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Defence Reform Bill

Volume 753: debated on Wednesday 2 April 2014

Third Reading

Clause 50: Short title


Moved by

Clause 50, page 33, line 6, at end insert—

“(3A) Before a draft is laid before Parliament in accordance with subsection (3), the Secretary of State must—

(a) prepare and lay before Parliament a report on the options for carrying out defence procurement, and(b) publish the report.(3B) A report on the options for carrying out defence procurement is a report about—

(a) the arrangement of a kind mentioned in section 1 that the Secretary of State proposes to make following the coming into force of that section, and(b) any other options for carrying out defence procurement that the Secretary of State has considered as an alternative to those proposed arrangements.(3C) The report must include—

(a) an assessment of the impact of the proposed arrangements and the other options, and(b) any other information the Secretary of State considers appropriate for the purpose of enabling a proper comparison to be made between the proposed arrangements and the other options.(3D) The report must deal with at least one other option under subsection (3B)(b), namely the carrying out of defence procurement by the Secretary of State in the way it is carried out at the time of the report.

(3E) In subsection (3A) to (3D) “defence procurement” has the meaning given by section 1(8).”

My Lords, this amendment fulfils a commitment I made on Report. During that debate I made it clear that the Government supported an amendment, tabled in the names of the noble and gallant Lords, Lord Craig and Lord Stirrup, the noble Lord, Lord Levene, and my noble friend Lord Roper, that would have required a future Government to publish a White Paper and an impact statement before laying a draft order commencing Part 1 of the Bill. I agreed to bring forward a suitable government amendment at Third Reading, and that is the amendment that is before us today.

I do not intend to repeat the debate that we had on this issue in Committee and on Report. In essence, the debate centred on the need for parliamentary oversight and scrutiny of a future decision to proceed with a GOCO and the provision of sufficient information to Parliament to enable it to have an informed debate prior to the commencement of Part 1. In the end, there was consensus that this should take the form of a statutory requirement on any future Government to publish a White Paper and an impact statement. The government amendment reflects that commitment, although the need for precision in legislative drafting requires us to describe the content rather than the form of these documents. Nevertheless, the information that would be provided under the amendment is effectively the information that would be included in a White Paper and impact assessment.

Amendment 1 therefore makes it a requirement to publish and lay before Parliament a report on the options for carrying out defence procurement that the Secretary of State has considered. This must be done before any draft order commencing Part 1 of the Bill is laid before Parliament. The report will need to cover not only the GOCO option but any other options that the MoD is considering at the time for the reform of DE&S and it must include an assessment of the impact of the options and any other information that is appropriate to enable a proper comparison to be made between them.

It should be noted that the report must deal, in particular, with the option of what is commonly called DE&S-plus-plus—that is, the new DE&S as it will be once the transformation, which began at yesterday’s vesting day, is in place. This requirement specifically to consider the reformed DE&S is covered by new subsection (3D) of the amendment. I know that this is something that noble Lords were particularly keen should be captured in the amendment.

I hope that the amendment will command widespread support. It reflects the detailed debates that we have had on this Bill about the need for Parliament to have oversight of a decision to proceed with a GOCO and shows that the Government have listened carefully to the concerns raised by noble Lords from all sides of the House. The amendment will ensure that Parliament is provided with sufficient information to enable it properly to scrutinise and consider a future decision to proceed with a GOCO. I beg to move.

My Lords, I thank the Minister for his explanation of the amendment. As he has mentioned, the amendment reflects Amendment 9 on Report, which was tabled by the noble Lords, Lord Levene and Lord Roper, my noble and gallant friend Lord Stirrup and myself. The amendment that the Minister is now proposing is indeed fuller than the one that we put down but it carefully covers all the points that we had in mind. It may not mention the words “White Paper” but it spells out, in 25 lines compared with our five, the very thorough and comprehensive look at the proposals that is to be taken before Part 1 is passed into law. I thank the Minister and all those who have worked on the amendment. I shall certainly give it my support.

My Lords, like the noble and gallant Lord, Lord Craig, I want merely to express my gratitude to my noble friend the Minister for having brought forward an amendment which, as he explained, goes somewhat further than the amendment we considered on Report. Like others who have been involved in these discussions, I am very grateful that he has taken so much care to ensure that this matter is properly dealt with and that we have in the statute a very good basis so that if at some stage we come to consider the introduction of Part 1, we will have useful material for the parliamentary consideration. I have great pleasure in saying that I am keen to support the amendment.

My Lords, all credit is due not only to the noble and gallant Lord and my noble friend Lord Roper but to the Labour Front Bench for starting this ball rolling and developing it into an affirmative or, perhaps I should say, slightly super-affirmative Motion, to which I hope the House will agree.

My Lords, the Minister explained the background to this amendment which arose from an undertaking that he gave when we last discussed the Bill. I should like to take this opportunity to explain our position on the amendment and our views on it.

We welcome the amendment as it represents a move from the Government’s previous stance that the affirmative order without any associated requirements stated in the Bill would be sufficient, if passed by both Houses, for a future Government to change significantly defence procurement services by making arrangements for such services to be provided by a company to the Secretary of State under contract. The Government’s amendment does not go as far as we would wish, given that the Government were not prepared, as we sought, to withdraw Part 1 when it became known that they could no longer proceed before the general election with their preferred option to go down the road provided for in Part 1. We argued for a super-affirmative procedure involving an independent examination of a future Government’s case for bringing in an outside company to provide defence procurement services and for a report on that independent review by the House of Commons Defence Select Committee prior to Parliament being asked to make a decision on the affirmative order. That did not find favour with the Government either.

What we do have is the Government’s amendment providing for a report to Parliament on the options for carrying out defence procurement with a requirement, as the Minister said, that one option that must be covered in the report is the carrying out of defence procurement by the Secretary of State in the way it is carried out at the time the report is prepared. In other words, the effectiveness or otherwise of the new DE&S-plus-plus organisation that started to come into effect a couple of days ago, at the beginning of this month, will have to be compared with any other proposed arrangements that a future Government may wish to introduce. That is important because the Minister said in the debate on this issue in Committee that if it had been a matter for this Government rather than a future Government, they would have looked at the outside company option—the GOCO—only if the new DE&S-plus-plus organisation now being introduced did not transform the defence procurement operation.

If a future Government adopt the same approach, the report on the effectiveness of the new DE&S-plus-plus organisation will be crucial, as will be the objectivity of that future Government’s assessment of DE&S-plus-plus and their case for believing that the GOCO option would be more successful. Proper time will be needed to evaluate and consider the report to Parliament from that future Government, as provided for in this amendment, if that Government decide they want to go down the GOCO route and not to continue with the new DE&S-plus-plus organisation.

A big concern we have about the Government’s amendment is that it does not lay down any minimum timescale, either directly or indirectly, between the report on the options for carrying out defence procurement being laid before Parliament and the associated affirmative order being considered by Parliament. A future Government, having made up their mind that they wanted to go down the GOCO route, might be tempted to try to rush through the affirmative order. In that context, I cannot help but recall that this Government, in declining to withdraw Part 1, argued that there might in future be a need to bring in the GOCO option with a minimum of delay—an odd argument, bearing in mind that the Government themselves had just had to delay their intentions on the GOCO option by at least two or three years, but nevertheless an indication of a Government’s thinking that they might seek to make the change as quickly as possible at the possible expense of proper scrutiny. Hence my comments and concerns that the Government’s amendment does not provide any real check on such an intention by a future Government.

However, despite our reservations, we shall not oppose the Government’s amendment, as it clearly represents progress towards our position and a move away from the Government’s earlier stance. We are grateful for the support there has been from other noble Lords in pressing the Government to move from their initial stance that affirmative orders, without any associated requirements that would also have to be met, were sufficient.

My Lords, I thank noble Lords and the noble and gallant Lord for their helpful contributions to our short debate. It is clear that this amendment attracts support, particularly from the Official Opposition, and that it would significantly improve the arrangements for parliamentary oversight should Part 1 ever be commenced. I accept the observation of the noble Lord, Lord Rosser, that our amendment does not go far enough but I think we can agree that this amendment makes a good Bill much better.

As we have, I hope, reached the final stage of the Bill in this House, I thank noble Lords for their work on the Bill. In particular, I am grateful for the contributions of the noble and gallant Lords, Lord Craig and Lord Stirrup, the noble Lords, Lord Rosser and Lord Tunnicliffe, and my noble friends Lord Palmer, Lord Roper and Lord Lee among many other noble Lords who have spoken during the course of the Bill and done so much to ensure that it leaves this place in good shape. We have covered a lot of ground including on some quite technical matters.

I am also grateful to my noble friend Lady Jolly for her assistance on the Bill and to my officials for their support and hard work. The Government have listened to the concerns that have been raised and have responded, where appropriate, by bringing forward amendments such as the one before the House today. I therefore ask noble Lords to support this amendment.

Amendment agreed.


Moved by

Before we go through the final stage, I should like to thank the Minister for his usual patience and courtesy in taking the Bill through your Lordships’ House, and not least for the detailed responses he has given to the amendments that have been pursued and the questions that have been asked. I should also like to thank his ministerial colleague, Philip Dunne MP, for meeting us on more than one occasion, in particular my noble friend Lord Tunnicliffe on Part 2 on single-source contracts. We extend our thanks in that regard to the noble Baroness, Lady Jolly. Having meetings with Ministers has also involved officials, and likewise we extend our thanks to them for their courtesy and helpfulness in responding to the many points that we raised.

Bill passed and returned to the Commons with amendments.