HC Deb 03 August 1966 vol 733 cc446-8
15. Mr. Dodds-Parker

asked the Secretary of State for Defence what sales have now been successfully negotiated to offset the purchase of F111 aircraft from the United States of America.

54. Mr. Goodhart

asked the Secretary of State for Defence what sales of arms have now been concluded with the United States of America in order to offset the cost of purchasing F111A aircraft from the United States of America.

Mr. Healey

No sales have yet been concluded, but I am pleased to inform the House that in addition to the items I mentioned in my reply to the hon. Member for Gillingham (Mr. Burden) on 18th July, we have now heard that the British bid for an ocean-going salvage tug was the lowest when the bids were opened on 21st July. British bids for two items of aircraft electronic equipment were also the lowest. These bids are now being evaluated by the United States Department of Defense and we hope to hear that we are getting the orders during this month. Their value would be about 24 million dollars. Hon. Members will also be aware of the prospect that Rolls-Royce will reach agreement with Allisons on the supply of Spey engines for the A7. The value of this is expected to be about 100 million dollars.

Mr. Dodds-Parker

What action has the right hon. Gentleman taken to make inquiries beyond the defence departments of the United States Government to see whether procurement can be made through other agencies, such as hospitals, police forces and so on, of equipment which the United States Government and its agents buy?

Mr. Healey

That is not a matter for me, but, as I have made clear to the House, under the offset agreement with the United States we are identifying items of equipment, not only arms and military equipment directly, but also general supplies for military purposes, and some supplies of the nature which the hon. Gentleman has mentioned will no doubt arise under that head.

Mr. Goodhart

The right hon. Gentleman referred to the possible order for Spey engines. If it is wrong to sell bombs to the United States, why is it not wrong to sell engines which fly the aircraft which drop the bombs?

Mr. Healey

I think that many hon. Members would feel that, rather than attempt to make mischief between Britain and the United States, hon. and right hon. Gentlemen opposite might do their duty better by expressing some pleasure at the fact that Her Majesty's Government have enabled British firms to win contracts to a value of about 125 million dollars worth of foreign exchange.

Mr. Ronald Atkins

Would my right hon. Friend consider selling back Polaris as part of the offset agreement as it was retained in the first place because we had already ordered it, although we do not really want it?

Mr. Healey

No, Sir. We regard out Polaris submarines as an important contribution to an international Western deterrent.

Mr. Powell

Is it not a fact that negotiations for the sale of these Spey engines have been in progress since long before the offset arrangement was entered into and that there is no reason whatever for connecting this sale, if it takes place, with the offset arrangement? Will he not further confirm that the sale of vital parts for the American A7 would be in breach of the policy announced by the Government in relation to the sale of arms for use in Vietnam?

Mr. Healey

The right hon. Gentleman is wrong on both points. Spey engines for the A7 were one of the items jointly identified by the two Governments, and without assistance from the Government the deal which we now hope to go through would have had little chance of succeeding. On the second point, the right hon. Gentleman is no doubt aware that the aircraft into which these Spey engines would go will not be flying for another three or four years.