Friend that competition is very much the order of the day. Nevertheless, there are times when we have to take into account wider and relevant factors.

Mr. O'Neill

The Minister must appreciate the widespread disappointment felt in Scotland, which the Secretary of State echoed, when the announcement was made. Deepening suspicion and cynicism are felt because everyone knows that this is merely a matter of fattening up Vickers before privatisation. There is the added cynicism that the price that the people at Cammell Laird were able to quote was possible because they were able to obtain information from Vickers at Barrow about the target figure that they would have to meet. There is little chance of competitive tendering if there is only one supplier, because the other one will be on its last legs if orders are not provided.

Mr. Lee

Most of the hon. Gentleman's suggestions are, with the greatest respect, unworthy of him. There is no question of placing the orders with Cammell Laird and Vickers because of the privatisation programme.

Mr. Wilson

In view of the insignificant share of defence orders that Scotland received in the last announcement, has the Minister's right hon. Friend issued instructions that steps should be taken within the Ministry of Defence to find more work for Scotland because of our substantial unemployment problem?

Mr. Lee

My right hon. Friend plainly understands the needs of Scotland, because of his former position, but he will be completely open and fair-minded in the placing of future orders.