Oral Answers to Questions

Debate between Huw Irranca-Davies and Philip Dunne

Monday 20th October 2014 Commons Chamber

[Huw Irranca-Davies (Ogmore) (Lab)]

When awarding defence procurement contracts, large or small, what levers do Ministers have to ensure that supply chain economic multipliers are maximised, particularly in areas such as south Wales that give so much in other ways to our armed forces?

[Mr Dunne]

As my right hon. Friend the Defence Secretary told the House in answer to an earlier question, the contract to award the Scout armoured vehicle is the largest single contract that has been placed under this Government since 2010, or to the British Army for 30 years. The Ministry’s job is to get the best deal with the prime contractor, and it is down to the prime contractor to secure the best supply chain.

Oral Answers to Questions

Debate between Huw Irranca-Davies and Philip Dunne

Monday 4th November 2013 Commons Chamber

[Huw Irranca-Davies (Ogmore) (Lab)]

2. What assessment he has made of the level of contracting by his Department with small and medium-sized enterprises; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

As I have said in the House before, the Government understand the significance of SMEs to the United Kingdom’s economy. The Ministry of Defence is playing its part in increasing the number of opportunities for SMEs to contribute to defence, both as direct suppliers and as subcontractors on major programmes. We recently published details of the MOD spend for 2012-13. Some £1.1 billion was spent directly with 12,000 SMEs. During that year, 10% of all new contracts by value and 36% by number were placed with more than 1,000 SMEs.

[Huw Irranca-Davies]

Jobs in the supply chain are vital to constituencies such as Ogmore, but I understand that last year the MOD was fined £21,000 for making late payments to suppliers. The new contracts and direct payments that were promised by Ministers have not materialised. Can the Minister explain to SMEs in the supply chain in Ogmore and throughout the United Kingdom why the Government’s actions do not match their rhetoric?

[Mr Dunne]

I am very glad that the hon. Gentleman has chosen to light on the single late payment penalty that the MOD suffered in just one of the 4 million transactions that took place in 2012-13. It involved a company that was not based in Ogmore, not based in Wales, and not based anywhere else in the United Kingdom. It was for late payment for aviation fuel sent by a supplier to our base in Akrotiri in Cyprus, with an invoice from a Greek company in Corinth, over the Christmas holidays. The Ministry of Defence pays 92% of its bills within five days, and has a better record in that regard than any other Department.

--- Later in debate ---

[Huw Irranca-Davies (Ogmore) (Lab)]

The Minister’s earlier response to me was shockingly complacent and refused, notably, to deal with new contracts and the failure to roll out direct payments, as the Government said they would. Will he respond to my constituents who run small and medium-sized enterprises that supply the MOD? They said:

“The MOD remains as inefficient as ever…Their commercial support is lacking and things take for ever to finalise…The MOD is in a mess in some areas we deal with.”

[Mr Dunne]

I am sorry that I disappointed the hon. Gentleman, who had clearly got his facts wrong when he stood up the first time. This Ministry pays 92% of bills within five days, and we make arrangements specifically for small and medium-sized companies to make part payments to assist them with their cash flow. I would be happy for the hon. Gentleman to write to me if he has any other specific evidence to substantiate his claim.