HC Deb 26 June 1984 vol 62 cc790-2
2. Mr. Ray Powell

asked the Secretary of State for Defence if he has had to revise the costs of Trident since the publication of the defence Estimates.

12. Mr. Allan Roberts

asked the Secretary of State for Defence if, since the publication of the defence Estimates, there has been any change in circumstances that require the revision of cost estimates for the Trident programme.

15. Mr. Ernie Ross

asked the Secretary of State for Defence if, since the publication of the defence Estimates, there has been any change in circumstances that requires the revision of cost estimates for the Trident programme.

The Secretary of State for Defence (Mr. Michael Heseltine)

The estimate, 'which I announced in March, of £8.729 million is that which, by convention, was used for this year's re-costing of the defence programme. The estimate will be reviewed in the context of the 1985 long-term costings and I will announce the revised figure to Parliament next spring. Since I made my announcement in March there have been movements in the assumptions in both directions.

Mr. Powell

Does the Secretary of State agree with the first report of the Defence Select Committee, which says at paragraph 41 that a more realistic Trident estimate is around £9,400 million at 1984 prices? Will he give his views of paragraph 13, which says that an effective space-based anti-ballistic missile system could negate what we have in mind to do with Trident?

Mr. Heseltine

A space-based anti-ballistic missile system is still very much a research project. Nobody knows whether it is technically achievable or whether it will enter service, and we cannot build a defence strategy on those hypotheses. I have read the views of the Select Committee. It took into account the changing exchange rates. That was a matter of fact, although one cannot know what the exchange rate will be on the next update or during the rest of the life of the Trident programme. I shall stick to the precedents when I revise the defence Estimates which I make available to the House.

Mr. Roberts

When the right hon. Gentleman was Secretary of State for the Environment he forced local government always to have regard to the revenue consequences of any capital expenditure. Does he agree that the running costs of the Trident system might be about £120 million—similar to the estimates for Polaris—or will it be more? Does that not put the cost of Trident up to £12 billion?

Mr. Heseltine

The estimates that I have sought and given are the capital costs through the life of the Trident programme. There are associated running costs, but if the hon. Gentleman's figure is right, seen against the background of a defence budget of about £17 billion, it shows what an even better bargain it is than we thought.

Mr. Ross

Is the Secretary of State happy with the fact that only £4.6 million of the contracts on Trident will be awarded to British companies? What is he doing to ensure that 45 per cent. only of the contracts are allocated to firms in the United States?

Mr. Heseltine

The hon. Gentleman raises an important point. We have secured from the Americans an agreement that British companies will be free in many cases to tender for parts of the programme, which is 45 per cent. American procured. I must make the important caveat that, as this is an established and continuing programme, it is relatively difficult for outside contractors to break in to such an existing set of arrangements.

Mr. Robert Atkins

When considering the effect of Trident, if any, on the rest of the procurement budget, will my right hon. Friend give special attention to the European fighter aircraft, bearing in mind that about 50 technicians from the design department of British Aerospace have already left this year? They are anxious about Trident and would welcome my right hon. Friend's reassurance that it will not have an effect on the procurement programme.

Mr. Heseltine

I know of my hon. Friend's concern in these matters. That is why it is important to point out that the average cost of Trident is probably one sixth of the increase in the defence budget for which the Government have been responsible.

Mr. Forth

Will my right hon. Friend confirm that much of the excitement about the cost of Trident that has been generated in some quarters is misplaced because, as a proportion of the defence budget, it is, if anything, less than the Tornado programme in its day?

Mr. Heseltine

My hon. Friend is right to make that important point. Perhaps an even more relevant example is the fact that the Labour party managed to modernise the existing Polaris system with the Chevaline process. The cost of Chevaline more than doubled in real terms during Labour's tenure of office, and Labour forgot to tell the House either of the programme or of the increased costs.

Mr. Ashdown

The Secretary of State will recall that in last week's defence debate the Parliamentary Under-Secretary of State for Defence Procurement said that while the unit costs of cruise missiles were lower, an independent deterrent based on cruise missiles and delivering the same number of warheads as Trident would prove more expensive. How can he expect the House to accept those figures when he will not say how many warheads Trident is planned to have?

Mr. Heseltine

The hon. Gentleman will be aware that we have not yet reached a decision on the number of warheads that Trident is to have. That is something to which the Government must address themselves, and they will. However, I wish that the party for which he speaks and the party associated with it would make up their minds about whether they want us to have an independent nuclear deterrent. If so, I wish they would say when they thought that a decision was necessary and then tell us what they would do in place of taking it.

Mr. Walden

Does my right hon. Friend agree that, because of their position on Trident, both the Labour Opposition and the alliance—or perhaps part of it—are being driven into the absurd position where they are the only people asking Britain to spend more on defence irrespective of our needs or resources vis-a-vis the Health Service or education, and irrespective of value for money?

Mr. Heseltine

If I understood my hon. Friend, I think that I must remind him that the principal Opposition party has passed a conference resolution threatening to reduce conventional defence expenditure by about a third.

Mr. McNamara

Will the Secretary of State refer back to one of his earlier comments about the Select Committee, namely, that if the "star wars" concept takes place, and it very much looks as if it will, it will negate the need—indeed, the purpose—of Trident? When will we know, and when does the Secretary of State expect to know, at what point in the development of Trident he will have to come to a decision on whether to go ahead or negate it?

Mr. Heseltine

The hon. Gentleman is fully aware that the Government have taken the decision to go ahead with the Trident programme. We are committed to that, we have expended money in furtherance of it, and we intend to see the policy through. He is perfectly correct to ask about the hypothetical circumstances relating to the Trident programme and the "star wars" concept. It is not possible for us to take certain decisions now on the hypothesis of certain developments which may or may not take place, and the timing of which we cannot possibly foresee.