§ 5. Mr. ThorneTo ask the Secretary of State for Defence if he will take steps to ensure that after 1992 there will not be a monopoly supply situation in any branches of the defence supply industry.
§ The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Tim Sainsbury)The Ministry is committed to procurement by competitive tender, wherever practicable. We will continue monitoring changes to the supplier base and assess their implications for defence on a case-by-case basis.
§ Mr. ThorneWhen my hon. Friend's advice is sought over any bid for defence contractors in this country, and for the Plessey company in particular, please will he bear in mind the partners who may be involved in such a bid— especially in view of the fact that they may have nothing to contribute from a defence point of view—
§ Mr. SpeakerOrder. The hon. Gentleman's own question is about what will happen after 1992.
§ Mr. ThorneFollowing 1992, will we be careful to ensure that we do not make deals with people within the Community that will not be to the benefit of our defence interests, particularly when those concerned have little or no defence expertise of their own? That would mean sharing our secrets now, which might adversely affect our ability to obtain future contracts.
§ Mr. SainsburyI know that my hon. Friend takes, understandably, a close interest in the defence activities of many of his constituents. I assure him that we shall look carefully at each bid that might arise after 1992, or before, to take account of all the relevant factors, including the ownership of any companies that may be involved in any such bid.
§ Mr. Menzies CampbellCan the Minister give the House an indication of his Ministry's strategy for ensuring that its procurement programme is not in any sense disrupted or adversely affected by the takeover of companies either now or after 1992?
§ Mr. SainsburyI assure the hon. and learned Gentleman that we attach the greatest importance to maintaining competition among our suppliers, because we believe that that is the best possible way of promoting efficiency and therefore giving us value for money. We consider any circumstances that may arise, including bids of the kind to which the hon. and learned Gentleman refers, in the light of that strategy.
§ Mr. BurnsImportant though events after 1992 are, will my hon. Friend bear in mind events prior to 1992? Does he agree that, important though it is to have a non-monopoly, it is equally vital that Britain's largest defence contractor, GEC-Marconi, is not allowed to become partly owned by a foreign state-owned company? Does he accept that many people in my constituency and elsewhere believe that, if that situation were to arise, it would be the height of folly?
§ Mr. SainsburyI am sure that my hon. Friend will appreciate that it would not be proper or helpful for me to speculate on possible bids which have not yet been made and the nature of which we do not know.
§ Mr. DouglasGiven that the Minister is looking ahead to 1992, will he enlighten the House with his definition of "monopoly"? I accept the confidentiality of this, but what advice has he been given by the Civil Service about the blocking of bids which might result in large defence contractors which are now under threat being taken over or substantially controlled by foreign creditors?
§ Mr. SainsburyI hope the hon. Gentleman will agree that only one definition of "monopoly" stands up: when there is only one supplier. That is the one that we intend to stick to.
§ Mr. CormackDoes my hon. Friend agree that, both before and after 1992, there is a great deal to be said for big, Great British companies remaining British?
§ Mr. SainsburyI am sure that my hon. Friend will agree that we can take considerable pride in the competence of British defence contractors. I am sure that we can also agree that we can look forward to continuing to have a flourishing and successful British defence industry.
§ Mr. RogersIn 1986, the Government told the Monopolies and Mergers Commission that they were against a GEC-Plessey merger on the grounds, first, that that would reduce competition in defence procurement, and secondly, that it would mean a financial loss to the MOD of between £600 million and £900 million. May we assume that the Government, who pride themselves on being consistent, still hold the views that they propounded in 1986?
§ Mr. SainsburyAs I think is already known, the Office of Fair Trading has asked all interested parties, including the MOD, for advice on the bid for Plessey, and we have provided that advice in confidence in the normal way—
§ Mr. SainsburyAs I have just said, we have provided that advice in confidence in the normal way. Sir Gordon Borrie will make a recommendation to my right hon. and noble Friend the Secretary of State for Trade and Industry on whether the bid should be referred to the Monopolies and Mergers Commission. If there were a referral, we would expect to be asked for our views by the commission, and in due course it would publish a report which would. contain our views.
§ Mr. NelsonDoes my hon. Friend agree that conditions have changed significantly since the original bid was made? Moreover, when considering, as the question does, the situation after 1992, does he agree that the defence procurement needs of this country will be far better served by companies on a European basis that have the collaborative research strength and base to compete with some of the biggest defence contractors internationally? I very much hope that, for those reasons, my right hon. and hon. Friends will not make representations to the DTI which will prevent the shareholders of GEC and of Plessey from being able to decide for themselves how best to dispose of their assets.
§ Mr. SainsburyI assure my hon. Friend that the important and relevant factors to which he refers will be fully taken into account in any observations that we make about bids that are made, as opposed to bids that might possibly be made.