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Departmental Procurement

Volume 546: debated on Monday 11 June 2012

Innovation ensures that we are able to access and deliver technology into our systems and equipment to provide continuing operational advantage to our armed forces. That is why our recent White Paper, “National Security Through Technology”, highlighted the importance of investment in science and technology. It also recognised the contribution of commercial investment in developing new technologies. Using open competition in defence acquisition ensures that we are able to deliver the best and most innovative capabilities at an affordable price. In addition, the success of the Centre for Defence Enterprise in bringing through suppliers new to defence, particularly small and medium-sized businesses, which are important sources of innovation, led to our decision to broaden the centre’s remit, including the mentoring of smaller companies.

During the recess, BAE Systems announced the closure of the historic Scotswood road site in Newcastle, with the loss of more than 300 jobs. This brings to an end a 165-year history of skilled engineering, the longest continuous site of tank manufacture anywhere in the world, as well as bringing great distress and uncertainty to my constituents. Does the Minister agree that refusing to take into account the wider economic implications of defence procurement undermines not only innovation, but jobs and communities across the country? Will he agree to meet me and a delegation from BAE to see what can be done to save the site?

I have enormous respect for the hon. Lady’s expression of concern for her constituents, and I pay tribute to the work that those people have done over many years to support the armed forces. However, it is not true to say that the policy that she describes is the cause of the problem. The problem is that BAE Systems has not won contracts at this site. Meanwhile, the Warrior sustainment programme, the Scout SV programme, the Foxhound programme and the integration of the urgent operational requirements continue around the United Kingdom, generating thousands of highly skilled and important jobs. I very much regret that BAE Systems has been uncompetitive, but it is not the fault of the Government. The company must answer why it could not compete successfully for contracts.