Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Douglas Carswell

Monday 16th December 2013 Commons Chamber

[Mr Philip Hammond]

First, a collision warning system on the Typhoon is currently under test and if that test is successful, we would expect to roll it out. The Typhoon is a platform with a very long life ahead of it. There is also now a plan to install collision warning equipment on Tornados. The hon. Gentleman has raised this issue in the House before in relation to the very regrettable Tornado accident in his constituency in July 2012, and I have, in consequence, looked at whether, if the original procurement had gone ahead, we would have expected that equipment to have been installed on Tornados by the time that accident occurred. The answer is that we would not have expected it to be installed by that stage.

[Mr Douglas Carswell (Clacton) (Con)]

My right hon. Friend has done some sterling work to make sure that we get much better value for money from the defence budget. What role does off-the-shelf procurement have to play in that and what steps is my right hon. Friend taking to make sure that it becomes more of a default approach?

[Mr Hammond]

We have been clear that there are some areas where we need to protect UK sovereign capabilities for reasons of strategic advantage or in order to protect strategically important industrial capabilities. In all other areas we will look to procure in the way that is most effective for delivering defence.

Better Defence Acquisition

Debate between Lord Hammond of Runnymede and Douglas Carswell

Monday 10th June 2013 Commons Chamber

[Mr Hammond]

The hon. Gentleman is being a little harsh: most if not all of the elected and appointed people with whom I have come into contact do their very best to deliver in the public interest. We have a rigorous set of rules in place to deal with the cross-boundary issues between the public and private sectors. We must never get into a situation where we prevent or discourage all transfer between the public and private sectors. That would be a disaster. We need that flow of lifeblood between the two, but we need it to be done properly: it has to be properly regulated and transparent.

To answer the hon. Gentleman’s specific question, when The Sunday Times published revelations last year about people who had gone from senior military roles into defence industries, I asked the same question as he has and the advice I received was that it would not be lawful to issue an unlimited ban preventing people from taking up one career once they had left another.

[Mr Douglas Carswell (Clacton) (Con)]

For decades, much of the defence budget has been spent in the interests of defence contractors: by constraining the range of suppliers, the seller gets to set the terms of trade. How will these reforms ensure more choice and competition in defence procurement?

[Mr Hammond]

I am sorry to say that where there is a single supplier or a national security reason for our having to procure in the UK, we cannot magic up a competitive marketplace. What we can do in such circumstances is control the pricing of those contracts. At the moment, under the current regime, profit is clearly controlled but costs are not, and there is no incentive for contractors to control and manage their costs. What we are proposing is a regime where, as now, profit is controlled but where there are clear financial incentives for contractors to control their costs and get them down. By working in this way—by aligning the interests of defence with those of the contractors—we will drive out cost and increase the amount of deliverable military capability to our armed forces.