Armed Forces' Equipment: Maintenance Contracts (Hansard, 28 June 1993)

The Parliamentary Under-Secretary of State, Ministry of Defence (Viscount Cranborne)
My Lords, we have no separate criteria for maintenance contracts. As with all contracts, we satisfy ourselves that the potential contractor has the necessary technical, financial and management resources to carry out the work satisfactorily; that his quality standing is acceptable; and that his proposal meets our requirements in all respects and offers the best value for money.

§ Lord Dean of Beswick
My Lords, I am grateful to the Minister for that detailed Answer. I thank him for the documents that his department sent to me this morning which, unfortunately, I have not yet had time to read. I am deeply concerned, as I believe the public are, about the contract that was awarded to maintain Tornado fighters—a £7 million contract awarded to Airwork Ltd. I understand that 16 or 17 of those planes had to be grounded because of shoddy work and that in order to make them airworthy it will be necessary to spend £6 million on each plane. Bearing in mind that the highest priority of any government of this country has been. historically, the defence of the realm, how could such a mistake have been made? I believe that it arose from a determination to continue with a policy based on political preferences alone —privatisation—rather than allowing the work to be done in the public sector where it should be done.

Viscount Cranborne
My Lords, I am sorry to disappoint the noble Lord but as my honourable friend the Minister of State for Defence Procurement made clear in another place very recently, that particular contract did not result from a market testing exercise. That form of maintenance has been standard practice carried out by the private sector for many years now, including under a Labour Government.

§ Lord Hailsham of Saint Marylebone
My Lords, has my noble friend read the press reports condemning the condition of the rifles supplied to the troops in the Gulf war? Has he any plans to improve the situation in that regard?

Viscount Cranborne
My Lords, I can tell my noble and learned friend that I have not only read the press reports but I have also read, as I am sure my noble and learned friend has read, the report by the House of Commons Defence Committee on that project. I am happy to inform my noble and learned friend that the Armed Forces who use those rifles say that they are now perfectly satisfied that they are at least the equal of other rival rifles in service with other forces.

§ Lord Ennals
My Lords, for several months our Armed Forces did not have adequate equipment. We are now told that it is adequate. Does not the Minister agree that the equipment should have been adequate at the time at which the troops were required to use it?

Viscount Cranborne
My Lords, the short answer to the noble Lord, Lord Ennals, is yes, it should have been adequate. It is for that reason, among others, that changes have been made during the course of the past decade or so to the way in which procurement is addressed in the Ministry of Defence. We are happy that such shortcomings would not be possible at present. Equally, I must say to the noble Lord that one of the reasons why the rifles did not perform satisfactorily in certain respects was not so much the shortcomings of the weapon itself but that certain units did not follow the drills prescribed for it.

§ Lord Ennals
My Lords, has any action been taken against the firm concerned?

Viscount Cranborne
My Lords, the question of liability is still under discussion. It is a possibility.

Earl Attlee
My Lords, is the Minister aware that the Army has used contract repair services for the maintenance and repair of vehicles for many years? In many cases good quality repairs and delivery have been satisfactorily carried out.

Viscount Cranborne
My Lords, I am grateful to the noble Earl for what he says. It is perfectly clear that the effects of "contractorisation" are almost wholly beneficial. Indeed, if there are weaknesses they are more likely to be found earlier under contractorisation than they would be if they were hidden in the internal processes of the Ministry of Defence.

§ Lord Williams of Elvel
My Lords, is the noble Viscount aware that the Public Accounts Committee of another place on 16th June reported that the Government had spent £224 million on refitting two nuclear submarines which were then decommissioned in the middle of the refit? Is that what the noble Viscount calls value for money?

Viscount Cranborne
My Lords, the noble Lord, Lord Williams, will be aware that expenditure has also been made on the RD57 facility at Rosyth. That has cost considerable sums of money. In our investment assessment for the future we take into account what will be the total cost of a project. In this instance, with the lesser requirement for submarines since the Berlin Wall came down, the net result is a gain for the British defence budget.

§ Lord Mayhew
My Lords, which, if any, of the firms concerned have recorded contributions to Conservative Party finances?

Viscount Cranborne
My Lords, I am ashamed to say that I do not keep details of Royal Ordnance or Airwork Ltd reports and accounts at my fingertips, but since they are public documents I am sure that the noble Lord will find it easy to obtain that information in the Library.

§ Lord Mellish
My Lords, in view of the Minister's reply to his noble and learned friend Lord Hailsham, do I understand that the rifle that was supplied to our troops was in fact quite all right and that the press reports were wrong in their assumptions? If that is so, why was it not denied at the time by the Minister concerned?

Viscount Cranborne
My Lords, I must tell the noble Lord, Lord Mellish, that there were defects in the rifle as originally supplied; but a greater number of defects than we like to accept. However, by the time the rifle was in service in the Gulf, after having been properly cleaned, it was clear that its performance was at least the equal of other rifles in use.

§ Lord Dean of Beswick
My Lords, in his reply to my supplementary question the Minister referred to the particular method of placing contracts that was used and went on to state the usual kind of procedural path involved even under a Labour Government. However, whatever way it was done, I am concerned that the order was given to a private contractor; that it did not perform; and that 16 of our frontline aircraft were grounded, which could have resulted in danger to the country. Will the Minister comment on the press reports that the order was given to a private company against the wishes of the defence officers involved? If so, is not that a very dangerous route to take?

Viscount Cranborne
My Lords, I must tell the noble Lord, that four aircraft have been grounded and that a number of other aircraft, on which work had started, have been immediately re-examined. The noble Lord's interpretation could, in fact, be susceptible to another one: that it is perhaps more a tribute to the new procedures in operation for the Ministry of Defence that the problem was spotted so soon and immediate remedial action taken.