HC Deb 02 June 1965 vol 713 cc1700-2
12. Mr. Marten

asked the Secretary of State for Defence what is the estimated cost in foreign currency over the next five years of United Kingdom defence purchases.

Mr. Healey

As I explained in my Answer on 28th April, it is not yet possible to make an estimate of the total cost in foreign currency for the years ahead. Purchases of equipment to which we are already committed will cost about £240 million in foreign currency during the next five years.

Mr. Marten

When the Secretary of State takes action to try to make further cuts in this expenditure will he bear in mind the fact that many hon. Members, including many hon. Gentlemen opposite, are becoming extremely concerned at the degree of dependence of this country on the United States aviation industry. Will he bear this in mind from the point of view of both our balance of payments and the defence of Britain?

Mr. Healey

Yes, Sir. This was one of the factors which we had in mind when we made the agreement with the French Government for the joint production of two military aircraft.

Mr. Soames

Would the right hon. Gentleman say what sales of military equipment there have been to offset against this expenditure of £240 million across the exchanges?

Mr. Healey

Yes, if the right hon. Gentleman will put down a Question.

Mr. Goodhew

How much foreign exchange expenditure has been committed on orders already placed, in addition to the £240 million which must be paid in the next five years?

Mr. Healey

I do not quite understand the point of that supplementary question. We have committed £240 million over the next five years and that is the extent of the commitment so far. It may well be that we shall take up further options permitted to us under various understandings. That will lead to increases, which I will give to the House in due time.

16. Mr. Dell

asked the Secretary of State for Defence what preference his Department gives in making purchases to suppliers with good export records.

Mr. Healey

None, Sir. Our general object is to find the cheapest equipment compatible with operational needs, so orders are normally placed, as a result of competitive tendering, with firms offering to meet the technical and delivery requirements at the most economical prices.

Mr. Dell

In view of the importance of exports to the nation, and the particular importance of covering the defence costs of my right hon. Friend's Department, especially those incurred across the exchanges, will my right hon. Friend see whether any use can be made of the very large purchasing power of his Department to encourage suppliers to press forward with exports to a greater extent than now?

Mr. Healey

Of course I will investigate it, but I think that my hon. Friend, with his deep knowledge of economics, would not wish me to buy more expensive equipment than I otherwise would for that purpose. Secondly, he will recognise that there could even be a danger to exports in this by diverting export production to the needs of the forces.

Mr. Thorpe

Is the Secretary of State aware that his reply was the expression of the purest free trade doctrine, which will get wide support from many quarters of the House?

Mr. Healey

If the hon. Member's agreeable words are followed by action in the Division Lobby, I think that all of us on this side will be grateful to him.

Sir C. Osborne

Would not the right hon. Gentleman agree that companies that will make good and acceptable goods for the home market will also make good and acceptable goods for the export market; and that it would be unwise to base his policy on export records when buying for his own Department?

Mr. Healey

That is another economic generalisation, and I am afraid that my confidence in persuading the hon. Gentleman to follow me into the Division Lobby is not sufficient to justify my agreeing to it.