Defence Reform Bill

Debate between Lord Rosser and Lord Roper

Wednesday 26th March 2014 Lords Chamber

[Lord Rosser]

I was talking about our view that Part 1 should be withdrawn and about what happened in Committee. The Government declined to withdraw Part 1. We felt, and still feel, that it should be deleted because it provides for an untested and untried major change in defence procurement which the Government do not now intend to introduce and for which they cannot and will not be able to produce any evidence that it will provide a better alternative at some time in the future than either the existing arrangements or, significantly, the further developed DE&S model, which is not even yet up and running. That will now be a matter for a future Government, if that future Government decide to proceed with the GOCO option.

In Committee, we also moved an amendment, which we regarded as very much second-best behind the withdrawal of Part 1, for a super-affirmative order which would be required to be passed by both Houses before Part 1 could be brought into force. We have included a similar amendment in the group that we are discussing. I do not intend to go through in detail the arguments that we put forward in Committee in support of the super-affirmative. They are recorded in the Hansard of the Committee stage. They set out in detail what the super-affirmative would provide for as set out in these amendments.

The super-affirmative order is not something novel. It has been used by this Government. They added the super-affirmative procedure to the recent Crime and Courts Act in respect of any future order made by the relevant Secretary of State to modify the functions of the National Crime Agency. That super-affirmative provision in the Crime and Courts Act requires the Secretary of State to consult the persons who would be affected by an order to modify the functions of the National Crime Agency and lays down minimum periods for consultation and subsequent scrutiny. It also requires the Secretary of State to have regard to any recommendations or representations made by Parliament during the scrutiny period with the subsequent option of laying a revised draft order. I again simply make the point that we are not talking about a minor change that might be made in the future on the basis of affirmative orders but about an untested and untried major change in defence procurement involving more than £10 billion of taxpayer expenditure each year.

The amendment that has been moved by the noble and gallant Lord, Lord Craig of Radley, is an improvement on the current provision in the Bill, and we heard from the Minister—if I understood him correctly—that he will come back with an amendment at Third Reading which will be in line with that moved by the noble and gallant Lord. However, while that amendment provides for a White Paper and an impact assessment, it does not provide for an independent assessment or the involvement of the Defence Select Committee prior to an affirmative order being considered. It thus appears not to provide any minimum timescale between the production of the White Paper and the impact statement for consultation and scrutiny before any vote in Parliament.

It is worth pointing out that government departments do not always produce adequate and appropriate information to support orders they place before Parliament. We had yet another example of this only last night in this Chamber in respect of a Home Office order. Your Lordships’ Secondary Legislation Scrutiny Committee had criticised the poor quality of documentation produced by the Home Office accompanying the order and had written to the Minister of State concerned to voice its detailed concerns. When the committee received the Minister of State’s reply, it found that letter equally disappointing and wrote in its report on the order being considered last night that,

“we found the letter to be no more convincing on the merits of the policy than the Explanatory Memorandum”.

Our super-affirmative would address those potential concerns about the quality of documentation as there is provision for independent assessment and the involvement of the Defence Select Committee.

I take note of the intervention by the Minister to indicate—if I can use the expression—the Government’s acceptance of the amendment in the sense that the Minister intends to come back with a government amendment which, as I understand it, will say either the same thing or much the same thing as the amendment tabled by the noble and gallant Lord, Lord Craig of Radley. Obviously we will want to look at the amendment that the Government table at Third Reading and determine whether to support it or whether to seek to amend it.

[Lord Roper (LD)]

My Lords, in view of the remarks made by my noble friend the Minister in his intervention in the speech of the noble and gallant Lord, Lord Craig, saying that he intends to accept the principle of Amendment 9, I can be a good deal briefer than I would otherwise have been. Broadly, I felt after the discussion in Committee and subsequent consideration—particularly after the discussions with Mr Dunne—that it would be very important to get in the Bill the assurances about the material that the Government would produce before a decision was made on the affirmative order. That, of course, was a government amendment that was introduced in Committee after representation from a number of us that a decision should be made by affirmative order and that one could not just use Part 1 of the Bill without any further parliamentary consideration.

I believe that the situation here is the right way for us to proceed. The super-affirmative procedure to which the noble Lord, Lord Rosser, has just referred was discussed in some detail in Committee, and I initially saw some advantage in having a mechanism whereby one could look at this more carefully. On further examination, I took to heart the Minister’s view that this was rather a heavy way of tackling the problem, and that it would be possible for Parliament to be properly informed so that the debate on the affirmative order could be effective and efficient with the sort of procedures that are in Amendment 9. I therefore believe that Amendments 10 and 11 are too elaborate and that the lighter proposal in Amendment 9 is the one that the House, in principle, ought to accept, although of course we will be doing that at Third Reading rather than today.

Defence Reform Bill

Debate between Lord Rosser and Lord Roper

Monday 3rd February 2014 Grand Committee

[Lord Rosser]

This group also contains Amendment 9. Amendment 7 addresses the issue of scrutiny and transparency over increases in the cost of defence contracts, whether entered into by the Secretary of State or a contractor acting on behalf of the Secretary of State. The second amendment provides for scrutiny of financial assistance given to a contractor by the Secretary of State under the terms of Clause 2.

The form of scrutiny provided for in the amendments is parliamentary, through reports to both Houses, and with two other requirements as set out. The Secretary of State would not be able to approve any adjustment of the total price provided for in the contract or provide financial assistance to a contractor unless the required reports had been laid.

With the responsibility for keeping within the original financial terms of the contract likely to become more remote from the Ministry of Defence and the Secretary of State if the provisions of Clause 1 are implemented, there is a need to be precise about what checks and controls will be in place and how Parliament will be kept advised and aware of increases in the cost of defence contracts. Likewise, with the Secretary of State being given power under the Bill to give financial assistance to a contractor on terms and conditions that the Secretary of State thinks appropriate, there is a need to be precise about what checks and controls will be in place over the use of that power and of taxpayers’ money, and how Parliament will be kept advised and aware of how and when the power is being used.

In that regard, perhaps the Minister could give some examples of the kind of circumstances in which this power for the Secretary of State to give financial assistance might be used and is intended under the terms of Clause 2. It would be helpful if the Minister could say whether the new DE&S organisation that will come in from April as a bespoke central government trading entity with greater private sector involvement and new freedoms and flexibilities will lead to any changes in the current arrangements for reporting on or dealing with any increases in the cost of defence contracts or changes in the role of the Secretary of State in that regard. I beg to move.

[Lord Roper]

My Lords, I would be grateful if my noble friend in replying to this debate could give us more information on why Clause 2 is necessary and what sort of financial assistance we are discussing here.