My Lords, I thank the Minister for presenting the regulations. Part 2 of the 2014 Act and the subsequent Single Source Contract Regulations 2014 are supported by these Benches. Unfortunately, I have lived through every bit of their creation and evolution. The key thing is: are they effective? The way to judge their effectiveness is, first, to understand the mechanisms, which the Minister has been invited to expand on, and, secondly, to look at how extensive
they are. Does the Minister have at hand how much is being spent on equipment and infrastructure in a typical year, say, 2017-18? How much of that is single sourced? I believe the answer is nearly half. What proportion—and this is the key issue—are qualifying defence contracts? I wonder if he has similar figures for contracts with BAE.
The Explanatory Memorandum says that three of the five categories are “working well”, meaning that they describe the exclusions clearly. Two relate to land, I believe, and the third to government-procured equipment. Three are new or modified. The first, Regulation 7(b), is where there is international co-operation. The modification is that there should not be an exclusion if all parties agree. I have great trouble working out why parties would want to agree, because the mechanism is designed to give the Government, the SSRO, the MoD or whoever a better understanding of what is happening in the contract, giving them rights to challenge the suppliers. Why would anybody want to agree to this? Have any firms actually agreed to this?
The second modification relates to “intelligence activities”. This is clearly a case of unintended consequences because all intelligence activities are currently excluded. This turns it on its head to require only those contracts that are a risk to national security to be automatically excluded. Paragraph 7.9, I think, of the Explanatory Memorandum effectively defines “risk to national security”; that is, reports that would normally be required by the SSRO would contain information above a certain security level. Am I right in that understanding? Am I right that the key test will be the security level of the information that the SSRO would naturally demand if they became qualifying contracts? Otherwise, how is national security defined and who defines it?
The final modification relates to what one might loosely describe as novation. That does not give me any pain at all.
The key question about the modifications is: how many more, or what greater proportion of, single-source contracts will be brought into the ambit of the Single Source Regulations Office by these changes? Will the number be trivial or substantial? My final question relating to the order is: when will the MoD respond to the other SSRO recommendations?
Lastly, I have a question that is completely out of order. I point out to the Minister that the NATO summit is, I think, on Wednesday and Thursday. Will he give some indication of when he will give an overview of the defence modernisation programme promised before the NATO summit?