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Contracts (Small Businesses)

Volume 540: debated on Monday 20 February 2012

Innovative and efficient smaller businesses make an important contribution to defence, beyond the obvious benefits to the wider economy. That is why the “National Security Through Technology” White Paper sets out a wide range of measures to make defence and security procurement as accessible as possible to even the smallest of enterprises. I attach particular importance to the establishment of a new small and medium-sized enterprises forum, which meets regularly under my chairmanship to discuss and inform subsequent action on issues of concern to small businesses.

What steps are the Minister and his Department taking to engage with Britain’s 3,000 defence SMEs much earlier in the procurement process?

First, I congratulate my hon. Friend on the part he plays in the Skipton and Ripon Enterprise Group. I know that he takes a close interest in SMEs in general and I am grateful for his interest in defence SMEs. We are taking a wide range of steps to achieve precisely what he asks for, and the SME forum is but one example of that. He is particularly interested in the use of pre-qualification questionnaires. Their use is being minimised for procurements of under £100,000, and we are working to simplify or even eliminate them. We are already adopting the new core questionnaire, which is standardised across government. Many steps have been taken to encourage SMEs to engage earlier and more effectively with the Department, but if he has any ideas I would welcome them.

A written statement on the White Paper that was recently published indicates that the Government will no longer prioritise UK suppliers when buying defence equipment. For the sake of small companies, and for BAE Systems workers at Brough, 850 of whom face redundancy, ought we not to have a debate on the Floor of the House about that change in Government policy?

I have to say to the hon. Lady that such matters of debate are largely for the Backbench Business Committee to determine. No one would relish more than me an opportunity to explain the defence White Paper and the gross misrepresentation that she has just given. I would welcome such a debate, and I hope that it happens.

The Minister solicits ideas on this front. The Ministry of Defence necessarily requires strict security credentials from its business contractors, but that sponsorship can act as a barrier to competition. Will the Minister consider giving new businesses wishing to seek contracts with his Department the opportunity to apply in advance for security clearance for their personnel entirely at their own cost to level that playing field?

Actually, I think there is a widely shared misunderstanding in the SME community of the issues that it faces. I refer my hon. Friend to the box on page 61 of the White Paper, which explains in detail the security requirements and how the obstacles that I accept some small and medium enterprises think they have experienced can, in practice, be dealt with.

Order. I do not think that the House has access to the box in question, but we are immensely grateful to the Minister.

In view of the important role that SMEs play in some of our bigger programmes, and their need to be confident in the process and to have security of outcome, will the Minister give the House some clarity on the intention for the F-35 programme? In particular, given rumoured reductions in orders from the USA, Australia and Canada, does he expect the price that the MOD pays for each F-35 to rise, and does he have a view on the exact point at which they become unaffordable for the UK?

First, I apologise unreservedly to you for my earlier answer, Mr Speaker, but you have encouraged me to be pithy in the past, and it would have been quite a long answer to give the details in full.

Addressing the concern of the hon. Member for Plymouth, Moor View (Alison Seabeck), the honest answer is that we do not know. The Americans are not reducing the total numbers for the purchase of the joint strike fighter, but they have changed the profile of those purchases. Other partner nations have indicated that they will reduce their offtake. That is likely to have implications for JSF prices, particularly those acquired in the early stages of the process, which is when this country intends to acquires its JSFs. We are watching those implications carefully, and I am happy to talk to the hon. Lady separately about the implications for the UK.