Oral Answers to Questions

Philip Dunne Excerpts

Monday 3rd February 2014 Commons Chamber

[Caroline Dinenage (Gosport) (Con)]

4. What steps he is taking to ensure that suppliers to his Department receive prompt payment.

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

We are encouraging our suppliers to accept payment through our new electronic bill paying system, and I am proud to confirm to my hon. Friend that the Ministry of Defence paid 92% of correctly submitted invoices within five working days in the last financial year. We have identified that the majority of the less than 1% of late payments made by the MOD were a result of incorrectly submitted invoices, such as those submitted on order rather than after product delivery. All correctly submitted invoices were paid within 30 days in 2012-13.

[Caroline Dinenage]

Prompt payments are particularly crucial for small businesses that can face severe cash-flow problems without them. Will the Minister assure the House that he is doing all he can to ensure that small businesses are paid on time?

[Mr Dunne]

This Department, under this Government, is well aware of the benefits of prompt payment and the importance of cash flow to SMEs. That is why not only are we paying our suppliers on time, we are also encouraging them to pay their subcontractors within 30 days of receipt of a valid invoice.

When this issue was raised in November I inadvertently misled the House and I would like to put the record straight. I informed the House that the Ministry of Defence had incurred a single late-payment penalty on only one invoice out of some 4 million. It has now come to my attention that in fact we paid almost 5 million invoices last year—a penalty payment rate of 0.00002%.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

It would be churlish of Labour Members not to acknowledge the good work that MOD officials in particular have been doing, not least because they are protecting a supply chain that often produces extremely specialist products. What discussions is the Minister having with small and medium-sized businesses that may be affected by the reported 20% efficiency savings sought in the support contracts about the way that prime contractors may pass that 20% down the line to protect their own losses? Getting paid on time is one thing, but losing one’s business is another.

[Mr Dunne]

I am glad the hon. Lady asked me to comment on that. We are engaged across the supply chain in seeking to extract maximum efficiencies for the taxpayer from MOD procurement. I am engaged in SME conferences with the defence industry right across the country. Indeed, I intend to come to Plymouth in the not-too-distant future, and the hon. Lady may like to join me.

[Roger Williams (Brecon and Radnorshire) (LD)]

5. What his future plans are for the defence estate in Wales; and if he will make a statement.

--- Later in debate ---

[Jason McCartney (Colne Valley) (Con)]

T3. With one of my local engineering businesses having been awarded the design contract for the Type 26 global combat ship, please can my right hon. Friend update me on the progress of this project?

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

I thank my hon. Friend for giving me this opportunity to confirm that the current contest for the design for the Type 26 has been won by BAE Systems but it is in its assessment phase and all contracts that have been placed thus far are to enable BAE Systems as prime contractor to refine its pricing so that when the entire design is mature we will be able to place a main-gate contract, which we hope to be able to do by the end of this year.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

T9. Will the Minister update the House on what progress the Department is making in incorporating UN Security Council resolution 1325 on women, peace and security into the training and education of our armed forces?

[Duncan Hames (Chippenham) (LD)]

T5. Employees of Defence Equipment and Support who are resident in the Chippenham constituency are watching closely to see what the latest reforms of that organisation will mean for them. Will the Minister give them his assurance that those organisational changes will not put their jobs at risk?

[Mr Dunne]

Our proposal to stand up the DE&S as a bespoke trading entity with effect from 1 April are proceeding apace, and I can tell the hon. Gentleman that there are currently some 800 vacancies among the 9,500 posts in DE&S involved in defence acquisition, as my right hon. Friend the Secretary of State told the Defence Select Committee the other day. The prospects for skilled employees in the hon. Gentleman’s constituency and adjacent constituencies are therefore extremely good.

[Mr William Bain (Glasgow North East) (Lab)]

Does the Secretary of State welcome the terms of the agreement reached in Brussels last month on greater European defence co-operation, including completing the single market in the sale of military equipment? What does he think would happen to jobs in our defence manufacturing industries if Britain were to sleepwalk out of the European Union—a proposition that he has agreed with in the past?

--- Later in debate ---

[Julie Hilling (Bolton West) (Lab)]

While the Government are making cuts to the armed forces, how can they justify spending £66 million on consultants? Is it true that much of that £66 million was spent on the Secretary of State’s failed GoCo procurement? Will he be asking for the money back?

[Mr Dunne]

I am interested that the hon. Lady has given us an opportunity to highlight the amount of money that was spent on external consultants under the previous Administration. While this Government have undertaken transformational change in this Parliament and spent £45 million last year on external specialist advice, the previous Government did no transformation in defence and spent £120 million in 2007-08.

[Dr Julian Lewis (New Forest East) (Con)]

May we acclaim the fact that Members of both the Conservative and Labour Front Benches are vying to show which party is the more committed to the successor Trident nuclear system? Is the Secretary of State aware that an analyst at the normally sensible Royal United Services Institute defence think-tank has suggested that even an inactive fleet of submarines can help deter actors from seriously threatening the UK? Does he agree that to adopt such a dangerously destabilising posture would not even save any significant money at all?

--- Later in debate ---

[Alex Cunningham (Stockton North) (Lab)]

How many staff at Defence Equipment and Support have been made redundant and received pay-offs only to be re-employed on a consultancy basis a very short time later? How will that affect the new pay structures that the Secretary of State is planning to adopt there?

[Mr Dunne]

Close to 2,000 people from DE&S took voluntary redundancy under two tranches in 2012. There are a number of vacancies, as I have already said to the hon. Gentleman. A total of seven individuals have been rehired into DE&S who subsequently applied either for lower grade posts or who have upskilled in the meantime.

[Several hon. Members]

rose—