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Defence Procurement

I thank the hon. Gentleman; if I am looking for speakers to support me I might consider inviting him—although, given the Conservatives' record in Scotland, I might hold back from doing so. However, I take his comments in the spirit in which he intended them. We will have a robust discussion in Scotland about whether the Scottish nationalist-led Scottish Executive are prepared to put the necessary money into training to ensure that industries such as defence, which depends on the UK Government for its orders, is adequately staffed and provided for. That will be one of the most important political debates in Scotland over the next year or so, and I intend to participate in it. I have done all that I can to ensure that my constituents are aware that the placing of the orders for the aircraft carriers has come about as a result of Scotland's membership of the United Kingdom. My constituents are under no illusions. If there were an independent Scottish navy, it would not be ordering two aircraft carriers on its own. Let me return to the thrust of my remarks. The MOD has been working constructively and positively with the shipbuilding industry to try to provide a degree of forward planning to ensure that we avoid the peaks and troughs of demand that have caused such havoc in the lives of many of that industry's work force, who have had to be repeatedly laid off and then rehired. When skilled staff in industries such as shipbuilding get laid off, many of them find other jobs and never return. We cannot simply turn such a labour force on and off like a tap. Given that context, I particularly welcome the Government's commitment in principle that the peaks and troughs in the shipbuilding orders for the frigates and aircraft carriers will be evened out by sequencing the placement of the MARS programme—the military afloat reach and sustainability fleet tanker programme—and making sure that it meshes in. I was therefore extremely concerned when representatives of the industry informed me that the MARS commercial manager recently wrote to a number of suppliers suggesting that it was the Government's intention that the fleet tanker programme should be progressed under the EC public procurement regulations. If that were to happen, and if the competition for the fleet tankers were to be open to European companies, it would presumably go to the lowest bidder, and therefore the opportunity that we have to adjust the timing of the flow of work through the shipyards to take account of peaks and troughs would be lost. We ought at the very least to delay that until the forthcoming MARS industry day has taken place on 24 October. In the longer term, we should delay the programme until such time as we are able to ascertain exactly what the shipyards' flow of work under the aircraft carrier order will be. As I understand it, simply to issue an advert for the procurement process through the Official Journal of the European Union would commit us to that process at an early stage. We would not then be able to claw it back. I hope that the Minister can clarify an issue for me in this debate, or subsequently by letter; I am not clear about it at the moment. Does the requirement to conduct the programme under EC regulations stem from an assessment by the Ministry of Defence that the vessels are outside the scope of war-like equipments that can be exempted from the EU procurement process under article 296 of the treaties that established the European Union? In the past, we have argued that, in some circumstances, vessels should be designated ““grey ships”” and therefore not have to go down the open procurement route. Given what the specification for the ships is likely to be, it is my view that they clearly fall under that exemption and that the MOD is therefore not required to go for open procurement. As I understand it, the range of military capabilities and standards detailed in article 296 is substantial. There is a classification against Lloyd's register naval ship rules, rather than merchant ship rules. There is a specification about naval helicopter operating, support and maintenance facilities and one in respect of secure military communications systems, which will be in the contract. There will also have to be naval-replenishment-at-sea equipment, and firefighting and security arrangements that exceed merchant navy practice. Similarly, there will have to be manoeuvring, stability and sea-keeping requirements in excess of merchant standards. All that makes me believe that it is not necessary for the MOD to go to European open procurement. Also involved will be the ability to transit out of nuclear, biological and chemical contamination areas, having survivability, vulnerability and shock standards in excess of commercial standards and having operating patterns with warships. Such patterns would inevitably put the vessels in harm's way. In such circumstances, how can the MOD say that those are not military ships and are eligible to be put out for open procurement? I want the Minister to be clear about whether the MOD has thought through what the consequences of such open ordering might be. If the prime contract were won by a foreign supplier, it is entirely likely that that supplier would use its own supply chain. That would cut directly across the MOD programme to develop British supply chains in shipbuilding and elsewhere. I find it difficult to believe that the MOD would draw up a specification that gave the prime contracting role to a foreign supplier, yet not allow that supplier to choose its own sub-suppliers. If the supply chain were dictated from the United Kingdom, that would be a recipe for chaos, with a different prime supplier not using its normal supply routes. I hope that the Ministry of Defence and the Minister will consider the whole issue again. Finally, on behalf of the trade union movement in the yards of my constituency and elsewhere, I pay tribute to the excellent work that Lord Drayson has done. He has established a relationship with the trade unions far better than those of many of his predecessors, largely because he has been consistently open and straightforward with them. They genuinely believe that they can trust him; it has to be said that they are not always happy with what he tells them, but they have always accepted that he is simply giving it to them straight. Similarly, I have found him to be somebody with whom it is a pleasure to deal. As many Members know, when it comes to reform of the House of Lords, I am in favour of the ““one Lord, one lamp post”” solution. However, I want it made clear that that would not all happen simultaneously and would be done in tranches. Lord Drayson would certainly be towards the end of that queue. I hope that the Minister will be able to give me satisfaction on the points that I have made, if not today, then subsequently in writing.