Defence Procurement

Debate between Jim Shannon and Douglas Carswell

Wednesday 13th January 2016 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Gentleman for giving way, and it is good to see the Minister in his place. I look forward to a very positive response from him, because we have discussed this matter before. The hon. Gentleman is right. Defence is very important to our economy in Northern Ireland, where it provides high-tech, skilled jobs for the workforce. It is important that defence procurement is equally shared across the whole United Kingdom of Great Britain and Northern Ireland, and that regions such as mine can receive the benefit. If that is done right, we all benefit.

[Mr Carswell]

The hon. Gentleman makes a powerful point. I have to say that I am a little nervous about looking at the defence budget through the prism of what it means for jobs. Clearly that is important, but the defence budget’s primary purpose is surely not to act as some sort of Keynesian demand stimulus for a regional economy, but to make sure that our armed forces have the equipment they need to defeat our enemies and keep us safe.

[Jim Shannon]

We already have established companies in Northern Ireland that deliver the best and give value for money. The point I am trying to make is that they could do more if defence procurement was regionally spread.

[Mr Carswell]

I agree. If we allocated the defence budget on the basis of value for money, I am sure companies in Northern Ireland would get an enhanced share. However, if we create a system where public money is allocated on the basis of something other than value for money, we open the door—the revolving door—to lobbying and all sorts of nefarious influences. Not only is that bad in itself, but it has negative consequences in terms of giving us value for money as part of what will, by definition, always be a finite budget.

Those in the defence establishment will claim that providing Britain’s defence protection base is a strategic industry, and of course our defence industry is a strategic industry. However, they seek to justify giving privileged contractors the privileges they get on the grounds that that maintains our defence industry and that it is critical to our national security. However, let us assess that argument a little further.

The idea that Britain is self-sufficient in defence production is a myth. We need to import defence equipment and materiel. We did so throughout the last century, and it is thanks to our ability to do so that we won wars we would not have otherwise won. In fact, during the Napoleonic wars, we imported materiel and equipment from overseas through Harwich, near my constituency, to ensure that we prevailed in that struggle. Not for centuries have we been entirely dependent for our defence on equipment produced exclusively on this island, and it would be naive to assume we ever could be.

Today, British defence manufacturers cannot produce equipment without international support. There are few systems anywhere—from mobile phones to jets to missiles—that can be built and manufactured without some sort of international trade. I would say that that is a good thing. International dependence and complex international supply chains are a good thing; apart from anything else, they help to keep the peace and to enhance international co-operation. However, many supposedly British procurement options, which are sold to politicians, civil servants and Ministers as the most British option, actually mean we end up being ever more dependent on other Governments.

Let us take the example of the RAF’s new transport plane—the Airbus A400M. It is partly manufactured in the UK, and a very good thing that is too—I do not denigrate that at all. But it has a shorter range, a lower top speed and a smaller payload than the comparable Boeing C-17 Globemaster, and it is considerably more expensive to boot. However, here is the really shocking thing: if we bought the C-17, we would need the support, compliance and good will of only one Government—the United States Government. But the A400M option requires the compliance and support of the Governments of France, Spain, Belgium, Germany and Turkey, as well as that of the United States. The supply chain is even more interdependent. Far from giving us so-called sovereignty of supply, the A400M is an example of procurement that is protectionist and, at the same time, makes us more dependent and less operationally sovereign.

Defence protectionism has also created a contractor cartel. In an attempt to prop up the defence industry, successive Governments have promoted the supply side and consolidated it. That has created what economists call—this is a rather clumsy term—a monsopoly, which is a monopoly of supply. That means that a limited number of suppliers, not the state, control the terms of trade. Britain is paying over the odds because a tiny group of producers sets the terms of trade.

Big business is not the only vested interest that distorts procurement, either. Perhaps inevitably there is inter-service rivalry, so that projects serve the interests of different sectors rather than the defence interest overall. We have unenforceable anti-lobbying rules, which mean that former defence personnel can pursue what I would regard as inappropriate contacts on behalf of clients, without censure. Protectionist policy and those various crony corporate vested interests are undermining our national security. They are preventing our nation state from being able to turn whatever fiscal power we have into military muscle. We are simply being less efficient than we ought to be. We need a procurement policy that puts the national interest first and allows us to convert the fiscal power that we have into the maximum possible military muscle.

A few weeks ago, the UK Independence party parliamentary resource unit published an excellent paper called “Rethinking Defence Procurement”, in which we set out some ideas and suggestions—I think they are rather sensible, soft suggestions—on what we can do to get things right. First we suggest that the default—though not the exclusive—approach should be to buy a weapons system off the shelf. I grant that there are some weapons systems that we need to make in-house; we need that capability. However, if we want the best value equipment possible we need to be prepared to buy off the shelf.

It would be perfectly possible for us as a nation state to build smartphones that would be manufactured exclusively in the United Kingdom. Probably, they would be the size of a brick, there would be a waiting list for them and they would run on clockwork. It makes much more sense for us to buy smartphones that are the result of international co-operation, with chips built in South Korea, design from California and software from India. International co-operation enables us to have smartphones with a higher level of technology for less cost every year. We should apply a similar principle to defence procurement. We might think of off-the-shelf procurement as being almost like urgent operational requirements—which I know the military rather like. In other words, the military can buy what it wants, from whom it wants. We can think of it as an urgent operational requirement, but without the guddle and the rush.

Secondly, we need to start consolidating not the supply side but the demand side. By working with our allies we could initiate joint procurement projects. That is not a case of our building and manufacturing things jointly; that would be a supply solution. Rather it would be a matter of putting in procurement bids collectively with our allies, ensuring that in many areas we would have a buyers’ market, where the buyers collectively could set the terms of trade. We could do that with a number of countries—not just European countries and NATO members but countries such as Australia and India. If they and we needed a weapons system, why not put in joint procurement bids with our Anglosphere allies? That would drive down prices and ensure both we and our allies got better value for money.

Thirdly, I would like Parliament to have real oversight of the procurement process. Instead of just reviewing the annual report from the Ministry of Defence, the Select Committee on Defence should be required to oversee and authorise major projects. We should take back as a Parliament the power to scrutinise what the Executive spend on our account. Specifically in relation to defence, the Defence Committee should be required to approve and sign off on particular large projects. That sort of oversight would ensure that there was genuine accountability on procurement.

Finally, anti-lobbying guidelines need to become law. I was delighted to hear my hon. Friend and neighbour the Member for Harwich and North Essex (Mr Jenkin), as Chair of the Public Administration Committee, making some suggestions about that the other day. I think that is exactly what we need to be prepared to introduce, to make sure that, yes, the expertise that exists in Government Departments can be shared with contractors, but that there are public records of those contacts and that where there is a revolving door there is some accountability to ensure that nothing untoward happens.

Britain needs a defence strategy that aims above all to keep our country safe. In an era of growing threats and constrained budgets, misspending is no longer a luxury that we can afford. We need real reform. I know that the Minister recognises the need to improve the way we spend our defence budget, and that he is a reformer. I also happen to know, too, that in his Department reformers do not always get an entirely easy ride. I look forward to hearing what changes he has in mind to improve things, and whether he will consider going further and recommending any of the measures I have outlined.

European Agenda on Migration

Debate between Jim Shannon and Douglas Carswell

Monday 14th December 2015 Commons Chamber

[Mr Douglas Carswell (Clacton) (UKIP)]

In noting these documents and discussing this text, we are being invited, in effect, to give our approval to a deal struck between the European Union and Turkey—a deal negotiated and signed without our input, involvement or ability to vote it down. We should not approve it. I tabled my own unselected alternative motion.

A few days ago, the EU announced what is, in effect, a four-part deal with Turkey. I see perfectly well what might be in it for Turkey, from whose point of view it is a very good deal. However, it is not in our national interest. First, the deal will give 75 million Turks visa-free, unrestricted access to the Schengen area from next October. We may not be part of Schengen, but that does affect us. There will be no mechanism to log people coming into the Schengen area and none to log people out. The deal can only add to the porousness of the EU’s frontiers, which can only contribute to the increase in numbers of those camped outside Calais seeking entry into the UK.

Secondly, the talks between the EU and Turkey mean that Turkish accession to the EU is back on the table. I would not wish joining the EU on anyone, certainly not a friend such as Turkey.

[Jim Shannon (Strangford) (DUP)]

I have some concern about Turkey’s abuse of religious minorities—Christians, and the Kurds in particular. We are now considering supporting its joining the EU. Why should we do that given that its human rights abuses are so terrible?

[Mr Carswell]

The hon. Gentleman makes an incredibly powerful point. We are sometimes made to deal with Turkey as an equal, yet it does not have the belief in equality within Turkey that we in the west—Europe and north America—hold so dear. That is a valid and powerful point.

Thirdly, as part of the deal between the EU and Turkey that we are being asked, in effect, to approve, the EU will give Turkey €3 billion a year, of which a hefty contribution will come from British taxpayers. But it is the fourth aspect of the deal outlined in these papers, under the euphemism of “migration management”, that I find most objectionable. Each year some 400,000 migrants from Turkey will be allowed to settle within Schengen. Of course, we are not in Schengen, but again the issue will affect us. Those 400,000 will be assigned to Schengen member states by quota. Once those 400,000 migrants per year have a right of abode in the EU, they will acquire with it the right to live anywhere within the EU.

Do we seriously imagine that those allocated to a high-unemployment, sclerotic Portugal or Italy will remain in those countries? No—within a short time those assigned to Portugal will have every right to come and live in Peckham and those assigned to live in Italy will have every right to move to Ipswich. This is a deal being signed up on our behalf and in our name with profound implications for us, and we have no say over it. We can expect many more thousands of migrants to find their way into this country as a direct consequence of this deal and many voters out there will deeply resent the fact that they have simply not been asked.

The Government motion talks about our need to work with our international partners. Indeed we must, but I ask Ministers to be a little more circumspect when we select those international partners. It is difficult to assess the spread of Sunni radicalism in Syria and the middle east as a push factor without also examining and bringing into the equation the effect of Saudi Arabia and its promotion of radical Wahhabism. The EU has imposed sanctions on Iran; it is a pity that the documents do not consider action against those in Saudi Arabia who also export radicalism. I cannot support the motion in front of us. I regret that even if the House objected and even if we rallied heroically through the Division Lobby to defeat the motion and voted down this tepid motion and its Minister, nothing would change. It would not matter a jot. We have signed away the right to reject a duff deal with Turkey made in our name, the consequences of which will be with us for yours to come. And here, in an empty Chamber, on a Monday evening, there is nothing we can do about it. This is how we are governed.