Defence Procurement System

Dame Diana Johnson (Kingston upon Hull North) (Lab)
1. What assessment he has made of the effectiveness of the defence procurement system.

The Secretary of State for Defence (Mr Ben Wallace)
Defence procurement is some of the most complex in Government, but our defence and security industrial strategy, published last year, represents a step change that will see industry, Government and academia working ever closer together, while fundamentally reforming regulations to improve the speed of acquisition and ensure we incentivise innovation and productivity.

Dame Diana Johnson
It has been reported that the Ministry of Defence has wasted £15 billion of taxpayers’ money on mismanaged procurement since 2010, with £5 billion of it since 2019. Might the Secretary of State just set out in a little bit more detail how he is going to deal with that type of waste and stop it happening in the future?

Mr Wallace
I am afraid that the right hon. Lady has obviously lapped up the Labour Front Benchers’ dodgy dossier on defence procurement. Of course, over half of the figure she used was under the previous Labour Government. Labour double-counted, including in that dossier, and indeed made no reference to the fact that the top 15 projects under Labour, in its last period of power, produced a £4.5 billion overspend and a 339-month out-of-date period for projects.

As I said, these are very complex processes. We often make sure that we try to meet the demand and the threat, but some of these projects last 20 years. We have made significant steps to change and reform that, and the right hon. Lady will be glad to know that this year—or last year and the year before—the MOD came in on budget for its overall budget, with a balanced budget for the first time for decades.

Mr Mark Francois (Rayleigh and Wickford) (Con)
The Type 26 frigate is literally a world-beating design, which we have exported to both Canada and Australia, and we all want to see it in service as soon as possible. So it is doubly disappointing that, last week, the Department issued a written ministerial statement to say her entry into service is now delayed a further year from October 2027 to October 2028 and the lifetime cost to the programme will be over a quarter of a billion pounds more of taxpayers’ money. Given the defence budget is likely to come under great pressure, why does it take BAE Systems 11 years to build a ship the Japs can build in four?

Mr Speaker
Just before the Secretary of State answers, may I say that we even have the Speaker of Canada here, which is very appropriate.

Mr Wallace
First, just like in Canada, industrial complexes are facing post-covid skills challenges and indeed supply chain challenges—because our ships, just like everybody else’s ships, use international supply chains—and that has got involved in the timetable, which obviously has a knock-on effect on cost. However, where there have been supply chain problems, my team and I have personally made sure I have not only visited the manufacturer to grip the situation, but discussed it with the prime. It is incredibly important when we place these contracts, and the contracts are for billions of pounds, that the prime contractors, be they British or foreign, deliver in accordance with them. That is why, in future contracts, I have made sure not only that we do as much as we can to build in Britain, but that we get the primes to invest in the infrastructure of British yards and the skills base of British people to ensure this does not happen again.

Nick Smith (Blaenau Gwent) (Lab)
General Dynamics reports strong progress on the troubled Ajax programme, so can the Secretary of State confirm that a solution to the noise and vibration issues has now been found?

Mr Wallace
First, we expect General Dynamics to stick within the terms of its contract, and we will stick to our side of the contract. The user validation trials, which are the first steps in getting this Ajax programme back on track, have now been completed. We are looking at the results and hope to start the next phase soon, which is good news all round.

Jack Lopresti (Filton and Bradley Stoke) (Con)
What plans does my right hon. Friend have to further invest in and enhance our sovereign defence manufacturing capability, which not only provides us with a massive strategic benefit but is great for jobs and apprenticeships?

Mr Wallace
When we published the defence Command Paper, we committed to invest £23 billion in our land capabilities over the next 10 years—a significant investment in land. That was accompanied by a land industrial strategy. It has also been accompanied by a defence and security industrial strategy that puts a lot of weight on ensuring that we support a sovereign supply chain where possible, and that we invest in skills. A number of working groups in Government are designed to do just that, and to both improve the skills base, but also to ensure that, where possible, we get the best social value and indeed a British supply chain.

Mr Speaker
I call the shadow Secretary of State.

John Healey (Wentworth and Dearne) (Lab)
It was an honour to join you, Mr Speaker, the Canadian Speaker, the Defence Secretary and other Members of the House earlier today for the opening of the constituency garden of remembrance. At last week’s Defence Committee, the Secretary of State was asked when the MOD would sign a contract to make the new next-generation light anti-tank weapons that are needed both for Ukraine and to restock the British Army. He said:

“We have signed the first contract for next year.”

If the Defence Secretary was correct, Saab would have notified the market, but it has not. Would the Defence Secretary like to correct the record, and will he confirm when the MOD will get its act together and get that contract in place for new UK production, as this is day 257 of Putin’s war on Ukraine?

Mr Wallace
I am sorry to disappoint the right hon. Gentleman, but I did not say in my evidence that it was with Thales that I placed a contract for NLAW replacement, and many other people can give us access to NLAWs.

Mr Speaker
I call the SNP spokesperson, Dave Doogan.

Dave Doogan (Angus) (SNP)
Will the Secretary of State confirm the amount that the United Kingdom has spent on the defence nuclear enterprise in the past financial year 2021-22, and the equal but opposite cost of that nuclear expenditure to operational capacity, conventional equipment procurement, investment in service accommodation, and all other underfunded UK defence priorities?

Mr Wallace
We need to try to ensure that we find the funding to fund all those capabilities, and we must ensure at the time of placing a contract that we have certainty in the costs overall, to make sure there are no overruns.

Dave Doogan
The Secretary of State never answered my question, because he was not listening to the question. The answer is £6.6 billion, and that is to fund what we hear is the UK’s independent nuclear deterrent. I have a fairly well honed view of what independence looks like, and it does not look like the Secretary of State going cap in hand to the United States to ask it to bring forward its development of the W93 nuclear warhead. Will he explain what is independent about the UK’s nuclear dependency on the United States, except the cost in dollars for those weapons?

Mr Wallace
Where do I start? What is independent? I will tell the hon. Gentleman what is not independent, which is the SNP Government in Scotland placing a contract for ferries in Turkey. Supporting Scottish yards? That is not very independent.

The hon. Gentleman will know, as he seems to have a real interest in the technology and development of the nuclear warhead, that under the nuclear non-proliferation treaty we cannot ask the Americans to develop a nuclear weapon for us. That has to be done sovereignly, and if he read that treaty he would understand that.