HC Deb 27 January 1987 vol 109 cc174-5
7. Mr. Campbell-Savours

asked the Secretary of State for Defence what is the projected outturn for defence procurement expenditure for 1986–87.

Mr. Archie Hamilton

The defence procurement Vote provides for expenditure in the current year of £8,762 million.

Mr. Campbell-Savours

In so far as the outturn figure includes expenditure on the Zircon project, and not wishing to push the Minister on any aspect of that matter which is classified, may I ask him to tell us how much has been spent on that project to date?

Mr. Hamilton

The House will not expect me to comment on that project. Any question that the hon. Gentleman wishes to ask would be better put in writing to my right hon. Friend.

Mr. Conway

Will my right hon. Friend tell me, in the light of his Department's contracts with Shrewsbury companies and their importance to our local economy and job provision, whether the Opposition have advised him of the so-called socially useful purposes to which the main battle tank engine production line at Perkins in Shrewsbury would be put, together with the DROPS ammunition project at Multilift — each of which provides a considerable number of jobs and much local income — if the Labour party's policy were put into operation?

Mr. Hamilton

My hon. Friend has put his finger on a difficult problem. I do not see how people involved in high technology industries will be able to switch to making relatively low technology products for the Third world.

Mr. Nicholas Brown

Does the Ministry intend to procure three frigates and one AOR next year?

Mr. Hamilton

We are permanently keeping our future purchases of ships under review.

Mr. Gale

Does my hon. Friend agree that, in seeking to save money by trying to replace Trident with Tomahawk, which appears to be one of the options that the alliance is dithering over at the moment, it would be replacing a proven system with an inadequate one, which would be both dangerous and disturbing to the NATO Alliance? Does he further agree that the time has come for the alliance leaders to own up and admit that they belong to a unilateralist party?

Mr. Hamilton

I could not agree more with my hon. Friend. Submarine-launched cruise missiles have grave difficulties, one of which is that they have to operate in shallow water. If they become detectable, they are less of a deterrent than something that has a larger area of ocean in which to operate.

Mr. D. E. Thomas

Is the Minister concerned about the regional balance of the procurement budget, and will he confirm that 50 per cent. of the budget is spent in the south-east of England, including London, and only 2 per cent. in Wales and 6 per cent. in Scotland?

Mr. Hamilton

I have to accept that there is a regional imbalance in defence expenditure. We are always looking at ways of righting that imbalance.

Mr. Robert B. Jones

Is my hon. Friend fully satisfied that that proportion of this outturn that is attributable to the Nimrod programme was spent on Nimrod and was not siphoned off to spend on other projects by GEC?

Mr. Hamilton

I would need notice to answer such a question and I invite my hon. Friend to put it in writing.

Mr. McNamara

As the Government's White Paper on expenditure forecasts a cut in defence expenditure of £1 billion over the next three years, will the Minister tell us which part of the equipment programme will be hit by that cut?

Mr. Hamilton

The procurement programme is always under review.

Mr. Forman

Does my hon. Friend's Department still estimate that there is a sizeable relative price effect which influences defence expenditure in the Ministry of Defence, and to what extent have his improved managerial systems within the Department led to some discernible economy?

Mr. Hamilton

We have been able to get a much larger percentage of our contracts on to a fixed price arrangement and this has led to great savings, which we estimate are not less than 5 per cent., and may be as much as 10 per cent., of the overall procurement budget. That goes some way towards offsetting the inevitable inflationary increases in defence equipment which are above the general level of inflation.