Procurement

HC Deb 08 November 1999 vol 337 cc681-2

6. Mr. Simon Burns (West Chelmsford)

What changes against planned expenditure on defence procurement there have been this year. [96127]

The Parliamentary Under-Secretary of State for Defence (Mr. Peter Kilfoyle)

I expect expenditure on defence systems procurement this financial year to be within the level reported in the Government's expenditure plans.

Mr. Burns

Given that an important part of the manufacturing base in Chelmsford relies on defence contracts, may I say how pleased I am that Alenia Marconi will benefit from the signing of the contract for the principal anti-aircraft missile contract. However, is the Minister confident that the smart procurement savings will be made? If not, is he prepared to make a commitment that the Government will make up from other sources the shortfall in funding for defence procurement?

Mr. Kilfoyle

I am absolutely confident that all the objectives associated with smart procurement will be reached. I am glad that the hon. Gentleman has drawn attention to that matter, as the initiative has proved extremely attractive, in our defence budget and across Europe. I am also pleased to tell him that it is likely that Chelmsford will benefit from the principal anti-air missile for future warships project to the extent of some…100 million of investment. I do not foresee any change in that, under present circumstances.

Mr. Lindsay Hoyle (Chorley)

What progress is being made on the procurement decision for the beyond visible range anti-aircraft missile? Many companies and jobs depend on that decision. It is to be hoped that the British Aerospace Meteor programme—which is a pan-European missile—will be successful. If we do not get that, we will lose the relevant technology in this country.

Mr. Kilfoyle

It is true to say that all such projects depend on the effectiveness of the product, and on value for money. The competition is fair and open. We must assess each bid as it comes in for the projects under consideration.

Mr. John Wilkinson (Ruislip-Northwood)

I remind the Minister that the paragraph 96 of the strategic defence review identified an "urgent" need to improve our strategic transport. It suggested that the short-term solution was to acquire four McDonnell Douglas C-17 aircraft, or their equivalent. Is not that a grave deficiency that must be rectified at the earliest possible date? Was not the Secretary of State being disingenuous when he said that the short-term strategic transport aircraft requirement continued? I received a letter from Baroness Symons, the Minister for Defence Procurement, saying that the requirement had been terminated. No decision has been reached, but confusion continues.

Mr. Kilfoyle

I do not know whether the hon. Gentleman is confusing two different competitions. We fully intend to procure four aircraft in the short term, by one means or another, but we recognise that there are two separate issues. It may be argued that the long-term contract is even more important than the short-term. Responses have been received from Airbus Industrie, Boeing and Lockheed Martin. Each will be considered in due course.