Ministry of Defence: Palantir Contracts

Lord Fox Excerpts

Wednesday 11th February 2026 Lords Chamber

[The Minister of State, Ministry of Defence (Lord Coaker) (Lab)]

My Lords, I thank the noble Baroness, Lady Goldie, for the courteous way in which she asked the question. I will reflect on what she has said and respond appropriately once I have discussed it with others.

On the fundamental issue of single-source contracts, I can do no better than to quote the Conservative spokesperson in the other place, who said:

“It is true that many contracts in the MOD are rightly let on a single-source basis”.—[Official Report, Commons, 10/2/26; col. 691.]


In this particular instance, the MoD judged the capabilities and record of Palantir in the delivery of the systems that it has, and the artificial intelligence and data sharing that can take place, which started with the enterprise agreement that the last Government entered into in 2022, enabling Palantir to embed itself in all sorts of operations that were and are ongoing and will continue. The transparency notice that we published a few weeks ago, in December, laid out why the direct award was justified in this case, giving it to Palantir as a single-source contract and not making it available to more general competition. It was in our interests, the interests of the MoD and the interests of our country that we let that contract to Palantir to deliver the very special capabilities that it has.

[Lord Fox (LD)]

My Lords, leaving aside the nature of the ownership of Palantir and the questionable involvement of Peter Mandelson, we have another key concern. On the Government’s own admission, this is a strategic contract. It seems that only Palantir is in a position to deliver this, otherwise it would have been a contested commissioning. The Minister in the Commons has said that the data will remain under sovereign protection. However, the core competence of developing the ways of using that data for AI will rest with Palantir and will be embedded, as the Minister has said, with its proprietary systems and software. Does the Minister share my concern that this is outsourcing what should be a sovereign capability—not just owning the data but knowing how to use it? Does he recognise that we will be reliant for crucial AI expertise embedded across the defence industry on a single US supplier?

[Lord Coaker (Lab)]

I say to the noble Lord, who asks an important question with respect to this, that the UK defence data used and developed in Palantir’s software remains sovereign and under the control of the MoD. It resides in the United Kingdom. We have clear contractual controls in place to ensure that, as well as control over the data system that Palantir software sits upon. Any change from this cannot be conducted without the consent of the United Kingdom, so very real protections are in place to ensure that we can get the benefits from Palantir while protecting the data and information, so that we can allay the noble Lord’s concerns.