10. What steps he is taking to increase the proportion of his Department’s procurement spending that goes to SMEs. (901601)

That is me again. Small businesses provide a vital source of innovation and flexibility in meeting defence and security requirements. As I have already said, there was an announcement of a new target earlier this month to increase the proportion of MOD procurement to be spent with small and medium-sized enterprises to 25% by 2020.

Worcestershire hosts many small businesses in the defence, aerospace and cybersecurity sectors. How can these smaller businesses, such as Aeromet in my constituency, access the £70 million investment in innovation announced by the Secretary of State last week?

We see small businesses and academia as playing a vital part in developing technical innovation, so it is important that they can access this and other funding to maintain the operational advantage of our armed forces. We are doing this in a number of ways. Last month at Defence and Security Equipment International I announced the winners of one of the £10 million defence growth partnership innovation challenges. There were over 100 applications and 23 winners were announced, many of which were small businesses.

The UK steel industry needs support through Government procurement, and where we can we should always buy British. A functioning steel industry is crucial for our national security, so can the Minister assure me that that approach will feature heavily in our procurement policy in future?

I can reassure my hon. Friend that the steel for the Queen Elizabeth-class carrier, a contract which was placed some time ago, came from British steel foundries. It is something that we consider, but we have to look after value for money when we place orders through our contractors, and steel supplies need to be available at a competitive cost, at a competitive time and at a competitive quality.