§ 32. Mr. Bruce-Gardyneasked the Secretary of State for Defence what representations he has made, in view of the agreement for offsetting foreign exchange costs of United Kingdom purchases of the F111, to the United States authorities regarding their withdrawal of an offer to allow British shipyards to tender for the construction of four 840-ton ocean minesweepers for the United States Navy.
§ 60. Mr. Boothasked the Secretary of State for Defence whether, in view of the permanent withdrawal by the United States Navy of its offer to allow British shipyards to tender for the construction of four 840-ton ocean minesweepers worth $25 million as part of the agreement to offset the British purchase of F111 aircraft, he will reduce the F111 order by a corresponding amount to protect Great Britain's balance of payments.
§ 75. Mr. Priorasked the Secretary of State for Defence what representations have been made by the Government, in connection with the offset agreement, about the decision of the United States Government to cancel orders for four minesweepers from British shipyards.
§ Mr. HealeyI would refer to the Answer I gave on 9th November to the hon. Member for Banbury (Mr. Marten).—[Vol. 735, col. 290.]
§ Mr. Bruce-GardyneWould the right hon. Gentleman explain what happens in this matter? Is it not a fact that the United States has now put in a new order for small craft, and what happens if that is withdrawn? How does this process go on and how can we expect to fulfil the arrangements to offset the cost of the F111 under these circumstances?
§ Mr. HealeyI am sorry to disappoint the hon. Gentleman, whose chagrin is always extreme when Her Majesty's Government organise sales for British shipbuilders and others under the offset agreement. The fact is, as I made clear in my previous statement, that the offer, which was withdrawn because the specification of the ships was being redefined by the American Navy, will be resubmitted and British shipbuilders will be invited to tender. In the light of that, I wonder what on earth the hon. Gentleman is up to.
§ Mr. BoothWill my right hon. Friend inform the House, in view of the sacrifice that is involved in terms of unemployment, deflation, the wage freeze and our need to safeguard our balance of payments, whether he considers it fair to maintain the F111 order despite the difficulties which we face?
§ Mr. HealeyI wish to make it clear to my hon. Friend that, as a result of the order, work is already flowing in to Fair- 428 fields and Thorneycrofts which would not have been flowing in without the order.
§ Sir Ian Orr-EwingIs the right hon. Gentleman aware that, contrary to what he told my hon. Friend, we on this side of the House are delighted when sales are made—[Interruption.]—but that we are a little anxious about the Buy American Act and other pressures exerted in the United States and that we are particularly somewhat suspicious when specifications are changed after British firms have been involved in very expensive and lengthy negotiations drawing up contracts?
§ Mr. HealeyI am not responsible for any suspicions which the hon. Gentleman and his hon. Friends may feel. In the light of what he has just said, I think I can take it that hon. Gentlemen opposite are grateful to Her Majesty's Government for negotiating an offset agreement under which £50 million worth of work in dollars is already flowing to British firms.
§ Sir T. BeamishAm I right in thinking that the value of the arms exports to Saudi Arabia is, for some extraordinary reason, counted in this offset arrangement and that exports of other British arms, for example to Iran, also count?
§ Mr. HealeyThe hon. and gallant Gentleman must know that his right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), the Opposition spokesman on defence, actually forced a debate on the question of the inclusion of the Saudi deal in the offset agreement. I am surprised that I am asked now to confirm this yet again. None of the arms in respect of Iran are in the offset agreement.
§ Mr. PowellIs the right hon. Gentleman aware that what I did was to force a disclosure of what he was trying to hide?
§ Mr. HealeyIf the right hon. Gentleman wants to find one thing in the last 12 months on which he can pride himself, I will allow him to take credit for something for which credit is not really due to him.
§ 52. Mr. Rankinasked the Secretary of State for Defence what new variations are being introduced into the F111 offset 429 agreement by the United States Government; and if he will make a statement.
§ Mr. HealeyNo variations are being introduced.
§ Mr. RankinIs my right hon. Friend aware that in one case when a British firm won a contract on the American market in open competition against American firms protest was made to the State Department and a commission of inquiry was sent to Glasgow to see whether the firm, Fairfield's, could carry out the contract that it had won? Is that part of the offset agreement?
§ Mr. HealeyIf my hon. Friend will give me details—
§ Mr. RankinI am giving my right hon. Friend them.
§ Mr. Healey—of any episode if it concerns a defence contract, I will look into it. But I can set his mind at rest about Fairfield's. The contract for building fleet auxiliaries for the United States is already there. Perhaps I might take the opportunity to correct an earlier Answer that I gave. The firm other than Fairfield's to which work is already flowing as a result of the offset agreement is Brooke Marine, not Thorneycrofts.