HC Deb 12 February 2001 vol 363 cc13-4
9. Mr. Mike Hancock (Portsmouth, South)

When his Department will complete its evaluation of the tenders for the future offshore vehicles contract; and if he will make a statement. [148226]

The Parliamentary Under-Secretary of State for Defence (Dr. Lewis Moonie)

Invitations to tender for the future offshore patrol vessel contract were issued on 12 December 2000. The closing date for submitting bids was 8 February 2001. If industry's responses confirm improved value for money over the current service, the intention is to be able to place a contract in April 2001.

Mr. Hancock

Is the Minister aware of the importance of the contract to the employees of Vosper Thornycroft in the south of Hampshire, who currently face redundancy because of a shortage of work? In view of the important industrial implications, will he give a commitment to the House that the Defence Procurement Agency will complete its evaluation of the bids as quickly as is practicable, and will countenance no further delay? Will he also assure the House that the agency will be vigilant about the predatory bids for the contract that might be on the horizon, and rule them out of order? That will safeguard the position in which we have more than one shipbuilder building warships for the British Government.

Dr. Moonie

I am well aware of the importance that shipbuilders in the hon. Gentleman's area attach to the contract. I assure him that there will be no delays in reaching a conclusion on the bids that we have received. We are also well aware of the importance of competition.

Mr. Syd Rapson (Portsmouth, North)

I declare an interest as a member of the Amalgamated Engineering and Electrical Union, which has a presence in the industry. Given the size of future shipbuilding operations in this country and the extra capacity that is required, does my hon. Friend agree that it is important to maintain the two asset bases, one on the Clyde and one on the south coast, because having two United Kingdom companies that are efficient in that sector increases our chances of building and exporting warships?

Dr. Moonie

As I have said, we recognise the importance of diversity of location and ownership in shipbuilding for our armed forces. That includes the north-east and the north-west, as well as the south coast and the Clyde. We will do everything we can to ensure that we get best value for money and continue to support British industry.

Mr. Crispin Blunt (Reigate)

What confidence can there be that the Ministry of Defence will handle the competition fairly? The strategic defence review identified two LSLs as a requirement, but it was decided that four were needed instead, two of which were given, without competition, to the Yarrow yard. That has probably enabled Yarrow, which is owned by BAE Systems Marine Ltd., to launch a predatory bid for those craft. Is it not time the Ministry returned to the use of competition as the guiding principle, and stopped handing out contracts to giants such as BAE Systems, in the interests of industrial rather than defence policy?

Dr. Moonie

I must point out that the original requirement was for six of those ships, not four. [Interruption.]

Mr. Speaker

Order.

Dr. Moonie

When we are placing a large procurement order, such as the one mentioned by the hon. Gentleman, there is clearly a trade-off between where to place the shipbuilding orders and the time within which we want to bring the ships into service. Our armed forces are absolutely delighted with the speed with which we managed to place the orders.