HC Deb 29 November 1988 vol 142 cc568-9
12. Mr. Wigley

To ask the Secretary of State for Defence what steps he proposes taking to ensure that a greater proportion of his Department's procurement budget is secured from Wales.

Mr. Sainsbury

It is our policy to place equipment orders, wherever practicable, by competitive tendering. In 1986–87, about £150 million was paid to companies with a billing address in Wales. The future level of spending in Wales will be primarily determined by the enterprise and competitiveness of Welsh industry.

Mrs. Mahon

On a point of order, Mr. Speaker.

Mr. Speaker

Order. The hon. Lady's question was not very sophisticated.

Mr. Wigley

The Minister spoke a moment ago about the employment opportunities that had arisen from defence contracts in one of his hon. Friend's constituencies. Does he realise that over half of defence procurement expenditure is in the south-east of England, compared with only 2 per cent. in Wales, and that that amounts to a covert regional policy? If it were possible to have only a per capita expenditure level in Wales, it would be the equivalent of £300 million additional expenditure in the Welsh economy and about 20,000 to 30,000 additional jobs. Will his Department please take a more active stance to try to encourage some diversification of job opportunities?

Mr. Sainsbury

I hope that the hon. Gentleman will encourage firms in Wales to bid for MOD business. We like to see as many firms as possible, including small firms, competing as main contractors and as sub-contractors. There is a problem with the figures to which the hon. Gentleman referred. It relates to information on the head office to which we send our cheque. The Ministry of Defence does not necessarily have information on where the product for which we pay is actually manufactured. I suspect that more work is done in Wales than is shown by the information on the location of the head office where we send the cheque for our supplies.

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