Commons Sitting of 11 May 1966

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  MERSEY DOCKS AND HARBOUR BOARD BILL [Lords]
  Read a Second time and committed.
ORAL ANSWERS TO QUESTIONS
  MINISTRY OF AVIATION

    Transit of Animals
    Dame Joan Vickersasked the Minister of Aviation if he will take steps, by legislation or otherwise, to ensure that animals and birds transported by British aircraft are adequately protected so as to ensure their safe arrival in the United Kingdom.
    Mr. Burdenasked the Minister of Aviation if he will introduce legislation to prevent unnecessary suffering being caused to birds imported into this country by air.
    The Parliamentary Secretary to the Ministry of Aviation (Mr. Julian Snow): This is a problem that can most satisfactorily be resolved on an international basis and the International Air Transport Association has set up a study group to examine it. My Department will keep in touch with the Association, but in the meantime, bearing in mind the good practice and record of British operators, I do not propose to introduce legislation.
    Dame Joan Vickers: I thank the hon. Gentleman for that reply and also congratulate him on his first appearance in his new appointment.
    Would the hon. Gentleman consider trying to get a standard carrier, as is done for carrier pigeons, to suit the animals or birds concerned in order to be
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    certain that they have enough room during the journey?
    Mr. Snow: That sounds good sense to me. I will refer this matter to the Association, but I think the problem really starts at the consignor end; but we will take advice and give our views to the Association.
    Mr. Burden: Will the Parliamentary Secretary not agree that although most of these animals which suffer death and deplorable conditions of carriage are conveyed in foreign aircraft and our own operators have a very good record in this respect, it causes considerable unrest among many people in this country when it is disclosed that animals and birds which have been consigned to this country have been suffering en route? Will the hon. Gentleman, therefore, make the strongest possible representations to the Association?
    Mr. Snow: Yes, Sir.
    Mr. G. Campbell: Will the British Government take an initiative in promoting an international convention in view of the regrettable incidents that occur from time to time?
    Mr. Snow: The Association has already got this matter under consideration. When we examine the Association's views we will give it our views as well. We accept that there is a matter to be dealt with here.

    Airlines (Value of Output)
    Mr. Lubbockasked the Minister of Aviation if he will estimate the value of the output of United Kingdom airlines in the financial year 1965–66 in £ millions at 1964 prices.
    The Minister of Aviation (Mr. Frederick Mulley): About £250 million.
    Mr. Lubbock: Is the right hon. Gentleman aware that the estimate given in the National Plan for this year is only £236 million? Is he further aware that I wrote to his predecessor on 23rd November last year stating that B.O.A.C. had under-estimated its requirements for jet aircraft, and will he now press Sir Giles Guthrie and his Board to make sure that adequate aircraft are available to meet the capacity needs of the next few years?
    Mr. Mulley: I think there is a misunderstanding if the hon. Member thinks that the figure I gave relates to capacity. It is, of course, the actual revenue of all the airlines concerned. The National Plan forecasts are under review, and it may well be that there will be an upward revision in the National Plan target of £340 million for civil air transport in 1970.

    B.O.A.C. (VC10 Superb and Boeing 747 Aircraft)
    Mr. Lubbockasked the Minister of Aviation if he will make his permission for an order by the British Overseas Airways Corporation for the Boeing 747 conditional upon the British aircraft industry receiving substantial orders for sub-contract work on this project.
    Mr. Hamlingasked the Minister of Aviation if he intends to authorise the development of the VCIO Superb to meet the British Overseas Airways Corporation's requirement for large long-haul jets.
    Mr. Mulley: B.O.A.C. has not as yet submitted to me proposals for investment in large long-haul jets. In view of the time needed to develop aircraft, I have had, nevertheless, to consider meanwhile whether the Government could support the VC10 Superb. The whole cost of developing this aircraft would have fallen on the Exchequer, and the market prospects were not such as to hold out any prospects of recovering this expenditure over the limited number of sales foreseen. In all the circumstances, despite the magnificent reputation built up by the Super VC10, I have concluded with regret that the Government cannot support the Superb. Should B.O.A.C. propose to order the Boeing 747, the prospects of United Kingdom subcontracting and all other relevant matters will be borne in mind.
    Mr. Lubbock: Is the right hon. Gentleman aware that the Rolls Royce RB 178 is 120,000 dollars cheaper than the American engine which it is proposed to install in the Boeing 747, and that the value of the contract to the British aircraft industry, if we can get these engines installed, would be 570 million dollars? What action is the Minister taking with
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    the Americans to ensure that there is no discrimination against British suppliers?
    Mr. Mulley: I think the hon. Gentleman knows that we have done all in our power, and will continue to do so to support Rolls Royce. It is not a matter for me or for the American Government to determine what engines are used in American civil aircraft. Certainly the hon. Gentleman can rely upon me to do all I can to further the interests of Rolls Royce and this very fine engine.
    Mr. R. Carr: Does the Minister's statement mean that it is now a matter of Government policy that Britain should opt out of long-distance civil transport in the future?
    Mr. Mulley: The policy statement I have made is that I have not been able to undertake the entire launching and development costs of the Superb aircraft having regard to the very limited market which, on the best advice available, is foreseen for it.
    Mr. Rankin: Will my right hon. Friend have another thought in this matter as later today we shall be spending a huge amount of money on military aircraft? Could he not find a copper or two to advance civil aviation along the lines suggested?
    Mr. Mulley: My hon. Friend's arithmetic is none too accurate. In fact, the launching costs of this Superb aircraft would be in the region of £40 million on the airframe, with additional cost for development of the engine.
    Mr. Robert Howarth: Is my right hon. Friend prepared to say whether B.A.C. was prepared to put any of its own money forward for this project? Is he aware that, according to my understanding, the Boeing 747 project is being financed by the Boeing Company itself?
    Mr. Mulley: The fact that the whole cost would fall on the Exchequer means, as my hon. Friend suggests, that the company is not prepared to put any of its own money into the development of the aircraft.
    Mr. Onslow: How limited is the Minister's assessment of the market, and how far does his figure correspond with that produced by the company through its researches?
    Mr. Mulley: I cannot say exactly what figure the company has, but the kind of figure involved would be between 30 and 40 aircraft by 1975 and from 35 to 50 by 1980.

    Concord Aircraft
    Mr. Iremongerasked the Minister of Aviation what effect the plans for the new Boeing giant aircraft have had on the development programme of the Anglo-French Concord.
    Mr. Mulley: The recently announced plans for the Boeing 747 have had no effect upon the Concord development programme. The probable introduction of a very large subsonic jet aircraft in the 1970s is one of the factors which has always been taken into account.
    Mr. Iremonger: What are the market prospects for the Concord today, and are they affected at all by the fact that the American market seems to be pre-empted to some extent?
    Mr. Mulley: The market for supersonic travel is different from that for large long-haul subsonic jets. There is a later Question about the market prospects of the Concord. Perhaps I could wait till that comes.
    Mr. Biffenasked the Minister of Aviation what is the estimated total cost of the Concord project including work up to certificate of airworthiness standards and development flying.
    Mr. Mulley: We are still in the process of reviewing the costs of this project with our French partners and I am therefore not yet able to give a revised estimate.
    Mr. Biffen: Is the right hon. Gentleman aware that there is widespread expectation that the estimated total costs will be not less than £375 million? Is he sure that there will be sufficient sales of this aircraft to cover that cost?
    Mr. Mulley: I am afraid that I am not in a position to confirm or deny speculation which has occurred in the Press. One of the necessary ingredients of working with other countries is that when we are in consultation with them on matters of this sort, I must not seek to jump the gun by public statements of the kind which the hon. Member invites me to make. There will almost certainly be a substantial
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    increase on the former estimates, partly because of rising costs and changes of specification and partly because the new estimates will include the cost of post-certificate of airworthiness work. I cannot give a figure to the House. I am sorry.
    Mr. R. Carr: Will the Minister consider a method of giving regular reports to the House about progress in costs and other matters concerning this vast and important technological project?
    Mr. Mulley: My hon. Friend the former Parliamentary Secretary gave that assurance in the debate in February. We will, of course, keep the House fully informed, but it would be quite wrong of me to make ex parte statements while we are trying to agree figures—because the costs apply on both sides of the Channel—with my colleagues in Paris.
    Mr. Edwin Wainwrightasked the Minister of Aviation what was the number of firm orders for the Concord aircraft at the latest available date.
    Mr. Mulley: Sixteen aircraft have been reserved for B.O.A.C. and Air France. Options on a further 34 aircraft have been taken out by other airlines.
    Mr. Wainwright: Has there been any request from B.E.A.? Will my right hon. Friend do whatever he can to make certain that this aircraft is sold and firm orders are obtained?
    Mr. Mulley: I do not think that the Concord would be appropriate for the route pattern of B.E.A., much as I would like to see additional sales. We shall, of course, do all that we can to ensure that the orders which are placed become firm orders in due course.
    Mr. R. Carr: Is the Minister now telling the House that the reservations made by B.O.A.C. and Air France are now firm orders, which is what the Question asks?
    Mr. Mulley: In the case of B.O.A.C., a memorandum of understanding was signed by the Corporation and my Department in 1962 and, similarly, Air France made a declaration of intent. They are committed to coming to a firm decision when the characteristics of the aircraft are sufficiently advanced.
    Mr. Edwin Wainwrightasked the Minister of Aviation the total sum allocated, at the latest available date, for the building of the Concord supersonic aircraft.
    Mr. Mulley: Total commitments on the British side amount to about £70 million, of which about £32 million has already been spent.
    Mr. Wainwright: Does my right hon. Friend realise that articles have appeared in the Press stating that the cost was at least £280 million up to July of last year and is estimated to be £400 million before the end of this year? Will he look into this matter again and ensure that we are not spending money unnecessarily?
    Mr. Mulley: As I have already said, I can take no responsibility for speculation in the Press about either the amount already spent or what may be spent in the course of the programme. I have undertaken to give the House the fullest information as soon as the figures can be agreed with our French partners. I do not accept that those figures will have any relation to the figures quoted by my hon. Friend, which, I understood him to indicate, would be the total cost of the programme and not the amount spent to date.
    Mr. Burden: Would not the Minister agree that unless we go ahead, either ourselves or in partnership with other countries in producing aircraft of the future, and if we have to buy all our aircraft from America, there will be a terrible strain on our balance of payments?
    Mr. Mulley: I hardly think that that arises on this Question. I assure the hon. Member, however, that I accept that we should seek to produce for our own requirements as many aircraft as is technically and economically practicable.
    Mr. Onslowasked the Minister of Aviation what American firms have been awarded contracts in the development programme of the Concord project.
    Mr. Mulley: No contracts have been placed by my Department with American firms, but the two main contractors, the British Aircraft Corporation and Bristol Siddeley Engines, have placed a number of sub-contracts directly with American firms. The more important of these are with Rohr Corporation, Thompson-Ramo-Wooldridge,
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    Cameron Ironworks and Special Metals Incorporated, and Garrett Airesearch Manufacturing Company.
    I understand that the French main contractors have also placed some subcontracts with American firms. I should like to make it clear that it is the joint policy of both countries to avoid placing orders in a third country unless there is no acceptable alternative.
    Mr. Onslow: Can the Minister say why the contract for flight test recording systems was also placed with an American firm, Radiation Incorporated, of Florida? Was no British electronics company capable of carrying out this work?
    Mr. Mulley: I have no information about that contract. Perhaps the hon. Member will put down a Question.

    Dyce—Norway Service
    Mr. James Davidsonasked the Minister of Aviation what application he has received from British European Airways Corporation for assisting in establishing a direct airline service between Dyce Airport, Aberdeen, and Norway, to link with existing domestic flights.
    Mr. Snow: None, Sir.
    Mr. Davidson: Is the Minister aware that a direct service between Dyce and Stavanger would shorten the journey for everyone with a Scandinavian destination leaving from north of Birmingham, and that, unless B.E.A. does something about it, another concern will step in and start a service, as, for example, Faroes Airways already has between Kirkwall and Stavanger?
    Mr. Snow: These cases are, of course, within the commercial responsibility of any interested operator, subject to licensing.
    Mr. Hector Hughes: Does my hon. Friend realise that the Norwegians have shown very high appreciation of the value of links of this kind between Norway and Aberdeen at least, and will he, if necessary, take steps to encourage such links?
    Mr. Snow: We must leave it to the operators to use their commercial judgment in these matters. I appreciate that anyone would want to go to Aberdeen.
    Mr. Brewis: Is it not terribly important that a country of the size of Scotland should have much better air links with the Continent, and what is the Minister doing about it?
    Mr. Snow: There appears to be no obvious or immediate case on economic grounds, and my right hon. Friend has no power to subsidise uneconomic services.

    Boeing 707 Aircraft (Inspection)
    Mr. Kenneth Lewisasked the Minister of Aviation if he will make a statement on the withdrawal from service of the Boeing 707 jets by the British Overseas Airways Corporation because of tail cracks.
    Mr. Mulley: During inspection of the wreckage of the B.O.A.C. 707 which crashed in Japan, on 5th March, a small crack due to fatigue was found in part of the vertical tail fin attachment. As a precaution, B.O.A.C., in common with other operators of Boeing 707 aircraft, have been required to examine their aircraft for similar cracks. All B.O.A.C. 707s have now been examined and are back in service. The Air Registration Board, which has kept closely in touch with B.O.A.C., with the Federal Aviation Agency in the United States and with Boeing, is satisfied that this aircraft type is completely airworthy.
    Mr. Lewis: Can the Minister say what the cost of this was to B.O.A.C. and whether any other cracks were found on the other aircraft examined? Second, does not he agree that, if this had happened to the Super VC10, the adverse publicity in the United States would have been greater than the adverse publicity attending this incident involving the Boeing 707?
    Mr. Mulley: I have no responsibility for publicity. Without notice, I cannot give the actual cost, which, of course, is a matter for the company. I should want notice also to give the exact number of aircraft in which cracks were found, though I think that it was six.

    North Lanarkshire (Landing Strips)
    Mr. Dempseyasked the Minister of Aviation what consideration he has given to approval of landing strips for
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    aircraft in North Lanarkshire for the convenience of industrial interests.
    Mr. Snow: My Department has advised the Lanark County Council on the suitability of a number of sites for use by small aircraft of types commonly used for business purposes. No firm proposal has yet emerged.
    Mr. Dempsey: Are any of these sites in North Lanarkshire, which is the seat of industry in the county? Second, will my hon. Friend bear in mind that such a development would serve admirably the interests of the new town of Cumbernauld, and will he do his utmost to ensure that his Department co-operates to the full in having such landing strips provided in due course?
    Mr. Snow: Except for the fact that my Department has no funds for disposal for these purposes, we are, of course, very happy to provide technical advice and guidance as and when requested.

    F111B and F111A Aircraft
    Mr. Rankinasked the Minister of Aviation to what extent the faults and shortcomings of the F111B will be remedied in the F111A; and if he will make a statement on the matter.
    Mr. Hastingsasked the Minister of Aviation whether he is satisfied with the potential performance of the F111; and if he will make a statement.
    Mr. Mulley: As I said in answer to the hon. Member for Orpington (Mr. Lubbock) on 1st March, my right hon. Friend the Secretary of State for Defence and I are kept closely aware of development of the F111A and there is no reason to believe that this aircraft will not satisfy the R.A.F. requirement.
    Mr. Rankin: I thank my right hon. Friend for that Answer, but is he aware that there is a third version of this generation of aircraft, the FB111, of which President Johnson is ordering 200? Is he satisfied that this new version will not put the F111 somewhat out of date?
    Mr. Mulley: The FB111 version is a version for a strategic bombing rôle, a purpose quite different from that for which we require the F111A, as a Royal Air Force Canberra replacement.
    Mr. Hastings: Has the Minister seen a report by the United States House of Representatives Armed Services Committee, part of which was published only a week or two ago, which seemed to cast the gravest doubt on the capability of this aircraft, not only in the nuclear rôle but in the conventional bombing rôle, having regard to a number of criticisms? Is he still satisfied, and, if he cannot make a statement about it now, will he say something much more definite when we come to the debate later today on the F111?
    Mr. Mulley: The report to Congress to which tthe hon. Gentleman refers was about the FB111, and the criticisms against this aircraft do not seem to me to be relevant to a consideration of the one which we have ordered. All the information we have, which is, of course, supported by the fact that the United States Air Force is to have it in service two years before it comes to us, makes us quite satisfied that this aircraft will, as at present advised, meet the Royal Air Force requirement.
    Mr. Maxwell-Hyslop: Since the F111, the basic aircraft, has hardly begun its flight test programme and is in severe difficulties as regards both the compressor and the reheat system, what positive reasons are there for the Minister to believe that it will meet its performance guarantees?
    Mr. Mulley: The hon. Gentleman knows quite well that I cannot go into the actual ranges and other characteristics of an operational requirement. [HON. MEMBERS: "Why not?"] But, quite clearly, we, along with the United States Air Force, are taking a close interest in this, and the hon. Gentleman, who has acquaintance with the aircraft industry, knows quite well that one cannot wait until an aircraft is actually in service for some years before buying it without being charged with buying an obsolescent aircraft.
    Mr. R. Carr: In view of the continuing doubts about the performance of the F111, have the Government made arrangements, or, if they have not done so already, will they make arrangements, for some guarantee from the United States in case of, for example, a cancellation, as happened with Skybolt?
    Mr. Mulley: I think that we have all the guarantees for delivery of this aircraft and its meeting our requirements which any Government could reasonably request.

    B.E.A. Scottish Flights (Timings)
    Mr. G. Campbellasked the Minister of Aviation if, in the public interest, he will give a general direction to British European Airways to arrange their timetable of flights in Scotland to assist those who live and work there.
    Mr. Snow: No. Sir. The timing of B.E.A.'s Scottish flights is a matter for the Corporation, which takes into account local opinion and needs.
    Mr. Campbell: Will the Minister seek to alter or to increase the present flights to and from the Highlands, as now it is not possible for those who live and work in the Highlands to use the air services efficiently for business in the South?
    Mr. Snow: It is my understanding that B.E.A. is considering some suggestions from the Highlands Transport Board for improving its timings. As to suggestions about re-timing, the hon. Member will no doubt remember that there is a member of the B.E.A. Board specifically charged with meeting the requirements of the public.

    Prestwick Airport (U.S.A.F. Aircraft)
    Mr. Youngerasked the Minister of Aviation what arrangements he made, before handing over Prestwick Airport to the British Airports Authority, concerning reciprocal agreements between this country and foreign countries for the payment of landing fees for military aircraft.
    Mr. Emrys Hughesasked the Minister of Aviation what consultations he had, and what agreements were reached, with the United States authorities over the payment of landing fees, before the British Airports Authority assumed responsibility for Prestwick Airport.
    Mr. Mulley: Before the British Airports Authority took over Prestwick Airport it was decided that they could not be expected to continue the waiver on landing charges for certain military aircraft (including the Royal Air Force and U.S.A.F.) since they have a statutory

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    obligation to conduct their operations on a commercial basis. I am considering the implications of this with my noble Friend the Minister of Defence for the Royal Air Force. The U.S.A.F., of course, continue to enjoy the free use of navigation services and of land and buildings.
    Mr. Younger: Is the right hon. Gentleman aware that, as a result of no arrangement having been made about this before the hand-over, there is at present virtually no use of Prestwick Airport by the U.S. Air Force and the airport will lose about £150,000 a year? Will he see our Defence Department, which has a reciprocal agreement with the Americans, and make arrangements with the U.S. Air Force to bring it back to Prestwick?
    Mr. Mulley: As I said, I am discussing this with the Minister of Defence for the Royal Air Force but my information is that the U.S. Air Force has no immediate intention of ceasing operations at Prestwick.
    Mr. Emrys Hughes: Is my right hon. Friend aware that the Americans as well as anyone are entitled to pay a fair rent for Prestwick Airport and if no one pays a fair rent Prestwick Airport will close down, which will be to the great indignation of the hon. Member for Ayr (Mr. Younger)?
    Mr. Monro: Does the right hon. Gentleman agree that if the U.S. Air Force does leave Prestwick Airport, as seems likely, it will have a severe effect on the economy of Scotland?
    Mr. Mulley: The argument seems to be about whether the U.S. Air Force should pay or not, and that if it continues using the airport without paying any fees that would not help the airport. I am dealing with this matter and will report to the House on the conclusions reached.

    European Launcher Development Organisation
    Mr. Martenasked the Minister of Aviation if he will make a statement on the European Launcher Development Organisation meeting held in Paris during the last week of April.
    Mr. Biggs-Davisonasked the Minister of Aviation whether he will make a statement on the progress of the European Launcher Development Organisation.
    Sir J. Rodgersasked the Minister of Aviation what transpired at the recent European Launcher Development Organisation meeting; and if he will make a statement.
    Mr. Mulley: As I informed the right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd) on 4th May, after a thorough exchange of views with our partners on the problems facing E.L.D.O., the conference was adjourned until 9th June to allow time for further studies.
    Mr. Marten: In that reply the Minister referred to a study of user requirements being done between now and 9th July. Does that mean possible satellite communications? If so, why are the Government to come to some arrangement with America to use American satellite communications for defence purposes?
    Mr. Mulley: The hon. Member should know, as he was a member of the Government responsible at the time, that E.L.D.O. is by its convention and charter permitted only to engage in civil activities, so that the question of whether its launchers could be used for civil defence does not arise. The use of satellite communications is one of the uses which not only we but other countries have raised as needing further study before further decisions can be taken on 9th June.
    Mr. Biggs-Davison: May we take it from the reply that Her Majesty' Government have no intention of abandoning this project and are fully determined to press on in this sphere either with Europe, on a national basis, or both?
    Mr. Mulley: I do not see how it would further the cause of E.L.D.O. by pressing on on a national basis. The British Government, along with other Governments, want more information about the technical feasibility both of the E.L.D.O. programme and its possible use and the total cost involved before coming to any decisions about the future programme of E.L.D.O. This was by agreement the reason for the adjournment of the conference.
    Mr. Heffer: Is my right hon. Friend aware that many of my hon. Friends hope that the Government will approach this matter with a great deal of caution so

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    that we do not get too much involved in heavy expenditure on this project but approach it by way of getting better relations between Russia and America in relations to launcher developments?
    Mr. Mulley: I shall be interested in any suggestions as to how we can improve relations both with the Soviet Union and the United States in this field, but we are members of the Organisation and as such take a considerable responsibility for deciding its future programme. As my hon. Friend said, we have to apply the same tests to this as to national projects of our own, and our European collegaues agreed that this was a proper approach to make to the problem.
    Mr. Sandys: Does the right hon. Gentleman realise what a deplorable impression it would create a mong our European partners if Britain were to climb out of the E.L.D.O., which we played such a prominent part in establishing? Cannot he give a really firm, clear and unequivocal answer and assurance that Her Majesty's Government have no such intention?
    Mr. Mulley: I think that if I were the right hon. Member for Streatham (Mr. Sandys) I would not want to go into too much detail as to how this Organisation was set up, because the fraud involved in finding a use for Blue Streak is abundantly obvious to our European allies.
    Mr. Biggs-Davison: On a point of order, Mr. Speaker. Is it in order to accuse a right hon. Member of fraud?
    Mr. Speaker: I did not hear any such accusation.
    Mr. Mulley: It was not the right hon. Gentleman against whom I was making the accusation but the Government of the time. I have to answer for the fact that this Organisation was initially started to find a use for Blue Streak. Blue Streak in this rôle has been very useful. I think that is conceded, but in assessing this, like my colleagues of the other European member countries, I want to be satisfied that the programme proposed is worth while technically in terms of its use and in terms of the cost to which we are all asked to contribute.

    London Airport (Landings)
    Mr. Hugh Jenkinsasked the Minister of Aviation if he will set out the number of landings which have taken place each month at London Airport, Heathrow, from March, 1965 to date; and how many landings have taken place each month on the 28R runway compared with the 28L runway, the glidepath to which begins over Putney.
    Mr. Snow: As the reply contains a large number of figures, I will, with permission, circulate it in the OFFICIAL REPORT.
    Mr. Jenkins: Is my hon. Friend aware that if, as I suspect may be the case, the figures show no improvement, indeed that the slight improvement secured during the summer has gone off and more and more aircraft are coming over this area, I shall be moving, I hope, a Private Members' Bill on this matter, which I hope will receive widespread support in all parts of the House?
    Mr. Snow: Yes, Sir. The problem of noise is a very grave matter indeed, although my hon. Friend will, I trust, accept that the governing factors are climatic and weather conditions which it is very difficult to try to alter.
    Following are the figure:

    NUMBERS OF LANDINGS AT LONDON (HEATHROW) AIRPORT

    Total Landings on all runways

    Landings on Runway 28R

    Landings on Runway 28L

    March, 1965

    7,249

    498

    3,113

    April, 1965

    8,232

    915

    5,846

    May, 1965

    9,298

    830

    5,695

    June, 1965

    9,833

    1,184

    5,639

    July, 1965

    11,005

    2,208

    6,559

    August, 1965

    10,844

    2,129

    6,584

    September, 1965

    10,401

    3,165

    5,446

    October, 1965

    8,676

    970

    1,996

    November, 1965

    7,005

    1,925

    1,593

    December, 1965

    7,312

    2,335

    3,115

    January, 1966

    7,182

    1,628

    1,146

    February, 1966

    6,701

    1,447

    1,475

    March, 1966

    7,629

    462

    6,345

    April, 1966

    8,949

    719

    3,463

    B.E.A. (Aircraft Requirements)
    Mr. R. Carrasked the Minister of Aviation what action is being taken to ensure the availability of British or Anglo-European aircraft suitable to meet the future needs of British European Airways.
    Mr. Onslowasked the Minister of Aviation what discussions he has had with the Chairman of British European Airways and the management of the British Aircraft Corporation with a view to facilitating the purchase by British European Airways of an enlarged version of the Super VC10 aircraft; and if he will make a statement.
    Mr. Mulley: B.E.A. is still considering its fleet requirements from 1968 onwards. I am in touch with B.E.A. as well as with the British manufacturers, but the first step must be for B.E.A. to define its requirements, and I have asked it to do this.
    Mr. Carr: Can the right hon. Gentleman assure the House that he is aware of the urgency of a decision here from the point of view of B.E.A. since it has defined its requirements exactly? Can he also assure the House that he realises what very grave damage would be done to the British industry if B.E.A. were required to buy an American aircraft?
    Mr. Mulley: I think the right hon. Gentleman will concede that the urgency of the matter does not come to me until I get the proposals, but I appreciate the urgency of decisions and I am quite satisfied that B.E.A. will do its very best to buy British aircraft in future as in the past, and it will certainly have my full encouragement in that objective.
    Mr. Onslow: Will the Minister assure the House that if proposals reach him quickly he will consider them quickly and that he will not dally and ultimately damn this project, as he has done with the VC10 Super, by leaving it under consideration for a very long time? Will he say how much money is involved?
    Mr. Mulley: Until I hear from B.E.A. what their requirements are, it is impossible for me to give an estimate of the cost. The best evidence of my sense of urgency in this matter is that I have been pressing B.E.A. over a period of time to come forward with their requirements for this period.
    Sir Ian On-Ewing: Would the Minister get some sense of urgency in this? He has announced today that B.O.A.C. are to buy Boeing aircraft. It would be deplorable if we were not given an opportunity in this country of building and
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    developing the VC10 to meet the avowed needs of B.E.A. where traffic is growing much faster than anticipated.
    Mr. Mulley: I think that it will be conceded that I should not order aircraft for either of the Corporations without at least having the views of the Corporations. I accept the urgency. I did not announce today, and it would not be for me to announce today, that B.O.A.C. are buying Boeings. I made it clear that I have had no proposals from B.O.A.C. about their future aircraft requirements.

    Airports (Pilfering)
    Sir C. Osborneasked the Minister of Aviation, in view of the increasing theft and pilfering at airports, which is resulting in the loss of foreign business, if he will issue a general direction to the Airports Authority, after discussion with the leaders of the unions, who so far have opposed regular searches and spot checks on workers, to take steps to stop this organised pilfering; and if he will make a statement.
    Mr. Snow: No, Sir. This is a matter within the management responsibility of the British Airports Authority, and would not be an appropriate subject for a general direction under the Airports Authority Act, 1965. I appreciate however, the hon. Member's concern about this subject and I will draw his remarks to the attention of the Authority.
    Sir C. Osborne: Is the Minister aware that London Airport is getting such a bad name for thieving that one of the Swiss insurance companies advised its customers not to use London Airport and that this is giving our country a very bad name in Europe. Would the hon. Member—[HON. MEMBERS: "No."] Would the hon. Member—[HON. MEMBERS: "No."] Would the hon. Member—
    Mr. Speaker: Order. Hon. Members should not waste time by foolish interventions.
    Sir C. Osborne: I am obliged, Mr. Speaker, especially when they come from Scotland. Would the hon. Member look at the practical suggestions which were published in the Economist?
    Mr. W. Baxter: On a point of order. The hon. Member tried to cast a reflection

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    upon the honesty and integrity of Scottish Members by his remarks.
    Mr. Speaker: That is not a point of order for me. Mr. Snow.
    Mr. Snow: Yes, Sir. We knew about the observations of the Swiss insurance company, and we are taking its report into account and examining it. If the hon. Member refers to Section 11 of the Act which I have mentioned he will see that it gives powers to the Authority for the sort of stopping and searching about which he is talking.

    Woomera Rocket Range (Expenditure)
    Mr. Frank Allaunasked the Minister of Aviation what was the total expenditure on the Woomera rocket range from 1951 to October 1964, and from October 1964 to date; and what is the estimated future expenditure on this range.
    Mr. Mulley: Total expenditure by the United Kingdom, on payments to Australia and on equipment supplied from this country, was approximately £78 million from 1951 to October 1964 and £8 million from November 1964 to date. It is not possible to forecast total future expenditure, but payments are currently running at about £5¼ million per year. All these figures are in addition to considerable expenditure by Australia.
    Mr. Allaun: While thanking the Minister for that information, may I ask him to tell the House what is approximately the military share of this expenditure? Does it include, for instance, the testing of spy satellite and re-entry missiles?
    Mr. Mulley: I could not give my hon. Friend that information without notice. The testing of nuclear devices has been undertaken in Australia but not at Woomera.
    Mr. Biggs-Davison: What non-European and non-Commonwealth countries have the use of the facilities at Woomera?
    Mr. Mulley: I should want notice of that question, but as far as I am aware the only other proposed use of Woomera is by E.L.D.O., of which Australia is also a member.

    Turnhouse Airport (Second Runway)
    Mr. Stodartasked the Minister of Aviation when a feasibility survey of a second runway at Turnhouse Airport, Edinburgh, will be begun.
    Mr. Snow: Subject to obtaining access to the land it is hoped to start the feasibility survey of the runway this month.
    Mr. Stodart: Will the hon. Member give an assurance that he will show the same sense of priority to this as B.E.A., who have said that they regard this matter as one of absolutely top priority?
    Mr. Snow: Yes, Sir. The principle of a new runway has been accepted for a long time and the land is being kept under protection for this future requirement.

    Aldergrove Airport (Terminal Building)
    Sir Knox Cunninghamasked the Minister of Aviation when he expects the work of enlarging the civil air terminal building at Aldergrove in County Antrim to be completed; and what steps he is taking to prevent overcrowding at the airport during the summer, and particularly when flights are delayed owing to weather conditions or from other reasons.
    Mr. Snow: Work on the extension of the terminal building has now been started and it is expected to be completed in stages during the spring and summer of next year. Work on the main public areas—the departure lounge and the arrivals concourse—should be complete by the end of May, 1967. As my right hon. Friend informed the hon. Member on 25th February, some congestion at busy periods this summer will be inescapable, but by phasing and restricting the work in the public areas we hope to alleviate the inconvenience as far as possible.
    Sir Knox Cunningham: Would not the Minister expedite this work, bearing in mind the chaos in the passenger area which has happened in the past as a result of delayed flights? Cannot something be done a little earlier than the summer of 1967?
    Mr. Snow: My Department is very alive to this point and it has expedited the completion of this terminal building by one year. It has been brought forward accordingly.

    B.E.A. Flights (Alcoholic Drinks)
    Mr. Dalyellasked the Minister of Aviation whether he will give a general direction to British European Airways not to issue take-away bottles of free alcoholic drinks, and to reduce fares accordingly.
    Mr. Snow: No, Sir, this would not be appropriate. Provided there is compliance with the relevant tariff requirements, it is for B.E.A. to decide what hospitality to offer to their first-class passengers.
    Mr. Dalyell: Yes, but does not the Minister regard it as rather absurd that along with the sausage and egg on the Edinburgh and Glasgow routes there should also be the issue of free toddy?
    Mr. Snow: There is some doubt as to whether B.E.A. are acting strictly in accordance with regulations, and this is being examined.
    Mr. Speaker: Sir John Langford-Holt—next Question.
    Mr. Rankin: Is my hon. Friend aware—
    Mr. Speaker: Order. The hon. Member for Govan (Mr. Rankin) has no prescriptive right to be called.

    Duty-Free Spirits and Tobacco
    Sir J. Langford-Holtasked the Minister of Aviation, in view of the facts that conditions are imposed upon retail concessionaires at airports requiring a minimum price at which duty-free cigarettes are to be sold and that these conditions have resulted in 200 cigarettes of British manufacture being sold at a price 6s. 6d. above the price for which they are sold in European airports, if he will give a general direction, in the public interest, to the Airports Authority not to make similar conditions in future contracts.
    Mr. Ridleyasked the Minister of Aviation if he will give a general direction
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    to the Airports Authority to provide competing retail outlets for the sale of duty-free spirits and tobacco.
    Mr. Snow: No, Sir. The matters referred to are not appropriate to a general direction under Section 2(6) of the Airports Authority Act, 1965.
    Sir J. Langford-Holt: Is the Minister aware that virtually by contracts which his Ministry signed and which are merely being extended under the new dispensation British cigarettes are sold not, as is said in the Question, for 6s. 6d. more but for 7s. 4d. more than on the Continent of Europe? Is he aware that he is handing over a monopoly situation and telling the House that he proposes to do nothing about it? Would he look at it again?
    Mr. Snow: London Airport has the distinction of being the only major international airport in Europe which is not heavily subsidised, and we want to keep it that way.
    Mr. Ridley: Is the Minister aware that this is a restrictive practice of the most flagrant nature, being supported and endorsed by the Government? Will he have a word with the President of the Board of Trade with a view to referring the whole situation of the Monopolies Commission?
    Mr. Snow: On the face of it, I should not think that that was desirable. These matters are entirely within the commercial competence of the Authority.

    Helicopters (Anglo-French Collaboration)
    Mr. Ridleyasked the Minister of Aviation what progress was made in his discussions with the French last month on the possibility of collaboration on helicopters.
    Mr. Mulley: This subject was discussed at the meeting which my right hon. Friend the Secretary of State for Defence and I had with the French Minister for the Armed Forces on 6th May. We established that a basis for collaboration exists and further talks will shortly be held.
    Mr. Ridley: Would not the Minister agree that Europe has lost the capability

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    of producing an independent helicopter at the present time and that it is, therefore, vital that these talks not only succeed but are expedited? Will he, therefore, give an assurance that he will do all in his power to make sure that this project gets started and goes forward at a good speed?
    Mr. Mulley: We will certainly do all we can to further the possibility. As I have said, the talks took place only on 6th May. Steps to obtain a joint military requirement over a range of helicopters are already in progress. It is the intention of my right hon. Friend and myself to seek a further meeting with M. Messmer towards the end of July.

    V.T.O. Aircraft
    Mr. Wallasked the Minister of Aviation if he will make a statement about the development of British vertical-take-off aircraft.
    Mr. Mulley: The Statement on the Defence Estimates confirmed the development of the P1127 V.T.O.L. aircraft for part of the R.A.F. ground attack and Army close support rôle. The development programme is proceeding satisfactorily and initial orders related to production aircraft have been placed.
    Mr. Wall: Is it not a fact that the P1127 is subsonic and that because of delays in submitting the order it is now virtually obsolete? Is the Minister aware that our partners in the evaluation squadron, both America and Germany, have several new projects in hand? Are we to be left behind once again?
    Mr. Mulley: My experience is to the contrary and that in both Germany and the United States it is realised that this aircraft gives us a very real lead in this field. We have an aircraft that is already flying and on which there has been a lot of experience, and the development aircraft is shortly due to fly. I do not think that in the rôle for which the P1127 is designed supersonic speed is essential. As, however, the hon. Member probably knows, we are undertaking studies to see whether by plenum chamber burning we can increase the thrust of the engine.

    VFW614 Aircraft (Anglo-German Co-operation)
    Mr. McMasterasked the Minister of Aviation what support the Government are giving to the proposals for the joint design and construction by VFW Fokker and a British aircraft manufacturer of a new twin-jet feeder aircraft for sale to world airlines.
    Mr. Mulley: As I said on 25th February in the reply given to the hon. Member for Coventry, North (Mr. Edelman),
    "The Government have agreed, on the basis of a special funding arrangement proposed by the Federal German Government, to the development of the Bristol Siddeley M45H engine chosen by the German company for their VFW614 project.
    "Apart from this collaboration on the engine, we have decided that financial assistance from public funds cannot be made available to enable a British airframe manufacturer to participate as a principal on a risk-sharing basis in a project based on the VFW614 design."—[OFFICIAL REPORT, 25th February, 1966; Vol. 725, c. 163.]
    Mr. McMaster: Is the right hon. Gentleman aware that Britain has again lost out in an opportunity of sharing with Europe in what might be a valuable earner? In view of the unanimous recommendation of the Plowden Report that we should collaborate with Europe, will the Minister look at this matter again and see whether we cannot join in this project?
    Mr. Mulley: The Plowden recommendation, and certainly Government policy, is that we should seek profitable and satisfactory co-operative arrangements. This does not mean, and never can mean, that we most join every venture in which we are invited to join. I am not satisfied that the outcome of our participation in this venture would return to the taxpayer the substantial money that our participation on a principal basis would have involved.

    Warsaw Convention (The Hague Protocol)
    Mr. Maxwell-Hyslopasked the Minister of Aviation when he will ratify The Hague Protocol to the Warsaw Convention.
    Mr. Snow: Her Majesty's Government hope to do this very soon.
    Mr. Maxwell-Hyslop: Is the hon. Gentleman aware that nine months ago the former Parliamentary Secretary wrote to me:
    "The time has clearly come"—
    [HON. MEMBERS: "Reading."] I am reading a quotation.
    Mr. Speaker: The hon. Member must not read. He must tell us.
    Mr. Maxwell-Hyslop:
    "The time has clearly come when, one way or another, we should go ahead and ratify the Protocol."
    That was nine months ago. When will the Government take action?
    Mr. Snow: I shall as soon as possible, as soon as the necessary preparations have been made, invite the Foreign Office to deposit the instrument of ratification. The Protocol will come into effect for us three months after that has been done.
    Mr. Ronald Bell: Is there not a risk that the long delay which, for various reasons, has elapsed between the passing by Parliament of the enabling Act and ratification may have resulted in The Hague Protocol in respect of compensation for personal injury being already somewhat out-of-date? Will the hon. Gentleman consider this?
    Mr. Snow: There are extremes of thought about the limitations imposed or proposed under the Protocol. We think we have achieved the best solution we can. It has not been an easy matter. We are not the only parties to it.

  LITIGATION COSTS
  Mr. Fisherasked the Attorney-General whether he will take steps to reduce the cost of litigation to those not entitled to legal aid.
  The Attorney-General (Sir Elwyn Jones): My noble Friend the Lord Chancellor is always anxious to take whatever steps are practicable to reduce the cost of litigation. For example, a committee was recently set up under the chairmanship of Lord Justice Winn to consider the possibility of introducing a simpler
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  and more speedy procedure for the trial of actions for personal injuries. The Law Commission is also considering simplification of the law in various fields. Other action is also under consideration.
  Mr. Fisher: Would the right hon. and learned Gentleman agree that, although British justice is absolutely fair, it is so expensive if one loses in the High Court that only the richest and the poorest in the land can afford to go to the High Court? What positive proposals has he for dealing with this strange but in some ways very serious problem?
  The Attorney-General: I think the comparable figures will show that the cost of administration of justice in this country, both to the State and to the litigant, is probably less than that in any comparable legal system, but I have indicated certain measures which my noble Friend is contemplating. This is very much in our minds.
  Mr. Shinwell: How long is this consideration going to continue? When are we going to get some action to prevent lawyers, barristers and solicitors from getting away with the swag?
  The Attorney-General: Lawyers receive reasonable remuneration for the indispensable work they do.

  LAW OFFICERS (COURT CASES)
  Mr. Stratton Millsasked the Attorney-General if he will make a statement on the range of cases in which he appears personally as a Law Officer.
  The Attorney-General: Whether a Law Officer appears personally in any case is a matter for my judgment. The paramount consideration is the public importance of the case.
  Mr. Stratton Mills: While thanking the Attorney-General for that Answer, may I ask whether he would consider reviewing the range of cases in which the Attorney-General and the Solicitor-General appear, particularly having regard to their additional and heavy duties in Parliament and particularly their duties in law reform?
  The Attorney-General: All these factors are taken into account when my

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  hon. and learned Friend and I decide what cases we should personally undertake.
  Sir P. Rawlinson: Will the Attorney-General tell the House whether the absence of a Minister without Portfolio now to answer Questions about law reform matters will make any difference at all to the burden of the Law Officers?
  The Attorney-General: I think it will add something to the burden, but we shall do our best to cope.

  RENT ASSESSMENT CASES (LEGAL REPRESENTATION)
  Mr. Frank Allaunasked the Attorney-General if, in view of the difficulties of tenants when opposed by lawyers and chartered surveyors representing landlords, he will take steps to extend to tenants free legal aid when appearing before rent officers and rent assessment it committees.
  The Attorney-General: My noble Friend the Lord Chancellor does not consider that the provisions of the Legal Aid and Advice Act should be extended at the present time to proceedings before rent officers and rent assessment committees. However, my noble Friend will keep this matter under review.
  Mr. Allaun: But does not my right hon. and learned Friend, who is quite a high-powered lawyer himself, agree that as things are the dice are heavily loaded against the tenants, particularly when the big property companies are employing expensive professional representatives?
  The Attorney-General: I do not think there is any reason for anxiety on this score at the present time, but the matter is being carefully watched. The intention is that the proceedings before the rent officers and the committees should be somewhat informal. The issues are usually simple issues of fact, and in regard to the poorer houses, if I may so describe them, I do not think the problems of expert evidence very often are likely to arise.

  BOOK
  Sir C. Taylorasked the Attorney-General whether the Director of Public Prosecutions has decided to take criminal
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  proceedings against the printers, publishers and distributors of the book handed to the Solicitor-General by the hon. Member for Eastbourne.
  The Attorney-General: The Director of Public Prosecutions, after consultation with the Law Officers, has decided not to take criminal proceedings in respect of this book. He is not satisfied that a court would find that the effect of the book, unpleasant as it is, if taken as a whole, would tend to deprave and corrupt persons who are likely to read it, or that a defence that publication was for the public good on the grounds that it is in the interests of literature would fail. It would be deplorable if, as a result of publicity given to this book in the course of an unsuccessful prosecution, it was to become a best seller.
  Sir C. Taylor: I should certainly not mention the name of this book—[HON. MEMBERS: "Why not?"]—but in view of the very unsatisfactory nature of the reply, I beg to give notice that, without mentioning the name of the book, I shall raise the matter on the Adjournment at the earliest possible date.

  ARSON CASES (CRIMINAL PROCEEDINGS)
  Mr. Freesonasked the Attorney-General if he will instruct the Director of Public Prosecutions to institute criminal proceedings against leaders of the British Nazi Party for conspiracy at common law to commit arson and sacrilege against places of worship and other buildings.
  Mr. Abseasked the Attorney-General whether he is aware that the judge in a recent arson trial said that those convicted had been ensnared and used by unscrupulous persons, and that evidence was presented in the trial by the prosecution that a Mrs. Jordan had encouraged those convicted to burn down synagogues; and if he will instruct the Director of Public Prosecutions to proceed against those who by procuring and counselling those convicted were accessories before the fact to the felonies committed.
  The Attorney-General: The police are continuing their inquiries into these matters, and the Director of Public Prosecutions is considering whether further criminal proceedings in respect of them should

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  be instituted. I understand that Mrs. Jordan is at present outside the jurisdiction.
  Mr. Freeson: While thanking my right hon. and learned Friend for a much more sympathetic reply than the one which we had on a previous occasion, may I ask him if he will bear closely in mind that these people, members of the Nazi Party, together with other Fascist and anti-immigrant organisations, have, for the past 20 months or more, been organising arson, violence and even death against Jewish and coloured members of the community, and that there is a sense of urgency which should be kept in this matter?
  The Attorney-General: Of course, I have these matters very much in mind. The House will know that there have already been prosecutions in respect of these matters which have resulted, in certain cases, in the infliction of long terms of imprisonment. We certainly have the situation under very watchful eyes indeed.
  Mr. Abse: In view of the very great concern amongst the Jewish community in Britain after a judge has categorically stated that there are people behind those who have so far been convicted against whom no proceedings have continued, would my right hon. and learned Friend perhaps tell the House whether in the course of his investigation he is finding that the Race Relations Act is too weak to be able to deal with the situation? What talks is my right hon. and learned Friend having with the Lord President over the question of amending that Act?
  The Attorney-General: With respect, the Race Relations Act is not the weapon in the armoury of the criminal law one would call in aid to deal with arson or incitement to arson. Fortunately, the criminal law is well able to deal with that kind of criminality. The problem is to get the necessary evidence against the individual and to catch the individual.
  Sir B. Janner: Will my right hon. and learned Friend take into consideration the fact that no judge is likely to award the kind of judgment which was given in the case in question unless he is satisfied by actual evidence placed before him that the facts were such that this incitement did take place, and, in consequence of
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  that, would my right hon. and learned Friend get in touch with the learned judge to ask him if he will assist him in the inquiries which he is undertaking now?
  The Attorney-General: If I may say so, I am familiar with all the relevant facts of the matter. A person who was alleged to have been guilty of the incitement in that case has been expressly named in the Question, and, therefore, it is proper that I should refer to her, namely, Mrs. Jordan, and she is at the moment out of the jurisdiction of the courts of this country.
  Mr. Crowder: Can the Attorney-General say whether or not Treasury Counsel have been asked to advise on the evidence in this matter as is usual?
  The Attorney-General: This matter has, of course, been under the active consideration of the Director and myself. Whether or not Treasury Counsel are called in aid, if I may say so, their advice is not always necessary.

  WITNESSES (PAYMENTS BY NEWSPAPERS)
  Mr. Gresham Cookeasked Mr. Attorney-General if he will instruct the Director of Public Prosecutions to bring proceedings against the newspapers which made payments to witnesses in a recent murder trial for articles and stories, in view of the fact that such payments have the effect of suborning witnesses.
  The Attorney-General: There is no evidence that the testimony of any witness in the murder trial referred to was affected by the payments in question. After careful consideration, I have decided not to take proceedings in respect of the newspaper concerned. However, the practice of paying witnesses for information about the subject matter of a trial and interviewing them about that information before they give evidence does give rise to serious problems in relation to the administration of justice. Accordingly, the Government proposes to examine these problems with a view to making such changes in the law as may prove necessary.
  Mr. Gresham Cooke: While thanking the Attorney-General for the second part of his Answer, is he aware that many

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  people think that practices of this nature, as evidenced in the moors trial, should be stamped on very hard, because there is a belief that payments to witnesses in criminal trials, where they get bigger sums if convictions are secured, may lead to witnesses erring in the truth of the evidence that they give in trials?
  The Attorney-General: I am aware of this public concern, which I share myself. However, I should not by silence accept the suggestion that in this particular case a bigger sum was offered in the event of a conviction. If that were to remain without challenge, it might be unfair to the newspaper concerned.
  Mr. Strauss: Is my right hon. and learned Friend aware that there is a general appreciation of the admirable way in which he conducted this horrible case?
  Mr. Hogg: Did I understand from the right hon. and learned Gentleman, because he put his answer in the form of what I thought was a double negative, that the suggestion that the payment was contingent on a particular result is without foundation; because that is what particularly worried a great number of people, including myself?
  The Attorney-General: That was one of the matters that I had to consider. There was some evidence orally to the effect that that was the arrangement. However, other evidence that was obtained by the police was to the contrary effect, and the most important factor which decided me not to take proceedings was the knowledge that, in any event, the evidence of the two witnesses, Mr. and Mrs. Smith, was not affected by any of these payments at all. I will not weary the House with the matters which arose evidentially which enabled me to come to that conclusion.
  Mr. Grimond: Is the Attorney-General aware that there will be general satisfaction that he is going to look into this matter, and that there is wide disquiet over these matters, whether or not they are dependent upon a conviction? Will he also bear in mind when examining them that responsibility must surely lie on the proprietors and owners of newspapers, and must not be sloughed off on to editors and newspapermen?
  The Attorney-General: I am grateful to the right hon. Gentleman for that
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  intimation. This is a problem which the Press proprietors and, if I may say so, journalists have to face. It is essential that in this country there should be no trial by newspaper, and that the fountain of justice should not be polluted by external pressures.
  Mr. Carlisle: Is the Attorney-General aware that the important point is not so much whether the payment was contingent on the result as whether or not the witness thought that the payment was contingent on the result? Surely there was clear evidence in this case that that was the belief of the witness. Would he not agree that it is wholly monstrous for a payment to be made to an important witness prior to his giving evidence, and would he look at the matter?
  The Attorney-General: Those were the two matters to which I referred in my original Answer. They are important matters, and it seems to me that a long process of questioning a witness before he gives evidence, sometimes between committal proceedings' and his giving testimony at the trial proper, has possibilities of grave impropriety for the proper conduct of the trial.
  Mr. Blackburn: Is the Attorney-General aware that, whether the newspaper promised more or less, there is a great deal of resentment in my constituency, where these witnesses live?
  The Attorney-General: I am aware of the public feeling on this matter, and I am grateful that these questions and the opinions that have been expressed in the House have underlined the importance of the matter. I hope that, even before any Government action is taken, Fleet Street will now put its house in order.
  Mr. Paget: On a point of order, Mr. Speaker. I want to ask for your guidance with regard to the last four or five Questions. Is it not a fact that the decision whether or not to prosecute is an important judicial decision, and that a decision to prosecute, even if that prosecution should prove unsuccessful, is a decision to inflict a very severe penalty? How, then, do questions of this sort fit in with the general rule that there ought not to be political pressure exerted or attempted to be exerted, in this House or elsewhere, to decide a judicial point one way or the other?
  Mr. Speaker: The lego-political implications of what the hon. and learned Gentleman has asked me I must leave to the Attorney-General and to the Solicitor-General. But it has been the custom in the House for a long time that the action of the Director of Public Prosecutions in not instituting a public prosecution or instituting one is something which is raised in the House with the Law Officers.

HEAD OF DEFENCE SALES (APPOINTMENT)
The following Question stood upon the Order Paper:
Mr. JOSEPH KEVIN MCNAMARA: To ask the Secretary of State for Defence if he will now make a statement on the appointment of a Head of Defence Sales.
The Secretary of State for Defence (Mr. Denis Healey): With permission, I will now answer Question No. 83.
I am glad to inform the House that Mr. Raymond Brown, O.B.E., joint founder and Managing Director of the Racal Electronics Group has agreed to accept this post. He will start his duties on Monday next.
Mr. Brown will be responsible jointly to me and the Minister of Aviation. The appointment is for two years at a salary of £8,000 a year.
Mr. McNamara: While thanking my right hon. Friend for his Answer, may I ask him to assure the House that there will be no conflict of interest, that keen political control will be ensured to make certain that there are no sales of arms to areas where there might be a delicate balance, and that no arms will be sold directly or under licence to any parties engaged in the Vietnam conflict?
Mr. Healey: Mr. Brown has resigned his appointment as Chairman and Managing Director of Racal Electronics and has ceased to take any part in the business of the company. In his new post, he will have no contractual relationship with Racal, but occasions may arise in the course of export promotion when he may have to deal with matters affecting the interests of Racal as well as other firms. In such cases, it would be inappropriate for decisions to be made by him, and they will, therefore, be referred to
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the appropriate Permanent Secretary or his representative.
On the second part of the question, yes, Mer Majesty's Government will ensure that arms sales for which the Government are responsible take account of the possible political consequences of such sales.
On the third part of the question, about Vietnam, we regard the United States as a country to which we are perfectly free and indeed anxious to sell armaments, and we would not seek to impose any limitations on the use of the arms that we sold.
Mr. Powell: When the right hon. Gentleman made his original announcement on 25th January he will remember undertaking to ensure that the work of the new section and the gentleman appointed to it were open to the closest Parliamentary scrutiny. Could he now say how he intends to achieve that?
Mr. Healey: It will be open to right hon. and hon. Members to ask me or my right hon. Friend the Minister of Aviation questions about Mr. Brown's activities and the activities of the unit for which he is responsible; and we shall answer those questions.
Mr. W. Baxter: Is my right hon. Friend aware that this appointment has caused great concern throughout the length and breadth of our land? Is he further aware that it does not seem compatible with the appointment of a Minister of Disarmament? Will he look at the whole question again with a view to terminating the appointment before it is made?
Mr. Healey: On that last point, "No, Sir". It has been made clear on many occasions that we believe that it is not only our right, but our duty, to ensure that British defence industries have a market which enables them to survive and have a proper share of the international market, though I would assure my hon. Friend that the sooner that we can arrange for a multilateral abolition of the international traffic in arms at all levels through the operation of some disarmament agreement, the happier we shall be.
Mr. Marten: Can the right hon. Gentleman say what salary this gentleman is being paid? [HON. MEMBERS: "The Minister did say."] Will he also say

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whether the expenses he receives will be subject to minute examination? If they are, I am afraid that this will not be very helpful to the gentleman in his efforts to sell arms overseas.
Mr. Healey: On the question of expenses, as with other civil servants, Mr. Brown will be entitled to expenses for travelling, subsistence, and official entertainment in accordance with the approved scales. In addition, the new sales organisation will have its own funds for sales promotion, and we shall expect the industry to pull its weight in affording vigorous promotion to its own products. Mr. Brown is no amateur at selling defence equipment, and he is perfectly satisfied with the arrangements which have been made in this respect.
Mr. Rankin: Is my right hon. Friend aware that the appointment of Mr. Brown seems to be somewhat similar to a former appointment, that of Sir Basil Zaharoff, who earned a reputation in this country and in the Labour movement for his nefarious practices which were widely condemned by every member of the Labour movement?
Mr. Healey: With respect, I was not responsible for the activities of Sir Basil Zaharoff, nor were the British Government of the day. There is an immense difference between the activities of a private manufacturer of armaments and the activities of a Government servant in seeking to promote sales of British defence equipment in line with the policies of Her Majesty's Government.
Several Hon. Members rose—
Mr. Speaker: Order.
Mr. W. Baxter: In view of the unsatisfactory nature of the reply, I give notice that I shall endeavour to raise this matter on the Adjournment at the earliest opportunity.
Mr. Speaker: Perhaps I might say a word on the matter of order on Questions which are taken at the end of Question Time. This is done for the convenience of Ministers who wish to give slightly longer answers, or because the Question has not been reached, but, once the Question
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has been asked, it is subject to all the rules of short, snappy supplementary answers on the part of Ministers.

CHILD CARE, DORSET (ARRANGEMENTS)
3.44 p.m.
The Secretary of State for the Home Department (Mr. Roy Jenkins): With your permission, Mr. Speaker, I should like to make a statement about child care arrangements in Dorset.
Following my meeting with representatives of the Dorset County Council in February, a thorough inquiry has been made by my inspectors into the council's child care arrangements. Particular attention was given to all the circumstances surrounding the case of the boy who was injured while in the council's care.
Although my inspectors found no serious failures in the county's general standard of child care, or particular defects in the council's arrangements to which this distressing case could be attributed, the Report does disclose some shortcomings. I am asking the council to discuss these urgently with me. Among them is the need to ensure that the reporting to the full Children's Committee of any serious occurrence is not again overlooked. I also wish to direct attention to the need for additional children's residential accommodation in the county.
I further propose to ask all local authorities to issue new guidance to medical practitioners as to the information required in the periodic medical reports to be furnished on children in care.
In view of the special circumstances that led to this inspection, I am arranging for a copy of a letter I have sent to the council and of the chief inspector's Report to be placed in the Library, and for the publication of the Report as soon as possible.
Mr. Hogg: Will the right hon. Gentleman accept the apology of my hon. Friend the Member for Poole (Mr. Murton) who was prevented from being in his place owing to temporary indisposition?
May I ask the right hon. Gentleman whether he is aware that this case shocked the conscience of, I think, all kinds of public opinion in the country,

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not merely because of its particular circumstances, but because of doubts about the adequacy of recruitment of child care officers, and possibly of payments to foster parents, which may make it more difficult for the right hon. Gentleman to recruit a sufficient number of parents of adequate calibre?
Did the inquiry, the result of which the right hon. Gentleman has now published, involve a visit by his inspectors to the foster parents concerned? Can the right hon. Gentleman say what was the date of the last visit to the child before the incident was discovered? Is it not the case that the child's injury was such that a full medical examination would have revealed it, and was not a similar injury discovered as long ago as 1961?
Mr. Jenkins: I accept the apologies of the hon. Member for Poole (Mr. Murton), and I am sorry that he is not able to be here.
I was fully aware of the general disquiet which this case aroused, and it was precisely for that reason that I took the action which I have described.
Finally, I think that it would be better if the right hon. and learned Gentleman and hon. Members generally were to study the Report and raise any detailed questions subsequently.
Mr. Abse: Is my right hon. Friend aware that this case has only pinpointed the difficulties encountered by foster parents who receive inadequate payment, no money for holidays, and no maintenance grants of any kind? Is it not time that my right hon. Friend took notice of the Association of Foster Parents, and like bodies, who want to review the terms of service, and want to make certain that there are sufficient child care officers to give adequate support and time to the foster parents who have these difficult charges in their care?
Mr. Jenkins: I shall look into these matters. I do not think that the question of payment to foster parents is central to the difficulties in this case, though I shall consider this in the general context.
With regard to the number of child care officers, my hon. Friend will see that there is a reference to, and a recommendation on, this point in the Report.
Mr. Winnick: Would not my right hon. Friend agree that at the present time salaries for child care officers are completely and totally inadequate? Will he give some instruction to local children's authorities to upgrade child care officers so that these officers, who are doing such a valuable and essential job in the community, are properly paid?
Mr. Jenkins: I keep this matter under review, just as I endeavour to keep under review matters concerning other people in similar fields whose payment is also sometimes not regarded as overgenerous.

HEAD OF DEFENCE SALES (APPOINTMENT)
Mr. Mendelson: Mr. Speaker, I wish to ask permission to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a definite matter of urgent public importance, namely,
"the announcement by the Secretary of State for Defence that Her Majesty's Government have decided to supply arms to South Vietnam, and to parties fighting in that area."
I do so in view of the fact that Her Majesty's Government are a co-Chairman of the Geneva Conference and should be strictly neutral in this conflict.
Mr. Speaker, unlike what happens on other occasions, I have had no opportunity to give you any warning of my intention to move this Motion under Standing Order No. 9 because we had no knowledge that an announcement was to be made by my right hon. Friend the Secretary of State for Defence in reply to a Question at the end of Questions.
I want briefly to submit, strictly on the constitutional aspects of the matter, why, under Standing Order No. 9, I ask for your permission to have the leave of the House to move the Adjournment, without entering into the substance of the matter.
First, I think that this is the first time that this decision has been announced by a member of the Cabinet speaking on behalf of the Government, and, as you and the House know, it is essential under this Standing Order to seek to move the Adjournment at the earliest possible opportunity. That is why I am doing so now.

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Secondly, the matter is urgent because, according to all reports, many of the events in Vietnam are moving to a crisis, and it is, therefore, all the more essential that Britain, as one of the co-Chairmen, should be in a position to act quickly, if necessary, to help in bringing the conflict to an end. This decision to supply arms under certain circumstances will make it almost impossible for Her Majesty's Government to play any useful part as co-Chairman of the Geneva Conference.
Thirdly, the matter is definite because in the announcement contained in the statement made by my right hon. Friend there was an expression not only of the feeling of Executive decision but of Executive intention, so that it is quite conceivable that such arms might be supplied within the shortest possible time.
Finally, it is essential that we should all remember that when such announcements are made the House of Commons cannot exercise its function of affirming and asserting the Government's policies, so acting as a check on the Government's policies, unless there is an opportunity to debate the matter immediately after the announcement.
Mr. Speaker: The hon. Member seeks leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a definite matter of urgent public importance, namely,
"the announcement by the Secretary of State for Defence that Her Majesty's Government have decided to supply arms to South Vietnam and parties involved in a conflict in which Her Majesty's Government, as co-Chairman of the Geneva Conference, should be strictly neutral."
I make no complaint of the fact that I have had no previous notice of this Motion. It may be in the course of events that an hon. Member may seek to raise, under Standing Order No. 9, something of which it would be impossible to give Mr. Speaker previous notice. I would say, on the other hand, that it is also invaluable, from the point of view of the House and the nature of the important decisions that Mr. Speaker has to make, that he should, whenever possible, have previous indication of someone's intention to invoke Standing Order No. 9.
I am advised that the announcement to which the hon. Member refers is part of governmental administration; that
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there are opportunities for a debate on Government policy, including this aspect of Government policy, and that there are precedents which prevent me from allowing the application of Standing Order No. 9 for this purpose. Therefore, I must reject the hon. Member's application.
The Secretary of State for Defence (Mr. Denis Healey): On a point of order. I do not wish to comment on your decision, Mr. Speaker, but I want to make it clear that I made no announcement in the terms to which my hon. Friend has referred. Indeed, the statement that he has attributed to me was not made, and is not Government policy.
Mr. Speaker: That matter must arise in the course of some other kind of debate.
Mr. Frank Allaun: On a point of order. It has been announced that Britain is supplying military Hovercraft to South Vietnam—
Mr. Speaker: We cannot debate the issue whether the hon. Member who sought to raise this matter under Standing Order No. 9 was correct in the statement that he made about the Minister of Defence. We must leave it. That must be debated on some other occasion, and not in the guise of a point of order.
Mr. Rankin: On a point of order. Do I take it that during the course of the debate during the second half of today's business, when we are discussing the Bill on military aircraft, it will be possible to make some reference to the question of the Hovercraft?
Mr. Speaker: I never like ruling hypothetically on what will be in order on a debate. I will judge that at the time when the hon. Member seeks to make a reference to it. I will have to decide then whether or not it is in order.
Mr. Shinwell: On a point of order. I was under the impression that my hon. Friend the Member for West Stirlingshire (Mr. W. Baxter), after the announcement had been made, gave notice that he would raise it on the Adjournment.
Mr. Speaker: Possibly that will be done. An Adjournment is one of the Parliamentary opportunities to which I

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referred on which a Government decision can be questioned or opposed. But this has nothing to do with a Member's right to seek to raise a matter under Standing Order No. 9.
Mr. Shinwell: Do I understand, Sir, that once an hon. Member has given notice that he will raise a matter on the Adjournment it is still possible to raise it under Standing Order No. 9?
Mr. Speaker: I can conceive circumstances in which I can conceive that it would be possible. I shall have to look into that matter.

CONDUCT OF THE MINISTER OF AVIATION
3.55 p.m.
Mr. Enoch Powell: I beg to move,
That this House regrets that the Minister of Aviation misled the House on 7th March on a material point of fact, namely, by concealing from the House that the value of the Saudi Arabian contract announced on 21st December is included in the dollar offset arranged with the American Government for the cost of the F111A aircraft.
The matter to which this Motion directly relates is in itself narrow and simple, but the issues which it raises are of great importance; indeed, they are perhaps issues than which this House could not debate more important, for they go to the relationship of Her Majesty's Government with the House itself and to the manner in which Ministers deal with hon. Members in this House.
The facts which I shall adduce in support of the Motion are in themselves simple and plain, but their very simplicity and plainness renders the more shocking the deception which has been practised upon the House and to which the Motion draws attention.
It will be convenient to begin with the Defence White Paper, published on 22nd February, which conveyed the information, in paragraph 11, on page 11, that:
"We"—
that is, the Government—
"have taken steps to ensure that the foreign exchange cost of the F111A will be fully offset by sales of British equipment."
That was an announcement which, naturally, attracted great attention and to which much importance was attached. The Defence White Paper had announced at last the Government's decision on the long-debated question whether we should purchase any of these American aircraft, and one important factor which bore upon that decision was its effect upon our, balance of payments.
Consequently, the arrangements which might be made to offset any burden thereby falling upon our balance of payments were of exceptional importance, and there was great public interest in the nature and effectiveness of those arrangements. So one naturally read with great care and attention that part of

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the Defence White Paper which referred to those arrangements. It went on, in explanation of the sentence which I have read to the House, to refer to arrangements which had been made
"for British firms to compete without discrimination for United States defence contracts".
The whole of that paragraph—indeed, it was the only part of the Defence White Paper which referred to the offset arrangements—was concerned with the sale of equipment by this country to the United States Administration.
Therefore, many hon. Members, and, I think, many without the House, were extremely struck and very surprised by the further details of this arrangement which were given to the House in the course of debate on 7th March by the Minister of Aviation. As this passage is so important, I hope that the House will bear with me if I read the one sentence in quest on in extenso. It runs:
"The total dollar cost over the period has been stated as being £260 million over a 10-year period amounting in dollar terms to 725 million dollars, and we have the agreement of the United States"—
there are two parts to this agreement, the first only of which was referred to in the Defence White Paper—namely,
"that it"—
that is, the United States—
"will over the period buy directly British equipment to the value of 325 million dollars …"
That was the first part of the arrangements as then, on 7th March, expounded to the House by the right hon. Gentleman.
Then followed the second half, relating to the greater part of the total figure of 725 million dollars, which ran as follows:
"… and that it"—
the United States—
"will co-operate with us in sales to third countries, at least of a kind similar to that we have recently arranged with Saudi Arabia, to the value of 400 million dollars—covering the whole dollar cost of the purchase of these aircraft over the 10 years."—[OFFICIAL REPORT, 7th March. 1966; Vol. 725, c. 1861.]
From that statement, the House and the country learned of the bipartite nature of the agreement which had been made with the United States Government and which was the justification—if justification it
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be—for the statement in the Defence White Paper that the Government
"… have taken steps to ensure that the foreign exchange cost of the F111A will be fully offset by sales of British equipment."
We learned that the greater part of that offset was to be in the nature of American co-operation with us in sales to third countries. The Minister of Aviation gave an example of the sort of sales to third countries that he had in mind in the words:
"… at least of a kind similar to that we have recently arranged with Saudi Arabia …"
It could not occur to the mind of anyone hearing or reading that passage that the Saudi Arabian deal itself and the value of it were already included by this arrangement in that 400 million dollars.
If I might give an imaginary parallel—if you and I, Mr. Speaker, were in commercial relations and I were to say to you, "It is my intention to buy from you—I will buy from you—£100 worth of goods of the same sort as I recently purchased from you", it would not, it could not, enter your head that I intended only to buy £100 worth less the value of the goods which I had already purchased. Neither you, Mr. Speaker, nor any other rational human being, I submit, could suppose that that was meant. One was bound to assume—so far as I know, everyone did assume—that the plain meaning was that, in future, there would be sales to the value of 400 million dollars, in obtaining which the United States Administration would co-operate with this country, and that, by way of illustration of the kind of sales meant, a reference was made to a transaction in the recent past in which there had been, so the House was told, such co-operation. I would particularly ask the House to note the clear distinction of time in the right hon. Gentleman's Statement, that the United States
"… will co-operate with us"—
future tense, from now onwards—
"in sales … to the value of 400 million dollars"—
contrasting with the past tense in the reference to the deal—
"… recently arranged with Saudi Arabia …"
The reference was, of course, to the deal announced to the House by the

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hon. Member for Wednesbury (Mr. Stonehouse) on 21st December last. I will not quote more than the vital sentence of his statement on that occasion, which was:
"I have to tell the House that the Government of Saudi Arabia have this morning announced that a consortium of British firms has secured the major part of the order for their new complete air defence system."—[OFFICIAL REPORT, 21st December, 1965; Vol. 722, c. 1873–4.]
That was the known agreement, the known "recent sale", to use the adverb of the Minister of Aviation, to which he referred by way of analogy as the kind of co-operative sale which the United States, so he was telling the House, would organise with us to the value of 400 million dollars, the greater part of the total sum in question.
That was how matters stood when the right hon. Gentleman resumed his seat on 7th March. That was the meaning which had been conveyed by the right hon. Gentleman's statement, and not only to the House but to any reasonable person who read and studied his words. But during the month of March, towards the end of the month, it began to be bruited—I must confess that I received the rumours with incredulity—that the value of the Saudi Arabian deal was already included in the 400 million dollars part of the offset, that £75 million at least, which is the immediate foreign exchange gain to this country of the Saudi deal, as the hon. Member for Wednesbury said on 21st December—that 210 million dollars-worth—had already gone, had already been written off the 400 million dollars offset about which we were told on 7th March.
So, wishing to be clear on this matter, wishing to check these rumours which cast such a slur on the good faith of the Minister of Aviation and of the Government, I raised this point in the debate on the Address on 26th April and I put it to the right hon. Gentleman the Secretary of State for Defence that this was rumoured and had not been denied. He made no reference to this point at all when he replied to the debate, but on the following day, on 27th April, in answer to a supplementary Question after a long series of supplementary Questions, he said:
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"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."—[OFFICIAL REPORT, 27th April, 1966; Vol. 727, c. 689.]
Thus, there was eventually dragged out of the Government, almost two months after the Minister of Aviation spoke, the fact that the deal which he had led the House to believe was a past deal—mentioned for the sake of example and not included in the 400 million dollar offset—had already, in fact, been written off against that offset. It is the conflict between the facts about this agreement and the plain meaning of the statement of the Minister of Aviation which is the basis and the justification for this Motion of regret.
But before I come to examine the possible explanations of the Minister's behaviour in thus misleading the House on 7th March, I should like to ask a question. I may not get it answered this afternoon, but we shall, no doubt, learn the truth about this, too, in due course. The question is whether the value of the Saudi Arabian offset, which is being written off this 400 million dollars—written off the total 725 million dollar offset for the F111A—is limited to the initial foreign exchange earnings of £75 million or 210 million dollars, or whether the agreement to include it also includes the value of any future earnings, in terms of the supply of spares, and so on, which might be held to flow from the Saudi Arabian agreement. We might be told that as well. But whether we are told it now or, as is apparently usual with this Administration, a long time afterwards, it will no doubt in due course appear.
Now I come to the Minister of Aviation, who thus, on 7th March, led the House to believe the opposite of what we now know are the facts about the inclusion of the Saudi Arabian arrangement in the 400 million dollar offset by way of sales to third parties. There are three, and so far as I can see only three, explanations for the right hon. Gentleman's behaviour.
The first explanation I reject out of hand. It is that it was his intention, and his deliberate intention, knowing the facts and being conscious of the facts, to mislead the House. I repeat that I do not regard that as an acceptable explanation.

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I know the right hon. Gentleman well, as the House does. We have served in the House together for 16 years. We both entered it together. I do not entertain the suspicion that he came to the House on 7th March with the intention of deliberately misleading it by what he said. But, if that is so, then we must fall back upon one of two other explanations for his having thus misled the House.
The second possible explanation is that the Minister was guilty of a lapse of tongue, that he meant to tell the House that the Saudi Arabian deal was included, that that was the reason why he mentioned it and that it was only on account of some confusion in speaking, some clumsiness of grammar or diction, that he referred to it in a context which specifically excluded it, which plainly and to any understanding excluded it, from the 400 million dollar offset. That could happen to anyone.
But then, we generally read HANSARD the following day—I dare say that the right hon. Gentleman's officials also read HANSARD the following day, if not sometimes the same night—and it could not have escaped the right hon. Gentleman's attention in this case, or the attention of his officials, that he had given the opposite impression to that which he intended and the opposite impression to the truth. Therefore, if that is the explanation he is greatly at fault for not having come to the House at the earliest possible opportunity—and there are many opportunities for doing so—and put the record straight.
So far as I can see, there is only one remaining hypothesis which could account for the right hon. Gentleman's having misled the House as he did on 7th March. That is that he was not in the secret, that he did not know that the arrangement did include the Saudi deal, that it came as a shock to him afterwards, as it has come to the rest of us, to learn that this was so.
The Minister of Aviation (Mr. Frederick Mulley): Perhaps I can help the right hon. Gentleman. I accept that I was fully informed on 7th March as to the nature of the arrangement. I would not seek to let the right hon. Gentleman develop that theme. I knew the full arrangement when I spoke to the House that day.
Mr. Powell: Then in that case I have to say that the gravest censure and blame rests upon the right hon. Gentleman himself and upon all his colleagues who were concerned with this matter for not insisting that the record was brought into agreement with the facts which they knew but which no one else suspected until weeks afterwards.
If so, why did they have to wait week after week? Why did they let it pass by when these rumours and questions were being asked? Why did not the right hon. Gentleman, even in the debate on the Address when I asked this question, confirm what the facts were? Why did he wait until the last moment when the truth could not be withheld, was too blatant to be held back?
The right hon. Gentleman the Minister of Aviation has been greatly at fault. It is a fault which, unfortunately, now can only partly be retrieved. It can be partly retrieved—and I address myself to him personally and ask him to retrieve it to that extent this afternoon. This House can be a very cruel and a very critical place; but this House is always very ready to accept and acknowledge an admission of error, even if that admission is made, as this will be, belatedly. I beg the right hon. Gentleman, when he replies, at least to say now that he recognises that he misled the House on 7th March and that he regrets that he did so. That at least will make some amends to the House and the public for what has happened and I hope that he will do so.
But still there will remain irrevocably censurable the fact that the Treasury Bench opposite knowingly, consciously and deliberately on this material matter, on this point which might well have altered the view of the House and the country on the transaction itself, held out week after week and made no move whatever to correct the misleading knowledge which had been given and to substitute in its place the true facts.
The right hon. Gentleman the Minister of Aviation can do much for himself personally to mend what has been done amiss. I am afraid that, so far as the Government as a whole are concerned, this event will remain a lasting blot upon their reputation.
4.20 p.m.
The Minister of Aviation (Mr. Frederick Mulley): The right hon. Member for Wolverhampton, South-West (Mr. Powell), on behalf of the Opposition, has taken the unusual course of moving what amounts to a Motion of censure on my conduct as Minister of Aviation. The Motion alleges that I misled the House on 7th March on a material point of fact by concealing from the House that the value of the Saudi Arabian contract is included in the dollar offset arrangement concluded by my right hon. Friend the Secretary of State for Defence in connection with the purchase of the F111A aircraft.
The House will well understand the grave position for a right hon. Member finding himself, as I do, the subject of a rare personal Motion of this character; and after 16 years' membership of the House I much regret that I should be charged with discourtesy to the House for the first time.
I say at once, as my right hon. Friend the Secretary of State for Defence did on 27th April, that there was no intention to mislead the House and that I regret the fact if any words or omissions of mine caused any hon. or right hon. Member to be misled. I say to the right hon. Member for Wolverhampton, South-West that I appreciate that he very kindly acquitted me of any deliberate intent to deceive the House and that I am obliged for what he generally said about the way I have tried to behave in the House during the years we have served in it together.
At the same time, I am bound to say that I consider the Motion to be totally unjustified. Before coming to what I did or did not say in my speech of 7th March, on which the right hon. Gentleman rests most of his case, I think that I should briefly sketch the complicated history of the Saudi Arabian deal.
Since 1962, British firms have been engaged in efforts to sell a new air defence system consisting of aircraft, radar and communications and surface-to-air missiles to the Saudi Arabian Government. There was strong competition from both United States and French firms. Direct Ministerial assistance to British firms began in December, 1964, when my right hon. Friend the Secretary of State for Defence and my predecessor gave them
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their full support, and this continued throughout the negotiations. I would like, in particular, to pay tribute to the efforts of my former Parliamentary Secretary, my hon. Friend who is now Under Secretary of State for the Colonies.
In October of last year my hon. Friend heard that matters had come to a head and that the Saudi Arabian Government were on the point of deciding to accept the all-American proposal to meet their requirements. At this point it was clear to all concerned that there was no hope of an all-British sale and that the only chance of a substantial sale of British equipment rested on a co-operative arrangement.
As a result of an immediate examination of the situation to determine whether, even at this late date, some British equipment might be accepted, my predecessor decided to approach the Americans with a proposal that a joint United States-United Kingdom programme, consisting of British aircraft, British radar and communications—including some American components—and the American Hawk surface-to-air missiles might be offered as an alternative solution.
The Americans agreed that such a joint proposal should be made with their backing, but pointed out that it would, of course, not be possible to withdraw the all-American proposal which had so far found favour with the Saudi Arabian Government. My hon. Friend visited Saudi Arabia early in November and, with the full support of the American Government, presented the U.S.-U.K. proposal to the Saudi Arabian Government as an additional option for them to consider.
It was made clear that while the American Government gave their support to the joint U.S.-U.K. proposal, the all-American proposal was not being withdrawn and that it was entirely up to the Saudi Arabian Government, as the customer, to make the choice. Thus, while, on the one hand, we had the essential support of the American Government for the joint programme, there was genuine competition between the British and American firms throughout. In December, 1965, the Saudi Arabian Government decided to accept the joint U.S.-U.K. proposal and signed a Letter of Intent with the three main British contractors to this effect.

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As my hon. Friend announced on 21st December, the value of the British element of the joint programme is over £100 million, of which about £75 million will accrue as export earnings. I am pleased to tell the House that on Thursday last, 5th May, the detailed negotiations for the major part of the programme were completed and contracts signed. There will, over the next few months, be further negotiations on other elements of the deal, but the House will, I know, appreciate that it is not possible to go into any details.
Since my hon. Friend's statement of 21st December has been referred to, I would draw the attention of the House to his opening words:
"I have to tell the House that the Government of Saudi Arabia have this morning announced that a consortium of British firms has secured the major part of the order for their new complete air defence system. The remainder of the system will be provided by American firms and we have had valuable co-operation from the United States Administration in formulating the joint programme."
In reply to a Question from the right hon. Member for Mitcham (Mr. R. Carr) my hon. Friend said:
"There is no question of the agreement with the Americans to co-operate in giving technical and political support in this proposed deal being in any way linked with a commitment concerning the F111."—[OFFICIAL REPORT, 21st December. 1965; Vol. 722, c. 1873–5.]
Indeed, there could not have been any connection since no decision about purchasing the F111 had been made and during the previous week, on 13th December, both my predecessor and my right hon. Friend the Secretary of State for Defence had explained to the House that the option to buy this aircraft had been extended by two months, from 31st December to 1st March, because no decision had been or could be made until the conclusion of my right hon. Friend's Defence Review.
At no time during the Parliamentary Secretary's discussions with the Americans was there mention of the F111 or any other further British purchase. Subsequently, it was made absolutely clear to the Americans, in case there was any misunderstanding, that American assistance on the Saudi Arabian deal would have no influence whatever on any F111 purchase by Her Majesty's Government.
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The American Government's interest in assisting our sales, as well as their own was due to the fact that we had stressed the need for some reciprocity in respect of our foreign exchange position, which had been affected not only by the purchase of Phantoms for the Royal Air Force and the C130 transport planes, but also by the considerable dollar expenditure we inherited in orders placed by right hon. Gentlemen opposite for Polaris and the Royal Navy Phantoms.
Mr. Cranley Onslow: Perhaps it would be of some help if the right hon. Gentleman would say what precisely, in time, is meant by "subsequently" it was made out to the Americans that no influence would be allowed to be taken into account, and on whose initiative. Was this in response to impressions apparently gained on the American side, or was it felt necessary that we should make this clear from our side?
Mr. Mulley: The word "subsequent" means subsequent, in fact, to the actual meeting to which I referred that my hon. Friend had with the American Government. The clarity was introduced in discussions with officials. I do not usually like to bring official discussions into public statements, because Ministers must always be responsible to the House, but between the discussions that took place in which my hon. Friend put forward the idea of the joint proposal, and its being submitted and actually accepted—I have not the dates, but I would say that it would be about between mid-November and mid-December of last year.
When we entered into negotiations with the Americans for the purchase of the Phantom for the Royal Air Force and of the C130, we not only got their active support for the substitution on as large a scale as possible of British equipment and thereby reduced the dollar cost substantially—for example, British equipment and parts in the Phantom aircraft amount to over 45 per cent. in value—but we also got the Americans to examine whether there were items which they could buy from us and whether there could be co-operation in sales to other countries which would assist our industries.
These new and novel arrangements for establishing outlets for our industries,

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both in the United States and in the third countries, evolved over the past year. Acceptance, however, of the principle was not enough, and after more negotiations my right hon. Friend obtained the targets which I announced on 7th March, in addition to favourable credit terms and a fair price for the aircraft themselves.
In arriving at the target figures we took into account, on the one hand, the purchases of Polaris and the Phantoms by the Royal Navy on which the previous Government had made no attempt to negotiate any reciprocal arrangements, the Phantoms for the Royal Air Force, the C130 transport and the new F111 purchase, and, on the other hand, the expenditure by the United States forces in this country over the same period of time. The specific targets for sales to the United States and to third countries, amounting to 725 million dollars in all, were calculated to offset the dollar cost of the new F111A purchase alone.
It was, therefore, perfectly reasonable to include the Saudi Arabia deal in the overall arrangement which had given us a new market for British equipment that we would not otherwise have had.
Mr. Eric Lubbock: The Minister uses the words "we would not otherwise have had". Does he mean that we would not have had the Saudi Arabia market unless we had placed the order for the F111A?
Mr. Mulley: With great respect, I am standing here because of a half sentence by which it is claimed I misled the House. I am trying to put facts on record, and hon. Members do not seem to want to hear—[HON. MEMBERS: "Answer".] I have answered quite clearly.
I have already said that a point had been reached when it was agreed by all that there was no prospect of selling any substantial amount of British equipment. The only possibility was a joint arrangement of the kind my hon. Friend arranged with the American Government. Quite clearly, without such a joint arrangement there would not have been a substantial sale, and, therefore, it is absolutely correct, as I have just said, that this arrangement produced a new market for British equipment that we would not otherwise have had.
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The complex series of negotiations sought, therefore, to establish firmly the principle of quid pro quo, to work out detailed methods of procedure and to agree targets which, if no more is achieved, will offset the cost of the purchase of the F111A. These arrangements were summarised in the White Paper.
Complaint has been made—and the right hon. Gentleman himself made it again today—that no reference was made to sales to third countries until my speech of 7th March. Certainly, the right hon. Gentleman the Member for Mitcham and his right hon. Friend the Member for Barnet (Mr. Maudling) both behaved on the following day as though this was the first they had heard of it. Indeed, the point was made again by the right hon. Member for Wolverhampton, South-West in a speech, to which he has referred, on 26th April.
In fact, my right hon. Friend the Secretary of State for Defence, on 22nd February, spoke about
"… collaborative sales to third countries …"—[OFFICIAL REPORT, 22nd February, 1966; 725, c. 245.]
both in his introductory statement to the House on the Defence White Paper and in reply to questions posed by the Leader of the Opposition—[Interruption.] If hon. Gentlemen opposite will not listen and will not read the text in HANSARD—[Interruption.]—I think that they are in no position to complain. In reply to the first day's debate on the Defence White Paper on 7th March I sought to give the House further information in considerable detail of the offset arrangements my right hon. Friend had made with the United States Government.
In contrast to the criticism for not having given enough information, to which I am now subjected, I was then criticised by the right hon. Member for Barnet in the following day's debate for saying too much. As the right hon. Gentleman put it:
"The whole gaff was blown yesterday by the Minister of Aviation. He gave the whole show away."—[OFFICIAL REPORT, 8th March 1966; Vol. 725, c. 2032.]
Indeed, the right hon. Gentleman the Member for Wolverhampton, South-West—and I understand that he is now reproving his right hon. Friend—on 26th April when, he has just told the House, he

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was seized of the full circumstances, made exactly the same point but, I must say, in rather more eloquent language.
I have, of course, for the purpose of this debate reread my remarks with great care. I confess that I did not read them on the day following the debate. Perhaps I am at fault there, but I did not read them until the speech was brought at a later stage to my attention. But I have reread my remarks, particularly the section quoted by the right hon. Gentleman in which, in describing co-operative sales to third countries, I said:
"… at least of a kind similar to that we have recently arranged with Saudi Arabia …"—[OFFICIAL REPORT, 7th March, 1966; Vol.725, c. 1861.]
In retrospect, I recognise that this may have been an imprecise way of quoting the proposed sale to Saudi Arabia as an example of what was meant by collaborative sales. But it was not intended to mean—and in my view it is stretching language to suggest that it does mean—[HON. MEMBERS: "No."] that this deal was excluded—[HON. MEMBERS: "Nonsense."] I think that I should say, however, that: I was replying to a day's debate from notes taken during the debate, and not making a prepared statement.
I think, that any hon. Member who reads the OFFICIAL REPORT, and certainly those—a number of whom I see here today—who were present on that occasion, will concede that I was frequently interrupted, and was pressed for time. I make no complaint about that—it is part of the cut and thrust of debate, and we were on the eve of an election. [HON. MEMBERS: "Hear, hear."] Indeed, I recollect having difficulty in giving the House the information I did give to it, as it was clear that right hon. and hon. Members opposite were not anxious to have the details of how we had managed to get offset arrangements for dollar expenditure when they had failed to do so.
While I do not seek to excuse any shortcomings on my part, right hon. Members opposite must accept some responsibility if there was misunderstanding. [HON. MEMBERS: "Why?"] I must emphasise that after my speech there was a full day's further debate, in which any doubts might have been posed about what I said or what I did not say, and they could have been cleared up. The fact
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is that both the right hon. Member for Barnet and the right hon. Member for Mitcham made it abundantly clear in their speeches of 8th March—the evidence is there on the record—that they had not the slightest interest in the arrangements for sales to third countries. They condemned them root and branch and said that they were totally unacceptable.
I agree that their arguments lacked conviction, not merely because they had been members of a Government which had bought first Skybolt, then Polaris and, finally, Phantom aircraft without any offset arrangement whatever, without offsetting one dollar of the substantial foreign exchange involved. In each case they quoted the part of my speech of which complaint is now made, and they could have sought clarification had they deemed it to be material.
Mr. Robert Carr: Will the Minister accept from me that I would most certainly have sought clarification if I believed that his remarks were at all ambiguous?
Mr. Mulley: I accept that, of course. I am bound to say, however, that in rereading what I am reported to have said on that occasion, I found the final remarks ambiguous myself.
As I understand the Motion, the charge against me, in short, is a sin of omission rather than of commission. It is a charge that I gave the House insufficient information, and not that I gave the wrong information. This Government, unlike their predecessors, have sought to give the House as much information as possible on all aspects of defence, and I am sure that this is right. It will, however, be obvious that there are dangers if, at a later stage, there is to be a Motion of censure because information which was not requested at the time was not included. This could not have happened under a Conservative Government, because they withheld all facts from the House as a matter of policy, including their purchases from the United States.
The right hon. Member for Wolverhampton, South-West will recall being a member of a Government which, in 1963, produced a half-page Defence White Paper—in fact, a foreword followed immediately by a set of annexes. In the last defence debate during the time of

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the previous Administration, the then Minister of Defence, Mr. Thorneycroft, on 26th February, 1964, in reply to my right hon. Friend who is now Secretary of State for Defence, put his policy very shortly when he said:
"We never have stated the cost of an air-craft in advance. It has never been done in the history of any defence debate, and the hon. Gentleman knows it perfectly well."
Mr. Powell: Is the Minister now saying that the Government intend to withhold information from the House for fear that if that information proves to be false or misleading it will result in a Motion of censure?
Mr. Mulley: It would be interesting if the right hon. Gentleman were to extend his considerable textual analysis experience to some of the speeches of his right hon. Friends. I am glad to be able to point out that at column 453, on the same day, Mr. Thorneycroft made it even clearer in reply to one of his own hon. Friends when he was asked about purchases of the Phantom, the American aircraft which he had ordered for the Royal Navy. Mr. Thorneycroft was asked about its cost, its delivery and its price, and he said:
"I am not giving either the cost or the numbers, because such information has never been given in the House of Commons."—[OFFICIAL REPORT, 26th February, 1964; Vol. 690, c. 451, 453.]
The complaint of the Opposition is not that they were not given enough information, because they are in no position to sustain such a complaint. Their attack is on the offset agreement, which they could not themselves achieve. In pursuing this attack, they do untold damage to British industry. They do not believe that British industry can compete on equal terms with its American rivals. We believe that it can, and these arrangements are based on our confidence in British firms and on the support of the United States Government.
I have sought to give the House a full explanation of my conduct about which complaint is made. I hope very much that the House will find it acceptable.
4.46 p.m.
Mr. Eric Lubbock: The right hon. Gentleman for Wolverhampton, South-West (Mr. Powell) has
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explained with his usual clarity the reasons why the Opposition put down their Motion. As the right hon. Member said, everything depends upon the interpretation of the words used by the Minister in his speech on 7th March.
As the Minister knows, we on this bench look at every issue in the House on its merits, and we are not tied to voting with or against the Government for party political reasons. Therefore, my colleagues and I approach this question with an entirely open mind. We have studied the passage in HANSARD on which this debate centres and for my part I cannot understand how that passage could be construed in any other way than that in which the right hon. Member for Wolverhampton, South-West has construed it this afternoon.
There had been no public suggestion that the Saudi Arabian deal should form part of the offset arrangements until 27th April this year. The passage from the announcement by the hon. Member for Wednesbury (Mr. Stonehouse), now Joint Under-Secretary of State for the Colonies, which was quoted by the Minister, makes it clear that at that time, at least, there was no question of linking the Saudi Arabian deal with the subsequent offset arrangements.
The Minister did not quote the part of the question by the right hon. Member for Mitcham (Mr. R. Carr) to which he was giving the answer, and I should like to put this on the record from col. 1874. The right hon. Member for Mitcham asked:
"… is there a link of any kind—whether formal or informal—between the United States Administration's co-operation on this order and any possible order from us for the F111?"—[OFFICIAL REPORT, 21st December, 1965; Vol. 722, c. 1874.]
The Minister has already quoted the reply that at that time there was no question of any connection between these two issues.
What the Minister said this afternoon was a little bit ambiguous because he said that there was no question of our selling these Lightnings to Saudi Arabia unless the Americans withdrew. By saying that, he implied that at that time the offset agreements were already under discussion and that we had thrown this into the melting pot to help the Americans to

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make up their minds to withdraw from Saudi Arabia.
Mr. Mulley: I tried to explain to the House that over the previous year—since the first purchases that were made with the United States—we were seeking improvements in trying to get better foreign exchange arrangements by direct sales and through co-operative sales to third parties. These talks had been going on for a long time, for the general benefit of our foreign exchange policy. They were in no way related to the F111, because in the very week to which the hon. Member is now referring both my right hon. Friends explained to the House why we could not exercise the option—the hon. Member will remember this—on the F111 by the end of the year. So there was no link with the F111. Naturally, however, we were anxious to get an offset or reciprocal arrangement for our dollar expenditure.
Mr. Lubbock: I am most grateful to the Minister, because I think that what he has just said is of very great importance. It means that, when his right hon. Friend was talking with the Americans about the offset arrangements relating purely to the Polaris and the Phantom, they decided to throw in the Saudi Arabian deal which had not yet been concluded as part of the price which we were to pay. I remind the Minister that this conflicts with something that his hon. Friend said at his Press conference in announcing the Saudi Arabian deal. I have two quotations here, so I am sure that these must be accurate. The first is from The Guardian of 22nd December:
"Mr. Stonehouse emphasised at a Press Conference that the order has been acquired in the teeth of American competition. The United States, which so far has supplied almost all the aircraft to the Saudi Government, at no time withdrew its project for 100 per cent. American systems".
That was not a verbatim quote, but in the Daily Telegraph the hon. Gentleman's remarks are in inverted commas. He is reported as having said:
"Until the eleventh hour the Americans were trying every possible means to stop the order and substitute American equipment."
I must point out to the Minister that this is at variance with what the Secretary of State for Defence said in the Answer he gave on 27th April which has already been quoted. He then said that
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"… the Americans originally undertook to stand aside"—[OFFICIAL REPORT, 27th April, 1966; Vol. 727, c. 689.]
in the Saudi Arabian deal as part of the negotiations which were under way for the offset of our dollar expenditure on weapons as a whole including, as we have heard this afternoon, the Phantom and the Polaris.
The Secretary of State for Defence (Mr. Denis Healey): If the hon. Member reads what my right hon. Friend said in opening the debate, he will see that it is quite clear. The American Government were involved with us in making a joint effort to the Saudis and they put their official governmental support behind that joint effort; but they said they could not persuade the American firms concerned—particularly Lockheed—to withdraw their alternative offer and they must leave it to the Saudi Government to decide between the joint offer sponsored by the British and American Governments and the other American offer. My hon. Friend the present Under-Secretary of State for the Colonies was absolutely right in saying that competition from Lockheeds persisted to the very last moment and was very stiff indeed.
Mr. Lubbock: I am grateful to the right hon. Gentleman for making that clear, because his remarks on 27th April, 1966, caused some offence in the British aircraft industry. [Interruption.] Yes, they did, and particularly in the British Aircraft Corporation, which was upset by the implication that it had a free run to Saudi Arabia and that no American competition was involved. Further, the right hon. Gentleman's remarks have upset the Saudi Arabians, because from their point of view the implication is that they were getting something less than the best, whereas, as everybody will admit, the Lightning fighters which the Saudi Arabians decided to buy were infinitely better for their purposes than any American alternative they might have had.
I return to the main issue in this debate. I plead with the Minister to look even more carefully at the remarks he made on 7th March and to consider whether there is any possibility whatsoever that they could have been interpreted in the way he suggests. In my view, there is no such possibility. In view of what had

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gone before and some of the arrangements, particularly the Saudi Arabian one and the statements made on it in the House which I have already quoted, there was no doubt in my mind, and certainly not in the minds of any of the national commentators in the aviation scene, about what he meant in that passage of his speech.
Therefore, I am not at all surprised that the right hon. Member for Mitcham did not make any reference to it, as the Minister says, in the last day of the defence debate. I do not see any reason why he should have done. He must have been extremely relieved to hear from the speech of the Minister of Aviation that there was no question of any link between these two deals. It was with great satisfaction that many people concerned with the future of our aircraft industry learned that that was being left on one side and that we still had the whole of the 400 million dollars to be expected in the next 10 years as contracts which would be placed with the British aircraft industry by third countries.
That would have been an extremely satisfactory position for the British aircraft industry. I think that there is some merit in these arrangements for sales to third countries. But now, to their consternation, they learn that this amount of contracts which they might have expected to get is only one half of what it was. This is not at all a satisfactory position for the British aircraft industry to be in.
In conclusion, even though the Minister may have relaxed somewhat on the ridiculous secretiveness of his predecessors, he has not gone nearly far enough yet. If he is trying to give himself a pat on the back and say that he now is giving the House figures of the value of contracts which were not given by his predecessor, Mr. Thorneycroft, I can tell him that neither on this side of the House nor on his own will we accept the present position as being the end of the road. Many of us want to see a Select Committee charged with the responsibility of examining these matters, on similar lines to the committees they have in the United States, so that the House can be fully informed of all that is going on in defence, and particularly where hundreds of millions of £s are involved, as in this case. Until we reach that situation, we on this bench will not be satisfied; and I very much
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regret to have to tell the Minister that, in spite of the answer he gave this afternoon, we shall have to vote against him at 7 o'clock.
4.56 p.m.
Mr. Ronald Atkins: I am very grateful indeed, Mr. Deputy Speaker, to have this first opportunity of addressing the House. I represent a Preston constituency the north end of which has a football team, the team which drew with Manchester United and defeated Cardiff last week by nine goals to nil.
Preston is famous for other reasons, too. Before the 1832 Parliamentary Act, it shared with Westminster the distinction of being just about the only democratic constituency in the whole country. This was at a time when other constituencies were either in the landlords' pockets or had a tiny number of electors who sold their votes at every election.
In any comparison between Preston and Westminster I should say that Preston has the edge on Westminster, because I remember reading that during the election of Charles James Fox towards the end of the eighteenth century Charles bought votes by sending around the Duchess of Devonshire with kisses. There is no evidence of anything like that happening in Preston, no doubt because the men of Preston are so honest and because the women are so beautiful that any charms from any duchess would be quite superfluous.
The democratic tradition of Preston is probably reflected in the fact that this year we are celebrating the one hundredth anniversary of the existence of the Labour and Trades Council. Probably the early growth of this movement was associated with the early industrialisation of Preston. This part of England—Lanacashire—saw man's first great breakthrough in controlling the forces of nature—an event which raised human affluence to heights never dreamed of before. This was the result of great native genius expressing itself at first in the cotton industry, but remaining today in a great complex of industries, including the aircraft industry and its associated interests, an industry on which the future of Britain largely depends because of its ramifications.
This is why I speak in this debate. Unfortunately, it is a controversial subject

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for a maiden speech, when one is expected to be neutral. However, the people of Preston are forthright, like most Northerners. I draw courage from the words of another great Northerner, my right hon. Friend the Prime Minister, who not once but twice quoted the authority of Dante:
"The hottest places in hell are reserved for those who are neutral in a moral crisis."—[OFFICIAL REPORT, 21st December, 1965; Vol. 722, c. 1924.]
and would any hon. Member have a maiden neutral in a moral crisis?
This is about morality. This is a question whether we were misled on the matter of the offset agreement relating to foreign currency in connection with the F111A. Many thought that the Saudi Arabian agreement was not included in this offset agreement and, although my right hon. Friend was quite genuine in his earlier statements, one wonders whether or not the United States negotiated a change of mind. I am aware that the United States Government are hard bargainers in matters of this kind.
At least one right hon. Member, several hon. Members and even a noble Lord were given credit in my local newspaper for this deal, and I imagine that it was a deal which was concluded in the face of strong competition from America. The final credit was given in the local newspaper to a sales executive. According to this newspaper, the usual commission on the deal would be 1 per cent. which would have given the sales executive £1 million, though it was suggested that under the circumstances the commission might be somewhat less.
Nevertheless there is raised the question, who is to be paid this money? I am wondering whether it should go to President Johnson, if he helped to conclude the deal. We might do better in the future in selling aircraft if we had the kind of power that comes from the United States Administration in aircraft deals throughout the world. I do not think that they are inhibited in using political influence and strength in order to forward the American aircraft industry.
I have little sympathy with the crocodile tears which have been shed by some hon. Members opposite over the loss of foreign currency. They have shown little concern in the past about expenditure in connection either with foreign bases or
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with the British Army of the Rhine. It is very significant that they would probably increase the loss of foreign currency in defence expenditure in Aden. However, I am more concerned about the future of the aircraft industry and I wish Opposition Members would say more about that, as hon. Members on this side of the House have done. Are we to continue to lose foreign currency over aircraft purchases? It would be very serious if this were to continue.
I have some sympathy with some hon. Members opposite who have been expressing concern about the remarks of Mr. Richard Worcester. Some have asked the Minister publicly to disown the views of Mr. Worcester that the Anglo-French projects to which we are committed—or, at least, to which I thought we were committed—are to be shelved in favour of more co-operation with the United States. This has caused a great deal of alarm among aircraft workers throughout the country. I have received representations both personally and in writing from people, including the managing director of B.A.C., who are worried about Mr. Worcester's statement.
People have put their views to me and I believe they are important views which need to be answered. They believe that the British aircraft industry faces slow extinction if the Government and nationalised airlines place large orders in the United States. Our best designers, engineers and craftsmen—not just the un-skilled men—are departing in their hundreds to our competitors, chief of whom are the United States. We are losing the brains, not the fat.
I have been asked what we are to do with the aircraft of the 1970s which we have on British design boards. My constituents ask: will Britain get the orders with French co-operation, or will the orders go to the United States, or will we just drift so that in the end we shall have to go American? The aircraft workers say that those who talk merely of the economy are penny wise. If the British aircraft industry goes to the wall, British technology goes with it. How can Britain remain in the front of the computer age, if we withdraw aircraft from the main field of computer development? On the other hand, if we build under licence to American designs, what shall we design—fruit machines?

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B.E.A.'s great success for over 20 years has been based on British planes. The French know what they want. They want to make the planes that they use, if possible in co-operation with us. This way into Europe is wide open and is the most practical way of getting in. We—not the French—create the difficulties in this case. Dutch, Swedes, Germans and Italians, both inside and outside the Common Market, could be partners and customers in this huge market. This would be a market to match the Americans. Equal with our partners in aircraft and other projects, we could remain an independent industrial Power with high living standards and with some self-respect.
Prestonians ask not for words and plans. They ask for orders now.
5.7 p.m.
Mr. Aidan Crawley: It gives me great pleasure to follow the hon. Member for Preston, North (Mr. Ronald Atkins) in his maiden speech. There are many on this side of the House who regret the disappearance of his predecessor, but, after the hon. Gentleman's speech, I am sure we all welcome him very much indeed. He spoke with great fluency and competence. He was not controversial, although I thought he was brave in at least hinting at some criticisms of his own side. But he did it with such charm that I have no doubt they will be heeded. I am sure that the House will look forward very much to hearing the hon. Gentleman again.
The hon. Member touched on one point which concerns me. He mentioned Charles James Fox's custom of winning votes in his constituency by kissing the Duchess of Devonshire. I should tell the House that the present Duchess of Devonshire is a constituent of mine and, however much I should like to follow the example of Charles James Fox, I am afraid that it would not win me any votes today.
I think we were all pleased that the Minister of Aviation expressed regret if he had unintentionally misled the House, and I am sure we accept his expression of regret. On the other hand, I do not believe that anybody, when re-reading
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what the right hon. Gentleman said, could be in any doubt that unintentionally he did mislead the House. One should remember that we heard the statement from the hon. Member for Wednesbury (Mr. Stonehouse) who, in announcing the Saudi Arabian deal, said categorically that it was in no way linked with the F111, and indeed that this subject had never come up in his conversations with the United States.
On top of that, we then had the Minister of Aviation saying, in regard to sales to third parties, that he hoped that it would lead to co-operation in sales
"at least of a kind similar to that recently arranged with Saudi Arabia".—[OFFICIAL REPORT, 7th March, 1966; Vol. 725, c. 1861.]
I do not believe that anyone rereading those words now could conclude anything but that he was excluding the Saudi Arabian deal.
The Minister went on to relate some of the history of the deal. He said that the Saudi Arabian Government were on the point of accepting the across-the-board American offer and there was no chance of Britain getting the contract unless we came to an agreement with the Americans on a joint offer. I wonder exactly how accurate that is. I have no doubt that the Saudi Arabian Government were considering very carefully the across-the-board offer, but did they make no condition when they were considering its acceptance? Is the Minister absolutely sure that, if they did make conditions, the Americans would have agreed to them? Is he sure that there was no chance whatever of Britain getting the contract?
The Secretary of State for Defence then said that the Saudi Arabian Government decided to accept the joint proposals. Again, I wonder whether that is exactly the way to put it. Was not the position rather different? Was not the true position that not only had the American Government not been able to prevent—indeed, they had no powers to do so—the Lockheed group from pressing its claims as hard as it could right up to the last minute, but, towards the end, the Lockheed group had official backing? Was not the true position that the military representatives in Saudi Arabia were

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accompanying the Lockheed representatives when they were pressing their case, and does not this indicate that, whatever the original intention of the American Government had been, they were not in fact able to carry out their undertaking not to press the deal with the private companies?
If that is so, the truth is that we won this contract against intense competition. The Secretary of State for Defence told us, on 27th April, that
"When the original negotiations were undertaken … the Americans originally undertook to stand aside …"—[OFFICIAL REPORT, 27th April, 1966; Vol. 727, c. 689.]
In the end, however, they did not stand aside, and we won this contract against intense competition, the American Government having been unable to fulfil their intended undertaking not to support the deal. It had no connection with the contract for the F111, and there was no reason why it ever should. This is what is so incomprehensible. We won this concession on our merits, the American Government having been unable wholly to stand aside, but, in spite of this, the Secretary of State for Defence agreed, when he came to negotiate the F111 contract, to offset the dollar cost of that against the Saudi Arabian deal.
I wonder why he did this. There was no reason for it. We had the contract. The Americans were glad to get a share of it when we got it, but it was due to our own competition. It was not due to American collaboration. Yet the Minister gave away these dollars.
I suspect that the reason is that he is finding the whole problem of offsetting these dollars far more difficult than he expected. It should be remembered that both he and the Minister of Aviation had said in the Defence White Paper and in their speeches in the House that they had "taken steps to ensure" that these 725 million dollars would be "fully offset" by sales to the American Government and by sales to third parties, and they divided the total—rather surprisingly, I think—into 325 million dollars on the one hand and 400 million dollars in respect of sales to third parties.
If one has taken steps to ensure something, one presumably has in mind fairly clearly how one will ensure it. One must have some direct sales, some contracts,
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and some sales to third parties in view. In the Defence Review, the Minister mentioned one such sale. He said that we were tendering for auxiliary naval vessels. We now learn that that tender has failed and we have not got the contract. We have some sales of components, but I wonder what other sales are in view. We can carry on tendering, but it will not be easy to earn those 325 mill ion dollars.
What about sales to third parties? I think that the Secretary of State for Defence was much more confident of this. We were told about it in the newspapers, and there was a Parliamentary Answer on 9th May telling us that, since the F111 contract, there had been a sale which we might have expected to take some part in and which we might have expected to be able to set off against the F111. I refer to the sale of aircraft to Jordan. With our long connection with Jordan, one might have expected this country to have some claim to sell aircraft there. But, when the Minister of Aviation was asked on 9th May what representations he had made to the United States in order to get a share of this contract, he replied,
"None."—[OFFICIAL. REPORT, 9th May. 1966; Vol. 728, c. 24.]
I wonder why. Were no representations, suggestions or approaches ever made by Jordan to this country? Have we so lost contact there that we are not interested in such a contract?
Or is the reason that the Minister does not need any more foreign sales contracts? We should get a better idea of the true situation—perhaps the right hon. Gentleman will clear this up—if we knew exactly how much of the Saudi Arabian deal is being set off against the F111. Is it just the 200 million dollars, or is there, as there may well be, an additional sum for spares and further expenses to be incurred? If there is an additional sum, it is clear that the right hon. Gentleman is not much worried about any other contracts, because he has pretty well written off the whole of the 400 million dollars due to third party sales already. In other words, he has simply given the Americans something they never for one moment expected to have.

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There is not the slightest doubt that the Americans were deeply disappointed at losing this contract and were determined to do what they could to repair the position. I do not believe that they ever thought that the British Government would agree to count the Saudi Arabian contract in against the dollars for the F111, but they thought they would try it on, and they got away with it. They got away with it because the Secretary of State for Defence is a weak man and he simply gave it to them on a plate.
Mr. Healey: Wait till my reply.
Mr. Crawley: That being the case, what has happened is that we have lost an opportunity to boost British aircraft and British sales in return for the F111 contract. We have dealt another blow at the British aircraft industry, and the Secretary of State for Defence has shown that he is capable of misleading not only the House but the country.
5.18 p.m.
Mr. Nicholas Ridley: The decision to purchase the F111 and to cancel the TSR2 was a highly controversial one at the time, and many of my hon. and right hon. Friends and hon. Members opposite felt that it was a wrong decision. Apart from the military aspects of the decision, the Government's case rested on three main grounds. First, that it would cost £300 million less to buy these aircraft than to carry on with the TSR2; second, that the cost would be covered by credit which was being extended to us by the American authorities for the whole of the purchase of the American aircraft; third, that the dollar cost would be fully met at least in so far as the F111 went.
It seems to me that the whole transaction has been surrounded in mystery. The House has been given little bits of information on all these three points but never the complete picture. For instance, when we try to discover where the saving of £300 million has been made, the Government have been evasive throughout. It appears in the end that they did not allow in their figures for the effect of the cancellation charges and the abortive work on the TSR2, amounting to £195 million or perhaps more, which reduces the possible saving to barely £100 million. This omission has never been admitted.
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The Government have never come clean about it, and it takes endless questioning and badgering by my hon. Friends to elicit the truth on a simple matter such as that.
We are now told with regard to the credit arrangements that those parts of the aircraft which are to be made in Britain are not to be given credit coverage by the American authorities.
Why were we were not told this at the beginning? Why was it left to the middle of March this year before this information was given to the House? What we are debating today is the question of the dollar offsets. That is far the greatest consideration, apart from the military and strategic ones, which surrounds the whole controversy. If the House had not thought that the bulk of this £260 million spent in dollars could be got back in the form of export earnings of some other sort, this deal would have been an even more certainly bad one than it appeared on the surface.
I make one small point before coming to the main ground of the Motion of censure. It was obvious from the beginning that we should do everything possible to install in all these aircraft the maximum amount of British-made or British-built equipment. I was surprised, therefore, when visiting Lockheed to discover that the order had been placed for the C130 aircraft before any suggestion was made by the Minister of Aviation that British parts should be incorporated in it. The date when the order was first made public was 2nd February, 1965, and not until 2nd July of that year was any suggestion made to the Lockheed group that British parts should be incorporated.
This extraordinary time lag of four months puzzled me and I put a Question to the right hon. Gentleman on 9th March. He denied this time lag and said that it was in fact in March that the order was first placed for British parts to be incorporated. I shall leave it to him to sort out with the Lockheed company whether it was July or March. I am inclined to believe what I was told on the spot. But I wish to draw the attention of the House to the blind folly of ordering expensive aircraft, worth perhaps £100 million, and after placing the order making the condition that we would like to have British equipment incorporated.
Mr. F. A. Burden: Is my hon. Friend saying that the Lockheed company, when he was there, told him that the order was received in July and that the Minister said that it was placed in March?
Mr. Ridley: That is the position. I do not know where the error has occurred and I am not making any allegation, but it is puzzling that the decision, whether it was in March or July, should have happened after the date of ordering the aircraft in February in the first place.
The main point is the one which my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) raised so convincingly this afternoon. The first point I wish to dwell on is that raised by my hon. Friend the Member for Derbyshire, West (Mr. Crawley) in a very powerful speech. There was competition for the Saudi-Arabian deal. We have now been told this and we are no longer in any doubt. Therefore, I ask, how can this deal he called:
"co-operating with us in sales to third countries."—[OFFICIAL REPORT, 7th March, 1966; Vol. 725, c. 1861]
Those words were used by the Minister of Aviation when he wound up the debate on 7th March. He described the Saudi-Arabian deal as one similar to those which we expected to make and in which the Americans would co-operate with us in sales.
It is abundantly clear already that there was no ca-operation, because there was this independent private company, Lockheed, trying its very utmost to obtain the order against the competition of the joint project. So we must ask the Secretary of State to tell us how on earth he agreed to take this into account when agreeing the target for the offsets. The right hon. Gentleman said earlier this afternoon that his right hon. Friend agreed the target on 725 million dollars for the F111A after weighing up the pluses of the American bases in Great Britain and the minuses of Polaris and Skybolt and other historical events which I can see no justification for bringing into account at this stage.
Mr. Mulley: I made no reference at that point to bringing Skybolt in. Polaris was brought in because we are still paying dollars for Polaris.
Mr. Ridley: The figure which the right hon. Gentleman mentioned of £260 million exactly fits the bill for the F111A, so one can only presume that he has cancelled out, on the one hand, the American bases in Britain and, on the other hand, those weapons purchased long before he was responsible. It boils down to trying to get an offset for the value of the F111A alone.
The right hon. Gentleman concluded in his speech that it was perfectly reasonable to include the Saudi Arabian deal. We fought tooth and nail against American competitors to get that deal. The Parliamentary Secretary, who is now Joint Under-Secretary of State for the Colonies, claimed great credit and that this was a triumph for British contractors. Many of my hon. Friends congratulated the Government on this deal. We all, quite rightly, still do. It was a great success, yet the Secretary of State for Defence was all this time in Washington selling down the river this valuable dollar export by counting it against the purchase. It is the most extraordinary story.
Captain Walter Elliot: Does my hon. Friend recollect that when the hon. Member for Wednesbury (Mr. Stonehouse) announced the signing of this contract, I think on 21st December, he congratulated Lord Blyton and a Parliamentary delegation, which had played a small part in Saudi Arabia a few weeks previously, on the work they had done in getting the contract? I was a member of that delegation and I can fully support my hon. Friend in saying that the contract was being won in the face of fierce American competition.
Mr. Ridley: I think this has been admitted by the Government this afternoon. It raises a new hare which it would be inopportune for us to chase after today, but that hare will run on another occasion. It exposed the Secretary of State to a charge either of innocence or gullibility which none of us would have expected of him. I have often heard him called in my constituency, "The Cardboard McNamara", but I never knew that he was a sucker to boot. I am grateful to my hon. and gallant Friend the Member for Carshalton (Captain W. Elliot) for having confirmed the competition which surrounded this deal.

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The question which now must be answered by the Government is how they came to include this deal under American pressure when it had already been won in the teeth of competition from an American firm. If the Secretary of State had come clean and said, "I have done my best; I have not been able to make a good bargain, but I have succeeded in getting a certain amount of offset and the Americans will not agree to leave out of the offset the £75 million we have won in Saudi Arabia", the House would have been critical but not unforgiving. We would have known where we were. This seems a remarkable lapse on the part of the Secretary of State.
I should like to pursue a little further the right hon. Gentleman's position in all this. It was on 21st December, 1965, that the Saudi deal was first announced by the Joint Under-Secretary of State for the Colonies. On 27th April, about four months later, the Secretary of State answered a question by my right hon. Friend and said,
"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."—[OFFICIAL REPORT, 27th April, 1966; Vol. 727, c. 689.]
The bargaining was, therefore, going on before the Saudi deal had been fixed. That must have been before the Parliamentary Secretary made his announcement.
Mr. Mulley: Perhaps I may help the hon. Member. I see that he is trying to get the facts right. On the matter of dates, I made it clear that the main contracts had not been signed. They were not signed until Thursday of last week, and some contracts still remain to be signed.
Mr. Ridley: The point is that at the time the Secretary of State was selling us down the river in America on the question of this £75 million in exchange, the Parliamentary Secretary told the House,
"There is no question of the agreement with the Americans to co-operate in giving technical and political support in this proposed deal being in any way linked with a commitment concerning the F111."—[OFFICIAL REPORT, 21st December, 1965; Vol. 722, c. 1875.]
That was 21st December. The Secretary of State was in Washington before this.
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On 7th March the right hon. Gentleman repeated this when he said,
"at least of a kind similar to that we have recently arranged with Saudi Arabia. …"—[OFFICIAL REPORT, 7th March, 1966; Vol. 725, c. 1861.]
Thus, both the present Minister and the former Parliamentary Secretary repeated with complete assurance and complete certainty what the Secretary of State was busy undoing all this time in Washington.
The Minister has told us that he did not fail to know about this. The question which my right hon. Friend finally pinpointed this afternoon arises from the fact that the Minister did know. We know and respect the Minister personally and we utterly and entirely absolve him from any suggestion of deliberately lying to the House. The question is—how did he come to use those words on 7th March in winding up the debate?
This is a vital matter in support of the Government's whole policy in cancelling the TSR2 and buying the F111A. It is vitally important to our balance of payments at a time when the Government have rested their whole electoral case on stories of the inheritance which they took over from the Conservatives. Yet the Minister treated us in this cavalier manner by pretending that they had won a great victory for the balance of payments when in fact they were double counting and double bluffing on £75 million.
Mr. Burden: Double crossing.
Mr. Ridley: This is something which cannot be treated as a small point which the Opposition should not make too much fuss about and which they should not dig up with too much enthusiasm. I remind the House that we are dealing with £75 million and that the total value of F111A deal is £260 million. This is nearly one-third of the total. As my right hon. Friend said, it is more than half of the value of the offset which is to be placed against selling to third countries.
This is a matter of some gravity. It concerns the trustworthiness of the Government's word and the question of their being honest with the House. That is what disturbs my hon. and right hon. Friends most about this whole matter. Any reasonable man would agree that it is going too far to claim that the words

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which the right hon. Gentleman used could be interpreted in any other way than the way in which my right hon. and hon. Friends have interpreted them this afternoon. Whichever way we look at them, whether we come from England, Ireland, Scotland or Wales, we cannot believe that the right hon. Gentleman was admitting the Saudi Arabian deal as part of the offset.
The right hon. Gentleman said that any doubts could have been cleared up next day. The point is that there were no doubts and could have been no doubts about the singleness of the meaning of the words which he used. Nobody challenged them the next day and nobody had the lightest inclination to clear up any doubts because the words themselves left no doubts.
I ask the right hon. Gentleman to make a more fulsome apology to the House than that which he has made. I remind him of the example of the noble Lord, Lord Crathorne, who, on an occasion when the fault was not his own but that of some of the civil servants for whom he was responsible, made a very much bigger withdrawal and a very much humbler apology than that which the right hon. Gentleman has offered to the House this afternoon. I am sure that the House will forgive him for the slip which he has made, but I am not convinced with the explanation which he gave in his speech this afternoon, and I feel that he would have far better deserved the forgiveness of the House if he had come cleaner about what happened on the night of 7th March.
5.37 p.m.
Sir John Eden: I agree very much with the closing words of my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley). We are debating a deception, deliberate or accidental, perpetrated in the House by a Minister of the Crown, and this is a very grave matter. The right hon. Gentleman the Minister of Aviation was right to take it as seriously as he did, but I agree with my hon. Friend that it would have helped our proceedings considerably in this short debate if he had answered this Motion in a more straightforward and open manner. His attempt further to obscure the issue with futile references of a
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partisan nature merely served to debase his own position and to add to the doubts in our minds. Personally I was inclined sympathetically towards him before this debate began, but I do not feel at all in that position at the moment, having heard his speech.
I will not go over the ground which has been covered by my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), the hon. Member for Orpington (Mr. Lubbock) and others, but it is quite clear that the words which the right hon. Gentleman used in the House and the words used by his hon. Friend the Member for Wednesbury (Mr. Stonehouse) clearly meant to imply that the Saudi deal stood on its own. No other interpretation could be placed on their words. It is also clear that the Secretary of State for Defence clearly intended to indicate that the Government had reached some new and special arrangement to offset in the future the dollar costs incurred in the purchase of the F111A.
It is also clear that the Parliamentary Secretary to the Ministry of Aviation, as he then was, took great pride in the fact that this order had been won in the teeth of competition. We have been helped somewhat this afternoon by his right hon. Friend in his further explanation of what he meant, on the one hand, by competition and of what he apparently now means, on the other hand, by offset arrangements with the Americans.
There are, I think, lessons here for all of us—first of all, that it is absolutely right that the Ministry of Aviation should help our aircraft industry and exporters in securing orders overseas. In so far as any credit goes to anybody, it certainly is right that it should go to the lucky incumbent at the time of the final conclusion of the negotiations. But these were negotiations which had been proceeding for three years or more. Like other hon. Members, I, too, have been to Saudi Arabia. I went there about two years ago. I found myself playing sortie small, minor, and wholly insignificant rôle in the labyrinthine confusion of the negotiations. I know something about it at first hand. I know the sort of thing that goes on. I know the nature of the competition. I also know the need for positive help.

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We were right to have secured positive help from the Ministry of Aviation. But if we are now to be told that in future we are always to have some kind of understanding with the United States Administration as to where or how or when we are going to be enabled to secure further orders in third countries, there are lessons here of great importance for the Foreign Office as well, and I hope that the Foreign Office will take note of the need actively to back British export efforts in this and other related deals.
These new offset arrangements mean, apparently, that the United States political offensive will be withdrawn when it suits it, but that tough commercial opposition will continue. Certainly tough commercial opposition continued in this case. It continued in relation to Lockheed, which was pressing its claims on the Saudi Arabian Government until the last moment. It was because we managed to secure this order that there was a general air of satisfaction and self-congratulation.
I do not altogether agree with the record that the Minister of Aviation spelt out to us today. The emphasis which I thought he gave to it was contrary to that which I have heard given to it elsewhere. Perhaps at a later stage in the debate some other Minister may develop the point a little further. The right hon. Gentleman made out that we were getting from the United States some real benefit from this deal, that it was to our advantage that we had initiated the proposals for a package deal. This is not the interpretation that I had put on it.
I may be wrong, but I strongly believe that we should have secured the order anyway, that there was a very real feeling on the part of the Saudi Arabians that they wished to do business with this country. However that may be, we must examine most carefully and most closely the exact nature of the commercial offset arrangements which the Government claim to have entered into with the United States Administration.
Reverting to the prime point of the debate, the Motion of censure on the right hon. Gentleman himself, I am not at all happy, as I have made clear, about the manner in which he replied to the debate. He tried to drag other issues across it and go back over old quarrels and arguments which are irrelevant at the
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present time. However, although the censure Motion is directed against the Minister of Aviation personally, I believe that the Minister of Defence should not escape. He is every bit as much a guilty party.
Since they came into office, he and other Ministers have developed an arrogance towards the House which I and many other hon. Members on both sides find highly offensive. It is clear that by their slackness and "smart aleck." approach, particularly at Question Time, they are trying to fob off questions to which they do not wish to give the answers. I hope very much that this short debate, if it has done nothing else, will at any rate have caused the right hon. Gentleman and his hon. Friends to have a higher regard for Parliament and for the need always to preserve absolute integrity and honesty in their dealings with it.
5.45 p.m.
Mr. Cyril Bence: I apologise for not having been in the Chamber when my right hon. Friend was answering this quite unwarranted Motion of censure against him.
Mr. Powell: Did the right hon. Gentleman send for the hon. Gentleman?
Mr. Bence: No, but I have the capacity sometimes to speak in defence of my colleagues.
Mr. Powell: Without knowing what has gone before?
Mr. Bence: I know what happened. I know something about defence. I spoke in the debate on the decision to purchase the F111. I am perfectly entitled to come here and discover that on the Order Paper there is a Motion of censure against my right hon. Friend. I am sure that right hon. and hon. Gentlemen opposite have no doubt at all about my right hon. Friend's integrity and have tabled the Motion merely as a tactical device. My right hon. Friend has been in the House a good many years, a couple of years longer than I have. I have never known anyone question his integrity. I am shocked that the hon. Member for Bournemouth, West (Sir J. Eden) should question his integrity.
I rise to defend, however inefficiently, my right hon. Friend. Let us be clear

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what we are talking about. [HON. MEMBERS: "Hear, hear."] I am clear what I am talking about. I have been in the House for 15 years. I heard the hon. Member for Bournemouth, West suggest that answers given by my right hon. Friends are too slick and too "smart aleck". In the last two years I have seen on the Order Paper some of the slickest and most "smart aleck" Questions that I have ever seen in my 15 years here. What is happening is that on certain matters we are not given as much information as some hon. Members would like. But over the last two years we have been accused of talking too much and giving too much information.
Mr. Burden: The hon. Member should get it right when he intervenes. It is a question not of giving too much or too little information but of giving entirely incorrect information. That is what is being debated.
Mr. Bence: I am coming to the point about incorrect information. Often the value of information is a matter of the interpretation of the person who receives it. Questions are often put on the Order Paper in such a manner that a supplementary question can be put which is out of order. That is part of the technique of politics in the House of Commons. Sometimes hon. Members table Questions which appear to be innocent, but the motive emerges when they put their supplementary questions. So it is not a matter of the Minister giving false information. Indeed, I have heard supplementary questions from right hon. Gentlemen opposite which have had no relevance to the Question on the Order Paper.
The hon. Member for Gillingham (Mr. Burden) has no right to suggest that Ministers—no matter what their party may be—give false information just because they do not give the answer that the questioner wants. We all receive answers that we do not expect, but we have no right to say then that the Minister is not acting honestly and with integrity. We make our own interpretation of the answer. This is a political institution. We are concerned with questioning the Executive. Naturally, one gets this sort of argument. I strongly objected when I heard previous speakers question the integrity of my right hon. Friend, and I felt
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that I should say something in support of him.
I am surprised that when the Saudi Arabian deal was going through or being negotiated with the Americans hon. Gentlemen opposite should complain about the ruthless and efficient competition of American business. [HON. MEMBERS: "No."] It is no use complaining about that. In other words, what hon. Members opposite are saying is that this was British business and private enterprise being inefficient in salesmanship and in the marketing of products, compared with the Americans. [HON. MEMBERS: "No."] Oh, yes. That is what they are saying. American selling and marketing institutions are powerful, are strong, are efficient, are able. I admit that they offer strong competition to British manufacturers. Of course they do. So do the Japanese. So does everybody else. It is up to our manufacturers to match them in competition.
If one reads the information available about the discussions with the Saudi Arabian authorities over the selling to them of British and American products it is obvious that my right hon. Friend negotiated a reasonably good bargain in supplying them with aircraft components and parts. I think it was a very good deal, in co-operation with American manufacturers and the American Government. This was long before the decision was made to buy the F111—long before.
Mr. Maurice Macmillan: The hon. Member has made it very clear that this was against strong competition by American manufacturers. That is what he is saying. But it was not.
Mr. Bence: The hon. Member was not here when this happened. There was strong competition. One of his hon. Friends said that it was.
Mr. Maurice Macmillan: I said that there was not.
Mr. Bence: The hon. Member for Bournemouth, West said very effectively that American marketing and competition were strong and were active everywhere. I presume that in Saudi Arabia the same thing applied. This is how I interpreted it, and I thought it was a very competent and able negotiation, that rather than lose the whole of the order

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we got some of it. I thought at the time that this was a very successful action on the part of the British Government, on the part of British manufacturers, where before British manufacturers themselves could not break in.
Sir William Robson Brown: You have missed the whole point of the argument, unfortunately.
Mr. Deputy Speaker (Sir Eric Fletcher): The hon. Member must not say that I have missed the whole point of the argument.
Sir W. Robson Brown: I am sorry, Mr. Deputy Speaker. The point which I want to make to you—
Hon. Members: To whom?
Sir W. Robson Brown: Oh, never mind.
Mr. Bence: I am sorry. This is very unfortunate, because I was relying on a little more assistance from the hon. Gentleman.
Sir Douglas Glover: The hon. Member needs it.
Mr. Bence: I am glad to have assistance from any part of the House. I am sure that many hon. Members opposite could give me assistance in defending the integrity of a member of the Government who is known to everyone to be of the highest integrity. I am shocked at these aspersions which have been made against him as they have been made. Hon. Gentlemen opposite know very well that in matters of military exchanges, of defence purchases, defence issues, of movements between allies, a Minister at the Dispatch Box in answering a question cannot always go into every detail. This sort of thing has happened time and time again. Obviously, a Minister speaking for the Armed Forces cannot mention every dot and comma in negotiations. Of course he cannot.
Ministers give the maximum information they are entitled to give, and in this case it was given, and hon. Gentlemen opposite know as well as I do that they are putting into juxtaposition two events which did seem superficially to make my right hon. Friend's statement not quite as clear as they would have liked it to
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have been—[HON. MEMBERS: "Oh."] But that, of course, is what all Ministers have done.
Sir D. Glover: Oh.
Mr. Bence: In fact, when they have to answer questions they steer as near as they possibly can. We have all seen it. Some right hon. Members opposite were artists at this when they were in power, real artists. There was a former Prime Minister who was adept at the Dispatch Box, an artist in saying what might come to two paragraphs in HANSARD, but not answering the question. He was most efficient in not giving any information at all. And he was admired by hon. Gentlemen opposite. I refer to Mr. Harold Macmillan
Mr. Ridley: Our complaint about the present Minister is that he gave a great deal of information in answering the question, but was really inefficient. It was the other way round.
Mr. Bence: Well, there were Ministers from 1951 to 1964 who were very efficient in giving no information at all. We have had this sort of thing time and time again.
I am shocked that this Motion should have been put down. I am absolutely certain that if hon. Members opposite had been on this side, and the same events had taken place, there would have been an outcry if a Motion against the integrity of a Minister had been put down. I have known my right hon. Friend for many years, apart from his being a member of the Executive. So have other hon. Members. I resent a Motion which implies—not an error in judgment: that would be fair enough—but a challenge to his integrity.
Mr. Lubbock: The Motion actually says
"that the Minister of Aviation misled the House … on a material point of fact".
It does not say that he did it deliberately, or by omission.
Mr. Bence: No, but to say that he misled implies that. I heard the words of the hon. Member for Bournemouth, West and of a previous speaker, the hon. Member for Cirencester and Tewkesbury, (Mr. Ridley) and they implied it was a lack of integrity. To say, in a Motion of censure, that a Minister misled the

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House is to imply that he did it deliberately. [HON. MEMBERS: "No."] Oh, yes. To say that a Minister "misled" is to suggest that he gave an answer, or dealt with a matter, in such a form as—and the intention—to mislead the House.
I do not believe that my right hon. Friend did. I believe that he answered those questions genuinely. He made a statement on 7th March—was it?—and one previously, on 21st December, or about that date—offhand, I cannot remember precisely. What I am concerned about, and what I am defending, is the Minister's integrity. To put down a Motion as this has been put down is challenging his integrity, as I see it. It must be read that way.
Sir D. Glover: If the hon. Gentleman had had the advantage of listening to the debate today he would know that my right hon. Friend quoted from a speech made by the right hon. Gentleman on 7th March, and the Minister then, instead of admitting to the House that he could have been misunderstood—which the House would have accepted—justified what he did. Then, unfortunately, the hon. Gentleman did not hear the Minister.
Mr. Bence: The point is, of course, that he justified what he did because he takes the view, as he is entitled to take the view, that what he did was quite right and quite in order. I do not see why he should not take that point of view.
I have no objection to people saying that in their estimation my right hon. Friend was wrong. That is fair enough. But I strongly object to hon. Members opposite, who know my right hon. Friend very well indeed. As a man of the highest integrity, imputing, not that that he was wrong, that he made an error of judgment, but that he deliberately set out to mislead the House. That is what I am criticizing. It is on those grounds I am defending my right hon. Friend. I hope that the right hon. Gentleman the Member for Mitcham (Mr. R. Carr) will wipe the slate clean, and will say that the Opposite are not challenging my right hon. Friend's integrity, that they are not asserting that my right hon. Friend made a deliberate and conscious attempt to mislead the House. That is
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what I am asking, and that is what I should have thought would have come from the Opposition benches.
6.0 p.m.
Mr. Cranley Onslow: I do not believe that the right hon. Gentleman or his colleagues have the slightest cause to feel gratitude to the hon. Member for Dunbartonshire, East (Mr. Bence). He has brought an element of low farce, irrelevance and foolery into the debate which does no credit to his side or the Government to which I understand he gives support. If he had been concerned to defend the right hon. Gentleman and could not be here to hear the debate opened, he would have done better not to have been here at all.
Sir D. Glover rose—
Mr. Onslow: I hope that my hon. Friend will forgive me if I do not give way.
I will not say the same for the hon. Member for Preston, North (Mr. Ronald Atkins), who intervened in the debate with considerable courage to make his maiden speech. He went in off the deep end in a debate in which the atmosphere is fairly highly charged with tension and may become more so. We listened to him with attention and agreed, perhaps more than he suspects, with much of what he said. I hope that, as he takes a closer interest in our proceedings, he will find that the tears which are shed for the aviation industry from this side of the House are not crocodile tears, but genuine ones. One of the reasons why that is so is summed up in this afternoon's debate.
The right hon. Gentleman would have won much more sympathy from us if he had sat down after the first five minutes of his speech. It was delivered with modesty and humanity, and I think that it captured the attention of the House. In an intervention, the Minister admitted to my right hon. Friend when he opened that he had knowledge of the state of affairs before he made the statement about which we complain. He apologised to us for such omissions or ambiguities as there might appear to be in what he said.
Then he spoiled it, because he went on to make out that it was a totally unjustified Motion. But I cannot see that anyone who understands the English language as it is commonly spoken in this

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country can say that the Motion is unjustified in any way. The facts are not seriously in dispute, the meaning of the English language is not in dispute, and the Minister has not prayed in aid any grammatical inadequacies in it.
We have a position where a Motion has been put down quite properly. It is not an attack on the integrity of the right hon. Gentleman. It is an attack on what occurred, and it seeks agreement that we, as a House, regret that it should have occurred. But, as my right hon. Friend made plain in his opening, which the hon. Member for Dunbartonshire, East did not have the advantage of hearing, there was no attack in it on the integrity of the right hon. Gentleman.
Much of the right hon. Gentleman's defence of himself was irrelevant, dragged up from past history, and, as my hon. Friend the Member for Bournemouth, West (Sir J. Eden) said, presented in a very partisan and biased fashion. It did nothing to strengthen his case—in fact, he lost our sympathy. He lost it in making an attack on my right hon. Friends for not having seized upon his statement and questioned him upon it, when anyone can see in the first place that its meaning is transparently obvious, and when everyone concerned with it was aware of the previous statement made by the hon. Member for Wednesbury (Mr. Stonehouse). With that statement in our minds, we took the right hon. Gentleman's statement as confirmation of something that we had already been told and believed, and, therefore, we had not the slightest reason to suppose that we were in any way being misled at that time.
Unless the right hon. Gentleman is putting forward the proposition—and, if he is, we shall have to note it—that we should never believe anything said by the Front Bench opposite, he can have no cause for complaint that, on the following day, my right hon. Friends did not seek to return to a matter upon which they must have thought themselves, justifiably, satisfied. Again, it is a sign of weakness in the Minister that he sought to pray that in his own defence.
Now he tells us that the Saudi Arabian deal had been thrown in, and he describes it as something which is reasonable and which, by implication, any reasonable
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man taking an interest in matters would have assumed to be the case. That seems to be about the most unreasonable proposition which has been put before us in the whole debate.
To forgo an advantage which had already been gained, to throw it into a deal which we are told was subsequently concluded, is an entirely unreasonable and inexplicable action. I think that we might be told on what interpretation of the word "reasonable" the Minister is here relying. Was it reasonable on the ground that the United States Government were expected to insist that it should occur? We have been told that there was no formal agreement and that, although the United States Government were probably aware of the fact that the TSR2 had been cancelled, since it received much publicity on this side of the Atlantic, it was unreasonable to suppose that they would not have taken that into account.
Was it reasonable subsequently, even? That is the point on which I took up the Minister in his speech. Why was it subsequently necessary to make it clear to the American Government in the negotiations conducted by the Parliamentary Secretary that the co-operation which they gave us on the Saudi deal would not make any difference to our commitment, problematical at that point, we are led to believe, to buy the F111? Why was it not made clear to them at the outset? What terrible second thoughts ran through someone's mind after those discussions? Who said to whom, "The Americans may think that we were offering them a quid pro quo here. We must get this cleared up." Perhaps that happened and, if the Parliamentary Secretary tells us that that is what happened, we shall believe it.
However, it indicates a good deal of naïvety, and I think that naïvety and incompetence in other matters are things of which the right hon. Gentleman will find it difficult to clear himself.
Why should we have assumed it to be reasonable? Was it because a reasonable man would know that to sell large quantities of British arms round the world would offend certain hon. Members opposite who sit below the Gangway? Should we have inferred that the Minister would seek to limit the sale of certain

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arms under that agreement? Should we have assumed that the Minister had so little faith in the capacity of the British aircraft industry to compete in world markets that he did not believe that it would be able to meet the full offset value unless the Saudi Arabian deal were thrown into it? Ought we to have assumed that, and ought we now? Should we assume that there is something in this which upsets the National Plan? I do not know. For the Minister to use the word "reasonable" to describe this entirely gratuitous and insane action of throwing a deal which had already been concluded into the F111 transaction is astonishing. By no stretch of the imagination can it be described as "reasonable".
That is why I say that the Minister has proved himself to be a very naïve man. Perhaps the House may remember how naïvely he found himself in a situation where he had to come to us on the last day of the last Parliament to tell us that the B.O.A.C. Super VC10s were going to be cancelled. That was a very naïve situation into which to be driven.
Mr. Harold Gurden: Does my hon. Friend also recall that, at the same time, there was a large placard on the way to the airport saying, "Fly B.O.A.C. VC10—the finest jet airliner in the world"?
Mr. Onslow: I have no doubt that the Minister reads it and recites it to himself daily, but it does not get B.O.A.C. to buy the VC10s.
Mr. Robert Howarth: Is the hon. Gentleman aware that there are independent British airlines which have not ordered the VC10 but are hoping to place orders for Boeings?
Mr. Onslow: I am aware that the VC10 is a very fine aircraft, and that it has been ordered by an independent Thai airline.
I am also aware that, in making the statement that he did, the Minister allowed himself to be put in a situation where many people might have thought that he had deliberately tried to conceal this from the House and the country before a General Election.
This the action of a very naïve man, and he will not wriggle out of the accusation on this ground, whatever the
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result of the Motion. We know him now as a very naïve man, and he has done one thing by his action in this business. By the inclusion of the Saudi Arabian deal, he has gravely undermined the pride which the aircraft industry and the people of this country took in that deal, because it has been devalued. It has been cast in as part of another deal. [HON. MEMBERS: "No."] Yes, it has. It has been used as a counter in a not particularly creditable manæuvre, and it has been devalued. This is the fact, and it is right that B.A.C. should be very indignant about this. It has done the aircraft industry no good, and the Minister knows it.
I believe that the Minister did mislead the House, but I do not believe that he did it intentionally. I acquit him of that, but I think that he will find hon. Members reluctant to acquit him on the charge that he misled the House unintentionally, and that he is too naïve to know it.
6.12 p.m.
Mr. Stephen Hastings: I think that it is perhaps noticeable how few hon. Members on the other side of the House have sprung to the defence of the Minister of Aviation when this very grave charge lies before us, with the exception of the hon. Member for Dunbartonshire. East (Mr. Bence), who dropped from the clouds, so to speak, and made his usual agreeable speech. We always enjoy listening to him, but I am not convinced that he did the case for the right hon. Gentleman much good in the process.
The hon. Gentleman complained that this was an attack on the right hon. Gentleman's personal integrity. I do not believe that any of my right hon. Friends who have spoken in this debate have said anything to indicate that this is so. Indeed, my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), specifically made it clear that this was not so. He said that he did not accept that as an explanation. But what my right hon. Friend said afterwards, and in my submission had every right to say, was that when this mistake was discovered—and I think that the hon. Gentleman referred to a mistake—on reading HANSARD, or it was brought to his attention by his officials, it was then his duty to come straight to the House

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and explain what went wrong. The burden of our charge is that that never happened for weeks and weeks, and this lies at the root of the accusation of misleading the House.
This has been a rather long debate, and I do not want to detain the House unduly, but there are one or two things only that I want to say. First, I believe that the right hon. Gentleman is the victim of the muddle and confusion which has been brought about by the decision originally to cancel the TSR2. There have been plenty of victims—and who can say the extent to which the country will suffer as a result of this in the future?—but the latest victim is the Minister of Aviation. It is necessary to say that it was clear to me—just as it has been clear to my hon. Friends who have taken part in this debate—from what the hon. Member for Wednesbury (Mr. Stonehouse) said, and from what the Minister subsequently said, that the Saudi deal was won independently.
That was the reason for the congratulations which were offered to the hon. Gentleman by a number of us on this side of the House—and I think that we would be prepared to offer them again today—for the efforts which he and others made to secure this deal. There was an air of euphoria in the House, and quite understandably so.
Anyone connected with the industry knows something of the protracted, bitter struggle which there was to secure these contracts in Saudi Arabia. It ought not to be necessary for anybody to say this to the Minister, but I believe that the American aviation industry—or American aviation interests—does not give up if it thinks that it has a chance. Thus, if it agreed to include this Saudi deal in the offset agreement in some form, it was done after it knew that it was beaten.
This is the burden of the attack made by a number of my hon. Friends on an aspect of this debate, and it is a very important one. As my hon. Friends the Members for Woking (Mr. Onslow), and Bournemouth, West (Sir J. Eden) said this is most discouraging for the sales staff in B.A.C., for the agents in Saudi Arabia who played an extraordinarily valuable part in all this, for the officials
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of his own Ministry and for the visiting delegation of which my hon. Friend the Member for Bournemouth, West was a member.
All those who took part in the Saudi negotiations have had their achievements belittled and downgraded as a result of this affair. It will not help us to sell our aircraft abroad in future if it is suspected that the only way we can do it is by making some deal to keep the Americans off. This is precisely the opposite of the kind of impression which the right hon. Gentleman should be seeking to create on behalf of the British aviation industry, and I would be surprised if the hon. Member for Wednesbury did not agree wholeheartedly in his heart with what I have said in that connection.
My first point is that there was no need to make this deal as part of the F111 contract, and if it was made in this way, we ought to know a lot more about this contract, because it has the gravest implications for future attempts to sell British aircraft abroad.
My second and last point concerns the Motion of censure itself. This is a question of the confidence of the House of Commons in the right hon. Gentleman. Many compliments have been paid to his character and integrity, and I should like wholeheartedly to associate myself with them. But it is not only a question of the confidence of the House of Commons. It is also a question of the confidence of the British aviation industry in the Minister, and I do not think that his explanation was adequate. I think that my hon. Friend the Member for Woking was right. If the Minister had concluded his speech after the first five minutes of it this afternoon, our feelings would have been vastly different from what they are now. I hope that, for the sake of confidence in this House, for the sake of the future conduct of his affairs so long as he is at the Ministry, and for the sake of the confidence of the industry itself in him—in so far as confidence can be said to exist at all in him as an individual after what has happened over these last two years—he will go further when he replies to this debate and turn back to the spirit of his first remarks and not to the things that he said afterwards.
6.18 p.m.
Mr. Robert Carr: The first thing that I wish to do is to congratulate

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the hon. Member for Preston, North (Mr. Ronald Atkins) on his maiden speech. It is unusual to make a maiden speech in a censure debate, and I congratulate the hon. Gentleman on the way in which he achieved the neutrality which is demanded on these occasions by, shall I say, attacking both sides equally. We shall look forward to hearing him again.
In this debate we have, inevitably, heard something about the basic merits of the Saudi Arabian agreement, about the F111, and all the rest of it. These are very interesting and important matters. We have debated them before in this House, and I have little doubt that there will be cause to debate them again, but I want to bring the House back to the precise and rather narrow line of the Motion before us.
It is never pleasant, whichever side are the Government or the Opposition, to move a Motion of censure on the conduct of a fellow Member, and like my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), I acquit the Minister of Aviation absolutely of any deliberate intention to mislead the House. We acquit him absolutely of any charge of that kind. Nevertheless, he misled the House and that is why we had to table the Motion. He has today in his speech expressed regret and said that if, inadvertently, he misled us, he is sorry about it and admits that, in retrospect, his words may have been imprecise.
We welcome that, as far as it goes, but it does not go nearly far enough. I must say at this stage quite definitely that so little does it meet our case that we have no alternative but to divide the House on the Motion, because the charge against the Minister is not the one with which he seemed to be dealing in part of his speech—of giving us insufficient information—and not even one of giving us no information at all. It is a charge of giving us false information.
We feel that it is disgraceful, whatever may have been his intentions and however inadvertently he may have acted, that even at this late stage no full explanation or apology has been made to the House by the right hon. Gentleman. I hope that the Secretary of State for Defence will put right that omission when he winds up the debate. I am sorry to say about the Minister of Aviation
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that, having made his very limited expression of regret, he lost some respect and sympathy which he might otherwise have had by the bombastic, partisan and superficial nature of the last part of his speech. This was the way of a man who knew that he had a bad case and who could not answer the charge. As I say, it was not a deliberate misleading of the House, but a misleading which could not be denied.
I think that it is noteworthy—even more than noteworthy: remarkable and unique, anyhow in recent years—that, with the exception of one maiden speech, there was only one speech from the Minister's own back benchers in his support. That was from an hon. Member who had heard neither of the opening speeches, either that of my right hon. Friend or the Minister's reply—[HON. MEMBERS: "He is not here now."]—and who is not here now.
As I have said, I want to bring the House back to the precise and narrow terms of the Motion. I ask the Secretary of State to address himself to these points. The other matters of great national interest and importance can be dealt with on another occasion. We are concerned with a Motion of censure on misleading the House and it is on that matter that we want a reply from the Secretary of State. To make sure that he knows what we want, I must recapitulate some of the arguments which have been put forward.
One of the many powerful objections to the purchase of the F111A aircraft was its heavy dollar cost, the great burden which this would place on the British balance of payments. It is because of that that one of the most powerful and important arguments put forward by the Government to justify their decision to purchase the F111A was their claim to have reached an agreement with the United States that the dollar cost would be fully offset by the sale of British equipment.
Therefore, this was a most important matter in judging the F111A issue, a matter on which the House and the country had the right to expect the fullest frankness and an impeccable degree of honesty from the Government. Instead, the Government have been guilty of dishonesty. I am sorry to use that word, but it is dishonesty that we have been given.

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I want to refer, first of all, as did my right hon. Friend, to what was said in Part I of the Defence White Paper, in paragraph 11, where we have the assurance that the Government
"… have taken steps to ensure that the foreign exchange cost of the F111A will be fully offset by sales of British equipment."
This, in our view, was the first stage of the deception of the House. No mention was made in this White Paper of sales to third countries. The only example given was by the possibility of quoting for naval tugs for the United States Navy. The implication behind this was clearly that the offsetting sales were to be direct sales to the United States.
If there was room to mention naval tugs, surely there was room in this text to mention both the principle of sales to third countries and the particular example of this important sale to Saudi Arabia. Therefore, what was said or not said in that White Paper was the first part of the deception.
However, the Minister of Aviation soon disabused us in his speech in the defence debate on 7th March, of at least the general hope that the offset would be completely met by sales to the United States. He told us not that just a little of it was to be met by sales to third countries but that more than half of the dollar offset was to be in the form of sales to third countries and he gave the recently arranged Saudi Arabian example of what such orders would be.
We must again examine the words that the Minister of Aviation actually used. The use of the future tense—"it will co-operate", not "it has co-operated", "it" being the United States, with us in sales to third countries—referred to something in the future. There could not be any doubt about it. Then the Minister went on to give the Saudi Arabian order which, as he said, had recently been arranged as an example of the sort of sales to third countries which we could expect.
We submit that these words, even standing on their own, with no amplification or background, could have only one meaning, and that is that the deals which were to be offset were future deals—the words used were, "The United States will co-operate": in future—and that the example of this deal which had
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already been made was merely an example from the past of similar deals which we were to expect in future. That, I believe—as do all of us on this side of the House: the hon. Member for Orpington (Mr. Lubbock) made clear that he, too, felt this way—was the only interpretation which could be put on the Minister's words, even standing on their own.
But the Minister's words did not stand on their own. They stood in the context of what the House was told by the hon. Member for Wednesbury (Mr. Stonehouse), then Parliamentary Secretary to the Ministry of Aviation, on 21st December. Here again, I should like to quote. I particularly asked the Parliamentary Secretary, in a supplementary Question, when he had made his welcome statement about the Saudi Arabian order whether there was a link of any kind, whether formal or informal, between the United States' Administration's co-operation on this order and any possible order from us for the F111A. He replied:
"There is no question of the agreement with the Americans to co-operate in giving technical and political support in this proposed deal being in any way linked with a commitment concerning the F111."—[OFFICIAL REPORT, 21st December, 1965; Vol. 722, c. 1875.]
I say quite clearly that we on this side believe that the then Parliamentary Secretary was speaking the truth, the whole truth and nothing but the truth as he saw it at that time. He also went on to say at his Press conference—not in the House—that the order had been achieved in the teeth of American competition.
When one has been told, as the House was told, that there was no link of any kind with the F111A, when the country has been told at a Press conference that the order has been won in the teeth of American competition, it is only natural and reasonable for all of us, in the House and without, to assume that this has nothing to do with the dollar offset for the F111A order when it came two months later. I repeat that the Minister's words of 7th March to us in the House, even standing on their own, could have meant only that. But when we took them in the context of the previous statements it was impossible for them to mean anything else.
If there had been some change after 21st December the onus was clearly on

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the Government to tell the House so. The onus for clarification was on them, and it is ridiculous—to put it mildly—for the Minister, in trying to defend himself today, to ask, "Why did not you ask for some clarification on the second day of the Defence debate?" The evidence that I have given shows clearly that any reasonable man would be drawn to the conclusion which we came to. If we had had any idea at all that there was any doubt about this I can assure him that both in my speech in opening for the Opposition on the second day of the defence debate and in the speech of my right hon. Friend the Member for Barnet (Mr. Maudling) in closing, clarification would have been sought. The onus for clarification was on the Government.
They had plenty of opportunity to discharge that onus. They had the whole of the second day of the defence debate, and they have had two months since. They have seen rumours about this in the Press. Did they deny them? Of course they could not, because the rumours have turned out to be true. Did they confirm them? No. Why? Perhaps because there was an election. But even after the election—even after 1st April—we still had to wait for another 25 days before the Government finally "came clean".
It is disgraceful. Although our Motion is moved on the basis of the words of the right hon. Gentleman the Minister of Aviation in the Defence debate on 7th March—because he is the one who actually uttered the words which misled the House—our censure is perhaps even more on the Secretary of State for Defence, and on the Government as a whole.
Let us be sure that the House will not be misled any further on this matter. So that there is no misunderstanding on this matter in the future, I therefore ask the Secretary of State for Defence to give the House, here and now, a categorical reply to the question as to the amount which is to be credited to the dollar offset account in respect of the Saudi Arabian order. So that there is no possibility of his charging us with not having sought clarification, let me say what our clear understanding of it is at the moment. It is that the amount to be offset is about £75 million, which is the figure given to the House by the then
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Parliamentary Secretary concerning the export content of the Saudi Arabian order when he made his statement to the House on 21st December last. If there is any difference from that at all, let the Secretary of State come clean and tell us now. Let us not have to have another Motion of censure in order to extract the truth.
The House has been misled. I hope, for the honour of the House as well as for the honour of the right hon. Gentleman who is being put up in the front of the firing line on this occasion, that the Government will now have the honesty, decency and respect for the House to give a full and complete apology.
6.33 p.m.
The Secretary of State for Defence (Mr. Denis Healey): I can at least agree with the right hon. Member for Mitcham (Mr. R. Carr) on one matter; I, too, congratulate my hon. Friend the Member for Preston, North (Mr. Ronald Atkins) on an excellent maiden speech. It was a very happy thing that he chose to participate for the first time in a debate on matters concerning the aircraft industry, in respect of which his predecessor played such a lively and sometimes controversial rôle.
I also congratulate my hon. Friend on making a speech which was forthright, agreeable and witty, and which showed a real devotion to his constituency and to the major industry in which his constituents are employed.
I shall be glad to tell the House, in answer to one point raised by my hon. Friend, that I have never met Mr. Richard Worcester. I have never had any contact with him and, so far as I know, he has never had the slightest influence on the Government's policy on aviation matters. But Mr. Worcester's reported views on Anglo-French co-operation in aircraft are diametrically opposed to the views of Her Majesty's Government.
I am glad to tell the House that my right hon. Friend and I had a most successful meeting with M. Messmer and his team in Paris last week, and took a major step forward in the development of both the major projects on which we are engaged. We hope to make further collaborative progress on other projects in the next few months.
Mr. Hastings: I wonder whether the right hon. Gentleman has read the paper that was read to the Royal Aeronautical Society by Mr. Worcester, at Mr. Worcester's request. It would be interesting to hear his comment, if he has not, when he has.
Mr. Healey: I dare say that it would be interesting to hear my comments, but I do not regard Mr. Worcester as a major problem for Her Majesty's Government. He may be a major problem for the hon. Member.
I join the House in congratulating my hon. Friend the Member for Preston, North, but I cannot congratulate the right hon. Member for Wolverhampton, West (Mr. Powell)—and I do not think that he would expect me to—on his opening speech. He spent half an hour on the meticulous construction of a logical edifice based on assertions which had no relation to reality. He spent five minutes—as did his right hon. Friend the Member for Mitcham in asserting that the Government misled the House as to the fact that part of the offset was concerned with third party sales for a fortnight after the publication of the Defence White Paper.
Yet he himself and his right hon. Friend were present on the day when the White Paper was published, when I made a statement in the House on the White Paper, and referred twice—once in my opening statement and once in answer to a question by the Leader of the Opposition—to the fact that collaborative sales to third parties were included in the offset arrangements for the F111A purchase. The Opposition Front Bench must do their homework if they expect to be taken seriously in the House.
Mr. Powell: Will the right hon. Gentleman tell the House—if he dares—why there was no reference at all in the White Paper to third party sales?
Mr. Healey: There was no reference to third party sales, as there was no reference to many other things; but in my statement to the House that afternoon, and in reply to an intervention, I referred twice to third party sales, and the right hon. Gentleman was so tortured by his suspicions of Her Majesty's Government that he could not have
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understood what I was saying. On 22nd February, 1966, a fortnight before my right hon. Friend spoke in the defence debate, I said:
"The foreign exchange cost of the F111A purchase will be met by sales of British equipment to the United States and to third countries."
In answer to an intervention by the Leader of the Opposition, I said:
"As regards sales of equipment to the United States and collaborative sales to third countries, we have set ceiling totals for sales which together will cover the total cost of the F111A."—[OFFICIAL REPORT, 22nd February, 1966; Vol. 725, c. 241–5.]
How can the House and the country be expected to take seriously accusations based on a total refusal to accept the facts?
Mr. R. Carr: Does the right hon. Gentleman admit that in his own quotation he used the word "will", indicating future dealings, and did not refer to the Saudi Arabian deal, which was something in the past?
Mr. Healey: I shall come to that matter. I shall come to all these matters in a moment. I am merely pointing out that on this matter, in respect of which the Opposition have put down a Motion of censure personally against the conduct of one of my right hon. Friends, they have done their homework in a sloppy fashion, which has affected the whole conduct of the Opposition since the right hon. Member for Bexley (Mr. Heath) took over the party opposite.
There was no question—and both the right hon. Member for Wolverhampton, South-West and the right hon. Member for Mitcham agreed on this—of my right hon. Friend deliberately seeking to mislead the House. There was also no question of his giving false information. As my right hon. Friend himself has pointed out, he knew the facts and did not seek to mislead the House, and if his choice of words was unfortunate—and he has said that it was—he has apologised for that.
The real essence of the Motion, as the right hon. Member for Wolverhampton, South-West rightly said, is the claim to which I shall reply in detail, that, if the House had been told at the time in detail and unequivocally about the inclusion of the Saudi Arabian sale in the offset agreement, the verdict of the House and the

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country on this aspect of the Defence Review would have been different.
I welcome an opportunity of stating the full facts in detail before the House on this matter, but this time I hope I shall not be interrupted in doing so as I was at the end of the defence debate before the General Election, when I was subjected to 10 minutes organised yelping led by the Leader of the Opposition as I sought to give these facts.
Let me put all the facts in detail and in their context. The story started, as several hon. Members opposite pointed out, when we cancelled the Conservative programme for the TSR2 a year ago. We cancelled it because it would have cost the nation over the next 12 years more than £1,200 million and I do not believe that any Government in their senses—including right hon. Members opposite if the nation had been so unfortunate as to have had them still in power last year—would have taken any other decision.
At the time that we cancelled the TSR2 programme, we took an option on the F111A in case the Defence Review showed that there was a requirement for some aircraft with a performance comparable to that of the TSR2; and, after nine months of continuous and exhaustive study, we concluded that the sort of operations our commitments might involve us in would require the R.A.F. to have 50 F111As for tactical strike and reconnaissance.
We also discovered, in negotiations with the United States and through a prolonged period of negotiation with Mr. McNamara, that we could hope to buy these aircraft at a unit cost of £2½ million each, including the changes required by the R.A.F., as against £9 million for the unit cost for a similar number of TSR2s.
I must make it clear that we did not decide to buy the F111A as a favour to the American Government. Of course we did not. We decided to buy it to meet the operational needs of the R.A.F., and also to help achieve a saving to the British taxpayer of nearly £1,000 million when compared with the defence programme that we inherited from the Conservatives and £300 million compared with a similar number of TSR2s.
Mr. Ridley: In reaching the figure of £300 million, has the right hon. Gentleman or has he not deducted £195 million for abortive work and cancellation charges of the TSR2? I believe that, if he does his arithmetic again, he will find the saving to be £105 million. Will he please stop misleading the House?
Mr. Healey: That is untrue. The figures I have given make allowance for abortive expenditure on the TSR2 and for the cancellation charges. I explained this in detail in a letter to The Times some months ago, in answer to an absurd letter from Mr. Julian Amery and an hon. Member opposite.
As against this tremendous saving in expenditure, the purchase of the F111A would involve over the next 12 years a foreign exchange cost of 725 million dollars—about £260 million. This includes not only the full capital cost of the aircraft themselves, but also the spares and running costs—and interest payments because, to relieve the burden on the balance of payments during these next few critical years, we obtained credit facilities from the American Government which would ensure that we would not be required to make any substantial dollar payment until well after the first aircraft were delivered in 1968, and we also obtained an exceptionally favourable rate of interest for this credit arrangement of 4¾ per cent.
The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) asked why we did not ask for credit to cover the British components in the Phantom and other aircraft we are buying. The obvious reason was that this credit was intended to relieve the burden on our foreign exchange. We have no desire to borrow money from the Americans in order to pay sterling in this country. Nor, I imagine, would the American Government have agreed to allow us to do so.
Nevertheless, although we had this credit arrangement which saved us a heavy incidence of dollar expenditure as a result of purchases over the next few years, we were concerned, so far as possible, to make sure that, by the end of the whole 12-year period, there would be no net loss of dollars falling on the British Government as a result of the F111A purchase.

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One basic objective of the Government's defence policy is to ensure that the British balance of payments does not suffer unfair damage simply because of Britain's contribution to the security of the free world. We believe that it is quite wrong for one ally to benefit at the expense of another in foreign exchange solely as a result of co-operation for their common security. Right hon. Members opposite when in power tried to apply this principle for some years to our defence relations with West Germany; but, until we negotiated this agreement, there had never been any attempt to apply it to our defence relations with the United States.
I must remind the House of the point made by my right hon. Friend. The Conservative Government, some years ago, abandoned British aircraft as a means of delivering the strategic deterrent and cancelled the British P1154 aircraft as a means of providing air defence for the Royal Navy. They went to the United States for alternatives and permitted themselves to spend £410 million worth of dollars for Polaris submarines and naval Phantoms without making any attempt to see that the British defence industry or the British balance of payments received any concessions in return.
We took a different view. I had already, in negotiating the purchase of the C130 and the R.A.F. Phantoms, obtained the commitment from the United States Government to co-operate with us in seeking British equipment for American purchases. When I came to negotiate the F111A purchase, I was determined to obtain something far more concrete and specific. My basic objective was to ensure that the British balance of payments did not suffer as a result of our defence co-operation with the United States in N.A.T.O. and other parts of the world.
When we came to consider this matter in Washington, the first question was to decide how wide a field of defence expenditure in foreign exchange we could cover in our agreement. For example—and this was a critical point—should the United States be able to count on its side of the ledger the dollars spent by its forces in Britain, as we ourselves seek to cover our stationing costs in Germany in our offset agreement with the Federal Republic? I looked into this and found
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that, to have done so, would more than have covered the whole cost of the F111A agreement if American stationing costs continued at anything like their present level.
On the other hand, it is impossible to forecast precisely how America's expenditure on her forces in Britain will move over the next 12 years. It may go up or it may go down. I therefore thought it better to ask the Americans to count this expenditure against our dollar payments to them on weapons already ordered, like the Polaris programme, the Phantom, and the C130.
Moreover, I was not only concerned with foreign exchange: I also wanted to help Britain's own defence industry and to find markets abroad to compensate for the outlets that it was losing in Britain as a result of our purchases from the United States. As I said earlier today, the Government are determined to ensure that we have a viable industry in our own country based on international as well as national markets.
Mr. Edward Heath: I see that we cannot project into the future on this matter, but can the Secretary of State tell us what the American expenditure in this country is running at?
Mr. Healey: At about £40 million a year in dollars. If it continued at this level, it would be £400 million in the next ten years, vastly in excess of the dollar cost of the F111A.
Mr. Hugh Fraser rose—
Mr. Healey: I must get on. This is a short debate and I have already given way a great deal. The right hon. Gentleman was not present during most of the debate.
As I was saying, this is the reason why we agreed to separate the F111A deal from other purchases of equipment from the United States, and to concentrate on obtaining a direct offset for the F111A purchase by sales of British defence equipment to either the United States or third countries.
With respect to what has been said by hon. Gentlemen opposite, the Americans are by far our most formidable competitors for defence equipment in foreign markets. We have learned this time and again throughout the world, and if we can

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have their co-operation, rather than competition, it is something which, honestly, every aircraft firm in this country will welcome, and the industry will not ride away on the sort of flagwagging, jelly-belly Chauvinism shown by hon. Gentlement opposite—
Several Hon. Members rose—
Mr. Speaker: Order.
Mr. Hugh Fraser: On a point of order. A few moments ago the right hon. Gentleman referred to a letter which I wrote to The Times. Would it not be appropriate for him to give way?
Mr. Speaker: That is not a point of order.
Mr. Healey: I also have a duty to the House to make these points, and I remind hon. Gentlemen opposite that it is no good their complaining that they do not get the facts if they prevent me from giving them by behaving like a lot of schoolboys.
Hon. Members: Oh.
Mr. Hugh Fraser rose—
Mr. Healey: As the House knows, we fixed a target of 325 million dollars—
Several Hon. Members rose—
Mr. Healey: —a target of 325 million dollars—[Interruption.]
Mr. Speaker: Order. I want to hear the cut and thrust of debate. I have heard the cut. I want to hear the thrust.
Mr. Healey: I hope to satisfy you, Mr. Speaker.
As the House knows, we fixed a target—
Sir D. Glover: On a point of order. The right hon. Gentleman seems to be under the impression that this debate must finish at seven o'clock when it is not necessary for it to do so.
Mr. Speaker: That is not a point of order.
Mr. Healey: —a target of 325 million dollars for direct sales to the United States and 400 million dollars for collaborative sales to third countries. I should, perhaps, make one or two things clear, because they have been raised by hon. Gentlemen opposite. These are
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separate targets and they are not ceilings. They cover a 12-year period. There is not, as the hon. Member for Woking (Mr. Onslow) seemed to suggest, any limit to what we can sell, but these are targets which both Governments undertake to achieve. I believe that we will succeed in getting well above both of them, particularly since our sales to the United States, unlike our sales to Western Germany—under the German offset agreement—will be free from all artificial preferences imposed by the American Government under the Buy-American Act and balance of payments restrictions.
The target total of 325 million dollars for direct British sales to the United States is, at first sight, a formidable one, but it is to be achieved over a 12-year period and, indeed, represents little more than an average sale of about £12 million worth of equipment a year. Moreover, since our own payments for the F111A do not become significant under the credit terms until 1969 and 1970, we still have three or four years to make progress before our real need for dollars arises.
I have been asked to give details of concrete progress by way of achievements so far. We have already jointly identified about 50 items of equipment which the Americans think may meet their military needs and which we have, we believe, a good chance of providing on competitive terms. The American Department of Defense has just decided to buy 2 million dollars worth of assault tracking; American tests of our 105 mm. tank ammunition are now nearing completion; the American Navy is testing our 2 in. rockets; a number of invitations to tender are on their way; and the Department of Defense is now considering other items including, I am glad to say, the Hawker Siddeley 125 aircraft, which we are pressing very hard on them.
It is perfectly true that we have had a disappointment over the first small batch of naval tugs, but, contrary to what has been suggested, this small batch represents only £750,000 out of the potential £17 million which we hope to earn through the sale of naval auxiliaries to the United States in the current programme.
We have already learned a good deal from our experience, and I hope that the House will have noted that Brooke Marine Ltd., the British firm which put in the

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tender, said that it had every assistance from the Americans in making the tender; and are willing to try again. But there will always be difficulties. I do not disguise this fact. [Interruption.] If some hon. Gentlemen opposite had more knowledge and experience of trying to sell equipment abroad, they would snigger a little less when I make these points.
Mr. J. Bruce-Gardyne: Surely the right hon. Gentleman recognises that on each occasion, both in the case of the Jordan deal and in this latest case, no representations, apparently, were made to the American Government on these matters. Is this the way to achieve co-operation?
Mr. Healey: The hon. Gentleman is totally wrong. The tender for the naval tugs to which I have been referring arose directly out of co-operation between the British Ministry of Defence, the American Navy Department and the American Department of Defence. Brooke Marine was given every assistance at the Washington end and at the British end at every stage of the negotiations.
There will always be difficulties for British firms producing for the first time a small batch of equipment in competition with American firms which have been producing such equipment for some time. I do not say that it will always be easy to win these tenders, even though there is no preference against us; but we cannot expect the Americans to give us a preference over their own manufacturers.
I am convinced, on the basis of our progress so far—and I know that Mr. McNamara shares this view—that there are many British manufacturers who can compete with the Americans on their own ground, both in terms of cost and performance, provided they are able, as they are under this arrangement, to compete without the artificial discrimination which all other foreign firms, except the Canadians, must face. This is a new challenge to British industry and I hope that our firms will accept it in that spirit. I know that many are already doing so.
I come now to the Saudi deal. Naturally enough, the Americans insisted that if we were to offset the F111A purchase exclusively by sales of British equipment, then the Saudi Arabian deal
476
should be included in the target figure as a contribution towards the 400 million dollars for collaborative sales to third countries.
I will run through some of the points made during the debate. We could not have made the offer to the Saudis without American co-operation. This was made absolutely clear by my hon. Friend who is now the Under-Secretary of State for the Colonies when he spoke in the House on 21st December and gave details of the deal. As I understand it, this was really accepted—not necessarily agreed, but accepted as a fact—by the right hon. Member for Mitcham because he asked a lot of questions about what the Americans were getting from us in return for this type of co-operation.
We could not have made the offer, never mind won the contract, without American co-operation. But, of course, although the Saudis gave a written agreement that they would take up our offer rather than the competing Lockheed offer, the first contract was not signed until last week. The dollars resulting from it will be flowing into Britain during the period when we are paying for the F111A.
We expect—and this answers the question asked by several hon. Gentlemen opposite—that the total of foreign exchange resulting from our sales to Saudi Arabia will be about £100 million in foreign exchange, which is £25 million more than the £75 million which arises from the initial contracts because, as hon. Gentlemen opposite have rightly suggested, we hope to get "follow-up" in the form of spares and other equipment.
I must make it clear—and I hope that the right hon. Gentleman, with his vast experience of these matters, will accept it—that we cannot tell for certain whether it will fall short of £100 million in foreign exchange or go over, because we do not now know precisely how much "follow-up" there will be. The Saudis have so far only placed the first of the main contracts, and there are a very large number of other contracts to be placed in the coming months before we have even the first part of the deal amounting to £75 million of foreign exchange tied up.
Mr. Powell: The Secretary of State has now indicated that the amount to be written off the 400 million dollars for sales to third countries in respect of the Saudi agreement is at present anticipated to be about 280 million dollars. Do I understand from the last part of the right hon. Gentleman's narrative that although a letter of intent was signed in December, which was the basis of the announcement made by the hon. Member for Wednesbury (Mr. Stonehouse) on 21st December, the American Government gave him to understand that they would prevent that from eventuating in a contract unless it was included in the 400 million dollar offset?
Mr. Healey: Certainly not—of course not. The Americans gave the undertaking to co-operate with us, I think I am right in saying, as far back as last October. They have never in any way deviated from that. We have always made it clear to them that we did not consider that as imposing any obligation on us to buy the F111A, and they have always made it clear to us that they did not consider it as imposing an obligation, either.
There has never been any question of the American Government defaulting on their undertaking of October last. They have played perfectly fairly throughout, and even if, as I think, the right hon. Gentleman was about to point out, we get £100 million of foreign exchange out of the Saudi sale, it will leave a very substantial amount still to be covered by further collaborative sales to third countries.
I do not disguise from the House the fact that it would have been a great triumph for me if I had been able to persuade the Americans to exclude the Saudi sales from the target, but the whole justification of this operation of trying to balance our foreign exchange expenditure on a bilateral basis was to reach an overall balance between the countries in foreign exchange on defence. I would remind the House that America's foreign exchange problems are as serious as ours, and arise in even greater degree than ours from defence expenditure overseas. So the American Government had a reasonable argument for including the deal. I would very much have preferred to confine the agreement to mutual sales of defence equipment even if it meant including the Saudi sale in the collaborative
478
target rather than open the way to the inclusion of stationing costs in the agreement, which would have left British industry far worse off.
I do not claim that the arrangement with the United States was perfect. What I do say is that it was infinitely better than the previous Government had ever attempted—still less achieved. When they were in power they committed themselves to spend 410 million dollars on American defence equipment to replace British weapons, and they did not even raise the issue of the foreign exchange expenditure involved. We have. This is just one more example of what I think the right hon. Gentleman calls "action, not words."
Quite frankly, looking back at this whole story, I am staggered that the Opposition should have picked on this issue to try to knock the Government about. I am shocked—but, I confess, not surprised—that they should have tried to camouflage the operation with a disgraceful personal attack on my right hon. Friend. But this is typical of the behaviour of the Opposition over the whole range of major issues where they themselves are hopelessly divided—like Rhodesia, economic and social policies, and defence. They can never agree a basis for an attack on what we do, so they confine themselves to pinpricking us on how we do it.
I ask the House to reject the Motion as decisively as the country rejected its sponsors nearly six weeks ago.
7.5 p.m.
Mr. Edward Heath: I want to deal with the point of this Motion of censure on the right hon. Gentleman the Minister of Aviation. It is that the Saudi deal was made and settled before the F111A deal was completed. We are agreed on that. The then Parliamentary Secretary to the Ministry of Aviation told the House quite clearly that there was no connection with the F111, and we are agreed on that. The Minister of Aviation said that offsets would be of a similar kind. We on this side, including the Liberal Party, believe that there is only one interpretation of that, which is that it does not include the Saudi deal. There can be no other interpretation.
The right hon. Gentleman said just now that, looking back, he thinks that there was some ambiguity about it. I do

479
not believe, in fairness to him, that anyone in the House could see ambiguity in those words. That is why we never questioned them, because we accepted what he said; that this was a good deal—as the Secretary of State would have it—and that the Saudi deal was excluded. As the situation now is the Secretary of State has since said that the Americans insisted that the Saudi deal should be included. This is a recent development. It shows that the Government have changed their policy.
The Minister of Aviation was quite right in the first instance—the Saudi deal was not included—and so was the Parliamentary Secretary to the Ministry of Aviation, but the Secretary of State has now shown that as a result of the Americans insisting—I use his own words, I think—the Saudi deal has now to be included against the offset. That is the situation, and he has said—
Mr. Healey: On a point of order, Mr. Speaker. May I have a little guidance? I am not quite clear whether the right hon. Gentleman is interrupting before I sit down, or whether he is making a speech. If he is making a speech, I hope that the House will give me the right to reply, because this is an absolutely ludicrous misrepresentation of the facts and what I said. I did not suggest anything of the kind that the right hon. Gentleman is suggesting.
Mr. Speaker: Order. The right hon. Gentleman must not, under the guise of a point of order, start arguing the merits of what has been said. What I gather is that as I was about to put the Question the right hon. Gentleman the Leader of the Opposition sought to speak in the debate. He is doing that at the moment. If the Secretary of State for Defence seeks to reply to him, he can do so if he obtains the leave of the House.
Mr. Heath: Thank you, Mr. Speaker. I will continue with my few words.
The Secretary of State has now said that as a result of the Americans' insistence
—I believe that the right hon. Gentleman used these words, for I took a note of them; I think that he will find that he did so if he refers to HANSARD—as a result of his discussions with the Americans, he decided that it was to the advantage of the country that the Saudi deal should now be used as an offset, because he did not wish to have the Americans claiming the cost of their forces in this country as an offset against the F111A deal. Therefore, the Government decided—in their own lights, rightly—that this was the best way of handling the situation.
I do not know whether the Secretary of State wants to challenge that, but this is what he has just told the House—
Mr. Healey: I am sorry if I am intervening in the right hon. Gentleman's speech now. I hope that I am in order. I had the impression that the right hon. Gentleman was trying to suggest that this insistence of the Americans followed the publication of the F111A agreement, and that there had been some change in the situation since my right hon. Friend spoke to the House. Of course, all these discussions took place in January and February.
Hon. Members: Oh.
Mr. Heath: That makes it even more difficult as regards the Minister of Aviation's speech, because his statement, which cannot be interpreted in any other way, was clear. If that was the position, it was not conveyed to the House. So the situation is either that the wrong information was given to the House by the Minister of Aviation, or that the Government have changed their position, for reasons which the Secretary of State has given to us, since the Minister of Aviation made his statement. Those are the two counts on which we condemn the Government and condemn the Minister of Aviation. That is why we intend to vote on the Motion of censure.
Question put:—
The house divided: Ayes 241, Noes 337.

Division No. 7.]

AYES

[7.9 p.m.

Alison, Michael (Barkston Ash)

Balniel, Lord

Bennett, Dr. Reginald (Gos & Fhm)

Allason, James (Hemel Hempstead)

Barber, Rt. Hn. Anthony

Berry, Hn. Anthony

Astor, John

Batsford, Brian

Bessell, Peter

Atkins, Humphrey (M't'n & M'd'n)

Beamish, Col. Sir Tufton

Biffen, John

Awdry, Daniel

Bell, Ronald

Biggs-Davison, John

Baker, W. H. K.

Bennett, Sir Frederic (Torquay)

Birch, Rt. Hn. Nigel

Black, Sir Cyril

Harris, Reader (Heston)

Onslow, Cranley

Blaker, Peter

Harrison, Brian (Maldon)

Orr-Ewing, Sir Ian

Body, R.

Harrison, Col. Sir Harwood (Eye)

Osborn, John (Hallam)

Bossom, Sir Clive

Harvey, Sir Arthur Vere

Osborne, Sir Cyril (Louth)

Boyd-Carpenter, Rt. Hn. J.

Harvie Anderson, Miss

Page, R. Graham (Crosby)

Boyle, Rt. Hn. Sir Edward

Hastings, Stephen

Pardoe, J. W.

Braine, Bernard

Hawkins, Paul

Pearson, Sir Frank (Clitheroe)

Brewis, John

Hay, John

Percival, Ian

Brinton, Sir Tatton

Heald, Rt. Hn. Sir Lionel

Peyton, John

Bromley-Davenport, Lt. Col. Sir Walter

Heath, Rt. Hn. Edward

Pink, R. Bonner

Brown, Sir Edward (Bath)

Heseltine, Michael

Pounder, Rafton

Bruce-Gardyne, J.

Higgins, Terence L.

Powell, Rt. Hn. J. Enoch

Bryan, Paul

Hiley, Joseph

Price, David (Eastleigh)

Buchanan-Smith, Alick (Angus, N & M)

Hill, J. E. B.

Prior, J. M. L.

Bullus, Sir Eric

Hirst, Geoffrey

Quennell, Miss J. M.

Burden, F. A.

Hogg, Rt. Hn. Quintin

Ramsden, Rt. Hn. James

Campbell, Gordon

Holland, Philip

Rawlinson, Rt. Hn. Sir Peter

Carlisle, Mark

Hordern, Peter

Rees-Davies, W. R.

Carr, Rt. Hn. Robert

Hornby, Richard

Renton, Rt. Hn. Sir David

Cary, Sir Robert

Howell, David (Guildford)

Ridley, Hn. Nicholas

Channon, H. P. G.

Hunt, John

Ridsdale, Julian

Chichester-Clark, R.

Hutchison, Michael Clark

Robson Brown, Sir William

Clark, Henry

Iremonger, T. L.

Rodgers, Sir John (Sevenoaks)

Clegg, Walter

Jenkin, Patrick (Woodford)

Roots, William

Cooke, Robert

Jennings, J. C. (Burton)

Rossi, Hugh (Hornsey)

Cooper-Key, Sir Neill

Johnson Smith, G. (E. Grinstead)

Royle, Anthony

Corfield, F. V.

Johnston, Russell (Inverness)

Russell, Sir Ronald

Costain, A. P.

Jones, Arthur (Northants, S.)

St. John-Stevas, Norman

Craddock, Sir Beresford (Spelthorne)

Jopling, Michael

Sandys, Rt. Hn. D.

Crawley, Aidan

Joseph, Rt. Hn. Sir Keith

Scott, Nicholas

Crosthwaite-Eyre, Sir Oliver

Kaberry, Sir Donald

Sharples, Richard

Crouch, David

Kerby, Capt. Henry

Shaw, Michael (Sc'b'gh & Whitby)

Crowder, F. P.

Kimball, Marcus

Sinclair, Sir George

Cunningham, Sir Knox

King, Evelyn (Dorset, S.)

Smith, John

Currie, G. B. H.

Kirk, Peter

Stainton, Keith

Dalkeith, Earl of

Kitson, Timothy

Steel, David (Roxburgh)

Dance, James

Knight, Mrs. Jill

Stodart, Anthony

Davidson, James (Aberdeenshire, W.)

Lambton, Viscount

Stoddart-Scott, Col. Sir M. (Ripon)

d'Avigdor-Goldsmid, Sir Henry

Lancaster, Col. C. G.

Summers, Sir Spencer

Dean, Paul (Somerset, N.)

Langford-Holt, Sir John

Taibot, John E.

Deedes, Rt. Hn. W. F. (Ashford)

Legge-Bourke, Sir Harry

Tapsell, Peter

Digby, Simon Wingfield

Lewis, Kenneth (Rutland)

Taylor, Sir Charles (Eastbourne)

Dodds-Parker, Douglas

Lloyd, Ian (P'tsm'th, Langstone)

Taylor, Edward M. (G'gow, Cathcart)

Doughty, Charles

Lloyd, Rt. Hn. Selwyn (Wirral)

Taylor, Frank (Moss Side)

Douglas-Home, Rt. Hn. Sir Alec

Longden, Gilbert

Teeling, Sir William

Drayson, G. B.

Loveys, W. H.

Temple, John M.

du Cann, Rt. Hn. Edward

Lubbock, Eric

Thatcher, Mrs. Margaret

Eden, Sir John

McAdden, Sir Stephen

Thorpe, Jeremy

Elliot, Capt. Walter (Carshalton)

MacArthur, Ian

Tilney, John

Errington, Sir Eric

Mackenzie, Alasdair (Ross & Crom'ty)

Turton, Rt. Hn. R. H.

Eyre, Reginald

Macleod, Rt. Hn. Iain

van Straubenzee, W. R.

Farr, John

McMaster, Stanley

Vaughan-Morgan, Rt. Hn. Sir John

Fisher, Nigel

Macmillan, Maurice (Farnham)

Vickers, Dame Joan

Fletcher-Cooke, Charles

Maginnis, John E.

Wainwright, Richard (Colne Valley)

Forrest, George

Marples, Rt. Hn. Ernest

Walker, Peter (Worcester)

Fortescue, Tim

Marten, Neil

Walker-Smith, Rt. Hn. Sir Derek

Foster, Sir John

Maude, Angus

Wall, Patrick

Fraser, Rt. Hn. Hugh (St'fford & Stone)

Maudling, Rt. Hn. Reginald

Walters, Denis

Galbraith, Hn. T. G.

Mawby, Ray

Ward, Dame Irene

Gibson-Watt, David

Maxwell-Hyslop, R. J.

Weatherill, Bernard

Gilmour, Ian (Norfolk, C.)

Maydon, Lt.-Cmdr. S. L. C.

Webster, David

Glover, Sir Douglas

Mills, Peter (Torrington)

Wells, John (Maidstone)

Godber, Rt. Hn. J. B.

Mills, Stratton (Belfast, N.)

Whitelaw, William

Gower, Raymond

Miscampbell, Norman

Wilson, Geoffrey (Truro)

Grant, Anthony

Mitchell, David (Basingstoke)

Winstanley, Dr. M. P.

Grant-Ferris, R.

Monro, Hector

Wolrige-Gordon, Patrick

Gresham Cooke, R.

More, Jasper

Wood, Rt. Hn. Richard

Grieve, Percy

Morgan, W. G. (Denbigh)

Woodnutt, Mark

Griffiths, Eldon (Bury St. Edmunds)

Morrison, Charles (Devizes)

Worsley, W. M.

Grimond, Rt. Hn. J.

Mott-Radclyffe, Sir Charles

Wylie, N. R.

Gurden, Harold

Munro-Lucas-Tooth, Sir Hugh

Younger, Hn. George

Hall, John (Wycombe)

Nabarro, Sir Gerald

Hall-Davis, A. G. F.

Neave, Airey

TELLERS FOR THE AYES:

Hamilton, Marquess of (Fermanagh)

Nicholls, Sir Harmar

Mr. Francis Pym and

Hamilton, M. (Salisbury)

Noble, Rt. Hn. Michael

Mr. R. W. Elliott.

Harris, Frederic (Croydon, N. W.)

Nott, John

NOES

Abse, Leo

Archer, Peter

Bacon, Rt. Hn. Alice

Albu, Austen

Armstrong, Ernest

Bagier, Gordon A. T.

Allaun, Frank (Salford, E.)

Ashley, Jack

Barnes, Michael

Alldritt, Walter

Atkins, Ronald (Preston, N.)

Barnett, Joel

Anderson, Donald

Atkinson, Norman (Tottenham)

Baxter, William

482

483

Beaney, Alan

Foley, Maurice

Luard, Evan

Bellenger, Rt. Hn. F. J.

Foot, Sir Dingle (Ipswich)

Lyon, Alexander W. (York)

Bence, Cyril

Foot, Michael (Ebbw Vale)

Lyons, Edward (Bradford, E.)

Benn, Rt. Hn. Anthony Wedgwood

Ford, Ben

Mabon, Dr. J. Dickson

Bennett, James (G'gow, Bridgeton)

Forrester, John

McBride, Neil

Bidwell, Sydney

Fowler, Gerry

McCann, John

Binns, John

Fraser, J. D. (Norwood)

MacColl, James

Bishop, E. S.

Fraser, Rt. Hn. Tom (Hamilton)

MacDermot, Niall

Blackburn, F.

Freeson, Reginald

Macdonald, A. H.

Blenkinsop, Arthur

Galpern, Sir Myer

McGuire, Michael

Boardman, H.

Gardner, A. J.

McKay, Mrs. Margaret

Booth, Albert

Garrett, W. E.

Mackenzie, Gregor (Rutherglen)

Boston, Terence

Garrow, Alex

Mackie, John

Bottomley, Rt. Hn. Arthur

Ginsburg, David

Mackintosh, John P.

Bowden, Rt. Hn. Herbert

Gordon Walker, Rt. Hn. P. C.

Maclennan, Robert

Boyden, James

Gourlay, Harry

MacMillan, Malcolm (Western Isles)

Braddock, Mrs. E. M.

Gray, Dr. Hugh

McMillan, Tom (Glasgow, C.)

Bradley, Tom

Greenwood, Rt. Hn. Anthony

McNamara, J. K.

Bray, Dr. Jeremy

Gregory, Arnold

MacPherson, Malcolm

Brooks, Edwin

Grey, Charles

Mahon, Peter (Preston, S.)

Broughton, Dr. A. D. D.

Griffiths, David (Rother Valley)

Mahon, Simon (Bootle)

Brown, Hugh D. (G'gow, Provan)

Griffiths, Rt. Hn. James (Llanelly)

Mallalieu, E. L. (Brigg)

Brown, Bob (N'c'tle-upon-Tyne, W.)

Griffiths, Will (Exchange)

Mallalieu, J. P. W. (Huddersfield, E.)

Buchan, Norman

Gunter, Rt. Hn. R. J.

Manuel, Archie

Buchanan, Richard (G'gow, Sp'burn)

Hale, Leslie (Oldham, W.)

Mapp, Charles

Butler, Herbert (Hackney, C.)

Hamilton, James (Bothwell)

Marquand, David

Butler, Mrs. Joyce (Wood Green)

Hamilton, William (Fife, W.)

Marsh, Rt. Hn. Richard

Callaghan, Rt. Hn. James

Hamling, William

Mason, Roy

Cant, R. B.

Hannan, William

Mayhew, Christopher

Carmichael, Neil

Harper, Joseph

Mellish, Robert

Carter-Jones, Lewis

Harrison, Walter (Wakefield)

Mendelson, J. J.

Castle, Rt. Hn. Barbara

Hart, Mrs. Judith

Mikardo, Ian

Chapman, Donald

Haseldine, Norman

Millan, Bruce

Coe, Denis

Hazell, Bert

Miller, Dr. M. S.

Coleman, Donald

Healey, Rt. Hn. Denis

Milne, Edward (Blyth)

Concannon, J. D.

Heffer, Eric S.

Mitchell, R. C. (S'th'pton, Test)

Conlan, Bernard

Henig, Stanley

Moonman, Eric

Corbet, Mrs. Freda

Herbison, Rt. Hn. Margaret

Morgan, Elystan (Cardiganshire)

Craddock, George (Bradford, S.)

Hilton, W. S.

Morris, Alfred (Wythenshawe)

Cronin, John

Hobden, Dennis (Brighton, K'town)

Morris, Charles R. (Openshaw)

Crosland, Rt. Hn. Anthony

Hooley, Frank

Morris, John (Aberavon)

Crossman, Rt. Hn. Richard

Horner, John

Moyle, Roland

Cullen, Mrs. Alice

Houghton, Rt. Hn. Douglas

Mulley, Rt. Hn. Frederick

Dalyell, Tam

Howarth, Harry (Wellingborough)

Murray, Albert

Darling, George

Howarth, Robert L. (Bolton, E.)

Neal, Harold

Davidson, Arthur (Accrington)

Howell, Denis (Small Heath)

Newens, Stan

Davies, Dr. Ernest (Stretford)

Howie, W.

Norwood, Christopher

Davies, G. Elfed (Rhondda, E.)

Hoy, James

Oakes, Gordon

Davies, Ednyfed Hudson (Conway)

Hughes, Rt. Hn. Cledwyn (Anglesey)

Ogden, Eric

Davies, Harold (Leek)

Hughes, Emrys (Ayrshire, S.)

O'Malley, Brian

Davies, Ifor (Gower)

Hughes, Hector

Oram, Albert E.

Davies, Robert (Cambridge)

Hughes, Roy (Newport)

Orbach, Maurice

Davies, S. O. (Merthyr)

Hunter, Adam

Orme, Stanley

Delargy, Hugh

Hynd, John

Oswald, Thomas

Dell, Edmund

Irvine, A. J. (Edge Hill)

Owen, Dr. David (Plymouth, S'tn)

Dempsey, James

Jackson, Colin (B'h'se & Spenb'gh)

Padley, Walter

Dewar, D. C.

Jackson, Peter M. (High Peak)

Page, Derek (King's Lynn)

Diamond, Rt. Hn. John

Janner, Sir Barnett

Paget, R. T.

Dickens, James

Jeger, George (Goole)

Palmer, Arthur

Dobson, Ray

Jeger, Mrs. Lena (H'b'n & St. P'cras, S.)

Pannell, Rt. Hn. Charles

Doig, Peter

Jenkins, Hugh (Putney)

Park, Trevor

Donnelly, Desmond

Jenkins, Rt. Hn. Roy (Stechford)

Parker, John (Dagenham)

Driberg, Tom

Johnson, James (K'ston-on-Hull, W.)

Parkyn, Brian (Bedford)

Dunn, James A.

Jones, Dan (Burnley)

Pavitt, Laurence

Dunnett, Jack

Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)

Pearson, Arthur (Pontypridd)

Dunwoody, Mrs. Gwyneth (Exeter)

Jones, J. Idwal (Wrexham)

Peart, Rt. Hn. Fred

Dunwoody, Dr. John (F'th & C'b'e)

Judd, Frank

Pentland, Norman

Eadie, Alex

Kelley, Richard

Perry, Ernest C. (Battersea, S.)

Edelman, Maurice

Kenyon, Clifford

Perry, George H. (Nottingham, S.)

Edwards, Rt. Hn. Ness (Caerphilly)

Kerr, Mrs. Anne (R'ter & Chatham)

Prentice, Rt. Hn. R. E.

Edwards, Robert (Bilston)

Kerr, Dr. David (W'worth, Central)

Price, Christopher (Perry Barr)

Edwards, William (Merioneth)

Kerr, Russell (Feltham)

Price, J. T. (Westhoughton)

Ellis, John

Leadbitter, Ted

Price, William (Rugby)

English, Michael

Ledger, Ron

Probert, Arthur

Ennals, David

Lee, Rt. Hn. Frederick (Newton)

Pursey, Cmdr. Harry

Ensor, David

Lee, Miss Jennie (Cannock)

Randall, Harry

Evans, Albert (Islington, S. W.)

Lee, John (Reading)

Rankin, John

Evans, Ioan L. (Birm'h'm, Yardley)

Lestor, Miss Joan

Redhead, Edward

Faulds, Andrew

Lever, Harold (Cheetham)

Rees, Merlyn

Fernyhough, E.

Lever, L. M. (Ardwick)

Reynolds, G. W.

Finch, Harold

Lewis, Arthur (W. Ham, N.)

Rhodes, Geoffrey

Fitch, Alan (Wigan)

Lewis, Ron (Carlisle)

Richard, Ivor

Fletcher, Raymond (Ilkeston)

Lipton, Marcus

Roberts, Albert (Normanton)

Fletcher, Ted (Darlington)

Lomas, Kenneth

Roberts, Goronwy (Caernarvon)

Floud, Bernard

Loughlin, Charles

Roberts, Gwilym (Bedfordshire, S.)

484

485

Robertson, John (Paisley)

Stonehouse, John

White, Mrs. Eirene

Robinson, Rt. Hn. Kenneth (St. P'c'as)

Strauss, Rt. Hn. G. R.

Whitlock, William

Robinson, W. O. J. (Walth'stow, E.)

Summerskill, Hn. Dr. Shirley

Wigg, Rt. Hn. George

Rodgers, William (Stockton)

Swain, Thomas

Wilkins, W. A.

Roebuck, Roy

Swingler, Stephen

Willey, Rt. Hn. Frederick

Rogers, George

Symonds, J. B.

Williams, Alan (Swansea, W.)

Rose, Paul

Taverne, Dick

Williams, Alan Lee (Hornchurch)

Ross, Rt. Hn. William

Thomas, George (Cardiff, W.)

Williams, Clifford (Abertillery)

Rowland, Christopher (Meriden)

Thomas, Iorwerth (Rhondda, W.)

Williams, Mrs. Shirley (Hitchin)

Rowlands, E. (Cardiff, N.)

Tinn, James

Williams, W. T. (Warrington)

Ryan, John

Tomney, Frank

Willis, George (Edinburgh, E.)

Shaw, Arnold (Ilford, S.)

Tuck, Raphael

Wilson, Rt. Hn. Harold (Huyton)

Sheldon, Robert

Urwin, T. W.

Wilson, William (Coventry, S.)

Shinwell, Rt. Hn. E.

Varley, Eric G.

Winnick, David

Shore, Peter (Stepney)

Wainwright, Edwin (Dearne Valley)

Woodburn, Rt. Hn. A.

Short, Rt. Hn. Edward (N'c'tle-u-Tyne)

Walden, Brian (All Saints)

Woof, Robert

Short, Mrs. Renée (W'hampton, N. E.)

Walker, Harold (Doncaster)

Wyatt, Woodrow

Silkin, S. C. (Dulwich)

Wallace, George

Yates, Victor

Silverman, Julius (Aston)

Watkins, David (Consett)

Zilliacus, K.

Skeffington, Arthur

Watkins, Tudor (Brecon & Radnor)

Small, William

Weitzman, David

TELLERS FOR THE NOES:

Snow, Julian

Wellbeloved, James

Mr. John Silkin and

Spriggs, Leslie

Wells, William (Walsall, N.)

Mr. George Lawson.

Steele, Thomas (Dunbartonshire, W.)

Whitaker, Ben

ORDERS OF THE DAY

  MILITARY AIRCRAFT (LOANS) BILL
  Order for Second Reading read.
  7.22 p.m.
  The Chief Secretary to the Treasury (Mr. John Diamond): I beg to move, That the Bill be now read a Second time.
  As the House is by now fully aware, the Government have entered into arrangements with the United States Government to acquire certain military aircraft for the Navy and the R.A.F. I refer to the three aircraft—the C130 Hercules Transport, the Phantom and the F111A. Part of the arrangements between the two Governments is that the American Government will make available credits amounting to 1,250 million dollars to cover the initial cost of these aircraft so far as this has to be paid in dollars.
  The House has been kept informed about these credits as agreement has been reached. On 11th February last year my right hon. Friend the Secretary of State for Defence informed the House that the United States Government would make available credit facilities to cover the dollar costs of the purchase of the Hercules and R.A.F. Phantoms. On 5th August he told the House that it had been agreed that the credit could be extended to cover the Phantoms for the Navy ordered in 1964 by the previous Administration, and in Part I of the Statement on Defence Estimates this year it was stated that 50 F111A aircraft would be bought for delivery by January, 1970, and that the production costs and a contribution to research and development costs would be met by credit terms. The purpose of the present Bill is to extend the Treasury's powers to borrow so that we can take advantage of these credit facilities.
  It may be suggested that the introduction of the Bill is perhaps unnecessary, in that essentially this transaction is one of borrowing money and, as such, is well within the Treasury's general powers of borrowing under the National Loans Act, 1939, which authorises the Treasury to raise money in such manner as it thinks fit for the repayment of maturing debt.
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  But where such borrowing is, as in the present case, earmarked for specific expenditure, it would be unrealistic to regard the transaction simply as a loan; for in fact what is really happening is the acquisition of certain American aircraft by means of a loan and it is surely proper that the House should be enabled to exercise the same powers of control over expenditure as if the aircraft were being bought out of money voted by the House.
  It is true that the passing of the necessary legislation inevitably consumes valuable Parliamentary time, but I feel sure that in this all important field of Supply the House must act in such a way as fully to preserve its rights vis-à-vis the Government of the day. It is in this spirit that the Government, rather than attempting to rely on their general borrowing powers, have introduced the Bill.
  Perhaps it would be convenient if I were first to outline the loan transaction, then to refer shortly to the detailed accounting procedures and their relation to the provisions of the Bill, and finally to put the whole matter in perspective by a short reference to the defence position.
  The initial dollar cost of the aircraft already described amounts to 1,250 million dollars or, in round figures, £450 million. Of this sum, 52 million dollars were spent last year, but we have borrowed these dollars under the general borrowing powers I have already mentioned, so as to get the benefit for our balance of payments. That leaves the sum of 1,200 million dollars, or approximately £430 million, which is the figure provided in the Bill. This is the sum which is to be spent during the six years ended 31st March, 1972; that is to say, the period during which the aircraft in question will be delivered and progress payments will be due. The expenditure is to be financed by borrowing from the American Government. The interest rate, as has already been announced, is 4¾ per cent. and the repayment terms are such as to keep the repayment of principal as low as possible up to 1968 and then spread fairly evenly up to 1978.
  It is by no means the case that the whole of this expenditure relates to purchases made by this Government. Indeed,

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  the additional dollar bill as compared with the programme we inherited from the Conservative Government is not in fact so very great. It is £165 million spread over the next 10 years, an average of about £16 million a year. I will explain a little later on the reasons why this additional cost is relatively small; but I thought it would be helpful for hon. Members to have this comparison in their minds when considering the accounting arrangements which I will now shortly describe.
  The purpose of the financial procedures is to enable Parliament to have the same measure of control over expenditure being incurred as if it were being met from our own resources in the normal way, instead of being met in the first place out of borrowed money. Accordingly, as progress payments are made each year through the United States Department of Defence to the American contractors, so each year will the equivalent sum be included in the Votes presented with the Estimates to Parliament. Similarly, the sums of money which are borrowed from the United States Government to enable these payments to be made each year will be mirrored in the corresponding sums being issued out of the Consolidated Fund as appropriations-in-aid of the relevant Vote. In this way, although the net amount remaining on the Vote will be only nominal, both the full cost being incurred and the full amount being borrowed will be subject to Parliamentary scrutiny for every year this process continues.
  Mr. John Hall: It is perhaps because the Chief Secretary is reading rather fast that I am not following him exactly. Did I understand him to say that the amount spent each year would come forward in the Vote for Parliamentary scrutiny? What power would Parliament have to alter that, because are not we already fully committed to the expenditure?
  Mr. Diamond: I am referring to the normal procedure of Parliament being able to control expenditure by means of debate on the Estimates and refusing Supply or refusing to vote for Supply. The point I wanted to make to the House is that those same rights are being preserved, even though this country is not being put to expense at that particular
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  point of time, because the money spent is coming out of borrowed money.
  It is quite a different point with regard to the contractual position. The House is in exactly the same position as it would be about any other kind of contract. It can refuse Supply, but if a Government have entered into a contract—either the previous Government or this Government—and if Supply is refused, problems about cancellation and the usual problems arise. However, this Bill deals not with that aspect but with maintaining the full rights of this House, as if the money were not borrowed money but actual expenditure spent on the Votes.
  Mr. Tam Dalyell: Can my hon. Friend confirm that the books will be open to the Comptroller and Auditor General and his staff?
  Mr. Diamond: I am not sure which books my hon. Friend refers to.
  Mr. Dalyell: The whole transaction.
  Mr. Diamond: Yes, of course, the whole transaction will be open to the Comptroller and Auditor General in the normal way, certainly.
  I was describing the procedure under which, in the early years, the transactions being met in cash in the United States would be mirrored in book-keeping transactions in this House. I described the Vote which is, in fact, the new Vote described as Ministry of Aviation (Purchase of United States Aircraft) Class IV, No. 9, which appeared for the first time in the 1966–67 Civil Estimates with an appropriate footnote. That Vote already exists.
  When repayments of principal and interest under the loan are made by the Exchequer, matching repayments will be made to the Exchequer out of the normal Votes, that is to say, out of Defence Votes in respect of production and out of the Ministry of Aviation Vote in respect of research and development. Accordingly, the cost of these aircraft will fall on the defence budget when the real burden of their purchase falls on our economy, that is to say, when repayments of the loan and interest take place.
  I hope that the provisions of the Bill itself will now fall into place. Clause 1(1) authorises the Treasury during the six years ended 31st March, 1972, when the

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  planes are being delivered, to issue out of the Consolidated Fund sums not exceeding a total of £430 million to be applied as appropriations-in-aid of moneys provided by Parliament both for the purchase of American aircraft and to cover our share of the expenditure on research and development incurred in the United States.
  Subsection (2) of Clause 1 protects Parliament in two ways. It provides that no issues from the Consolidated Fund may be made for the purposes I have described until Parliament has passed the necessary Supply Resolution covering the Estimate; and also that the amount so issued for any year is limited to what is specified in the Estimates for that year. It is those two provisions which securely protect the rights of this House.
  Subsection (3) is in common form and authorises the Treasury to borrow for the purpose of making these issues. Authority is given to raise money in any manner provided by the National Loans Act, 1939, which in its turn refers,
  "to raising money either within or outside the United Kingdom and either in sterling or in any other currency."
  Clause 2 follows the precedent set by previous Acts, for example, the Armed Forces (Housing Loans) Acts 1949–1965. Subsection (1) provides for the repayment to the Exchequer of moneys advanced under subsection (1) of Clause 1 as appropriations-in-aid of the new Vote. Repayments of principal and interest will be a charge on Air and Navy Votes, for production, or on the Ministry of Aviation Vote, for research and development, having regard to which Department ought properly to bear each final charge.
  Subsection (2) enables the Treasury to use the interest and instalments of principal received from Departments to repay debt and to offset interest charges which would otherwise have to be met from the Consolidated Fund. In the present case, naturally, the sums paid by Departments will be used to service the American credit.
  So much, then, for the legal provisions and accounting procedures affecting the loan. I should now like to deal a little more fully with the Government's reshaped aircraft programme, and to show
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  that the provisions of the Bill are an essential means of reconciling our economic situation and our military needs. My hon. Friend the Under-Secretary of State for Defence for the Royal Air Force will be happy to reply to questions related especially to this aspect should he have the good fortune to catch your eye, Mr. Speaker, later on.
  When the Labour Government took over from the party opposite, they were confronted with an aircraft programme which was going to place an enormous load on the domestic economy, but nevertheless was going to come to fruition too late, in certain essential respects, to meet the military need. What we had to do was to evolve a programme which both met the military requirement on time and also reduced the call on domestic resources in respect of arms production by about £1,400 million over the next 10 years. This very large sum represents the costs of human skills and material facilities which we estimated could, without causing large-scale unemployment or great hardship to individuals, be re-engaged in industry so as to make a most useful contribution towards direct exports and towards reducing domestic demands for manufactured imports.
  Of course, we had to pay a price for this, and this price has largely taken the form of an increase in purchases of aircraft from the United States. But, as I said earlier, the additional dollar bill, as compared with the programme we inherited, is not in fact very great. Over the next 10 years it amounts to an average of about £16 million a year. The cost is relatively small for several reasons. First, we reduced the Polaris submarine programme from five to four. Secondly, we cut back the reconnaissance/strike aircraft order to 50, achieving in the process room for the co-operative Anglo-French development of an advanced variable geometry aircraft. Thirdly, we found it possible, partly as a result of the decisions we took about the carrier force, to satisfy our military needs with a combined Royal Navy and Royal Air Force Phantom order of about 200.
  But the timing of the total dollar payments would have produced unacceptable effects on our economy. In the next two or three years we shall be receiving very large quantities of United States equipment and, without some arrangement for

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  spreading the liability for payment, we should have been in some difficulty. This spreading is the fundamental purpose of the United States credit arrangements. Under them, we are able to borrow dollars and thus minimise the adverse effects of the whole transaction on our balance of payments. Between now and 1968, when we have other large liabilities to discharge, the sums due for repayment under the aircraft programme will be small. Thereafter they will be spread evenly over a period lasting beyond the mid-70's.
  As a result of all this, we shall, of course, incur interest liabilities which are included in the figure of £165 million which I mentioned earlier. But the rate of interest is relatively modest, and without the benefits the loan transaction affords we should have been unable, in the absence of further major sacrifices all round, to provide our forces with the equipment which they need. I have no doubt, therefore, that this Bill is in the best interests of our country.
  7.39 p.m.
  Mr. Robert Carr: The Chief Secretary, in moving the Second Reading of this Bill, concluded his remarks by going over some of the stale old arguments which we had heard before about the aircraft programme which the Labour Governor ant inherited. They do not convince us any more by repetition than they did the first time we heard them, and neither, as the Chief Secretary must know, do they convince many of his hon. Friends behind him.
  It really is nonsense to make this claim about the dollar bill for these aircraft being only £165 million more than the dollar programme the Government inherited when they get the reductions in other ways. We are talking about the aircraft programme at the moment. Of course, but for the present Government's policy towards the British aircraft industry, they could have made the other changes to which they refer and saved many more dollars as well. They cannot get over the fact that the replacement of British aircraft by American aircraft is, to the full extent of the cost of those aircraft, an added burden to the balance of payments and to the dollar cost. If one is able to make other savings, that is another matter and it affects the overall balance of payments, of course, but it is
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  quite unfair to compare the aircraft programme, on the one hand, with the overall programme, on the other. That is a very peculiar way of arguing.
  There is another matter which we ought to keep in mind. This Bill does not represent the whole of the dollar cost of this Government's programme for purchasing American aircraft. I expect that this is known to the House but, perhaps, it could he something about which we could make an error in our thinking and we might mistakenly imagine that the £430 million mentioned in Clause 1 represented the whole dollar content of the purchase of American planes. But this is not so, and it would be as well for the House to remind itself of the total dollar bill. This was revealed most recently by the Secretary of State for Defence in a Written Answer shortly before the General Election. It appears in Written Answers in cols. 396–7 of HANSARD of 4th March, and it shows that the total dollar cost of purchasing the F111A, the Phantom and the C130 amounts to £660 million.
  The Under-Secretary of State for Defence for the Royal Air Force (Mr. Merlyn Rees)indicated assent.
  Mr. Carr: I am glad to see the Under-Secretary of State agreeing with that. As I say, I am sure that there is no dispute between us, but it is as well to be clear about it. The figure of £430 million mentioned in the Bill might give some hon. Members and people outside the House the idea that this was the total dollar cost involved, whereas, of course, it is not much more than about two-thirds of the total dollar cost altogether.
  In our view, that cost is likely to mount in the future. As we made clear in the defence debate at the beginning of March, we find the ordering of just 50 F111s rather incredible. The Chief Secretary takes credit for it now as one of the ways in which the dollar expenditure is kept down. But one must take account of inevitable wastage. Whatever precautions are taken, there is bound to be some wastage with any aircraft. Having regard also to the number of aircraft which have to be withdrawn from the front line at any given time for service, and so on, we are, to put it no higher, extremely sceptical about whether an order of 50 is

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  credible. The House should realise, therefore, that the dollar cost we are talking about is likely to be much more than the £430 million mentioned in the Bill.
  We regard the Bill as objectionable. It is abhorrent not only to us on this side of the House but also, as the Chief Secretary realises, I am sure, to a number of his hon. Friends as well. Those of us who detest it are, however, put in an awkward position, unless we take the view of a handful of hon. Members opposite. We are put in an awkward position because the Bill provides the machinery to enable the Government to carry out the agreement to which they are irretrievably committed to buy a whole range of American military aircraft. Following the cancellations and the castration of the British aircraft industry as a supplier of military aircraft in this range in the next few years, they have no alternative source of aircraft for the Royal Air Force. Therefore, if the House were to deny the Government this machinery, we should, in fact, be denying the Royal Air Force the aircraft it must have over the next few years. For this reason, however much we may detest the Bill, we cannot vote against it and we shall not do so.
  Neither do we see anything wrong with the machinery provided. We see little to quarrel with there, given the unpalatable fact that this business has got to, be done. However, before we pass the Bill, we have the right to ask the Government to answer for the House a number of questions, and I am sure that the Under-Secretary of State for the Royal Air Force, who, I understand, is to reply, will note these points and do his best to reply to them.
  First, we wonder whether the £430 million is enough. What assurances can the Government give us that it is likely to be enough? I have already mentioned our doubts about the credibility of ordering as few as 50 F111s, but I have more in mind than that. I wonder, for example, whether there are sufficient guarantees against price rises, against escalation. Let us take the F111 as an example. I take it as an example because we have had particular assurances that we really have a fixed-price contract for the F111 or, at least, we have been told that it is a ceiling price. Only a short time ago, in the previous debate, the Secretary of State
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  for Defence reiterated that this was a ceiling price of £2½ million per aircraft, even with the modifications required by the R.A.F.
  But what about spares for this aircraft? As we all know, spares over a period of years can make a substantial addition. The F111 seems, undoubtedly, to be having substantial development troubles. I am not suggesting that they will not be overcome, but the reports are too persistent to be swept aside. It seems highly probable that this aircraft is having substantial development troubles, and that to overcome them might well require heavy extra research and development expenditure over and above what has hitherto been budgeted for in the United States.
  The question we put on this aircraft is whether we have any safeguards against such extra research and development expenditure as may be necessary above that previously contemplated being recouped by the Americans in the price of the spares which we shall have to buy from them? If anything of that kind were to happen—we believe that examples of it have, unfortunately, happened to some of our European allies when they have purchased American aircraft—then the cost could mount greatly above what we are talking about now even though the unit price of the basic aircraft is a fixed one. Taking the example of the F111, but, naturally, seeking information about the other aircraft involved, we should like an assurance from the Government before we pass the Bill that this is an adequate amount and is safeguarded in a reasonable way against escalation.
  The second question which we put to the Government came up briefly in Questions to the Minister of Aviation earlier today. It is related to the troubles which the F111 appears to be having in its development. As we shall be dependent on this aircraft, we hope that these troubles will be overcome. There is no wish that they will not be behind anything I say, but there is the possibility that they might not be overcome. There is the possibility—we speak feelingly because we suffered it—that there could be another cancellation as there was of the Skybolt. Without any party partisan feeling but from the standpoint of, "Once bitten, twice shy", we want to know whether the Government have

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  obtained proper guarantees from the United States of financial compensation in the event of cancellation of the F111 by the United States if, unfortunately, its present development problems are not overcome. We expect and hope that they will be, but we think that, if they are, extra costs will be involved. Further, there is the possibility that they might not be, and the British Government ought in prudence to have proper safeguards and ought to be able to tell the House that they have secured them.
  Another question which we should like to probe a little deeper before we allow this Bill to go through is that of further information from the Government about the effect on our balance of payments. Here we come near to the subject matter of the earlier debate today. One thing which cannot be denied is that this Bill will add £430 million to the debit side of our balance of payments account. What we are concerned about is, what is the adequacy of the dollar offset agreements, and particularly the only complete dollar offset agreement the Government claim to have made, namely, on the F111? We need more information and assurance, because the present evidence seems very discouraging.
  There is the vexed matter, around which the previous debate centred, of inclusion of the Saudi Arabian order in this offset. We believe that order should have been obtained—indeed, according to the Government's own testimony before Christmas it had been obtained—without any connection with the F111. Now we know that it is included in the offset, included to the extent, as the Secretary of State for Defence agreed a short time ago, of 280 million dollars. Almost three-quarters of the dollar offset for the F111, concerning sales to third parties, is in this deal completed by Britain before the F111 order was placed.
  This does not encourage us very much. Nor, to be frank, are we much encouraged by some reports we hear of the kind of co-operation which we get from the United States even in obtaining the Saudi Arabian order. We understand that some co-operation agreement was made between the Government and the United States Administration. We also hear reports—it would be nice to have confirmation or denial, I hope a denial, of the reports—that, after we reached agreement
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  with the United States Administration, not only did the American Lockheed company go on trying to get the order, but that it was officially supported in its attempts by the United States Government.
  I ask this specific question. Is it true that following this agreement, this understanding with the United States Administration, a deputation went from the Lockheed company, headed by its Chairman, Mr. Gross, with the personal knowledge of President Johnson himself? Is it true that, having got to Saudi Arabia, that delegation was taken to see the Saudi Arabian Minister of Defence by officials of the United States embassy in Riadh? These are the sort of reports which are current. If they are true it gives us no faith at all in the value of United States co-operation in these matters.
  We fully understand that the United States Administration cannot give orders to American companies to hold off. We would not expect them to try. I do not think British companies would take it very kindly if the British Government tried to do so in this country. But what we are disturbed about is reports that the United States Administration, having come to an understanding with the British Government, should not only not refrain from telling American companies to hold off but should actually encourage and help them in doing the reverse. If that is true, this agreement with the United States is not of much value.
  I want to stress that these are reports and that reports can be untrue, but I think it better to bring these reports out into the open and have them denied, if denied they can be. If they are true it is also better, as well as honest to this House, for the Government to tell us that they are true so that we know the problem we are up against and can put the proper value on the offset agreements, which in that case would not be a very high value.
  Another bit of evidence which causes us worry about the worth-whileness of the balance of payments offset agreement, is the British failure to obtain the recent Jordanian order for aircraft. Here, we would have thought, was a classic example of the sort of order which was in mind in the dollar offset agreement

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  connected with the F111 purchase. Here was an order which, I think, came up later than the Saudi Arabian one. One would have thought this was the first example, the first test, of the worthwhileness of the sort of agreement we believed we had made with the United States Administration. As The Times commented in an editorial a few weeks ago, it was rather surprising that we did not seem to get anywhere near it.
  We should like to know from the Under-Secretary of State for Defence for the Royal Air Force some of the background of why we did not succeed in obtaining the Jordanian order. Did we have co-operation from the United States in trying to get it? Was it a matter of finance? Was it that we did not want the order because we felt that the Jordanians could not have paid us for it? Might there have been some possibility that when our Government were negotiating with the American Government over such a matter as the purchase of the F111 we should have used our great bargaining power and made some agreement that some of the aid moneys made available to Jordan by the United States should be made available for purchase of British aircraft when they wanted them? We were in a strong bargaining position. From all the information I can get, the United States in general and Mr. McNamara in particular were most anxious that they should get the British order for the F111. We cannot help feeling that our bargaining power was thrown away and not used as strongly as it should have been.
  Another bit of evidence which gives us discouragement about the value of the dollar offset agreement is the just recently reported failure to obtain orders for harbour tugs for the American Navy. This was thought to be a sufficiently important and hopeful item as to be mentioned specifically in the White Paper. The little matter of the Saudi Arabian deal was so minor that it could not be mentioned. The print ran out for this, but the tugs were thought to be so promising and important that they were specifically mentioned and now we hear nothing has come of it.
  These are just some examples of our concern about whether the much-vaunted
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  dollar offset agreements are as beneficial to this country as they are made out to be. There is also one other matter about which I should like to put a question to the Under-Secretary. What are the Government doing to keep down the dollar content of these aircraft purchases to a minimum? We know that sub-contracts, for example, for British components for the Phantom have been obtained. We are told that 40 per cent. to 50 per cent. of the cost of the Phantom is now represented by British parts. That is a good thing which we welcome. For example, we know how important the production of the Spey engines will be in this connection.
  But there are disturbing reports that the Government either have put or are putting pressure on British firms which have obtained such contracts for parts of these American planes to use as much American material as possible in order to get more of the planes' value on the American loan account. The point is that the American credit must be restricted to dollar expenditure and therefore the bigger the British component we can get into these planes, the smaller the American credit and the greater the amount of expenditure in sterling which has to be met as it arises by the Chancellor of the Exchequer and which cannot be put back on the "never-never" system for five years.
  Reports have been circulating that in order to keep down the expenditure of the next few years and to get as much as possible on the five-year credit, the Secretary of State for Defence—or, if not him, some other section of the Government—has been putting pressure on British firms to use as much American material as possible to keep the dollar content up. These, again, are reports. I hope that they are reports which will be firmly and categorically denied. But they are circulating. If they are true, they are disgraceful. If, as we hope, they are untrue, then it is far better to bring them out into the open and for them to be once and for all categorically denied without any doubt. I hope that the Under-Secretary will do that.
  I have two final comments to make. First, the House and the country must realise what the Government are up to in this respect. They are not just buying

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  a great many American planes. They are buying them on the "never-never" by paying the American costs on a five-year credit basis, and in this way they are able to get a "phoney" reduction in defence expenditure in the next few years, leaving whatever Government is in power in the 1970's to pick up the bulk of the bill.
  Mr. Diamond: It will not be a Conservative Government.
  Mr. Carr: We shall see about that. We feel very encouraged by the way in which things have been going in the last few weeks. But even if it were to be a Labour Government, what they are doing is merely pushing off the bulk of this expenditure into the 1970's, and to that extent the much-vaunted reductions in defence expenditure over the next few years are unreal and the House should recognise that fact.
  Secondly, the Government have been negligent in bringing in the Bill so late. That is the view not just of the Opposition but of the all-party Select Committee on Estimates. I think that those hon. Members who may not have read that Select Committee's Report should be made aware exactly what the Select Committee said. I am referring to paragraph 20 of the second Report of the Estimates Committee, Session 1965–66, Spring Supplementary Estimates, House of Commons Paper 108. It was published on 2nd March. It is particularly worth drawing it to the attention of the House because, as it was published on 2nd March, I suspect that it has not received the normal attention which it would get from hon. Members, who at that time were either engaged in or concerned with certain events and who are unlikely to have read this Report with their usual attention. Paragraph 20 of the Report reads:
  "Your Committee view with concern the fact that delays in introducing legislation have made necessary dollar expenditure of £6·7 million on the Ministry of Aviation's Vote this year and further dollar expenditure amounting to £15·8 million on other Votes, making a total of £22·5 million."
  I skip a sentence for brevity and conclude the paragraph:
  "… at a time when balance of payments difficulties are acute, over £22 million of dollar expenditure is being incurred which could have been avoided by the introduction of appropriate enabling legislation."
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  There could not be a stronger condemnation than that of the Government's incompetence and carelessness.
  Mr. Diamond: As I made clear in my speech, the £430 million being borrowed is after deducting £20 million, in round figures, which is the figure which the right hon. Gentleman has mentioned. That has been deducted from the £450 million of the full cost. As I said, that £20 million has not been spent. It has been borrowed.
  Mr. Carr: I was not a member of the Estimates Committee which took evidence on the subject, but I have been a member of the Select Committee of Estimates for five years and I know the care with which evidence is taken. I know that the Select Committee on Estimates is an all-party Committee which does not make critical comment of that kind without justification. If there is no justification for it, then I hope that an opportunity will be found by the Government for that Report: to be debated so that it may be made plain to the House that their Select Committee was wrong in that very strong criticism which it made.
  I repeat—we find this an objectionable Bill, but we cannot divide against it because in the circumstances the effect of denying the Government the machinery which they are seeking would be to deny the Royal Air Force the planes which we on this side of the House know they must have and which now, alas, they cannot obtain from the British aircraft industry in the period about which we are talking. With great reluctance we shall let the Bill pass, but I hope that, in view of the importance of the subject, the Under Secretary will do his best to reassure the House and the country on some of the questions which I have put to him.
  8.7 p.m.
  Mr. Russell Kerr: A new Member of the House who hopes to make his maiden speech finds himself the recipient of much advice from all sides. With all due modesty, I have decided to ignore all but two of these pieces of advice which I have received over the past few days.
  The advice which I propose to accept I have gleaned from the columns of the Daily Mail, from a celebrated columnist,

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  the right hon. Member for Enfield, West (Mr. Iain Macleod), who recently gave it as his opinion that it did not much matter whether or not a maiden speech was controversial so long as the maiden speaker did not "do a Hamlet" on the House and spend the first half of his speech thinking out loud as to whether his maiden speech should be controversial. I propose to follow the right hon. Gentleman's advice and to leave it to him and others to judge for themselves.
  The second piece of advice which I propose to follow is something which, along with other new Members of the House, I have already been incautious enough to suggest to the House—in the shape of an early day Motion seeking to keep the speeches of hon. Members on both front and back benches suitably short. I shall, therefore, be brief.
  I feel that in my speech I must follow convention to the extent of saying that I feel greatly honoured to have been elected to represent the people of Feltham in this House. Feltham is a constituency the qualities of which are many, but its main claim to fame is that, prior to the creation of the Greater London Council, by hon. Members opposite, it had achieved under a Labour-controlled Feltham Urban District Council perhaps the finest housing record of any comparable local authority in the country.
  The only other thing which I would say in this connection is that my constituents in Feltham, very many of whom are highly skilled workers at London Airport and on the surrounding industrial estates, are much too commonsensical and down-to-earth to be impressed by flowery phrases or "flannel" from their Member of Parliament, which is why I say no more about them on this occasion.
  However, a reference to Feltham would not be complete without a word about my predecessor, "Bob" Hunter, whom the House well knew as an assiduous and dedicated Member and whom I have known as a good comrade and a very good friend indeed. I speak for a great number of people in Feltham, where he has been greatly loved as well as respected, when I say that we wish him a long, happy and productive retirement in the years ahead.
  Aside from my natural and understandable pleasure at finding myself a
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  Member of this honourable House, I have in addition a special reason for gratification which I share, as far as I know, only with the hon. Member for Maldon (Mr. Brian Harrison). Like myself, he, too, is an Australian born and bred and he, too, I have no doubt, shares my pride in the fact that the ties of Commonwealth are still sufficiently strong to make possible the election to this British Parliament of one who is still unrepentantly proud of the land of his birth.
  I mention my Australian birth not merely for reasons of sentiment but also because I am old-fashioned enough to believe that the British Commonwealth has been a much under-estimated—and a much under-used—weapon in our political armoury. However, since this debate, though fairly wide-ranging, can hardly be held to include a discussion on the relations between Labour Britain and the Commonwealth, I will content myself by saying that I hope we shall not see a repetition of the quite shameful neglect of Commonwealth interests which occurred when some hon. Members opposite were hell-bent on getting Britain into the Common Market three or four years ago, irrespective of the terms available.
  None the less, there is one sense in which this debate, which I believe indirectly to be concerned with the future of the British aircraft industry, connects with the Commonwealth. I believe that a not inconsiderable part of the troubles which have afflicted this industry, on the civil as well as the military side, has been due to a quite staggering failure to develop the potentialities of the Commonweath, both as a market for our civil aircraft and as possible collaborators in terms of the development and procurement of such military aircraft as the Government, preferably acting as the agent of the United Nations, may judge to be required in the future.
  In my judgment, there is one consideration which should weigh above all others when we discuss the aircraft industry. The fact is that with every year that passes the aircraft industry of the Western world is becoming more and more of an American preserve. Helped by a scale of operation that we cannot hope to equal, with the enormously profitable defence contracts which are available to bear a large part of their development costs—

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  and with hidden subsidies ever-present to sweeten the mixture—the Americans could easily swallow all their foreign competitors in this industry within a few years, with the most dire consequences for this and other Western European countries.
  Such a development would be serious enough in terms of the livelihood of thousands of skilled workers in various parts of Britain, and, indeed, in such towns as. Toulouse, in Southern France; but the consequences for us in political and strategic terms would be infinitely worse. Any hopes which any of us may have entertained of an independent British foreign policy, including independent initiatives for peace, and so on, could safely be forgotten. Our dependence on America in strategic and political terms would he complete and final in that event.
  For that reason, I have been unhappy about the Government's recent decision to purchase the F111 as a tactical strike aircraft for cast-of-Suez theatres of war. I believe that this decision is one more nail in the coffin of an independent European aircraft industry—an earlier and even more disastrous coffin-nail being the decision of hon. Members opposite to buy the American Phantom instead of developing a British or, perhaps, an Anglo-French aircraft for that requirement.
  Unlike my right hon. Friend the Home Secretary, I am not a Common Marketeer. I happen to believe that that would involve selling our soul for a rather smelly mess of pottage. I certainly agree with my right hon. Friend, however, in a speech which he made in the House a year or so ago, when he pleaded for Anglo-French or, rather European collaboration in aircraft manufacture. If I understood him aright, my right hon. Friend, too, saw the dangers of an American-dominated industry, for this country above all others. I hope that his successor as Minister of Aviation will move energetically to bring together for the purposes of co-operative long-term planing and development the great array of potential customers among the airlines of the Commonwealth and of Europe.
  It is very sad to me to see so many of our Commonwealth airlines, in particular, heavily involved in the purchase of American aircraft—the more so since the
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  technical and scientific resources of both the British and French aircraft industries are in no sense inferior to the American and in several key respects are markedly superior.
  I believe that the necessary and overdue transformation of the aircraft industry of Britain could best be carried out under a plan which includes substantial public ownership of the industry, or even the outright nationalisation of the private sectors of that industry—which, incidentally, over the last 15 years or so, has been in receipt of about £4,000 million of public money in one form or another. If this were done, the British industry would, I believe, be able to compete on equal terms with the highly efficient French firms, such as Sud Aviation, which have long since been owned entirely by the French nation.
  I am well aware, however, that to pursue such a line of thought might well land me into an area of controversy, which is something I have tried hard to avoid. I therefore conclude my brief remarks by appealing to my colleagues and friends in the Government, at this very late hour in the crisis of the British aircraft industry, to open their eyes to the very real danger in the present situation.
  I feel sure that a Government who have so firmly nailed their colours to the twin masts of scientific and technological progress, on the one hand, and political independence on the other, will not lightly stand aside when the well-being of the country, and the very future of Britain as an independent and powerful agent for peace in the world, is so obviously involved.
  I thank you, Mr. Deputy Speaker, and Members of the House, for listening to me so patiently.
  8.18 p.m.
  Sir Lionel Heald: I regard myself as very fortunate indeed in being able to follow the hon. Member for Feltham (Mr. Russell Kerr), for two quite different reasons. The first is that we would all agree that he has proved during the last few minutes of his quite short speech that he will be a substantial addition to our debating forces and also to our instruction on many subjects, not the least of them being that of the Commonwealth. It is a very fine thing indeed

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  that we have such a splendid representative of the Commonwealth coming amongst us as a new Member.
  My other reason, which is purely personal, is that the hon. Member's predecessor, Mr. Hunter, was one of my earliest friends in this House and has been ever since what, I hope, I might describe as a very real and dear friend of mine. I have always been fortunate—it is seldom, perhaps, that one can say these things, but they ought to be said—in having a number of very good friends on the other side of the House, and Mr. Hunter was one of the very best.
  The only thing I would say is that I am afraid that his work here was becoming a great strain to him. There were some of us who were very concerned about his health, but from what I have recently heard I believe that he is gaining benefit from having a more restful time, although he will always be wanting to do something. I hope that I may be allowed to ask the hon. Member for Feltham to convey to him the kind regards of all of us, and particularly of myself. [HON. MEMBERS: "Hear, hear."]
  I am also fortunate, again in that my constituency and that of the hon. Member for Feltham have quite a number of things in common. We are virtually next-door neighbours, and he has a number of men who work in the aircraft industry, quite apart from London Airport. I know from Mr. Hunter that there are a number of people who go from Feltham every day to Weybridge, so that the hon. Member has a special interest in that side of it.
  Of course, we are very concerned about the aircraft industry, and we share that concern—apart from, perhaps we may say, minor differences which there are and must be between the hon. Member and myself. I could not go all the way with him, I am afraid; for instance, the word "nationalization" we on this side believe to be rather dirty. However, we look at the aircraft industry from entirely the same point of view, and, therefore, subject to trifling differences, I believe that what I have to say will apply as much to the hon. Member's constituency as to mine; and as, as I am sure he knows, more and more problems are arising, the more and more need there
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  is for those who can agree about these things to work in harmony, and to try to reduce to the minimum the necessary, but very important, political differences between us.
  Now, I am very grateful to the Chief Secretary for having explained, no doubt being responsible himself for, this Bill; because he explained very clearly that the purpose of it is to comply with the fundamental principle that Parliament should have an opportunity of discussion and of expressing grievances and demanding assurances before it agrees to a thing of this kind. When I say a thing of this kind it can be put in the simplest possible way in the very clear language of the Bill: during the next six financial years the Treasury may issue sums not exceeding in the aggregate £430 million to be applied in the purchase of United States aircraft.
  I do not believe that there is anybody in the House who would disagree that before we do that we require to consider it quite carefully and that we require to have certain assurances—some of us, perhaps, from different points of view, but all of us, I hope, from the point of view, first of all, that we require an assurance that this is not to be taken to imply the death of the British aircraft industry. Let me say here again that I very much welcome the atmosphere, following a maiden speech by a believer whom we have just heard, for I have taken the attitude for years in my constituency that the aircraft industry is not and should not be a political cockpit—leaving out, of course, the good old subject of nationalisation; but in my experience the very large number of people who make aircraft are not any more worried about nationalisation than they are about many other things. They want to get on with the job. What they want are orders and work. That is what they are concerned about at this present time.
  I rather want to follow the hon. Member in being as non-controversial as I can—for a change; but we cannot help, in my constituency at any rate, remembering that just before the General Election, on 7th March, 1966, a remarkable thing was said by the right hon. Gentleman the Minister of Aviation:
  "As the White Paper makes absolutely clear … we have provided the industry with the stability that it has been seeking for so long

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  in the programme that we have announced for the next five years. I am convinced that when our programme is put to the test of public discussion outside not only will my right hon. Friend's Defence Review be endorsed by the people, but, also, that the industry will accept that we have laid the foundation for a healthy aircraft industry and provided it with the stimulus by which it will save itself by its own exertions."—[OFFICIAL REPORT, 7th March, 1966; Vol. 725, c. 1862–3.]
  My constituents who are concerned, so many of them, directly or indirectly, with the aircraft industry were very disappointed that there was no reference to the aircraft industry in the election manifesto of the Labour Party and that there was no mention of it of any kind in the Gracious Speech. That has been a source of considerable concern to them, because they do not know where they are, and they do want to know what is the future. I am sure that, as I hope, I have the hon. Member with me, because I am sure he will find that those men employed in the aircraft industry, highly skilled craftsmen, are very gravely concerned about the future of this great industry.
  It is a great industry, when we think of the production at Weybridge, of the Wellington, which was a military aircraft, and very relevant to the sort of discussion we are having today, a magnificent aircraft, and of the Viscount, no fewer than 500 of which were sold, and the VC10, which I still maintain is as fine an aircraft as has ever been made in the world. That is the sort of thing that has been going on.
  Where are we today? I shall not be entitled to spend more than a few moments on it, but it ought to be realised that there is great concern and anxiety amongst those who work in the aircraft industry today. They ask, before we allow £400 million to be expended on American aircraft, for a statement from the Government of what they think about the British aircraft industry. We have not heard a single word about that since 7th March. We have not heard anything.
  There may be reasons for that. I do not know what they are, because we have not had an opportunity of hearing them. It would not be quite fair to ask the Under-Secretary of State for Defence for the Royal Air Force to give us an authoritative statement now, but he may possibly give us some guidance, and I
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  would also ask him and the Chief Secretary whether they would pass on to their colleagues the very real and strong desire and demand there is from everybody in the aircraft industry to get some idea of what the Government really intend with a view to giving that industry what it wants; that is to say, a feeling of stability and confidence and a feeling that it is worth while for the people who are in it to go on and for new men to come into it.
  Let me give one example of the kind of thing which has been giving grave anxiety to my constituents and, I am sure, those of the hon. Member for Feltham. Recently, a development has taken place of an extraordinary character. Men who are expert draughtsmen and designers in the aircraft industry are virtually working for America in this country. There are organisations which have been set up in the region of London Airport where British draughtsmen and designers of the highest ability are employed. They are not employed on making anything for this country.
  Elementary plans are brought over from the United States to the places where these men work, and into them is incorporated all the great skill of our British designers and draughtsmen. The plans then go back to the United States in order to be put into operation. That is an extraordinary way of avoiding the brain drain, yet, at the same time, sucking the blood of our best men. It is a very alarming fact.
  I only give that as an example. I assure you, Mr. Deputy Speaker, that I have no intention of making a lengthy speech, but I want to emphasise one or two points which are giving great anxiety to the industry.
  Surely it ought to be possible for us to have a clear and reassuring statement before long in which the very first point must be, as I emphasised every time I spoke on the subject during the General Election, that it is absolutely wrong to say that the British aircraft industry is dead. It is a very tempting thing to say, after some of the things that have happened in the last year or two. A number of people in my constituency who were employed in it wanted me to say that the Government have completely destroyed the industry. I am bound to say that I

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  told them that some unkind people would say that they had done their best to do so, but had not succeeded, and none of us thinks that they have.
  There is plenty of good morale and keenness still there, together with the desire to go ahead, but it must be stimulated and assisted. Therefore, I ask that we be given at any rate a preliminary assurance that the Government have these things in mind and that they will give us some definite idea of the future of the aircraft industry before too long. If that could be achieved, I believe that the fortunate coincidence of one hon. Member following another who has just made a maiden speech and finding that he comes from an adjoining constituency having very much the same interests may lead to great benefits for many other constituencies as well.
  8.32 p.m.
  Mr. John Rankin: I always listen to the right hon. and learned Member for Chertsey (Sir L. Heald) with pleasure and with profit. I had the good fortune to follow him on the last occasion that we debated aviation, when he pointed out that it was time we knew somehing about the future of the aviation industry. I agreed with him, but I was not so strong in my support for what he was saying when he tried to put the entire responsibility on the Government for some of the difficulties in the industry today.
  I am sure that he must have read the Plowden Report. Paragraph 125 of that Report gives us at least one reason why the industry is in difficulty today. It says:
  "Erratic Government policy in defence procurement during the last decade has denied the industry the consistent objectives and stable programme needed for success."
  That is the verdict of the Committee that inquired into the health of the industry. It lays the blame clearly and substantially on the Tory Government who went out of power in 1964, never, I hope, to return to that high office again.
  I do not want to be too controversial tonight. I agree generally with what the right hon. and learned Member for Chertsey said, because in 1960 the number of persons employed in this industry was 310,000; by 1964 it had come down
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  drastically to 250,000, and today it is in the region of 200,000. This drop must arrest our attention and demand some form of action.
  Sir Eric Errington: Does the hon. Gentleman realise that in March last year exports from the aerospace industry amounted to about £8 million, while today, according to the figures on the tape, they amount to £21 million? How does the hon. Gentleman square that with the decay of the industry?
  Mr. Rankin: I did not say that the industry was in decay. I pointed out that the industry had declined numerically, and I was about to point out that, while it had declined in numbers, methods of production had changed tremendously, and now, with the introduction of the latest methods of production, skilled labour is being dispensed with and the machine is doing jobs which were formerly done by individuals. This perhaps helps to produce the figure which the hon. Gentleman quoted.
  I want to confine myself as closely as possible to the Bill. Naturally, a Bill of this nature must disturb many of my hon. Friends, and I must confess that I was dismayed when I saw that its purpose was to
  "Provide money for the purchase of military aircraft, and parts, equipment and other articles for, or for use in connection with, military aircraft"
  and a whole lot of diverse and specified reasons, without any indication of what these parts, and so on, are.
  The Long Title ends with the words
  "and for connected purposes".
  These four concluding words give any Government the power to venture not merely into pastures new, but into fields which, from the point of view of some of us, might be very dangerous indeed. Any alliance or understanding which brings us into closer contact with America at the present time is bound to create some disturbance in our minds. It does in mine, because the Bill, taken in conjunction with what the Secretary of State for Defence said in the House earlier today, means that we are to get not merely 50 F111 aircraft from America, along with this great host of accompanying parts, but that we are to enter into closer relationships with

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  America than ever before. We are doing that at the very time when America is carrying out a foreign policy of the most despicable kind in the Far East.
  Everyone in this country—and, I should imagine, everyone throughout the world—has been roused, alarmed and shamed by what happened in Saigon this week. To see little children come out with their hands up before American soldiers was a shocking business in a Christian age. That disturbs us. I do not want to see this nation, to which I am proud to belong, entering into a relationship which is any closer than that defined by the treaty to which both America and ourselves subscribe. I do not want to see us entering into any closer relationship than is presently accepted.
  We have been told today that arms produced in this country are to be sold to America, and to further those sales we have agreed to make a special appointment of an individual. If these arms—aircraft and all their parts—are sold to America, will they be used against Vietnam? Are we now to be involved, indirectly, in the war in South-East Asia simply because military equipment of all kinds made in Britain is to be used in the war there? We have had assurances time and time again from the Dispatch Box, from the Prime Minister, that we will not put British soldiers into Vietnam. If we are to put military equipment into Vietnam, how can we refuse to put in soldiers?
  Mr. Deputy Speaker (Mr. Sydney Irving): I would remind the hon. Member that he must keep more narrowly to the Bill in hand.
  Mr. Rankin: I have the F111A in mind all the time. I can assure the House that it is not out of my mind. I do not want to see its being bought from America under this agreement and then used in Vietnam. If we can use an aircraft we can use soldiers. They are part and parcel of our armed might.
  If we are not to use soldiers, and pat our consciences on the back—which is an unusual English phrase—[HON. MEMBERS: "Scottish."] Scottish, all right; I never refuse to bring the best from Scotland—and it is not always in a bottle. If we say that we can use military
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  aircraft, how can we say that we will not use soldiers. If we say that we shall not use soldiers, how can we defend the use of military aircraft? I hope that if we build military aircraft or buy military aircraft they will not be used in Vietnam to slay innocent people.
  When my right hon. Friend was speaking I took one or two notes. He made an interesting statement. He said that the Bill enables us to reconcile our economic resources with our military needs. That is an achievement. However, when a Minister makes a statement like that—even when he sits on my own Front Bench—one should examine it with care. I am glad to see that my right hon. Friend has returned to the Chamber, because he and I are brothers—in the industrial sense. His statement assumes a constant if there is reconciliation of needs with resources and I should like to know whether that constant is embodied in our military needs.
  We can reconcile our existing economic resources with our military needs at any point only if our military needs are constant. Does what my right hon. Friend has said mean that, despite the Bill, our military needs will not expand? That is one of the dangers which I see. We want an assurance about the Bill, that, with this aircraft, our military needs will not expand.
  My right hon. Friend also had a kindly word for the Anglo-French variable geometry aircraft development. I was glad to hear that, because it is important that, when our Government are meditating on the possibility of entering Europe, we should say something to European people about a development of this nature.
  I wonder whether we could hear a little more about it. In January, I was at Dassault and was in contact with French Parliamentarians and members of the joint Anglo-French committee which is dealing with this matter. They were very disappointed at the progress being made in the development of this Anglo-French concept. I hope that we shall be able to give them some encouragement.
  I know that the debate is limited, and I do not want to speak too long, but this afternoon I raised the question of the F111 in another connection. I know that there is now a series of aircraft which all

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  have this sort of designation. One of the versions is the Navy version: I think that that is the F111B. There is another, which we are getting—the Air Force version—which is the F111A. But a third version, the FB111 has been developed and, as I said, about 200 aircraft of this type have been ordered by President Johnson.
  I am told that these aircraft will fulfil different purposes. That might not be true, but I think that it is generally accepted nowadays that aircraft like, say, the F111A or the FB111 might well do, if necessary, various types of jobs. They are strike aircraft and can be used for reconnaisance, and, in some cases, can be bombers as well.
  No sooner is one version produced than another one is on its way. We want to be completely sure that, if we are taking the F111A, it is cleared of all the faults that many of us have been led to believe still attach to it, and also that it will not be outmoded and outdated by another aircraft that is already coming to birth in the United States.
  I hope that, when we are spending the vast sum of £430 million, especially at a time when we are telling the nation that we have not too much to play about with, we shall get good value for that money, even although some of us are doubtful about the purpose. I understood from my right hon. Friend that we have adopted new methods in that no money changes hands—"ours today and unnumbered years to pay". It sounds attractive, but there is danger in that.
  8.52 p.m.
  Mr. Stanley R. McMaster: This has been a remarkable debate. We have had a number of speeches from both sides—including the excellent maiden speech of the hon. Member for Feltham (Mr, Russell Kerr)—and not one has praised the Bill. Hon. Members, including the hon. Member for Feltham in his non-controversial speech, have criticised the Bill, which proposes spending £430 million of the British taxpayers' money in supporting the American aircraft industry. There is no doubt that these purchases of aircraft from the United States do help to support the American aircraft industry.
  I want to join in protesting strongly about the proposal in the Bill. These
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  aircraft could well have been obtained in Britain. The British Aircraft Corporation, Hawker-Siddeley, Short Bros. and Harland and other companies could have produced aircraft which would have served the purpose just as well as the F111A and the C130 which the Government propose to buy. But the Government realised, when they cancelled the TSR2 and decided not to go ahead with the HS681 transport aircraft, that they would have to buy American aircraft. They decided that they would run down the British aircraft industry and that rundown is very serious.
  The hon. Member for Glasgow, Govan (Mr. Rankin) has already mentioned the rundown in employment from about 250,000 to about 200,000 that has already taken place in the aircraft industry. Just before he died, I was speaking to a close friend, Sir Sydney Camm, who designed the vertical take-off P1154. The Government have ordered the P1127 but not the venturesome P1154. Sir Sydney was very nervous about the state of affairs in Hawker-Siddeley. Many of the senior design staff were leaving. The 10,000 or more who have left in the past year consist of the cream of the industry. When there is a rundown on this scale the best men leave first. These men can easily find other employment. Some of them are already designing American aircraft in Britain. Many others have gone overseas; to America, South Africa and, perhaps, Australia.
  What is the net result of all this to Britain? It is that we are losing our balanced aircraft industry, and I stress the word "balanced". We not only need the facilities to manufacture aircraft. We need the design staff as well. Consider our export orders. British exports of aircraft and aircraft parts are running at about £150 million a year. The amount has varied during the past 10 years between £100 million and £150 million. We have already scored a record export figure in the past month and this reflects important orders for aircraft and equipment such as seats and so on—all won as a result of plans made four or five years ago by the former Government.
  For how long can we expect such sales from the aircraft industry? What are the Government doing? The answer is that they are merely exchanging sales for

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  aircraft rind parts, both civil and military—aircraft like the Lightning, which went to Saudi Arabia, the Hawker Hunter, which was sold widely throughout the world and was an excellent fighter, the Viscount, the VC10 and the BAC111.
  The aircraft industry in Britain depends, like most aircraft industries, on military orders. Indeed, 70 per cent. of purchases from the industry in Britain represent military orders. In America the figure is 80 per cent. Even in France it is 60 per cent. These purchases of military aircraft enable British aircraft manufacturers to maintain their design staff and go ahead breaking into new fields of aviation.
  It is an illusion to think that the Government can cut away the military orders and that the civil side of the industry will survive and flourish. That cannot happen if 70 per cent. of the industry's work is taken from it. Instead of earning exports by selling civil and military aircraft, we are having to pay £430 million for American aircraft. That is the first and most immediate loss and it will have a great effect on our balance of payments. In addition, we will lose the technological fall-out of the industry. It is an exciting industry which attracts the keenest and best brains. The men who possess these brains will not move to factories producing washing machines, cleaners or motor cars.
  These men are interested in breaking new bounds of knowledge. Their brains and the products of their research—aeronautical research, metallurgy, new uses for plastics and so on—are all being lost. A tremendous technological fall-out is being lost to this country. In addition, we lose our independence, for we become completely dependent on the United States for our military aircraft and, perhaps for a large part of our civil aircraft requirements.
  As the previous debate underlined, the House has been misled by the party opposite about the Government's intentions concerning the aircraft industry. The Prime Minister said in the House in February of last year:
  "What this House wants to ensure and what the state of our economy demands is a healthy and balanced aircraft industry, an industry which never again becomes virtually dependent for its existence on one highly costly venture …"—[OFFICIAL REPORT, 2nd February, 1965; Vol. 705, c. 936.]
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  He went on to stress the vital rôle to be played in our defences by the British aircraft industry and the contribution which it had to make to our national economy. The Secretary of State for Defence said in April of last year:
  "… it is the Government's firm intention to retain a lively and viable aircraft and equipment industry …"—[OFFICIAL REPORT, 6th April, 1965; Vol. 710, c. 338.]
  In a leaflet circulated in Preston before the 1964 election, the Labour Party stated:
  "There is a good future for the British aircraft industry under a Labour Government."
  Yet how do they act when they are in power? The Government cancel the main orders for our aircraft industry.
  In my constituency we have the firm of Short Bros. and Harland. That aircraft manufacturing firm is in an area of high unemployment. We are very concerned about employment in Northern Ireland—about 7 per cent. of the men are unemployed. What did the previous Minister of Aviation say about the rundown in the aircraft industry? I will quote what he said, and ask whether hon. Members consider it to be an honest statement of fact. The Minister referred to the shortage of skilled labour, and said:
  "… there is no point in releasing labour"—
  this was said on 9th February, 1965, with reference to the aircraft industry:
  "unless it is to be quickly reabsorbed in more productive work. In any changes we shall, therefore, have the fullest regard to where and how far that is possible. We are determined not to leave labour lying idle. If retraining is necessary it will be energetically provided. The aircraft industry is spread fairly widely over the country. Much, but not all of it, is in areas of very full employment. If redundancies are necessary, we shall look to the firms to consult fully with us—they live, after all, on public money—and concentrate these redundancies in the most labour-scarce areas."—[OFFICIAL REPORT, 9th February, 1965; Vol. 706, c. 236.]
  That was a plain statement of fact yet in an Answer today, when I asked about the future of Short Bros. and Harland at Belfast, I was told that by the end of December this year the number will be cut to 6,000 men—
  Mr. Dalyell: On a point of order, Mr. Deputy Speaker. Matters in Northern Ireland are obviously very important, but what have they to do with this Bill?
  Mr. McMaster: I am relating all these remarks directly to the Bill, because the expenditure of this money is at the cost of employment at Short Bros. and Harland, which has the Belfast—
  Mr. Deputy Speaker: I am grateful to the hon. Member for West Lothian (Mr. Dalyell) for his help, but I have as yet heard nothing that is out of order.
  Mr. McMaster: I apologise, Mr. Deputy Speaker, for jumping, in too quickly.
  The Answer I had today forecast a rundown of about 2,000 men in the next nine months, and in the following 12 months a further redundancy of 3,000 more, coming down in 1967 to just over 3,500 men at Short Bros. and Harland. Is that the way the Minister keeps his promise to concentrate redundancies "in the most labour-scarce areas"?
  On 28th May last, the First Secretary of State and Secretary of State for Economic Affairs said:
  "I would repeat the assurances given here"—
  he was speaking in Belfast at an apprentices' prize day, and a similar event will be held at the end of this week:
  "by my colleague, the Minister of Aviation, only the other day. 'Shorts is part of the British aircraft industry and will remain part of it.' I can assure you that Shorts will fulfil their commitments in the matter of delivery or after-sales service …"
  That assurance was repeated the following week by the present Home Secretary when the Financial Times reported him as saying on 19th May, 1965:
  "Shorts is part of the British aircraft industry and will remain part of it. He affirmed the Government's intention that the company should continue its work in the missile as well as the aircraft field."
  I do not want to weary the House, but I have one last important quotation. I believe that these quotations show that the Government were deliberately misleading, not only Members of this House but my constituents in Belfast. On 2nd February, 1965, the First Secretary of State said:
  "I am making a carefully considered statement and I think that he will find that Short Bros. and Harland, and Belfast, are looked after by this Government far better than by the last."—[OFFICIAL REPORT, 2nd February, 1965; Vol. 705, c. 1017.]
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  The right hon. Gentleman was referring to the Conservative Government. Yet the work force in Belfast has been halved in 18 months.
  I am glad to see the Chief Secretary to the Treasury here. I informed the Minister of Aviation this afternoon that I hoped to raise this point, and I am sorry that he is not here.
  There are three projects to which I should like to draw attention. First, there is the collaboration which Short Brothers has been carrying out with Fokker of Germany in producing the F28 aircraft. The Plowden Report emphasised that if the British aircraft industry is to survive it must collaborate with Europe. Based on this collaboration, which has been very successful, over the F28, there has been formed the V.F.W. Consortium, consisting of V.F.W. and Fokker, both Dutch and German firms, and the Consortium invited Short Brothers to take part by putting up 40 per cent. of the capital and producing a new twin-jet aircraft for which there is a great demand—the VFW 614, a small feeder jet which is intended to replace the Dakota, of which many hundreds were sold and used after the war. But the Government refused to support the project. Is this the way they support Short Brothers and Harland? The Government have refused to support a very promising project. Now the Germans and Dutch are carrying on on their own, and they will probably have great success.
  The Government should have looked carefully at the American attempt to sell out the British aircraft industry 'when it offered us the old C130E. The model started with A and they have gone through from A, B, C, D to E. It is a clapped-out old aircraft. The Government could instead have bought the Belfast, a new aircraft just coming into service. This aircraft could have been improved and developed. Why did not the Government take some of the Hercules on charter if they needed them urgently? They could have chartered this aircraft in order to fill the gaps. Ordinary civil air lines do this. In the meantime, the Government could have ordered further Belfasts in order to provide employment in Belfast and keep a viable aircraft industry in this country.

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  The last project is the Skyvan. It has just been reported in the Press that the Government will not support a promising approach from Indonesia to purchase 10 Skyvans. This might have earned this country and Short Bros. almost £1 million. I suggest that the Chief Secretary to the Treasury should reconsider this matter carefully. He was hoping to trade with Indonesia. It has just been announced that we are giving Indonesia a £1 million standby credit. If Indonesia does not buy the Skyvan, it is likely to buy the American aircraft, the Twin Otter. Short Bros. has just broken through into the toughest market in the world, the Australian market. Ansett, an Australian operator, has agreed to buy three Skyvans to be used in New Guinea. Here is a chance to bring work to the British aircraft industry and to a part of it which very much needs the work.
  I ask the Government to reconsider the whole proposition of spending £430 million in America. They should reconsider the position of our aircraft industry before it is too late, and look again at all the proposals which they are incorporating in the Bill to see whether it is not possible to give more help to our aircraft industry and to Short Bros. and Harland in so doing.
  9.9 p.m.
  Mr. John Hall: I am always impressed by the very wide knowledge of the aircraft industry shown by my hon. Friend the Member for Belfast, East (Mr. McMaster). I am sure that what he has said must commend itself to the attention of the House.
  Before I turn to my general remarks on the Bill, I have the very pleasant privilege of complimenting the hon. Member for Feltham (Mr. Russell Kerr) on his maiden speech. I only wish that when I made my maiden speech, about 13 years ago, I had made it with the same confidence and knowledge of my subject as he showed. He is a member of one of the few husband-and-wife teams in the House, his wife being the hon. Member for Rochester and Chatham (Mrs. Anne Kerr). I am sure that we all hope to hear the hon. Member on many future occasions. The only similarity, in a sense, between the hon. Gentleman's maiden speech and my own is that we were both critical of our respective Governments.
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  In my case, it was about a tax on furniture—not, perhaps, quite such an important subject.
  As my right hon. Friend the Member for Mitcham (Mr. R. Carr) said at the beginning of the debate, the Bill places us in a slightly difficult position. Clearly, it would be wrong for us to oppose it, for the reasons which have already been deployed. Nevertheless, we must examine very carefully, not only the future implications of the Bill, but the reasoning and the policy which has led up to it.
  My right hon. Friend asked many questions and I want to emphasise one or two of them. For example, my right hon. Friend asked whether the amount in the Bill of £430 million was likely to be enough. He pointed out the various things which would have to be covered. He made one point of great importance which must again be emphasised. Does the agreement cover guaranteed prices for spares and any future development which may be found necessary; or are we likely to be faced with the cost of new developments to overcome present problems? Will that be put on to the cost of spares in the future? This is an important point which I am sure the Under-Secretary will answer.
  My right hon. Friend also asked whether we were ordering enough of the F111s? He asked whether we were allowing for the kind of wastage which could conceivably occur. We have recently heard of the very unfortunate experience of the West German Air Force, where 54 Starfighters, which, I think, is the F104, have crashed during the last 18 months to two years. It is almost unprecedented in aviation history that this should happen. We know that this is a very sophisticated plane. It is supposed to be a very good plane. It is possible that it is its very sophistication which has created the problem which has produced the crashes. I wonder whether we have allowed for the possibility that with a very sophisticated plane like the F111 we may experience the same kind of casualty rate. If we do, this may well be disastrous for us.
  My right hon. Friend asked whether the dollar offset agreement is likely to prove adequate. He mentioned the failure of our attempts to get the tugs purchased recently. Remembering the power of the pressure lobbies in Washington on behalf

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  of the armament and defence industries in the United States, one sometimes wonders whether, with the best will in the world, the American Administration will be able to implement the offset agreement to the extent which Her Majesty's Government would like to persuade us will be the case.
  I want now to refer to a point which was brought out in an exchange which occurred towards the end of the speech made by the Chief Secretary. I must confess that I was not quite clear about it. This was the reference to the sums which have already been spent amounting to £22½ million and to which the Estimates Committee called attention. The Chief Secretary said that this amount of £22½ million has now been covered by borrowing. This puzzles me. On what authority was the borrowing carried out? We are now considering a Bill which covers £430 million of borrowing which excludes this £22½ million. Therefore, by what authority were the Government able to borrow the £22½ million? This is a point to which I hope the Under-Secretary will turn his attention and give the House an answer.
  My hon. Friend the Member for Belfast, East, in his excellent speech, drew attention to the fact that not one speaker has had a kind word to say for the Bill. Probably the strongest criticism has come from the Government benches. The hon. Member for Glasgow, Govan (Mr. Rankin) was very critical of the Bill and, indeed, of the thinking which lay behind it and of the reasons for it. We know that the hon. Gentleman has always been opposed to the defence policies followed, in the first place, by the Conservatives when we were responsible for government. At least the hon. Gentleman has been consistent. He has opposed the defence policy throughout. On the other hand, although right hon. Members opposite opposed it when they were in opposition, now that they have changed places they have adopted a similar policy.
  The hon. Member for Govan said that he hoped the F.111 would not be outdated and would not be almost immediately superseded by a more advanced aircraft. I ought set his mind at rest. It has been said quite recently that aircraft are now being built that can go so fast that they can cross the Atlantic
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  before they become obsolescent; so the hon. Gentleman need not fear too much.
  My hon. Friend the Member for Belfast, East drew attention to the very serious consequences that this decision to change to American aircraft could have on employment in this country, and in particular in Northern Ireland. This could have a very considerable effect on the economy of this country as well as on our position as a military power.
  The hon. Member for Feltham drew attention to the dangers into which we might put ourselves by making ourselves dependent almost entirely for our future fighter and bomber aircraft on the American aviation industry. He suggested that this would shackle us in the development of an independent foreign policy. This is a danger of which I am sure Her Majesty's Government are well aware. I took down the hon. Member's words and I thought they were interesting, coming as they did from the other side of the House. He said that we must open our eyes to the real dangers of the present situation. There is a lot to be said for this point of view.
  Perhaps I could give a brief survey of the aircraft situation. We are all aware of the decision of the Government to cancel the British aircraft, the TSR2, the Hawker VTO fighter and the Hawker Siddeley 681 which is the short take-off jet fighter. When these were being developed, they were, as I understand, part of an absolute pattern of defence. They were mutually supporting. In a sense, we have now disturbed this pattern. Whatever may be the reasons for choosing the F111 and increasing the order for the Phantoms, part of which I agree was placed when my party was in power, I find it hard to understand why we should buy the Hercules. If my memory serves me correctly, the Hercules was being offered to us before 1960 and we should have known a good deal about this aircraft. It was obsolescent then and I should think it is even more obsolescent now.
  Hon. Members on both sides of the House had an opportunity, I believe in June, 1960, to look at this aircraft and its performance. Several right hon. and hon. Members, including the First Secretary, the Minister of Agriculture, the Joint Parliamentary Secretary to the Ministry

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  of Housing and Local Government, the right hon. Member for Leyton (Mr. Gordon Walker) and some hon. Members on this side of the House, saw this plane demonstrated in Atlanta, Georgia, in 1960, and I do not think that at that time there was any noticeable enthusiasm on the part of any right hon. or hon. Member who was present to buy that aircraft. We believed that in this country we had planes existing or in course of development which would be as good as, and indeed better than, the Hercules as it then was. It is my conviction that today we have aircraft which could have been better than the Hercules which it has now been decided to buy.
  We have scrapped the Hawker Siddeley 681 A. I am not a technical expert. Aviation is not really my subject, but I am told by people who know about these things that that was a very good aircraft and, in the view of most experts, better than the Hercules.
  The Secretary of State for Defence (Mr. Denis Healey): Is the hon. Gentleman aware that there was no chance of getting the HS681 before 1972? The R.A.F. need a transport of this type next year and we shall get the Hercules next year. Nobody who is familiar with the problem that we have of deploying our forces in a hurry can doubt that we needed a vast increase in our medium transport fleet as fast as we could get it. There was no chance of waiting four years.
  Mr. Hall: As my hon. Friend the Member for Belfast, East said, we could have taken the Belfast on a short-term hire or a charter arrangement without scrapping this first-class aircraft. The consequences go far beyond the military field. I accept the view that there might have been an immediate military need, but what about the effect on the civilian market We have put ourselves out of the jet freighter business for the foreseeable future. We have made it impossible for us to compete in this market, by deciding to scrap an aircraft of this kind. This was a most unfortunate decision.
  The other outcome from the agreement is that we shall be importing into this country, over the next 10 years, American technology for the development of their own planes and we are restricting the development of our own technology very largely to assembly, repair and maintenance.
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  We have already seen the effect of this, and several hon. Members have referred to the way in which it affects their own constituencies where branches of the aircraft industry are situated. It affects employment in this country, although in a full employment society such as ours, by and large, a large number of the people who are put out of work may fairly readily he absorbed elsewhere.
  But what cannot be absorbed elsewhere and what we shall, in fact, be losing, is the skill of our designers and specialist craftsmen. As has been said already, these are now going overseas or being used by American firms in this country and are being denied to our British aircraft industry in consequence. This is one of the great dangers resulting from a policy of this kind.
  I realise that any Government faced with the difficult problem of mounting defence costs would look round to see in what way cuts could be made. It is natural to turn to aircraft, which are so very expensive, with costs rising all the time for development and the rest. It is quite understandable that this Government took that course to find a way by which they could reduce the overall cost of defence, but, in choosing this particular way, the machinery for which we see in the Bill now before us, they have struck a most damaging blow at the British aircraft industry, a damaging blow not only now but at its future development as well.
  The policy has now been decided on and it is there. There is nothing we can do to arrest its development. But the Government must steel themselves and attune their ears to what will be a growing high-pitched scream from the emasculated British aircraft industry of the future.
  My right hon. Friend asked several questions to which, I hope, we shall receive answers, but, even if we do have the answers, they will not detract from the fact that this Bill is, in the first place, the result of a failure to appreciate that legislation was necessary to give effect to the loan arrangements. This in itself is rather unfortunate. The Bill has come in late and, as we have heard, has in consequence attracted the censure of the Estimates Committee. We know that it imposes a further burden on our balance of payments. Already, £22;½ million have been spent in dollars at what is probably

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  a most critical time for our balance of payments. We now, also—there is nothing against saying it—that we are handing over the technical development of our aircraft industry in its main lines to the Americans.
  All this must have a dramatic effect upon the development of civil aircraft. As my hon. Friend the Member for Belfast, East said, to be able to develop civil aircraft one must have reasonable military orders as a basis for development and production. Cut those out, and it becomes almost impossible to develop a really worth while civil market and develop new planes with all the costs involved in research and development.
  The Government's policy is a bad one, ill-conceived and not thought out to its logical conclusion. In this respect, it resembles other equally important legislation put before us in the recent past. The Bill and the policy behind it will produce a situation which we shall bitterly regret. I very much wish that I could advise the House to reject the Bill, but we know that we cannot because, if we were to deny the Government the Bill tonight, they would not have the borrowing powers necessary to pay for the planes which they have already ordered. We are told that we shall have in our own hands power to debate and consider year by year the amounts expended in dollars under the Vote headings, and the House, as is its right, will have the power to throw them out if it wishes and refuse to vote the money.
  We know that this is true, but, under a Government with a very large majority, it is a rather empty protection. What is likely is that the Government will get what they want, so that this protection will be virtually illusory, until such time, of course, in another four or five years from now, when we shall have a change of Government and the situation will be quite different.
  I wish that I could advise the House to throw the Bill out, but I cannot do so. I only hope that when the Under-Secretary replies he will be able to remove from our minds some of the more serious anxieties we feel about the effect of the Bill, not as a piece of machinery for borrowing money and paying for orders already placed but on
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  the development of the aircraft industry and the effect upon the industry in this country.
  I also hope that he will turn his mind to the effect upon our independence of action. If we are to be dominated largely by the American aircraft industry in the provision of fighter and bomber aircraft and weapons of war of this kind, I should like him to consider the effect on defence and foreign policy. I can only advise my hon. Friends to let this Bill pass, but we do so with regret. It should not be taken by hon. Members opposite that by not dividing against the Bill we are in any way approving the policy which lies behind it.
  9.26 p.m.
  The Under-Secretary of State for Defence for the Royal Air Force (Mr. Merlyn Rees): I first offer congratulations to my hon. Friend the Member for Feltham (Mr. Russell Kerr). He represents a constituency which knows all about aircraft. His constituents can hardly stop listening to them at most times of the day and, as has been pointed out, large numbers of his constituents work in the industry. I should also like to add a word of praise to his predecessor, who was liked in all parts of the House and who served his constituents well.
  The new hon. Member has practical interests in the industry, both professionally and as an officer of one of the trade unions concerned with it. As he pointed out, he is an Australian, a sort of reverse immigrant, a reverse "Pommy", who served in the R.A.A.F. during the war and who was a Pathfinder. On his first trip today he has been "on target" and now is "home and dry". In my maiden speech as a Minister this evening I am still approaching target and have yet to get home.
  The debate tonight has been wide ranging and I shall try to answer all the points which have been made. Many controversial questions of policy raised in the last Parliament have been raised again tonight. Before looking into them, it would be as well to remind ourselves of the much more limited nature and purpose of the legislation before us. All the major decisions have already been taken and fully discussed in this House.

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  The decision to purchase Phantom aircraft for the Navy was taken by the Conservative Administration in 1964. The decision to cancel the P1154 and the HS68I and to purchase the Phantoms and the C130 was announced by my right hon. Friend the Prime Minister on 2nd February last year. On 6th April last year the Secretary of State for Defence told the House of the decision to cancel the TSR2. The 1966 White Paper announced the decision to buy the F111As.
  These matters have been discussed on many occasions, most recently on 7th March and 8th March this year. Hon. Members have had a very full opportunity to express their views about the merits of the new aircraft programme. The greater part of the decisions has been implemented. The capacity of the British aircraft industry has been, or is being, redeployed to take account of the cancellations, and firm orders have been placed for the American aircraft in the new programme, although not for the full quantity to be purchased in every case. To a considerable extent, therefore, we are contractually committed to the decisions that we have taken.
  In these circumstances, the Bill that is now before us is a technical Measure dealing with a straightforward although important financial problem. Its purpose is to avoid a sharply increased burden on the balance of payments during the particularly critical next two or three years in this respect. It is during that period that we shall be receiving large quantities of United States equipment, and unless we make these arrangements for spreading the burden we shall have to pay for it as the liabilities occur.
  To overcome this difficulty, we have negotiated an arrangement with the United States Government under which the Americans will make available credits to cover the dollar capital cost of the American aircraft which we are purchasing. The Bill is needed to extend the Treasury's borrowing powers so that we can take advantage of these credit facilities and to make it possible to use the borrowed money to relieve the Votes from which progress payments for the aircraft, their equipment, and so on, will be made.
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  The Bill is founded on the Resolution of last week. These two Measures authorise the Treasury to make loans to the Ministry of Aviation and the Ministry of Defence of up to £430 million in six years.
  Sir E. Errington: Does the £430 million include the £22 million which has already been borrowed and the 46 per cent. in respect of work that was done in this country?
  Mr. Rees: The 46 per cent. work done in this country is paid in sterling and, therefore, does not enter into this calculation. I will return presently to the point about money which has already been spent this year.
  The sum of £430 million is expected to cover the dollar capital element of the American aircraft, together with their associated weapons and specialised equipment and the initial lay-in of spares which come with the aircraft when new. It will also meet dollar expenditure on research and development and the training of aircrews and maintenance personnel.
  The figure does not include interest on the loan at what I regard as the very satisfactory rate of 4¾ per cent., nor does it include the dollar cost of spares replacements, as opposed to the initial purchase, which will be paid for in cash. The total dollar cost over the next 10 years works out at £660 million, as quoted in HANSARD of 4th March, 1966. This includes the £17½ million already borrowed, which, I believe, is the figure to which the hon. Member for Aldershot (Sir E. Errington) has referred.
  The Military Aircraft (Loans) Bill, which is before us tonight, could not be introduced earlier because its full implications could not have been explained to the House until the Defence Review was completed and until, in particular, the final decision had been made on the F111A. However, no additional dollar expenditure has been incurred, nor has there been any extra burden on the taxpayer as a result of this necessary delay, since the whole of the £17½ million involved was borrowed under a special arrangement, details of which have already been published.
  That was done under the National Loans Act, 1939. We considered that for this big purchase special arrangements

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  had to be made to bring it into the purview of the House annually, through the Estimates, but for the £17½ million, or approximately 50 million dollars, arrangements were made with the American Government and the Export Import Bank at the same rate of interest. Details of these were published recently.
  Mr. John Hall: This is an important point. I understand that the £17½ million which has already been committed and to which the hon. Gentleman has drawn attention was borrowed under the National Loans Act, 1939. I thought, however, that this kind of money could not be found under that Act and that the whole reason for the Bill was that it could not be done in that way. How, therefore, are we able to meet this expenditure under the 1939 Act?
  Mr. Rees: The greater part of the expenditure—the large sums involved—will in future be dealt with in this way. The £17½ million was dealt with in this manner in order to aid the balance of payments in the short run this year, and there is nothing under the National Loans Act, 1939, to prevent this. The Bill has been introduced to enable the House to have control over the large expenditure every year. The Bill is concerned only with the £430 million as payments ranking for credit terms. We expect to borrow this in periodical instalments between now and 31st March, 1972. The repayments on each individual borrowing will be spread over the seven-year period immediately following the borrowing transaction.
  My right hon. Friend has already given a clear explanation of the detailed working of the Bill. I suggest that any points of detail would better be left to the Committee stage. At this point I would merely re-emphasise that the Bill makes provision for Parliamentary control in the way suggested and explained by my right hon. Friend. It will, therefore, be seen that the Bill is concerned with the important financial problem of avoiding the over-burdening of the balance of payments in the years to come.
  Mr. R. Carr: Can the hon. Gentleman confirm that the balance of £230 million between the £430 million dealt with in the Bill and the total dollar cost of £660
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  million has to be paid for in cash as the liability arises and is not dealt with on credit at all?
  Mr. Rees: I am not sure that I understand the way in which the right hon. Gentleman puts it. Let me put it another way. The repayment of each individual sum of money which will be borrowed every year for the purchase of aircraft will be spread over the seven-year period following. So the borrowing of the first amount of money for the period 1966–67 will be spread over until 1974. Each one will go forward over a seven-year period in that way.
  Mr. John Hall: This is rather complicated. I thought that the hon. Gentleman was going on to the question of spares. He said that these figures included the spares that were delivered with the aircraft and that future spares would have to be paid for in cash. This does not quite answer the point raised by my right hon. Friend earlier. Is there any guarantee about the prices which will be charged for future spares?
  Mr. Rees: I shall come to that. I have made a note of all the questions and I hope to deal with them all in the course of the next 21 minutes. The hon. Gentleman can nudge me nearer the end of that time if I have missed them.
  I must now turn to some of the wider questions. Although, as I said, the main decisions have been taken, I can quite understand that, despite the fact that we have had a year of debate on this subject, right hon. and hon. Gentlemen opposite are anxious to return to matters which are of great importance.
  Sir E. Errington: I should like to press the hon. Gentleman as to what has happened between the £430 million that we are dealing with and the £660 million—that is, £230 million. One might lose that, but I do not know quite what has happened to it.
  Mr. Rees: Our credit terms are on the £430 million. That is what the Bill is about. This is our borrowing from the American Government. The other has to be paid for in the normal fashion, because there is no credit arrangement for it. As the right hon. Gentleman properly pointed out in his opening speech, the £430

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  million is only part of the total sum involved in the purchase of American aircraft, and there is credit only for the £430 million.
  I want to make one point straight away, speaking for the first time as Under-Secretary of State for Defence for the Royal Air Force. I should like to re-emphasise a point that was made very strongly by the Prime Minister in February, 1965. He said:
  "The first duty of any Government of any party is to ensure that the nation's defences are adequate and effective, that the nation's security is fully defended. This means that if this House as a matter of defence or foreign policy, puts British Service men into the field, or into the air, to fulfil national commitments, those who take up those burdens must have the right to feel that they are adequately equipped."—[OFFICIAL. REPORT, 2nd February, 1965; Vol. 705, c. 930.]
  It has been one of our prime aims in the Defence Review to give effect to this, and I believe we have now enabled the Royal Air Force for the first time in many years to see the way ahead clearly and to know for certain it will have the equipment it needs to carry out its commitments. I shall return to that point in a moment. It is a most important one.
  Having said that, we must also avoid the danger, and recognise it, of aiming too high in planning the future military aircraft programme and aiming for aircraft which are very desirable but not absolutely necessary for the rôles in which it is planned to use them. This inevitably leads to two consequences. One is that the aircraft take so long to develop that there is an unacceptably protracted period during which the Royal Air Force has to struggle on with obsolescent types; the other is that the aircraft, when they eventually reach the production line, are so costly that they face the Government with an unenviable choice, either to allow defence costs to rise far beyond what the country can sensibly afford, or else to cut the size of the front line to the point where it is no longer viable.
  When the Labour Government came to power we found we had inherited a programme which suffered from both these defects, and we set ourselves the task of remedying them. We are convinced we were right to grasp this nettle, and I believe, also, that the electorate agreed with us.
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  As my right hon. Friend the Secretary of State for Defence has said, the major savings resulting from the Defence Review will arise almost entirely from changes in our equipment programme, and the biggest saving will be in the Navy and the Royal Air Force aircraft programme, from which we shall save £1,200 million over the next 10 years.
  Much has been said tonight by hon. Members on both sides of the House about the effect on the aircraft industry. To achieve savings of this order of £1,200 million we have had to cancel projects in which the British aircraft industry had placed high hopes. These decisions were taken only with the deepest reluctance, but the plain fact is—and this came out clearly in the Plowden Report—that we cannot as a nation afford to go in for expensive aircraft development projects unless there are good prospects for exports and the possibility of spreading development costs over a much larger number of aircraft than our industry could expect to sell just to the Government.
  We have also accepted the view of the Plowden Committee—and this deals with a point raised by my hon. Friend the Member for Glasgow, Govan (Mr. Rankin) and my hon. Friend the Member for Feltham—that the most promising future for the aircraft industry dies in collaboration with other countries, especially other European countries. This is particularly the case with aircraft of a highly sophisticated character, such as the Anglo-French VG aircraft, but it also applies to less sophisticated aircraft such as the Jaguar, where the wider sales prospects should result in a viable production line. It is thus a crucial feature—I emphasise this—of our aircraft programme that it prepares the way for these two important Anglo-French projects, which fit in so well with what the Plowden Committee had in mind for the future.
  Mr. Stephen Hastings: Can the hon. Gentleman tell the House what the market is for the Anglo-French VG project, and what rôle is envisaged for these aircraft in the Royal Air Force?
  Mr. Rees: I will come to the rôle of these aircraft in a moment.
  The effects of these cancellations on the aircraft industry have so far borne out

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  our predictions and not the predictions of hon. and right hon. Gentlemen on the other side of the House. There has been no large-scale unemployment. Aircraft factories have been closed, but this should make possible the redeployment of resources, both financial and of skilled manpower, to other industries where they are badly needed, and the aircraft industry has been able to devote a fair part of its capacity to other uses including work on the Maritime Comet, the P1127, the Spey engine for the Phantom, the Anglo-French collaborative projects, and the Saudi Arabian order. It seems clear that the very gloomy predictions made in some quarters are not being realised, and they certainly were not borne out at Preston.
  The right hon. Gentleman raised the point of pressure on British contractors to include components of United States manufacture so as to raise the dollar content in the price of the aircraft. I can deny categorically that there is any such pressure. In one or two isolated instances, a British contractor building to an American design may buy a few components from the American licencer so as to meet a delivery date, but that would be a matter for his commercial judgment. Generally speaking the items incorporated in these aircraft are entirely British, particularly in the case of the Phantom, where they account for 46 per cent. of its value.
  I want to turn now to the consequences of our decisions for the R.A.F., which is the prime responsibility of my right hon. Friend the Secretary of State. In so doing, I wish to emphasise that the savings on the R.A.F.'s aircraft programme are not being achieved by giving the R.A.F. equipment which is inadequate for its task. On the contrary, it will gain to the extent that we are speeding up the provision of new equipment for certain essential military rôles.
  Taking transport aircraft first, hon. Members will know that the R.A.F. still has to rely to a very large extent on the vintage Hastings and Beverley, which are unacceptably limited in speed, range and performance. The first Hastings saw R.A.F. service in 1949, and the first Beverley in 1956. If we were still looking
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  to the HS681 as a replacement, the R.A.F. would have had to make do with these old aircraft until 1971 or 1972, for it was not until then that the HS681 could possibly have been introduced. The C130, on the other hand, will be introduced next year. It is urgently needed now. The R.A.F.'s tasks in the Zambian oil airlift operation would have been much simpler had the C130 been available.
  Even when 1972 is at last reached, we do not believe that the R.A.F. will greatly miss the additional capability of the HS681. As my predecessor, my hon. Friend the Under-Secretary of State for Scotland, told the House, we have made a careful analysis of all the available airstrips in the various parts of the world where we are likely to operate with the C130, and we are convinced that it would be a perfectly satisfactory aircraft for the kind of task that the R.A.F. will want it to perform. Since we can buy three C130s for the price of one HS681, that is a classic example of the point that I tried to make earlier about not aiming too high.
  Mr. McMaster: I hope that the hon. Gentleman will deal with the point that I raised about the possibility of using the Belfast for that purpose—and with Shorts.
  Mr. Rees: The hon. Gentleman will forgive me if I do not go into the wider point about Shorts. As far as the Belfast is concerned, we can get three C130s at a fixed price for one Belfast. That is an important aspect and one which my right hon. Friend the Secretary of State has to bear very much in mind.
  So much for transport aircraft. I should like to go into the aircraft programme fairly fully, because that is the aspect of the Bill tonight that matters to the R.A.F. The Government as a whole have wider considerations to bear in mind, but my right hon. Friend's responsibility and, indirectly, my own is to see that we do not send British Service men into a task for which they have not adequate equipment. That is something about which I feel very strongly.
  Turning now to fighter ground attack aircraft, we find the same story. The P1154 would have been an excellent aircraft, but there was no chance of getting it until 1972. Meanwhile, the R.A.F. would have had to struggle on with the obsolescent Hunter, which would have

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  been in service for no less than 18 years and be inadequate in almost every respect.
  The major reason for our decision to go for the Phantom and the P1127 instead of the P1154 was simply that we could not accept leaving the Royal Air Force dependent on the Hunter for such a period. The Phantom will now be coming into service in 1968—I emphasise that date—and the P1127 in 1969. These two complementary aircraft will together fulfil the rôle which had been in mind for the P1154—the Phantom with its supersonic performance, extremely good weapon-carrying capability, and so on, and the P1127 with its vertical take-off and short take-off capability for close support to the Army. The P1127 will he employed during its life in the ground attack rôle with the Army, and the Phantom will be employed in this rôle until 1973–74, when it will be transferred to the air defence rôle and replaced in the ground attack rôle by the Anglo-French Jaguar which will then be coming into service.
  The Jaguar will be a light-weight supersonic aircraft for training as well as for ground attack. It will be a versatile aircraft, and its dual rôle, combined with its joint development, should enable us to obtain the maximum benefit from large production orders which my hon. Friend the Member for Govan, mentioned. Thus, the Phantom will not only close the operational gap earlier than would have been possible, but will pave the way—and we regard this as of great significance—towards the introduction of this important collaborative project.
  Incidentally—and I emphasise a point which has been made a number of times tonight—to describe the version of the Phantom which we are buying as an American aircraft is to some extent a misnomer, since 46 per cent. of it will be of British origin. The greater part of this is the Spey engine, which, while of itself a little more expensive than the U.S. engine, gives a better performance, and is therefore likely to add to the length of the Phantom's operational life.
  Now I turn to the strike-reconnaissance rôle of the F111A, and to many of the questions which were asked tonight. Our decision to cancel the TSR2 and to purchase 50 F111As was taken basically on cost grounds. There has been much discussion
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  on this over the past year or 18 months, but whether one is arguing about unit cost, or programme cost—whichever basis is taken there is much room for argument and discussion—the F111A comes out on top. It was a cost-effective decision which was taken.
  The requirement is to replace the Canberra in the reconnaissance and tactical strike rôles, in the latter case essentially as a conventional deterrent. As the Defence Review progressed, it became clear that the V-bomber force would be operationally acceptable in the tactical rôle, for which it will be available once the Polaris submarines are in service, until the Anglo-French variable geometry aircraft became available in about 1974, provided that a comparatively small number of tactical strike reconnaissance aircraft were available by about 1970 to penetrate the most sophisticated opposition.
  We certainly could not accept the suggestion of the right hon. Member for Wolverhampton, South-West (Mr. Powell), or that of his right hon. Friend who talked about incredibility concerning the number of 50 F111As. The right hon. Member for Wolverhampton, South-West said that by the mid-1970s the F111A force would virtually have wasted out. This question has been looked at most carefully, and while I cannot say on what annual wastage rate our calculations were based, I assure the House that we shall be able to maintain the front-line force until well after the V-bombers have been replaced by the variable geometry aircraft.
  A point which I should like to emphasise is that the accident rate in the R.A.F., I am very pleased to say, improves with every year. It is a credit to the pilots, and it is a great credit also to the servicing carried out on aircraft in the Royal Air Force.
  Mr. R. J. Maxwell-Hyslop: British aircraft.
  Mr. Rees: The hon. Gentleman says "British aircraft". Anyone would think that if one buys another aircraft one is knocking the British industry. All other considerations have to be taken into account.
  Mr. Maxwell-Hyslop rose—
  Mr. Rees: I hope that the hon. Gentleman will not mind my not giving way, but I have only five minutes in which to complete my speech.
  It will be seen that the keystone of our future aircraft programme will be the Anglo-French variable geometry aircraft. The F111A is intended primarily to tide us over an operational gap. The hon. Member asked a number of questions about this and I want to get these in before I finish. He asked whether we were satisfied that the total of £430 million provided in the Bill was enough to cover all our needs. The answer is that while there never can be any absolute certainty in these matters, as he will recall, we have a great deal more reason for confidence in this case than we have had with any other advanced military aircraft that we have ever ordered in the past. We have a ceiling price for the basic aircraft. This insures us against price escalation over the bulk of the capital cost and we hope soon to negotiate a ceiling price for the modifications needed to bring the aircraft to the Royal Air Force standard of configuration.
  Secondly, we have agreed that we will not, in respect of any items in the programme, pay more than the average price paid by the United States Government. This deals with the hon. Member's fear that any unforeseen research and development cost might be offloaded by the United States on to the price of spares, although the spares in general will not be financed by the loan arrangements, as I pointed out earlier.
  The hon. Member asked how we would stand in the event of cancellation, and suggested that the Skybolt decision, over which he and his hon. Friends were so grievously disappointed, might be repeated. I want to make it clear that there is no parallel at all. At the time of abandonment, Skybolt was not an approved and funded United States Government project. The money spent on it, by the United States standards, was marginal. The F111A project is not only approved and funded but is well on the way to completion. Orders for several hundred aircraft have been placed. Cancellation is therefore only the remotest possibility but certainly by the time we start disbursing significant sums on the aircraft any prospect of a general cancellation will be negligible. But we
  540
  considered it proper to include in our arrangement with the Americans provision for a proper joint review of the British Government's position even in this remote possibility.
  I now turn to the problems connected with the F111A, and here I must point out that there has been a great deal of mix-up between the FB111 and the F111A. The F111A is the aircraft that we are buying. We believe that any problems that existed are being solved, and we have every confidence in the project. That is the way that we look forward to the future.
  I have mentioned briefly the contractual arrangements that have been made. I will now turn briefly, in the last few minutes, to the Bill and the balance of payments. The main object of the Bill is to avoid overburdening the balance of payments in the particularly critical next two or three years. The total dollar expenditure resulting from the new programme will amount to £660 million over the next ten years. After taking credit for the reduced Polaris programme and for the offset purchases that we have already discussed, this works out at only £165 million more than the programme of the Conservative Administration, of which £90 million is interest.
  I was asked a number of questions about this and about Jordan. In connection with Jordan, the offset arrangement is for 10 years. It takes three to make a collaborative sale. Not all negotiations that are opened will be fruitful, but we are confident that in the long run the scheme will come to fruition in the way that we have suggested. Up to 1969–70 dollar expenditure will not be very different from that which would have been incurred under the old programme, because the naval Phantoms were to have been bought for cash.
  In short, the major decisions on our aircraft purchases have been taken. The purpose of the Bill is a financial one. It is a good Bill, which is in line with the aircraft decisions of the Government in the last 18 months. We have come to terms with the military aircraft problems. We are providing the aircraft when the Royal Air Force want them, and we are also looking at the needs of the aircraft industry. We have been right on this. We are right on the Bill this evening.
  Mr. R. Carr: Can the hon. Gentleman deny the rumours that have been referred to in connection with Lockheed representatives going to Rhayad with the support of the American Embassy?
  Mr. Rees: I have not been able to check on this, but it should be borne in mind that at the least, if the American Lockheed company went to Jeddah, or wherever else it may be, the American military attachè, out of courtesy, would have had to accompany it. I have not been able to look into this, but I do not think that it is for me to comment on the subject.
  10 p.m.
  Mr. Tam Dalyell: Normally, one takes the rough with the smooth in being called and does not take advantage of exempted business, but on this occasion I make no apology for taking advantage of exempted business to make a short speech—not necessarily because of the weight of what I am going to say, but because I think that it is deeply wrong that, in a debate of this kind, scheduled for three hours, back-benchers should have had a total of 62 minutes, or roughly a third of that time.
  I wish to congratulate my hon. Friend the Under-Secretary of State on his very full explanation of this complicated subject. However, there are three questions which I should like to put to him. When he talks of a guarantee, if prices rise, could we have rather more of an explanation on this question? This was raised by the right hon. Member for Mitcham (Mr. R. Carr) and some of us have a feeling that, in certain aspects of the Bill, there is something of an open-ended contract. What I am asking for is details of the contractual agreement, particularly in relation to spares, after first replacement.
  My hon. Friend used the phrase "the initial lay-in of spares". Precisely what does this initial lay-in mean? Does it mean a certain allocation? Does it mean the first spares? What is meant by the "heavy extra costs" of research and development? In his speech, which was spoken at a very fast rate, my hon. Friend made reference to clauses involving research and development contracts. As those of us who were guests of the General Dynamics Corporation of the United States when its representatives
  542
  were over here will know, there is no doubt that those research and development items could escalate into a major cost.
  The question I put to my hon. Friend, therefore, is, precisely what are the terms of the contract as they concern research and development costs? To be specific, supposing it is found that the developments in Britain in inertial navigation techniques or fire control systems turn out, as they may, to be rather better than those in the United States. What are the terms of contract which will allow British manufacturers of fire control systems or inertial navigation techniques to have them fitted into any F111A which we buy?
  Finally, there is another question. Supposing that over the next few years our commitments themselves change, what happens then to the contractual agreement? Some of us hope very much that, within two or three years, we will have a saner relationship with the Indonesians. We hope that our relationship with Jakarta will be much better. We hope that there might be a basic change in our relationships over the Singapore base. The world may look very different, from a defence point of view, in 1968, from how it looks in 1966. Perhaps, as our commitments change—east of Suez or elsewhere in the world—our defence needs will change.
  I wish to ask my hon. Friend about something which he cut short at the end of his speech, namely, what are the terms of contract in the event of the British Government wishing to have some kind of a cancellation? If matters change in the Far East and we establish a different relationship with Indonesia or any other country, we want to be clear how our commitments are tailored to our needs in terms of the contract we are discussing. Do we have to pay for aircraft which, in certain eventualities, we may not require? At least, this question is worthy of an answer.
  I am sticking narrowly to the Bill, and passing no kind of judgment. I have spoken in foreign affairs debates and there are other times to raise various matters of Far East policy. But tonight I offer no apology for asking precisely what the terms of contract are and just what we are letting ourselves in for in the event of a change in policy.
  10.5 p.m.
  Mr. Albert Booth: Hon. Members opposite have referred to the position of draughtsmen affected by aircraft cancellations involved in this programme. I speak as a member of the Draughtsmen's and Allied Technicians' Association and feel, therefore, that I must make it clear that draughtsmen look at this problem not only in the light of cancellations which have taken place in the last year or two and of the wisdom or otherwise of engaging in a deal involving hundreds of millions of pounds with the United States, but also in the light of all the cancellations that have taken place over the last 15 years.
  This problem started for the draughtsmen in the time of the post-war Labour Government, but it grew very much. I remind the House that it was in 1951 that the Sturgeon anti-submarine aircraft was cancelled. In 1952, the Brabazon transport was cancelled and this was followed by the DH fighter aircraft in 1952, the developed Hawker Hunter in 1953 and the Princess transport in 1954. But 1955 was a bumper year. Cancellations then included the Vickers military transport, the Swift fighter reconnaissance aircraft, the Swift photographic reconnaissance aircraft, the Swift crescent wing fighter, and the Avro rocket interceptor. The rate slowed down in 1956 when we had cancellation only of the thin-wing Javelin.
  In 1957, we had the cancellation of the Fairey supersonic fighter, bomber and naval interceptor, and in 1958 the Orion turbo-prop engine. In 1959, there was cancellation of the Scorpion rocket engine, in 1960 the Spectre rocket engine, in 1962 the rotodyne helicopter, and in 1963 the steel supersonic research plane.
  If I do not continue with the list and give all the cancellations, it is not because I do not wish to mention the aircraft cancelled by this Government, or because I may have a party bias in the matter—I have plenty of party bias. It is because those already mentioned should be sufficient for my case.
  Mr. William Baxter: Would my hon. Friend be prepared to accept the hope—
  Mr. Speaker: Order. If the hon. Gentleman will turn towards the Chair, the Official Reporter may hear it.
  Mr. Baxter: I am sorry, Mr. Speaker. I ask my hon. Friend whether he would express the hope and the expectation that the aircraft involved in the Bill may be cancelled, also.
  Mr. Booth: I am not prepared to express such hopes at this stage. Consideration of that involves certain wider issues.
  I have not included in the list the cancellations of missiles, which reaches a formidable total.
  I must put it to the House just what a demoralising effect a list of cancellations like this has on draughtsmen and allied technicians. The day may well be gone already when a man can take individual pride in having created something, but the day is coming when a man can take greater pride in team efforts in building highly sophisticated pieces of machinery. Just as men take a pride in seeing a ship they have built go down the slipway, so the draughtsmen and designers take an equal pride when seeing a plane on which they have been working take off and fly successfully for the first time.
  It does not take much imagination to realise how hard it is to maintain enthusiasm when one is working on the drawings and designs of a project which one feels may be cancelled in the next week or two. This is one of the effects of the cancellations, cancellations which have led us to the point tonight of debating the borrowing of a large sum from America to buy American planes.
  Despite all the cancellations I have mentioned, in the period 1958 to 1964 Great Britain never failed to export less than £88 million worth of airframes and engines each year. Sometimes the figure was much higher. This is an ideal field for Britain to increase its exports because these products involve the maximum amount of labour and the minimum amount of raw materials. We are not likely to increase our exports if we are, at this stage, borrowing £430 million to buy the work of the American aircraft industry.
  First, every military airframe we design and develop is a flying test-bed. This cannot be over-emphasised. In these frames is the most advanced forms of electronic equipment, the very latest

  545
  types of computers, the latest forms of hydraulic equipment and the most advanced metallurgy. This knowledge is unobtainable in practically any other form at the moment and it is knowledge which must result in enormous civil benefits.
  Secondly—and this is elementary—foreign customers are not likely to buy British when they see British buying American. They are likely to take the attitude, "If Britain thinks it is wise to buy United States' planes, it must think that American planes are better than British ones."
  It is wrong of hon. Gentlemen opposite to point out the problems that exist in the F111 as a flying machine. There are problems, and this is undeniable. However, it is a very advanced variable sweep plane and it is almost inevitable that any plane of this type will have problems. If one waits until those problems are all ironed out before deciding whether or not to buy, one might wait a very long time indeed. It is almost inevitable, because of the rate at which aviation is progressing, that problems will exist and a decision to buy must be taken before all of them are ironed out. If the Americans are at good at ironing out problems as they are at selling their planes, they will he ironed out very quickly indeed because when the Americans come here to sell they come like an army invading—and a very successful army at that.
  Although this is to some extent against the case I am making, it is also true that the F111 will probably be available—or can be available—before the Anglo-French Spey-Mirage could be. However, against this one must remember that we are proposing to buy Fills because of the cancellation of the TSR2.
  The TSR2 was damned on grounds of enormous costs, but those were costs which anybody with sufficient knowledge of design and development in the aircraft industry could have foreseen. The specification under which the TSR2 was being built was so tight and advanced that it was inevitable that its cost would rocket. It is, therefore, not fair to hold up the F111 as a cheaper alternative when it was not made to the same specification as the TSR2. It is alleged in the industry that
  546
  the specification has been altered to admit the F111 as an alternative.
  Much the same thing can be said of the Hawker-Siddeley 681. That was cancelled, and we have been told tonight that in its place there is an order for the Lockheed C130. The C130 does not meet the specification to which the Hawker-Siddeley 681 was being built. It is appreciably smaller in freight hold dimensions. The hon. Member for Belfast, East (Mr. McMaster) suggested the Belfast as an alternative. It has been pointed out the Belfast is three times as dear, but what has not been pointed out is that the Belfast has a far higher payload and far greater range.
  Such factors have to be taken into account when comparing costs. When we are buying American aircraft on grounds of cost we must compare like with like. It is not fair to say that we are buying them because they are cheaper when we do not look at whether they come up to the specifications to which the British planes they are meant to replace are designed. That is one of the industry's serious criticisms.
  It would not be fair for me to criticise my own Front Bench if I were to do it in a way that suggested that it was possible at this stage to overcome at one fell swoop the effect on the country's economy or military capabity of all those cancellations I have mentioned. That would be impossible. But, to recover from the detrimental effect of those cancellations on the industry, we must realise one or two things.
  We must realise, and realise quickly, that if we are to welcome a reduction in our armaments costs, we have to accept, if that is to be done without detrimental effect, a very serious limitation of our military commitments. That is essential. I cannot believe that the country wants to concel any British arms contracts merely to take up American ones, where it would be detrimental in any way to our economy. Two actions should flow from the reduction of British military commitment, on which is based the cost of our arms programme. One is the development of the U.N. peace-keeping rôle. If we are to reduce our own rôle, that is essential. Secondly, we should strengthen our economy with the reduction of our military expenditure.

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  Military advisers have very limited horizons, and, goodness knows, this country, under more than one Government, has suffered from them. It was probably a Japanese military adviser who advocated the use of suicide planes, and thought that even a limited military objective justified throwing away a plane and a pilot. I sincerely hope that we shall not have a Minister who becomes a suicide pilot of the British economy in order to gain the short-term objective of a higher military capability.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Gourlay.]
  Committee Tomorrow.

  RESERVE FORCES [MONEY]
  Resolution reported,
  That, for the purposes of any Act of the present Session to make further provision with respect to reserve forces, associations established for the purposes of the Auxiliary Forces Act 1953, the discharge of men of the regular army and air force and the qualifications for appointment as deputy lieutenant, it is expedient to authorise the payment out of moneys provided by Parliament of—

  (a) any expenses of the Secretary of State under the said Act of the present Session; and

  (b) any increase attributable to the provisions of that Act in the sums payable out of such moneys under any other Act.

  Resolution agreed to.

  SCOTLAND (BURRELL ART COLLECTION)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Gourlay.]
  10.21 p.m.
  Mr. Richard Buchanan: The subject of this Adjournment debate is the housing of the Burrell Art Collection. It might be, "Why is the Burrell Collection not housed?" It seems a little grotesque that at this time we should be discussing a wonderful art collection which has not been housed because there may be a shortage of a few thousand pounds. We have just been dealing in terms of millions of pounds for military aircraft, and I hope that this debate will bring the House back to a vestige of sanity.
  The Burrell Collection was gifted by Sir William Burrell and Lady Burrell to the City of Glasgow in 1944. One of the restrictions involved in the gift was that the collection had to be 16 miles from the centre of Glasgow and within four miles of That was subsequently amended to 13 miles from Glasgow because of the difficulty in finding a site. This restriction is valid if one understands the type of collection. The prevailing winds in Glasgow are from the South-West, and Glasgow is an industrial city much affected by fog and smoke, although the Glasgow Health Committee is taking rigorous action to make the city smokeless. However, in 1944 this condition did not exist.
  The most priceless part of the Burrell Collection is the Gothic tapestries dating back to the 14th, 15th and 16th centuries. These tapestries are somewhat unique. Most Gothic tapestries are passionately Christian, but this collection is rendered unique and more attractive because of the number of secular subjects contained in it.
  I am expressing the views of experts when I say that this collection is one of the most important in the world. Looking back, one cannot cavil at the conditions laid down by Sir William Burrell. I think that it is my duty to stress the value of the collection in view of what I shall ask at the end of my speech. It contains the arts of the ancient civilisa-
  550
  tions, with examples of the early river civilisations dating from the fourth to the third millenium B.C. onwards. It has Persian earthenwares of the 11th, 12th and 13th centuries. There are almost 300 silver and gold and silver mounted items. There is a cross dating from 1300. There are Mazer bowls, pyxes, tankards, and so on, and there are 200 pieces of Chinese pottery from prehistoric times to the T'ang period and Chinese porcelain from Sung to K'ang Hsi.
  In all, there are about 500 paintings. There is an excellent representation of the 19th century French painters This represents amongst the 500 the only attempt at collecting a selective period of painting. In this excellent 19th century French collection we have examples of Renoir, Degas, Daumier, Manet, Courbet, Delacroix, Corot, Cezanne, Sisley, Millet, Gauguin, Ribot and Fantin Latour. It is an amazing collection, ranging through the classical and romantic phases and incur-porating experiments in colour and technique of the Impressionists and postimpressionists.
  Outside this group there are represented the 17th century by Velasquez, Rembrandt, Ribena, Hals and the 18th century by many of our own well-known English and Scottish painters—Hogarth, Hudson, Reynolds, Ramsay, Rzeburn, Romney and Gainsborough. To a later era belongs one of my own favourites, Peploe.
  There is a stained glass exhibition going on in Glasgow just now which is attracting great crowds. There are 587 windows of stained glass, 50 per cent. of which is heraldic, dating back to the 16th and 17th centuries. This is truly a universal appreciation of art throughout the ages. In range and quality it is probably the finest collection of its kind in the world.
  My purpose in stressing this and in spending some time on it is to let those who are not here to listen, those who are not Scots, those who are not Glaswegians, realise that this is not a twopenny ha'penny collection we are talking about. This is a collection which is insured for £2 million and which is probably worth

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  many millions of pounds in the open market.
  The trustees of this collection had a very grave responsibility, for its housing had to be forever. There would be no second shots. It had to be a building which was adequate. They took the necessary precautions. Many times I lost patience with them. Nevertheless, I appreciate that they are most sincere and dedicated people who are trying to do the best by the trust which was imposed in them.
  My hon. Friend the Member for Glasgow, Provan (Mr. Hugh D. Brown) was Chairman of the Art Galleries Committee when a gift was made to Glasgow by Mrs. Connell, of Dougalston Estate, near Glasgow. We all thought that this was a solution, because Sir William himself visited this estate and was delighted with what he saw there and approved the building of the galleries on the estate at Dougalston. The corporation acquired the site at Dougalston and spent a considerable amount of money on it.
  Then along came the National Coal Board. It started to sink bores in the area, with a proposal that mining should begin. Sir William, the trustees and ourselves took fright. We had to give up the Dougalston site. That was in 1954. So, in the modern vernacular, we were back to square one.
  Another site came to hand close to Dougalston, at Mugdock. This site was investigated thoroughly, but never "got off the ground." In these negotiations the various Lord Provosts of the City of Glasgow were concerned—Kerr, Hood, Galpern, Roberts, Meldrum, and the present Lord Provost John Johnson, with the City Treasurers and with my hon. Friend the Member for Provan as Chairman of the Art Galleries Committee. These responsible people were trying most sincerely to find a solution to what appeared to be an intractable problem.
  In 1962, I became the Chairman of the Special Committee on the Burrell Art Collection. Everything looked very, very bleak. It seemed that everything that could be tried had been tried. No solution seemed to be coming forward. Suddenly, it was spring again. Suddenly, in the midst of December, the sun shone, because a member of one of the families
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  near Glasgow, the Maxwell MacDonald family—Mrs. Anne Maxwell MacDonald, daughter of Sir John Stirling Maxwell—very much in the family tradition of public spirit and generosity, offered Pollok House and the estate at Pollok to the nation via the National Trust.
  Glasgow Corporation was party to a restrictive agreement between Sir John Stirling Maxwell, the National Trust and the corporation in 1939. This will come in later. The fact remains that this particular estate—Pollok House and all that it contained—was offered to the nation. Could a place be found for the Burrell Collection? It seemed too good to be true. On 16th December, 1963, the trustees, those concerned in the National Trust, and ourselves, visited the Pollok estate. On that grey December day Pollok estate still looked gorgeous. The trustees were impressed. They considered, they held meetings, and they agreed, subject to certain safeguards and conditions, that the Burrell Collection should be housed in Pollok.
  I shall remember that day for the rest of my life. The mixture of excitement and delight with which I was filled made me almost incoherent. It was a great thrill to be associated, even in a small and humble way, with anything that promised to make history for my native city. Pollok House was built in 1752 by William Adam, and is situated in beautiful parkland. I cannot believe that there is another site more appropriate for the housing of this collection anywhere else in the world. We have a historic and beautiful house built by one of Scotland's greatest architects in lovely parkland, and containing such an artistic collection, within three miles of the City of Glasgow.
  To give such a house to the nation is a tremendous thing. As I say, it was given completely in the family tradition of public spirit and generosity; and to add to this the Burrell Collection did not seem possible. But it was, for during friendly meetings it was agreed that if suitable arrangements could be made between the Government and the National Trust of Scotland for the Trust to become owner of Pollock House and policies, the Maxwell MacDonald family were in fullest sympathy with the aspirations of Glasgow Corporation that a part of the policies should be made available for the

  553
  housing of the Burrell Collection, and the National Trust for Scotland was of the same opinion.
  So, when I left Glasgow Corporation, the state of play was as follows. First, the Burrell trustees were in agreement, subject to certain safeguarding conditions, that Pollok be the site. Secondly, in terms of the restrictive agreement, Glasgow Corporation had a right of preemption which, if the property was to be transferred to the National Trust, the corporation would require to waive. Third, if satisfactory arrangements could be made for the National Trust to become owner of Pollok House and policies, it was understood that the corporation could have the site.
  It is the third item—the satisfactory arrangements—with which I am concerned. It is well known that the future care and maintenance of the property would place an impossible burden upon the Trust, for without financial help by way of endowment fund or annual grant, it could not carry on. At the beginning of 1964 such an application was made to the Treasury, via the Historic Buildings Council for Scotland and the right hon. Gentleman who was then Secretary of State for Scotland. There it seems to have stuck.
  There should not now be any reason for delay. Excuses will not do. This has been going on for 22 years. The collection is scattered throughout the city in six secret stores. For obvious reasons the stores must be secret. These priceless tapestries are unwound regularly to ascertain that no damage is occurring to them. But there obviously must be wear and tear, no matter how much care is taken in the examination. If it is the Government's fault I am disappointed that there should be this delay. But I am encouraged by the stimulus which the Government have given to the arts, not only in Scotland, but in Britain as a whole, to ask that they should do all in their power to make possible the housing of this wonderful collection.
  I implore my ex-colleagues of Glasgow Corporation to take their courage in both hands. Glasgow has always played her part in stimulating and encouraging the arts. In this respect a responsibility has been placed on them, and I ask them to
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  stop this delicate, dithering, dickering diplomacy. Delay simply plays into the hands of the Philistines in their midst. If the opportunity is lost here, it may never recur. I ask my former colleagues of Glasgow Corporation to "go it alone" if need be. They can do this sort of thing better than most.
  I hope that all obstacles to the housing of this fabulous collection may be removed and that it may yet be seen in its entirety in the gorgeous setting of Pollok, before this generation passes into oblivion.
  10.34 p.m.
  Miss Harvie Anderson: I congratulate the hon. Member for Glasgow, Springburn (Mr. Buchanan) on raising this very important subject tonight. Glasgow has long been prominent in the patronage of the arts, and some of my particular interest in the Burrell Collection may stem from the fact that my grandfather was chairman of the committee responsible for building the art gallery. But the importance of the Burrell Collection goes far beyond Glasgow.
  The fantastic generosity of Sir William Burrell caused him to donate these 8,000 objects to the City. The present insurance cover for them is £2 million, and is probably but a fraction of the collection's sale value. What is important now is that arrangements shall be made soon which can be reconciled with the terms of the donor's will. He could never have visualised that his treasures would remain hidden for 22 years. The prospect of a permanent home in Pollok must be welcomed by all concerned. No great city could offer a more wonderful setting within its bounds, and the long interest of the Stirling Maxwell family in the arts makes it an even more appropriate choice.
  As the hon. Member for Springburn reminded us, the collection includes the greatest collection of medieval tapestries in Europe, a unique collection of stained glass, and, apart from the pictures which he enumerated, the Oriental collection of Chinese bronze and early jade, with the Near East represented with perhaps the finest collection of Persian rugs and metal work in this country.
  Sir William Burrell had great skill in collecting, as did those associated with

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  him. It is more difficult to look after these treasures, scattered as they are, and we would all like to acknowledge our debt to the curator in whose care they have been. But the treasures are exposed inevitably to dangers. Moreover, they are only partly on show from time to time. I am sure that all hon. Members join in hoping that a universally acceptable solution to the present problem will be found, and found quickly.
  10.37 p.m.
  The Under-Secretary of State for Scotland (Mr. Bruce Millan): I am very pleased that my hon. Friend the Member for Glasgow, Springburn (Mr. Buchanan) has raised the question of the Burrell Collection, and I am particularly pleased that he has done so in such a very reasonable and helpful way. I know that this is a subject in which he has a deep interest and concern, and I hope that what I shall have to say will give him some ground for optimism.
  I am indebted to the hon. Lady the Member for Renfrew, East (Miss Harvie Anderson) for what she said and the way she put it, and I am delighted, too, that so many Glasgow Members are here tonight to hear this short debate, because their presence demonstrates the interest which, I know, hon. Members on both sides feel in the subject.
  As my hon. Friend said, the whole problem has become one which involves both the Burrell Collection itself and Pollok House, which also, incidentally, contains a very fine collection though on nothing like the scale or value of the Burrell Collection.
  I need not describe the collection in detail because my hon. Friend has already done so. It consists of a vast assembly of paintings, sculptures, tapestries and other objets d'art of very high quality. It is a very remarkable and valuable collection, and, as both hon. Members have pointed out, in many respects a unique one. It was amassed over a long period of years by Sir William Burrell, who, in 1944, 14 years before his death, gave virtually the entire collection to Glasgow Corporation, together with a large sum of money which now amounts to over £500,000, for the housing, care and enlargement of the collection.
  As my hon. Friend said, it was one of the conditions of the gift that the collection
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  should be housed in a suitable district and in separate buildings which would be specially erected for the purpose on a site provided by the corporation not less than 16 miles from Glasgow. The 16-mile limit was subsequently reduced to 13 miles, but the trustees have, quite understandably, been most anxious that the collection should not finally be housed where it would be exposed to damage from the smoky atmosphere of the City of Glasgow.
  My hon. Friend mentioned the number of unsuccessful attempts which have been made over the years to find a suitable home for the collection. I need not recount the history of that, and I come now to the present situation which has developed out of the proposition, first made in 1964, that a suitable site for the collection might be found in the grounds of Pollok House.
  The Burrell trustees have agreed that if the collection could be housed in buildings to be erected in the Pollok estate they would not enforce the obligation that it should be housed more than 13 miles from the city. We are very much further, therefore, than we were in 1964.
  I will say something about Pollok House itself. As my hon. Friend said, it is situated in Pollok estate, which is a very fine and extremely pleasant estate. I take the more pleasure in saying that as, incidentally, it is largely within my constituency of Craigton. It is only about three miles from the centre of Glasgow and the estate and house are owned by Nether Pollok Ltd., which is a family company. The house has a fine collection, a very notable collection, of Spanish paintings, 18th century furniture, silver and porcelain which has been built up by the Stirling-Maxwell family.
  The proposals under discussion are that the Burrell Collection should be suitably housed at Pollok estate. As my hon. Friend said, and I was very glad he said it, the present owners of Pollok estate have shown great generosity and public spiritedness over the years, particularly in this matter in their anxiety to ensure that the estate and the treasures of Pollok House should be available for the public at large to enjoy. There is already before us, therefore, the prospect that the two fine collections

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  could be housed near to each other in extremely pleasant surroundings, thus providing an unsurpassed amenity for the City of Glasgow.
  In the Scottish Grand Committee debate on 20th July, 1965, when the Committee was debating arts and amenities, my hon. Friend the Member for Lanark (Mrs. Hart), then the Joint Under-Secretary of State for Scotland, dealt briefly with the Burrell Collection. She said that at that time she was not able to give any final details or information about the negotiations which were then taking place. She went on to say that she had to be rather cautious because there were complex and delicate issues involved both for the private parties concerned and public bodies, Glasgow Corporation in particular. I am glad to say that since that time a good deal of progress has been made, but it is still true that the negotiations going on involving both private and public bodies are, naturally enough in view of the complexities of the subject and the variety of interests, at a delicate stage.
  My right hon. Friend the Secretary of State and myself have been kept in close touch with the progress of the negotiations by Glasgow Corporation and others who are involved. I think that all parties to the negotiations recognise that the Government are very ready to help. That does not exclude financial help, as my hon. Friend the Member for Lanark said last July. We are ready to help when a solution has been reached, but things are not yet at a stage where a solution has been reached by the other parties concerned. It would be premature, and I believe unhelpful, if I were to give the details of what is at present being discussed. Perhaps, however, I may mention one aspect of the problem to which my hon. Friend the Member for Spring-burn referred, the proposal that the National Trust for Scotland should become the owner of Pollok House and its immediate surroundings. It has become clear as negotiations have proceeded that maintenance of Pollok House, its contents and the estate would be a very heavy burden on the Trust which would necessitate their being substantially endowed for the purpose.
  This situation is not one which could appropriately be met by grant under the Historic Buildings Act. Various Governments
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  have taken this attitude. The discussions which have been going on recently, therefore, have not excluded the possibility that, in the event, the best solution might be one which did not involve placing Pollok House in the permanent care of the National Trust.
  I am not able to go much beyond that this evening, because we are dealing with private property and the legitimate interests of various public-spirited people. It would not be proper for me to say much more tonight. I emphasise, however, that the Government are very much interested in the outcome of the negotiations and are anxious to help. We are not, however, at present a major party to the negotiations. It is not for my right hon. Friend or myself to speak on behalf of the Burrell trustees or Nether Pollok Ltd., or for Glasgow Corporation or, indeed, the National Trust. In the first instance, it is for these bodies to see that a solution is worked out.
  In saying that, I am not trying in any way to conceal a lack of progress in this complicated matter. I repeat that considerable advances have been made in these private discussions, and I hope that they will be brought to a successful outcome. The preliminary exchanges seem to suggest that that will happen. We have to leave it now to the parties concerned to try to reach agreement. I know that they are all anxious to reach settlement and that there is a tremendous amount of good will on all sides.
  A great deal of time has elapsed since Sir William Burrell made this gift to the City of Glasgow, and many people feel strongly that not enough has been done over the years to have this problem solved and this great collection housed in a worthy gallery where it can be seen and enjoyed not only by the citizens of Glasgow, but by a wider public.
  For obvious reasons, I do not wish to go over the history of the whole problem, but, as both hon. Members who have spoken have pointed out, it is a considerable disappointment, to put it no higher, for all of us who are concerned about this matter that it should have dragged on for more than 20 years so that the benefits of the collection are not being made available to the public, as we should like them to be. Many people have become rather disillusioned that this difficult problem will ever be satisfactorily solved. I want

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  to make it clear, therefore, to my hon. Friend that I believe that we are now genuinely in sight of a solution to the problem. I hope that this debate will indicate to all the parties concerned the interest that, I know, hon. Members on both sides have in the matter and our concern that a solution should be reached.
  I repeat that the Government are certainly anxious that a solution should be reached. I assure my hon. Friend and other hon. Members that anything that we can do to facilitate a settlement, not as a major party to the negotiations but, obviously, as an interested party, we should be only too pleased to do.
  10.48 p.m.
  Mr. Edward M. Taylor: The Under-Secretary of State for Scotland has been very helpful and courteous in his reply to the debate. It is encouraging that something appears to be happening. It is also encouraging that the Minister will keep in touch with the parties concerned. As a member of the Glasgow Corporation for five years, I have had nothing like the experience of the hon. Member for Glasgow, Spring-burn (Mr. Buchanan) in being engaged in the negotiations.
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  I wish to make one brief point. I counsel the Minister against the feeling that the present time is a delicate stage in the negotiations and that something will happen. During the five years that I was on the council, we always had this feeling. Whenever there was a question of raising the subject in any way, we were told that negotiations were at a delicate stage and that something would happen soon. That is the situation now. We are told that something may happen soon.
  Everyone who has spoken tonight has accepted that this is a collection of international as well as national interest and is not simply a matter for Glasgow. The city, as we all appreciate, has an enormous financial burden at present, and looking to the future this may become more serious. If we are to approach this as a Glasgow problem, in which the corporation accepts responsibility for putting up buildings, I hope it will be possible for financial assistance to be given from the Government, because at present I feel that the resources are simply not there.
  Question put and agreed to.
  Adjourned accordingly at ten minutes to Eleven o'clock.