HC Deb 16 November 1966 vol 736 cc416-7
10. Mr. Powell

asked the Secretary of State for Defence on what date he agreed with the United States Defence Department a ceiling price for the changes in the basic F111A aircraft, which are required by the Royal Air Force.

Mr. Healey

This matter is currently under discussion with the United States authorities.

Mr. Powell

Since, according to the Defence Review of last February, this price was to be agreed as soon as practicable, is it now proving impracticable to agree a price? Does the right hon. Gentleman realise that until he has such an agreement he has no assurance of the total cost of these aircraft?

Mr. Healey

No, Sir. The fact is that we have always agreed that we would reach agreement on the incremental cost of the changes in the configuration of the F111A which were required to turn it into the F111K—the aircraft that we want to buy. This involves assessing the price of a large amount of British and American equipment that we want to put in, and the implications of that on the configuration of the aircraft and on the cost, but I can assure the hon. Gentleman that 80 per cent. of the cost of the aircraft, as we can now estimate it, is covered by the ceiling price of £2.1 million which we negotiated with the American Government last February. Therefore, I am still satisfied that the total cost of the aircraft, as we buy it in its British configuration, will be about £2½ million.

Mr. Emrys Hughes

When these negotiations with the American Government about the F111 opened, did my right hon. Friend know that a financial crisis was coming? Is he aware that we are to have a period of severe restraint? Is it not time that he reconsidered all these heavy burdens of expenditure to help the economic situation?

Mr. Healey

I can assure my hon. Friend that these considerations are never out of my mind; some of my colleagues never allow them to fall out of it.

Mr. Hastings

Have the Americans got the design of the compressor right yet? Would the right hon. Gentleman not agree that, without the powerful support of Mr. Robert McNamara, there would be at least some risk of the whole project being cancelled in the United States?

Mr. Healey

On the second question, I can assure the hon. Gentleman that there is no evidence whatever that there is any risk of this project being cancelled. On the first question, as he knows, there are some difficulties with the engine, but we have every confidence that they will be overcome in the very near future.