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TRANSCRIPT OF UK DEFENCE PROCUREMENT DEBATE 4

The basic point is that the DPA and its customer, the MOD’s equipment branch, are not equipped or organised to assess a non-compliant bid that may offer better value for money by proposing a reduced capability and price. If the MOD and the DPA truly want to implement smart procurement they need to change their way of assessing bids and increase the calibre of staff involved in the process.

My second point is about overseas competition, which many hon. Members have mentioned today. The MOD, in its pursuit of competition, encourages overseas companies to compete for work in the UK. All UK defence companies are used to competition—it is a way of life for many of them, and it can be a positive pressure on businesses to ensure that waste is eliminated, overheads are reduced and product development cycles are shortened. It keeps companies fit and lean in the defence industry. However, the marketplaces where we can compete openly in the world are not that big. In fact, we find that we compete with the same companies in the far east and middle east as on our home turf. Okay, all is fair in love and war, but we do not have the opportunity to compete in those competitors’ home markets, and the biggest culprit is the USA.

American companies are growing strong on rich pickings at home, and that gives them an added advantage over this country overseas. The UK Government should either get the US and other European domestic markets opened up to fair competition, or they should impose the same domestic restrictions on the US and other countries to protect our defence industrial base. That is the sort of language used in the pubs and clubs in my neck of the woods by people who work in the defence industry.

As I said, I spent most of my working life in the defence industry. I was a worker at Barr and Stroud, which is now called Thales. I also worked in Yarrow shipyard on the Clyde, which is now operated by BAE Systems. I congratulate the people whom I worked beside on the education that I received during that period—I am not blaming them for it—for which I am eternally grateful. Without being too critical, I have to say that the Ministry of Defence is one of the most difficult organisations to deal with. Extreme frustration is caused by procrastination when placing orders. Companies have to wait for orders that keep getting pushed further back down the pipeline. Companies and management sometimes have difficulty retaining their work force while waiting for such orders to come through and holding on to spare parts and components required to fulfil a contract. The Ministry of Defence is not an organisation with which someone would choose to work.

Many jobs in the defence industry have been lost over the years. More jobs have been lost in it than in any other industry of which I am aware. I am proud of the fact that that was done by companies and trade unions getting together to recognise the problems and taking appropriate action. I pay tribute to them, because if they had not acted at the time, we would not have the defence industry that we do, especially on the Clyde.

If we are to have a strong, robust and efficient defence industry, we must give the management and the work force the tools to realise that. That is why we need a long-term strategy that allows employers to plan, where possible, some years ahead in placing contracts and getting the tools to do the job. We must also consider the suppliers to the major contractors, because they have a right to know about the strategy. More importantly, employees in the defence industry must know the direction in which the Government’s strategy for defence is going and how that will impact on them.

I am proud of the Government’s record on placing MOD contracts with British companies, and I hope that it continues. However, may I also send a message to British companies that depend wholly on defence contracts? The MOD requires only a finite amount of equipment and has only a fin

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