Better Defence Acquisition

Tom Greatrex Excerpts

Monday 10th June 2013 Commons Chamber

[Mr Hammond]

I am grateful to my hon. Friend. He knows me and he knows that I am a cautious person. This is a big and complicated project, and we are approaching it carefully. We are weighing up the options and taking the appropriate length of time to make the decisions, and I am confident that they will deliver the result that we require. He asks about our national sovereign capabilities. We have set out our approach to the defence industry in the White Paper “National Security Through Technology”. We have also set out today, in this White Paper, the proposed changes to single-source pricing regulation and how we expect to drive greater efficiency into the single-source part of the defence industry that delivers about half our requirements. Only by making those in that sector focus on reducing costs, which they currently have very little incentive to do, will we make them not only efficient providers to us but efficient and competitive players in the international defence export market. That is in the interests of the industry, the UK’s armed forces and UK plc.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

The Secretary of State referred to the freedom to recruit and reward staff with market rates as, I think, a “critical” freedom in the potential move to a GoCo. In that phased transfer, would any increased remuneration in bonus packages still come from the MOD baseline?

[Mr Hammond]

That depends. We would expect a GoCo contractor to inject a certain number of senior staff who would be part of its package and who would be remunerated through its incentivised fee. Within the overall DE&S work force, getting the right skills in the right places will be part of the task for the management contractor. In some cases, that will mean recruiting at market rates, because at the moment we are haemorrhaging talent. The Under-Secretary of State for Defence, my hon. Friend the Member for Ludlow (Mr Dunne), has just given me an example where we had nine applicants for 70 commercial posts that have recently been advertised. We have to address the haemorrhage of talent from DE&S by offering market rates if we are to support our armed forces as we need to.