Independent European Programme Group (Hansard, 19 December 1984)

§ Mr. Heseltine

The tasks of the procurement executive of the Ministry of Defence are assuming even greater importance than hitherto. I described in the "Statement on Defence Estimates 1984" (Cmnd. 9227) the efforts that are being made to secure greater value for money from my Department's equipment budget, which in 1984–85 amounts to some £8 billion. In particular, I attach great importance to increased use of competition in letting contracts for equipment projects. At the same time, the Government have concluded that as technology becomes more sophisticated and the real cost of equipment continues to rise, it will be more important then ever for the United Kingdom to collaborate with its allies to develop and produce equipment. A significant step in this direction was taken at the meeting of the Independent European Programme Group held on 22–23 November 1984 at The Hague, and I have already placed a copy of the declaration, published at the conclusion of that meeting, in the Library. I have now issued instructions to my Department setting out the action to be taken to give effect in the United Kingdom to the decisions reached in The Hague. I have also had a preliminary discussion on the next steps in the National Defence Industries Council, and I have invited the industry side of the council to have further talks with me in the new year.

These developments are placing growing demands on the procurement executive, and to respond to them I have decided to make certain changes in its top management structure. At present the chief of defence procurement, Mr. David Perry, has responsibility for international equipment collaboration as well as for the management of my Department's procurement programme generally. I have decided that in future he should devote himself full-time to the pursuit of collaboration. It will be his task to lead the sustained and determined drive that will be needed over a period of years in order to bring about the substantial increase in co-operation with our allies which the Government believe the circumstances of the future require. Mr. Perry will be known as the chief of defence equipment collaboration and he will continue to be a member of the Defence Council. He will report through the permanent under-secretary to me and other Defence Ministers.

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Mr. Perry's remaining responsibilities will continue to be undertaken by the chief of defence procurement, and Mr. Peter Levene, who is at present chairman of United Scientific Holdings plc, has accepted my invitation to fill this post. His appointment will last for five years, and his salary will be £95,000 a year. I am discussing the precise terms of the appointment with the Civil Service Commission, but I can say now that Mr. Levene will not be appointed under the terms of the Civil Service Order-in-Council 1982. He will sever all connection with his present company, and at the end of his appointment he has agreed to be subject to the same rules governing the acceptance of outside appointments as apply to civil servants.

These changes involve the creation of an additional post at permanent secretary level, but this is necessary to meet the new situation facing the top management of the procurement executive. More generally, I am reducing the top structure of my Department as a whole: as explained in the White Paper on the "Central Organisation for Defence" (Cmnd. 9315), the number of posts at the levels of deputy secretary and under-secretary and their military equivalents is being reduced by four and five respectively.

The new appointments, which my right hon. Friend the Prime Minister has approved, will come into effect in March 1985.