UK Defence Industry: Procurement

Julian Lewis Excerpts

Wednesday 22nd June 2022 Westminster Hall

[Leo Docherty]

Yes, indeed. I join the hon. Gentleman in commending, and reaffirming our commitment to and admiration for, those 10,000 defence jobs. He rightly points out that they exist because of the standard of international excellence that those workers achieve, particularly as part of our deterrent. I hope that he will take a public opportunity—maybe not now, but perhaps in future—to put on the record his commitment to the deterrent. It may not be easy for him to do that, so I will move swiftly on.

[Dr Julian Lewis (New Forest East) (Con)]

Before the Minister moves swiftly on from the deterrent, I would like to take him back to aerospace. In the past he has been generous with his time and has met me to discuss the subject of the war widows, a subject that falls more within his own bailiwick. I have been trying to get a meeting with his colleague, the Minister for Defence Procurement, my hon. Friend the Member for Horsham (Jeremy Quin), so that a British-based aerospace firm can show him a presentation that greatly impressed me when I chaired the Defence Committee. I have no financial or commercial interest in the company concerned, but I am worried that independent, smaller companies get squeezed out by the big operators, and I would not ask for such a meeting if I did not think that company had something important to offer to defence.

[Leo Docherty]

I am happy to recommit our determination to ensure that SMEs are a part of our collective success. I am sure that the Minister for Defence Procurement will be delighted if I commit on his behalf to him meeting our right hon. Friend.

My hon. Friend the Member for Brecon and Radnorshire mentioned Ajax. We entirely understand the concerns that she has expressed and we have made no secret of the fact that it is a troubled programme. Despite those troubles, we are proud to be in Merthyr Tydfil because of the excellence of the workforce. I can offer some reassurance, in the sense that the Secretary of State for Defence and the Minister for Defence Procurement continue to meet with our commercial partners, but the bottom line, very clearly, is that we will not accept a vehicle that is not fit for purpose. I am sure that my hon. Friend the Minister for Defence Procurement will keep colleagues updated as progress is made.

I agree entirely with the main thrust of the speech we heard from my hon. Friend the Member for Brecon and Radnorshire, which was about supporting SMEs as an integral part of our supply chain. They are indeed the lifeblood of the Welsh defence industry. She referred to the fact that there has been a growth in the proportion of supply they make up, which I am pleased about. We want to increase the proportion of defence expenditure that goes into SMEs to 25% by the end of this year.

That will not happen by accident. It is happening because we are fortunate to have many SMEs who are agile and producing products that we absolutely want. My hon. Friend mentioned Charcroft Electronics and Compact Orbital Gears in her constituency. They are two very good examples of first-rate SMEs. I should also mention Radnor Range Ltd at Presteigne, which provides range facilities for the testing and evaluation of weapons and is another good example of a first-class SME with which we partner.

My hon. Friend can rest assured that institutionally we will continue to support companies big and small, and we have strategies such as the defence equipment plan, and the defence and security industrial strategy, which colleagues will be familiar with, alongside subsector plans to provide industry with the transparency it craves in order that it can clearly understand what capabilities we need and then respond to that.

As my hon. Friend mentioned, we are also using the opportunity provided by our departure from the European Union to develop better defence and security procurement regulations, which will be tailored to better meet our own needs. That will lead to the Procurement Bill, which will replace the existing set of complex public procurement ordinances with a single uniform framework. It will be simpler to use for both the Ministry of Defence and suppliers and it will make the acquisition process much faster, helping to unleash the innovative potential of British businesses. That is a concrete and important legislative step forward, which I am sure colleagues will welcome.

Our Department is also doing all it can to encourage larger defence primes to invest in and develop SMEs. As my hon. Friend pointed out, our refreshed SME action plan, which we launched at the beginning of the year, will be pivotal to this work. We are doing that to help smaller companies maximise future business prospects, ensuring that we can maintain an agile supply chain, which will help us meet the evolving threats that we face. To help innovative companies succeed, we have ringfenced £6.6 billion for research and development spending. That money will help industry produce the kinds of game-changing capabilities that are necessary to keep us ahead of the curve of innovation.

My hon. Friend mentioned exports. I was pleased to hear about the company that has a full order book. We commend that, and we are trying to do everything we can to offer more export opportunities to a greater number of players. We have committed to developing a standardised commercial mechanism for Government-to-Government defence and security sales, which should make it much easier for customers and partners to do business with us.

My hon. Friend mentioned operational ration packs. I confirm that I do know them through a great deal of personal experience, and I am actually a big fan. When it comes to procurement, it is only right that we have a nuanced approach. For some generic procurement, we are bound to a degree by public procurement regulation, but British food, of course, needs no introduction and has the competitive advantage of being great value for money. That is borne in mind more broadly across defence for not just the operational ration packs, but our provisioning for the entire defence establishment. We are reviewing the way we feed our force, and access to fresh, local British produce will be a key component of that. I am grateful for her remarks on the matter.

On skills, I applaud the apprenticeship programme that my hon. Friend mentioned. I have similar programmes in my own constituency, and I am pleased to confirm that we are working with the Department for Education to develop STEM programmes in local schools and colleges. I hope hon. Members would agree that the RAF has been ahead of the game on that matter. I am pleased that my hon. Friend the Member for Yeovil (Mr Fysh) mentioned the success of the commercial and institutional partnership that takes place at Royal Naval Air Station Yeovilton—between Leonardo, the Royal Air Force and local schools—to drive the collective success of the Fleet Air Arm and the Commando Helicopter Force at that critically important Royal Navy air station, which one of the busiest air bases in Europe. I am grateful for his comments.

I want to be clear that we are absolutely on the same lines. We are excited about the prospect of a greater number of SMEs being involved in the collective success of defence procurement. It is an exciting and innovative time for defence investment, driving forward the kind of operational output we need to fulfil our ambitious plans in the Future Soldier programme and the defence Command Paper. It is sensible to say that defence procurement not just in England but in Wales has a very bright future indeed.

Question put and agreed to.