HC Deb 27 April 1966 vol 727 cc687-9
24. Mr. Sheldon

asked the Secretary of State for Defence what sales of British equipment are being made to offset the foreign exchange cost of the F111A.

26. Mr. Goodhart

asked the Secretary of State for Defence what is the value of purchases of British defence equipment which have been made by the United States Department of Defence since 1st January, 1966.

34. Mr. Fisher

asked the Secretary of State for Defence what orders for British defence equipment have been placed by the United States of America, or are in prospect, since the F111As were ordered from the United States of America; and what collaborative sales with the United States of America have been achieved.

Mr. Healey

Details of a number of items of British defence equipment have been sent to the United States Department of Defence, some "invitations for bid" have been received and the first bids will be made tomorrow. No further proposals for collaborative sales have yet been made.

Mr. Sheldon

Is my right hon. Friend aware that the economic burden of our east of Suez rôle is being increasingly questioned by hon. Members on this side of the House? The purchase of the F111A is entirely devoted to the east of Suez rôle. While the expenditure may be extremely large, many of us feel thankful that the foreign exchange part of it is to be met, but we shall be watching this point very closely.

Mr. Healey

I do not know whether to be wholly grateful to my hon. Friend for what he said. I am grateful for what he said in the second part of his question. As for the first part, had he been present at the debate yesterday he would know that there are very sound reasons, accepted by the vast majority on both sides of the House, for continuing a British military capability outside Europe.

Mr. Goodhart

Can the right hon. Gentleman now deny the report that part of our defence contract with Saudi Arabia is included in the offset agreement on the F111A? Can he say what is the target for dollar sales in America on defence weapons for this first year?

Mr. Healey

We fixed a target for the 10-year period during which we shall be paying for the F111A. No substantial dollar payments will be made for the F111A for at least four years, and for this reason we have made no fixed annual target.

Mr. Speaker

Mr. Nigel Fisher.

Several Hon. Members rose

—

Mr. Speaker

I called the hon. Member for Surbiton (Mr. Fisher).

Mr. Fisher

Did not the right hon. Gentleman always justify the replacement of the TSR2 by the F111A on the ground that we should offset this very heavy dollar expenditure by selling a considerable amount of British defence equipment to the United States? Has he any comment on a report about a non-collaborative sale of 36 American aeroplanes to Jordan? Has he not wrecked the British aircraft industry without getting very much in exchange?

Mr. Healey

We always justified the purchase of the F111A rather than the TSR2 on the ground that it would save this country about £600 million. In addition, unlike any previous Government, we have arranged to offset the cost of the F111A purchase by arrangements for the sale of British products to the United States or British products to third countries with assistance from the United States. This is a precedent unique in British history and I should have expected hon. Members opposite to welcome it if they had any interest in the future of the British economy.

Mr. Powell

Will the right hon. Gentleman or his right hon. Friend the Minister of Aviation make a personal statement to the House explaining the circumstances in which they came to mislead the House by concealing the material fact that the value of the Saudi Arabian deal was included in the offset arrangements on the F111A?

Mr. Healey

There has been no attempt whatever to mislead the House on this—none at all. We agreed when we made the F111A deal that we should include the Saudi purchase arrangements, which had not then been concluded, in that part of the offset arrangements which related to sales to third countries. When the original negotiations were undertaken and the Americans originally undertook to stand aside, the F111A agreement had not been concluded, and the original American intention was not dependent on its conclusion.

Sir J. Eden

The right hon. Gentleman's answer completely contradicts what was said earlier in the House by other Ministers. If that is not deception, what is? In any case, why was it necessary to bring into this matter the Saudi Arabian deal, negotiations for which had been begun many years ago, and which had nothing whatever to do with the purchase of the F111A? To bring it into part of the offset arrangements at this stage is a shameless piece of deception.

Mr. Healey

I think that if the hon. Member takes the trouble to read what I said he will be less excited tomorrow than he was this afternoon. Negotiations for such sales were initiated under the previous Government. Like so many things which the previous Government initiated, they failed to bring them to a successful conclusion. We have done so—and that is the difference.

Several Hon. Members rose

—

Mr. Speaker

Order. Questions must be questions and not statements.

Sir J. Eden

I beg to give notice that we shall press this matter further at the earliest possible opportunity.