Adjournment (Christmas)

Part of Bill Presented – in the House of Commons at 7:13 pm on 15 December 1986.

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Photo of Mr Ian Gilmour Mr Ian Gilmour , Chesham and Amersham 7:13, 15 December 1986

I shall not follow the interesting speech by the right hon. Member for Bristol, South (Mr. Cocks), but I thoroughly agree that the House should not adjourn until it has had the opportunity to debate the defence scandal over the demountable rack offloading and pick-up system. The Government have agreed to set up an independent inquiry into the whole seedy affair.

DROPS is equipment for transporting ammunition to the battlefield. I know something about these matters because I was the Minister who set up the procurement executive and was in charge of it in its various manifestations during the first few years. The concept of DROPS was very largely that of a firm in my constituency, Boughton. It pressed the concept on the Army for many years. So confident was Boughton of its ideas that it built the equipment at its own expense and sold it to four foreign armies. Its equipment was in existence by 1975, and the Ministry of Defence could have bought it then. The equipment that was available to the Ministry of Defence is substantially the same as that which, after years of incompetence, duplicity and cover up, the Army will eventually receive in 1989.

However, there is a great deal more to it than mere incompetence in this disgraceful and scandalous affair. Indeed, the House will probably find the story scarcely credible as I briefly tell it. As I said, the concept is largely Boughton's, although I am sorry that my right hon. and hon. Friends have sought to deny that and have said—no doubt in good faith—that other firms were very much involved and that it was not Boughton's concept.

In 1978, the chief of staff, British Army of the Rhine, said: During the last two years the MOD have been examining the various systems used by commercial operators in the UK to allow one vehicle to perform two or more functions. The examination concluded that only one, the Ampliroll"— that is, Boughton's— possessed sufficient potential to warrant trials being carried out". In September 1981, the defence sales section of the procurement executive wrote to the vice chief of the general staff, saying: The Boughton Group have promoted the concept to DGTM since 1974 and developed most of the equipment which is central to it. They are the principal authority in what is technically feasible. That should be borne in mind when the Ministry of Defence is attempting to say that Boughton was not the leader in this development. However, Boughton pressed this equipment on the Ministry of Defence and eventually convinced it. The Ministry issued a statement of requirements and invited Boughton to tender for a feasibility study.

Boughton was clearly better qualified than any other competitor. Above all, it was the only company that had a complete working system in existence. All the others were still at the drawing board. Boughton had fully fledged equipment in existence. Boughton's design was wholly British. I know that the Ministry of Defence does not seem to be attached to British equipment these days, but to most people it is surely a considerable advantage. Furthermore, Boughton met all the specifications better than its competitors, and it was cheapest. The Ministry tries to blur that inconvenient fact by weasel words.

For the feasibility study vehicles, competitors were asked to produce prices backed by detailed documentation. Boughton was easily the cheapest—sometimes by up to 80 per cent. Competitors were asked to produce production estimates for 2,000 vehicles—just a one-line estimate backed by no evidence. Boughton produced its actual production costs—because it was the only company that produced the equipment, it knew the costs—and the others produced estimates bristling with hedges and caveats. In any case, for what Boughton was asked to do, it was the cheapest. The independent assessors, who were used on the "Panorama" programme and were recommended by the Institution of Mechanical Engineers as being the best in that business, supported Boughton.

To sum up, Boughton offered the most for the least, yet, incredibly, it was excluded from the trial. That was a shameful and improper decision. That is the most scandalous feature of the affair. One of the reasons for it was, I think, that the people in the procurement executive were so besotted with their own ideas and estimates of their abilities that they preferred a design which Boughton had many years before shown not to work.

The procurement executive then wasted much time and money proving that its ideas did not work—which we knew already—and, since then, it has been drawn back to Boughton's ideas and equipment while trying to conceal that it has done so. That is the second scandalous feature of this affair.

The third scandalous feature is the cover up that has gone on and the fatuous nature of the explanation that the procurement executive has attempted to make for its exclusion of Boughton from the competition. If anybody was in any serious doubt that there was a scandal here, he would only have to read the attempted explanation of it by the Ministry of Defence. Indeed, when "Panorama" was thinking of doing a programme, because it thought that there was something seriously wrong, it became fully convinced of that fact only when it had listened to a major presentation of the Ministry of Defence's case.

My right hon. Friend the Leader of the House is by nature very sceptical, but if he gets any briefing from the Ministry of Defence I strongly advise him to treat it with even more than his usual scepticism because, on all previous form, it is highly unlikely to be anywhere near true. Some of our right hon. Friends have suffered because of that already.

When I first raised this matter in July 1983, it took the Ministry of Defence six and a half months to give me a substantive reply. It is true that during that period my right hon. Friend the Member for Henley (Mr. Heseltine), then the Secretary of State, was courteous enough to see me. Nevertheless, it took six and a half months to get a reply, and then it was so staggeringly thin and unconvincing that, as I stated in my rejection of it, I would have regarded it as gravely inadequate if it had been sent to me the previous July. Put forward as an attempted justification of the Ministry of Defence's conduct six and a half months later, it was little more than a plea of guilty.

Not only does the Ministry of Defence's attempted replies starkly reveal the poverty of its case, but so bad is that case that it attempts to shut its opponents up. We all know of the intimidation of an hon. Member, but, on more than one occasion, people in the Ministry tried to intimidate the firm. That is not the behaviour of people who possess confidence in a just case; it is the frightened and guilty behaviour of people who know that their case is bad and is not defensible by decent methods. That is not so, of course, of all at the Ministry. People change so quickly in the Ministry of Defence that few of those who were responsible for this blunder or crime are still in the same spots. I think that some of their successors do not know what happened then and are acting in good faith. Others, out of misplaced feelings of solidarity, are just determined to cover up.

I have always refused to ascribe motives for what was done because the facts are enough in themselves. The reasons may have been personal animosity, blind dogmatism, sheer dismal ineptitude or something more sinister. General Mans, when he looked at the matter in 1984, thought that the unfair and improper exclusion of Boughton had been influenced by personal considerations. That is certainly true, but I do not exclude additional motives.

Like others, I have a high regard for my right hon. Friend the Secretary of State for Defence. We were Ministers together in the Ministry of Defence many years ago. He has a great deal to do and a great deal on his mind. Here he has made a natural but, in this case, disastrous mistake of believing what he has been told by his advisers. That has already involved him in some embarrassment because what he said—on Ministry advice, of course—about Boughton not being intimidated turned out to be wrong. Although I understand his difficulties, I find his refusal of any inquiry, at least up to now, indefensible.

It is true that the Comptroller and Auditor General is interested in this contract. Indeed, we drew his office's attention to it last August. That should be a useful inquiry, but everybody knows that the Comptroller and Auditor General is concerned with financial irregularity and the spending of public money. He looks at the Ministry's documents and examines civil servants. He does not hear outside evidence. Welcome as his researches are, they should be in addition to, not a substitute for, an independent inquiry.

I shall summarise the case. In 1983, the Ministry of Defence selected equipment which was of a lower specification than Boughton's, offered at much higher prices than Boughton's—some were 80 per cent. higher—in virtually every respect inferior to Boughton's in its compliance with the stated requirements, and years behind Boughton's in development. In making this selection, the Ministry neglected to verify compliance with the stated requirements, introduced new and arbitrary requirements which were designed to favour systems other than Boughton's, were irrelevant or wrong, were at variance with previous trials experience, Ministry policy or the majority of "expert opinion" in the Ministry, and are now seen to be incompatible with achieving the stated requirements for DROPS.

When dealing with complaints and inquiries since 1983, the Minstry of Defence has lied about the relative prices of competing equipment, lied about that lie about prices, intimidated Boughton to suppress its legitimate complaints, lied to hon. Members about that intimidation and attempted to suppress legitimate and proper inquiries in private by an hon. Member.

How can anybody now have any confidence in the procurement process for any other equipment if the procurement executive is allowed to get away with such behaviour and nobody is punished for it? Unless the Government want us to believe that this sort of behaviour in the procurement executive is quite normal, they have a clear duty to set up an independent inquiry. Unless they think that injustice, incompetence, dissembling and deceit are fine and proper as well as normal, the case for an inquiry is overwhelming. Unless the Government believe that the right response to a scandal is to attempt to hush it up, they should order an inquiry now.