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Defence Procurement

Volume 735: debated on Monday 26 June 2023

16. What recent assessment he has made of the effectiveness of the defence procurement system. (905611)

We are driving the delivery of capability to the frontline. Over a two-year period to December 2022, we have seen a one-year reduction in the average programme duration, but we can do more to improve and are committed to learning the lessons of the Sheldon review.

On 13 March, the Defence Secretary told me that UK steel was not specified in defence procurement because

“we do not manufacture the type of steel”—[Official Report, 13 March 2023; Vol. 729, c. 529]

required. But according to UK steel producers, this is not true as they adjust production lines to match the needs of each contract. Now he knows our steel producers can deliver, will he do what all other major countries do, for reasons of national security, and guarantee to use domestically produced steel in defence procurement?

I do not accept that. I am happy to write to the hon. Member with the details. Our position is that, obviously, we want to use UK steel and we recognise its quality, but there will be cases where the appropriate steel has to be sourced from elsewhere. Ultimately, we have to deliver the equipment required for our capability.

It is probably a bit of a shame but, after missing out on the job of Secretary-General of NATO, the Secretary of State seems to have reverted to “no more Mr Nice Guy” mode today, although it may improve as the day goes on.

I ask the Minister, in an amicable way, why, when every major military-industrial power is relentlessly focused on building domestic industrial capacity following Russia’s invasion of Ukraine, he is stubbornly refusing to do the same. His previous answer on steel shows again that the mindset has not changed. Why will he not back British industry and British military resilience?

I am happy to be Mr Nice Guy when it comes to British industry. A central tenet of the defence and security industrial strategy is that industrial capacity is part of our defence capability. I am absolutely clear about that. Of course we want to have a strong domestic industry. There are occasions when acquisition has to be undertaken at pace and, as we have seen in getting equipment out to Ukraine, we have had to be flexible in how we source that equipment. But we are absolutely committed to a strong industrial base for defence, both at SME level and with our primes.

Will my hon. Friend look at how the MOD can support the UK’s domestic supply chain by requiring prime contractors to adhere to a 30-day payment code for all defence suppliers, regardless of where they sit in the supply chain?

My hon. Friend is a champion of SMEs and makes an excellent point about prompt payment. I can assure him that the MOD has a standard contract term that requires primes to pay suppliers within 30 days. I am informed this is called DEFCON 534. Obviously, it is not to be confused with other uses of the word “DEFCON”, but it is a very important point. Like him, I want to see our SMEs supported.

When I asked the Minister for Defence Procurement to give a statement on the Sheldon review two weeks ago, he recognised the importance of workers to the defence industry. We have already heard from my hon. Friend the Member for Blaenau Gwent (Nick Smith) about the problems of Morpheus, which I understand is now rated red by the MOD; the problems we had on Ajax are emerging on Morpheus. One of the issues that came out of the Sheldon review was that the company was not listening to the voices of workers on the shop floor. What guarantee is the Minister putting in place to ensure workers have a system for reporting back, so that, when things go wrong, as with Ajax or, potentially, Morpheus, they are reported, listened to and acted upon?

As I said in the statement, I recognise the unique angle the hon. Gentleman has on this issue, because the factory in question is in his constituency. I stress that the employment of those employees is the legal responsibility of the company. We engage closely with them. One of the lessons learned is about that close engagement at SRO level through Defence Equipment and Support. Andy Start, CEO of DE&S, has led huge change in improving the way we work together. I suspect we will continue to build on the significant improvement the Secretary of State just highlighted, in terms of both cost and timing, between when the Opposition was last in power and now.

The previous Minister for Defence Procurement impressed many by hitting the ground running. He developed a forensic grip on the manifold issues within this dysfunctional area of defence and he worked up a plan to try to deal with that. Sadly, he moved on before he could implement that plan, so can I ask this latest Minister for Defence Procurement, does he have a plan? What will be the first evidence of that plan that our weary service personnel and taxpayers might see?

I am grateful to the hon. Gentleman for his praise for my brilliant colleague, my right hon. and learned Friend the Member for Cheltenham (Alex Chalk), who is now Secretary of State for Justice and the Lord Chancellor, no less. Absolutely, we have a plan, and that plan must take into account the lessons from the Sheldon review. In taking on this job, I recognise that there has been huge focus on Ajax, but I hope the fact that Ajax is now with the Household Cavalry for regular field training is a symbolic moment that shows we are turning the corner. We are going to engage right across defence to develop a better procurement system, and I want to ensure that delivers better outcomes. As I said at the Defence Committee, that is why we have tasked the permanent secretary to undertake an end-to-end review of the whole defence operating model.

That response could be loosely regarded as a stab at the previous question, but it was certainly not an attempt to answer my question. Let me try to probe a little further and give the Minister some examples that he may wish to bombast us with about the progress he is making. How has he challenged the pedestrian progress towards the next phase of the new medium-lift helicopter tender? What is the delay with the Type 32 or Type 31 successor announcements? Why does his element of defence not procure ground-based anti-aircraft missile systems to protect these islands in a more responsible way?

The hon. Gentleman has ranged a long way, from air to ground. The key element is to strengthen our speed and agility, whatever the platform in question. Some of the platforms he refers to are at a conceptual phase. I am committed to driving pace because, although times are improving overall, ultimately we do not want to have the delays we have had in some notable programmes. We need pace because that is how we maintain our competitive edge against our international adversaries.