Monday Volume 577 17 March 2014 No. 137 HOUSE OF COMMONS OFFICIAL REPORT PARLIAMENTARY DEBATES (HANSARD) Monday 17 March 2014 £5·00 © Parliamentary Copyright House of Commons 2014 This publication may be reproduced under the terms of the Open Parliament licence, which is published at www.parliament.uk/site-information/copyright/. 533 17 MARCH 2014 534 of new contracts is even greater with over a third of all House of Commons new contracts placed with SMEs in each of the last three years. Monday 17 March 2014 Mrs Madeleine Moon (Bridgend) (Lab): Devolved Administrations and their arm’s length agencies often The House met at half-past Two o’clock have very close relationships with their SME community. What discussions is the Ministry of Defence having with the devolved Administrations to make sure defence PRAYERS contractors based outside England also have an opportunity to bid? [MR SPEAKER in the Chair] Mr Dunne: Of course defence, and therefore defence procurement, is not a devolved matter and therefore the work the Ministry of Defence does is primarily with industries right across the country. I have undertaken Oral Answers to Questions events in Scotland and I am looking forward to an event in Wales in due course later this year. DEFENCE Angus Robertson (Moray) (SNP): May I wish you a very happy St Patrick’s day, Mr Speaker, and no doubt MOD Ministers will be pleased to put on record their The Secretary of State was asked— appreciation for the increasing co-operation with the Irish defence forces? Military Procurement In a parliamentary answer on 3 October 2011 the MOD admitted that out of 6,000 SME contracts with 1. Jesse Norman (Hereford and South Herefordshire) the MOD, only 50 contracts were in Scotland, which is (Con): What steps he is taking to support small contractors 0.83%, just under 10 times less than Scotland’s population in military procurement. [903043] share. When will the MOD answer my question on SME spending across the UK by region, which was The Parliamentary Under-Secretary of State for Defence tabled in January? (Mr Philip Dunne): I recognise that small businesses are an important source of innovation and flexibility in Mr Dunne: As I have said to the hon. Gentleman meeting defence and security requirements. I am determined previously, we do not believe it is relevant to look at the to help small and medium-sized enterprises access defence location of where we procure equipment. We want to opportunities, including standardising and simplifying procure the best equipment for our armed forces from our procurement systems. So from this month we are the best place. Scotland of course has a significant minimising the use of pre-qualification questionnaires share of much of our spending, not least through the and increasing use of standard contract templates for aircraft carrier contracts, which I saw for myself last low-risk requirements of under £100,000. week, and much of that defence work would be at risk We are regularly making progress on these and other were Scotland to vote yes in the referendum in September. SME initiatives, but we also need to inform the SME community that it is getting easier to do business with Defence Equipment and Support the Ministry of Defence, which is why we publish the SME action plan on the gov.uk website and why I am undertaking a series of regional visits to talk to SMEs, 2. Mrs Emma Lewell-Buck (South Shields) (Lab): such as the excellent event that my hon. Friend hosted What discussions he has had with the Chancellor of the in Hereford on 6 December 2013. Exchequer on staff pay and conditions in the new DE&S model. [903044] Jesse Norman: I very much thank my hon. Friend for that reply and for the extremely encouraging news that The Secretary of State for Defence (Mr Philip Hammond): he has described. There are a large number of specialist We have agreed with Treasury Ministers that Defence defence suppliers in my constituency in Herefordshire. Equipment and Support will be established as a bespoke They provide vital new technologies and training for the central Government trading entity from 1 April this troops, but they often face huge and apparently unnecessary year, with the necessary freedom to operate, including mark-ups and delays forced on them by the requirement freedom, within very broad limits, to set the pay and to be part of prime contracts. What can the MOD do to conditions of its civil service staff. help these companies compete more fairly? Mrs Lewell-Buck: I thank the Secretary of State for Mr Dunne: I agree with my hon. Friend that SMEs that response, but bearing in mind that bringing private have an important role to play across defence procurement, skills into Defence Equipment and Support is likely to but in particular in new technologies and in training. create a two-tier work force and, if handled badly, could That is why the Government are committed to increasing demoralise an already hollowed-out department, will the proportion of our annual spend on SMEs. Last year the Secretary of State update the House on what discussions that rose to 15% by value of all spend, with some he has had with employee representatives and trade £1 billion spent directly and £2 billion spent indirectly unions within Defence Equipment and Support regarding through larger prime contractors, but the proportion changes to employees’ pay and conditions? 535 Oral Answers17 MARCH 2014 Oral Answers 536 Mr Hammond: There have been discussions with the DE&S as a trading entity with freedoms and flexibilities trade unions and there will of course be further discussions to enter the marketplace and hire the people it needs to with the trade unions as DE&S-plus develops its pay do the job properly and effectively, we will ensure that model, but we do have to face the reality that this part outcome. of the public service is very much commercial-facing. It deals with commercial bodies and it interacts and exchanges Reserve Forces staff with commercial contractors, and we have to be able to pay competitive rates and we have to adopt 3. Sarah Newton (Truro and Falmouth) (Con): What competitive employment practices if we are to get the progress his Department has made on its planned best deal for the taxpayer and the best deal for our increase in the activity of reserves in Cornwall. [903046] armed forces. The Minister for the Armed Forces (Mr Mark Francois): Jack Lopresti (Filton and Bradley Stoke) (Con): Does I know my hon. Friend is concerned about the future of my right hon. Friend agree that reforming defence reserves in her constituency following the proposed procurement is a key step in driving better value for relocation of D company, 6th Rifles, and I welcome her money for the defence budget, and will he join me in strong interest in this issue on behalf of her constituents. paying tribute to the staff of DE&S in my constituency, I understand that my predecessor, my right hon. Friend especially those involved in the draw-down of kit and for South Leicestershire (Mr Robathan), gave her a equipment from Afghanistan? commitment that we would look closely at this decision, but that examination is not yet complete. Mr Hammond: The staff at DE&S at Abbey Wood perform an extraordinary range of functions and play a Sarah Newton: I thank my right hon. Friend for that vital part in this new whole-force concept. It is about response. We have had good news in Cornwall about how the armed forces work together, regulars and reserves, more RAF reservists being stationed at RAF St Mawgan, with civilian employees of the Ministry of Defence—whom but the continued uncertainty about the future of The I am happy to put on the record in the House today are Rifles in Cornwall is a major concern. People in Cornwall not pen-pushers, as some parts of our media would want to support their country and to have the opportunity have us believe, but vital components of our defence to serve as Army reservists. May I therefore urge my infrastructure. right hon. Friend to make a speedy, and the right, decision to enable people to serve from Truro? Alison Seabeck (Plymouth, Moor View) (Lab): The Secretary of State is ever the optimist, but he will know Mr Francois: I stress to my hon. Friend that we are that staff in DE&S and industry need certainty, and not closing the Truro Army Reserve centre, which will nothing in the changes to DE&S fits that description. remain the home of elements of both medical and His Department still has not confirmed the arrangements logistics units, as well as supporting local cadet forces in to bring the managed service providers into the business. any event. However, I do understand the strong historical He talked about the flexibilities and freedoms being attachment The Rifles have to Cornwall, so I hope to be broad—they are not in the public domain yet, and April able to give her a clear answer on this matter in the near is almost upon us. Is he not cutting it just a little fine? future. Mr Hammond: No. The contract notices for the Dan Jarvis (Barnsley Central) (Lab): Whether people procurement of the managed service providers will be are seeking to join the reserves in Cornwall or in any published shortly. We are finalising the terms of the other part of the country, everyone I talk to says it is memorandum of understanding between the Treasury still taking too long from the point at which they and the MOD, but the broad parameters have been express an interest in joining the reserves to the point at agreed.