Queen’s Speech

Lord Palmer of Childs Hill Excerpts

Wednesday 15th May 2013 Lords Chamber

[Lord Palmer of Childs Hill]

My Lords, we have heard excellent speeches today, covering so many areas not included in the gracious Speech. I will focus most of my remarks on the defence reform Bill, which is mentioned in the gracious Speech.

I welcome the Bill as it addresses the fundamental areas of defence that have needed urgent attention for some time. Although the detail is needed, at least it sends the signal that the coalition Government are serious about improving procurement. I trust that no noble Lord in this Chamber is calling for the status quo to be maintained where defence procurement is concerned, but that does not mean that we can leap straight into any particularly new model without careful scrutiny of the proposals, as the noble Baroness, Lady Dean, said so eloquently. One lesson from my experience of outsourcing is that a service that is badly run in-house is unlikely to be transformed overnight simply by letting a contract with the private sector for that service. My noble friend Lord Lee has set out many questions about the GOCO alternative and I am sure, in due course, that the Minister will reply to that book of questions, which were, I believe, asked from such a very positive stance that they need to be answered.

The Royal United Services Institute has rejected the GOCO idea as “undemocratic” and said it would put the power in the hands of defence contractors, on the basis that the MoD is not good at negotiating contracts with the private sector. The main question is whether the MoD should negotiate contracts with the private sector to negotiate on its behalf. I do not agree with the rejection of the proposals, but I have some questions. How will the contractors’ fees or commission be calculated? Would it be possible to keep some procurement in-house if the purchases were non-contentious, such as buying off the shelf? Why pay commission if it is so easy to purchase? Can the Minister make clear that the contractor will not itself be a defence contractor in any way? What safeguards will there be to avert conflicts of interest? How would a contractor be picked? Sadly, in this global world, many firms have connections which would make that conflict of interest quite difficult to avoid.

A newspaper has reported that Defence Equipment and Support consists of 16,000 civil servants. A couple of noble Lords have said that today. If this is true, a light-hearted observation at this time of night might be: how many members of MoD staff does it take to change a light-bulb? Sixteen thousand is a lot of people. My noble friend Lord Lee asked if this meant that we could not put our house in order. I am afraid that we do seem to be unable to put our house in order. If we were able to reduce this 16,000 down to, say, 1,000 to deal with the intelligent customer function, as is proposed, that model needs be looked at very carefully. There is also a MoD warehouse full of equipment and parts. What is the value of this stock, and should moves be made to sell off the items so as to realise the cash and save costs on the warehousing?

This debate has covered a number of subjects, including the Middle East. I do not want to dwell on it but will make one or two points on the Israel-Palestinian impasse. My noble friend Lord Alderdice very clearly put the case for a regional solution using the Arab peace process. That is certainly a way forward. But my point, which I have often made in this Chamber, is that peace is not possible, a Palestinian state is not possible and a secure Israel is not possible unless both parties come bilaterally to the negotiating table without any preconditions. If that happens, there may possibly be a state of Palestine and a more secure State of Israel, but if it does not, I guarantee that there will be no peace.

My noble friend Lord Ashdown made a very potent case about the treatment of the Afghan interpreters. I hope that my noble friend the Minister will take that forward in his answer. My noble friend Lord Ashdown also talked about whether we should lift the Syrian arms embargo, as did the noble Lord, Lord Dobbs. I agree with them that we should not supply more arms to Syria.

The noble Lord, Lord Ramsbotham, made an explosive intervention about Trident, which I heartily endorse, and I hope that my right honourable friend in the other place who is dealing with the review of whether there should be a like-for-like replacement for Trident will take those remarks, which were so well put, very much to heart.

My noble friend Lord Chidgey put a very potent case for food security, particularly in Africa, and other noble Lords have said the same. I hope that my noble friend the Minister can address that in his reply.

My noble friend Lord Sharkey and others talked about the 0.7% aid target, and a comment was just made about the fact that there was no need for legislation. We must all take pride that we have got to the 0.7% without any legislation, but I confirm to noble Lords that the Liberal Democrats are committed to putting this into law.

We hear discussion of the Ministry of Defence becoming a more intelligent consumer, but we must hear in concrete terms how this transformation is to take place. It has been promised many times over by different Administrations. Overall, I think many in your Lordships’ House believe that a deep change in MoD culture is needed, particularly in procurement, but we will need to be persuaded—and I hope we will be—that the GOCO proposals really are the answer to our procurement problems. We have heard today from sceptics about GOCO but I wonder what their solution would be. I am convinced that real change is needed and I hope that when my noble friend the Minister replies the fears expressed today can be addressed.

We heard from a number of noble Lords about Europe. During the passage of the defence reform Bill, I hope that we will value the pooling of resources within the European Union. European Union countries spend about €200 billion on defence. In these financially pressurised times, there are strong arguments for looking for opportunities for joint procurement. The recent paper Europe’s Strategic Cacophony says:

“Europe’s defence ambitions are crippled by the lack of a common strategic outlook”.

There are so many ways in which we must progress the reform of procurement and I hope that we will do that with the defence reform Bill when it comes from the other place.