HC Deb 25 January 1966 vol 723 cc64-8
The Secretary of State for Defence (Mr. Denis Healey)

With your permission, Mr. Speaker, I should like to make a statement.

In July this year my right hon. Friend the Minister of Aviation and I invited Sir Donald Stokes, the Managing Director and Deputy Chairman of Leyland-Triumph, to look into our policy and organisation for selling defence equipment abroad and to suggest in what ways they could be improved. Increased sales of British equipment will help significantly to reduce the burden of our military commitments by enabling us to win back some of the foreign currency which we have to spend on keeping our forces overseas and equipping them for their tasks.

While the Government attach the highest importance to making progress in the field of arms control and disarmament, we must also take what practical steps we can to ensure that this country does not fail to secure its rightful share of this valuable commercial market.

Sir Donald has now let us have his recommendations and I think that the House would like to know what the Government have decided already about the more important points in his proposals.

First, we agree with Sir Donald on the importance of having a closely-knit organisation within the Ministry of Defence and the Ministry of Aviation to handle arms sales and to help British firms to secure overseas defence orders, under the centralised control of a Head of Defence Sales. He will be a man of high calibre with direct access to Ministers and a suitable supporting staff both at home and overseas. He will be responsible jointly to my right hon. Friend and myself for all the arms sales work in our Departments.

At the same time, we are taking steps to ensure that when our own equipment requirements are formulated the present and future requirements of the overseas market are taken fully into account.

In setting up the arms sales organisation we will have regard to the recommendations of the Plowden Report and of the seventh Report of the Estimates Committee dealing with electrical and electronic equipment in the Services, to the extent that they cover the field of export sales. The more detailed proposals made by Sir Donald as to how the organisation might operate most efficiently are still under examination.

I should like, on behalf of the Government, to thank Sir Donald Stokes for undertaking this important task. I am sure that he is recognised by everyone as having sent a breath of fresh air through this tiresome and complicated subject.

Mr. Powell

While the House will wish to consider these proposals in more detail, there are two questions that I wish to put to the right hon. Gentleman. Will he confirm, with regard to the fourth point in his statement, that there is no question of British firms being precluded from securing orders otherwise than with the help of the new organisation? Secondly, are these practical steps to ensure that the country secures its rightful share of this valuable commercial market part of the proposals foreshadowed in the General Election manifesto of the party opposite to stop the private sale of arms?

Mr. Healey

On the second question, "No Sir." On the first question, of course private firms Will not be precluded from seeking markets on their own, and it is our conception that firms should be primarily responsible for actually making these sales. But, in some cases, Governments prefer to deal with Governments, and in all cases a Head of Defence Sales, with a suitable staff, can help firms both to find out what are likely to be the requirements of foreign markets and to aid them in securing contracts.

Mr. Frank Allaun

Is my right hon. Friend aware that many hon. Members on this side would much prefer it if all this activity and energy were put in to the sale of peaceful exports rather than warlike exports, that his announcement will encourage Governments and private armament manufacturers in other countries to do the same, and that we do not want this gentleman to turn into another Krupp or Zaharoff?

Mr. Healey

I entirely agree with my hon. Friend that we want to see a world in which the public or private sale of armaments is under international control; indeed, a world in which there is no public or private sale of armaments.

The House will be aware that some countries already have extremely extensive sales organisations. This is an international market which is worth about £1,000 million a year, and British industry has the same right to a share of that market as the industry of any other country.

Mr. George Y. Mackie

Is the right hon. Gentleman aware that the feelings expressed by his hon. Friend the Member for Salford, East (Mr. Frank Allaun) are shared by other people? This trade has long been held not to be a respectable one. Would the right hon. Gentleman ensure that the work of the new section and the gentlemen appointed to it are open to the closest Parliamentary scrutiny?

Mr. Healey

On the second question, "Yes, Sir", but I would point out that as far as Britain is concerned a major part of these sales is in co-operation with our allies in the production and sale of equipment for our collective defence. I do not think that by any stretch of the imagination, unless one is a complete pacifist, one can object to more efficient co-operation between countries in this field.

Mr. Emrys Hughes

Is my right hon. Friend's statement not likely to intensify the arms race? Is he telling us that we have to get into an economic conflict with America, which is supposed to be our greatest ally?

Mr. Healey

The answer to both those questions is, "No, Sir".

Mr. Marten

While giving general support to what the right hon. Gentleman has said, I understood him to say that he would still allow the private sale of arms. What did the Labour Party manifesto mean at the time of the last General Election?

Mr. Healey

A very good example is that we are not in favour of selling arms to countries which are hostile to us. [Interruption.] I hope that the right hon. Gentleman opposite, for all his love of free trade, would be prepared to control international commerce to this extent. Perhaps he will tell us if that is not so.

Mr. Hugh Jenkins

There is real concern about this trade. Does my right hon. Friend not agree that all forms of trade are not the same, and that it is desirable that we should encourage trade which does not have the effect of increasing tension and the possibility of war? Would he not give a more extensive answer to the question put to him by my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes)?

Mr. Healey

On the first question, I am even more anxious that national trade in peaceful exports should be extended, but my Department is concerned with defence and the sale of defence equipment, and I want it to be done as efficiently as possible in the context of our overall foreign policy. I would make it clear to the House that it is a field in which normal commercial considerations cannot always apply. It is always necessary to have regard to the political consequences of a potential sale, and we intend to do so under the new organisation.

Mr. Powell

Does the right hon. Gentleman seriously expect the House to believe that when the party opposite, at the last election, referred to stopping the private sale of arms all it meant was that we should not sell arms to our enemies?

Hon. Members

Answer.

Sir Ian Orr-Ewing

Will the right hon. Gentleman bear in mind that this is a considerable volte face, particularly when, during the first hundred days, vast opportunities to sell arms to Portugal, Spain and South Africa were forgone? Could he tell us whether he has it in mind to publish Sir Donald Stokes' Report so that we may have an opportunity of seeing some details of the new organisation, and could he tell us whether it is his intention to use the military, naval and air attaches and civil air attaches as the network for feeding back the information to the new section within his Department?

Mr. Healey

I have considered the question of publication of the Report, but I have decided that, on balance, it goes into too much detail on too many questions which involve national security for publication to be desirable.

On the latter question, the defence attachés in the various embassies are the prime sources of information on the likely requirements of possible markets, but we intend also to increase the specialist staff which already exists in certain embassies for that purpose.

Several Hon. Members rose—

Mr. Speaker

Order. We must move on.