Competition remains the cornerstone of defence procurement policy, except where other strategic considerations need to be taken into account—for example, national security, operational advantage and freedom of action.
I am grateful for the hon. Gentleman’s kind comments. It was a pleasure to meet a number of businesses in his constituency. We have been engaging a lot with the small and medium-sized enterprise supply chain. In fact, on
Last Thursday, myself and colleagues from across the House on the all-party parliamentary group on shipbuilding and ship repair launched our report on the national shipbuilding strategy. We have real concerns that competition, particularly for naval shipbuilding, is based on a model that does not include the economic benefits to the UK being recycled back in when we spend UK taxpayers’ money. Can the Minister give me an assurance that the Ministry is looking at that and will work with the Treasury to change our model, so that we can get the best value and ensure that our shipbuilding pipeline lasts in the UK?
I thank my hon. Friend for her question. She will be aware that Sir John Parker is currently doing a review of his initial report. International competition is also about encouraging UK industry and UK shipyards to be as competitive as possible, so that they can not only maximise the opportunities that UK defence offers, but take advantage of competition around the globe, too.
The Minister said that this is to make UK yards more efficient, but what they need is throughput of work. His Department has chosen to put the contract for the fleet solid support vessel into international competition. What weight was given in that decision to his Government’s prosperity agenda, our sovereign capability and the need to protect UK shipbuilding?
That is precisely why the Type 26s, Type 31s and aircraft carriers were built in the UK, so that we could maintain that capability here in the United Kingdom. The right hon. Gentleman might be aware of the speech that the Secretary of State recently made, and part of what she is doing is a review into the MARS—military afloat reach and sustainability—tankers, to ensure that we look at the exact experiences with that and take lessons from it.
Does my hon. Friend agree that the involvement of small and medium-sized enterprises in defence procurement is essential in promoting innovation in the sector?
My right hon. Friend is right. One of the things I have noticed in this role and as I go around the country is that innovation really exists in the SME sector. We have to ensure that more SMEs feel they can do business with the Ministry of Defence, so that we can take advantage of that for our armed forces.
The Government’s procurement process for military equipment is a shambles, and nowhere is that better seen than in the way it is handling the procurement of the Type 31e frigates. Having started, then stopped, then restarted the procurement process for the Type 31s last year and imposed a totally unrealistic price ceiling of £250 million per frigate, will the Minister confirm that he has now effectively removed that financial ceiling?
I do not actually recognise the hon. Gentleman’s interpretation of the competition. This is a challenging competition for the very reason that we want to ensure that UK industry is competitive—not just in the UK, but around the globe. We have taken a pragmatic approach to change the parameters to ensure consistency with all other competitions that have been happening. This is a challenge to industry, but we want it to be competitive. That was the whole point of the national shipbuilding strategy.