HC Deb 15 March 1967 vol 743 cc541-67

Motion made, and Question proposed, That a sum, not exceeding £268,000,000, be granted to Her Majesty out of the Consolidated Fund, to defray the expence of aircraft and stores, which will come in course of payment during the year ending on the 31st day of March, 1968.

Sir Geoffrey de Freitas (Kettering) rose

Mr. Emrys Hughes (South Ayrshire) rose

Mr. Deputy Speaker

Mr. Goodhew.

5.25 p.m.

Mr. Goodhew

Mr. Deputy Speaker, you are giving us all heart attacks, not only hon. Members on this side of the House.

I cannot allow this Vote to go by without referring to the form of wording under A and B and the rest of Vote 7. It is fascinating to read what was said by the present Paymaster-General on 9th March, 1964. I have told him that I would be quoting what he said on that occasion. He said: I have been trying to expose—and I am using this opportunity to do it again—the vacillation and the cowardice of right hon. Gentlemen opposite who dare not tell their back benchers and the country the truth about the expenditure of £2,000 million. Because they dare not, they treat not only this assembly but the country as if they were children. The Government have produced the Estimates in this form, and I protest about it. I have been protesting for the last ten days."—[OFFICIAL REPORT, 9th March, 1964; Vol. 691, c. 140.] It is quite remarkable that such a thing should have been said by the Paymaster-General in 1964 and that the Government of which he is a member should have been in office for two-and-a-half years, but we now find these Estimates presented in precisely the same form as that about which the right hon. Gentleman protested. I have a copy of the 1964–65 Estimates about which he was complaining. If any hon. or right hon. Member cares to look at them, he will find that it does not matter whether he looks at the 1967–68 or the 1964–65 Estimates, the wording is precisely the same and only the figures have changed. For someone who was accusing the Conservative Government of that time of cowardice and saying that they dare not give the House the truth and dare not tell their back benchers or the country the truth about what they were spending on aircraft, to be now a member of the Government and to do nothing about it is extraordinary.

It is the more extraordinary because the right hon. Gentleman does not have a Department to worry about. He lives in No. 10 Downing Street during his working hours, where one would expect him to use his influence to put the matter right. I find that the right hon. Member for Sheffield. Park (Mr. Mulley) said: I defy anyone to read Vote 7 and obtain from it any idea of the amount of money for particular projects or how the figures are worked out."—[OFFICIAL REPORT, 9th March, 1964, Vol. 691, c. 144.] This right hon. Gentleman is a member of the Government and he has been in the Government for two-and-a-half years. He has even been a Minister in the Ministry of Defence. What has he done about it? We have exactly the same form of words. I hope that we shall have an explanation this afternoon of how it is that hon. and right hon. Gentlemen who in opposition made such a fuss and accused us of cowardice and talked so much about government with guts, a gritty Government, and so forth, have not done something about putting right what they thought extremely wrong. It seems extraordinary that they should continue this form of words.

The figures for Vote 7A and Vote 7B, which are for airframes and aero-engines, would have been much higher were it not that we are buying American aircraft "on tick". There are many aircraft on the way for which payment would fall due in this Vote were it not that payment is being deferred. The reduction in the amount being spent on airframes is misleading. As I said yesterday, it is in the 1970s that we shall be suddenly seeing a large increase in this Vote, and no doubt hon. Members opposite, who will then be in opposition, will complain bitterly about it. We shall then have the deferred costs of the F111K coming in; deliveries of the Anglo-French variable geometry aircraft; we shall be receiving Phantom aircraft from America; we shall be buying the Anglo-French Jaguar aircraft and, presumably, we shall be having deliveries of the P1127.

It is always interesting to read previous debates on these matters. The right hon. Gentleman the Paymaster-General slammed us nearly a year ago. On 18th March he was asking how many Lightnings had been sold and saying that the answer was none. In fact, how many Lightnings have now been sold? This is the aircraft produced by a Tory Government, and many have now been sold to Saudi-Arabia and we are selling them to Kuwait. [HON. MEMBERS: "Does the hon. Gentleman applaud that?"] I applaud it, indeed. I am explaining that this is an aircraft which the previous Government ordered and that it is an excellent aircraft, worthy of consideration by other countries. The Paymaster-General sneered at us for selling only three Buccaneers to South Africa, but we could have sold many more but for the Government's policy towards South Africa.

We are told that the Phantom is a very fine aircraft. I understand—and here again I must say that I have been doing my reading in Janes "All the World's Aircraft" since I still insist that one gets more information from that than one does on the Floor of the House—that the version which we are getting is the F4N which is a development of the F4K which is being built for the Royal Navy. What is so strange is that the version being developed for the Royal Air Force is to retain the folding wings and arrester gear of the Naval version. I should be interested to hear whether that information is wrong, although I cannot believe it is when everything else I have quoted from this source has been confirmed by the Minister.

It seems extraordinary that the R.A.F. should be having an aircraft retaining the folding wings and arrester gear of the Navy version for aircraft carrier landings. In spite of what I said yesterday about the disappearance of the island-base concept which was to have replaced the carriers, I cannot believe that the Secretary of State for Defence has suddenly decided to have carriers for R.A.F. aircraft to land on as well.

There may be some other reason, and perhaps it is cheaper to have a continuing production line of aircraft all on a similar basis. I imagine that the fuselage of the British version, which contains Spey engines, probably has a different make-up from the American version and it is possible that to save adapting a special fuselage to R.A.F. purposes we are having some with built-in arrester gear and with folding wings, but it seems an odd thing to do. One would have thought that it would add unnecessary weight to the aircraft, which is something which one always tries to avoid.

It was encouraging to learn yesterday that these aircraft are to be half British. There is no doubt that the Rolls-Royce Spey engine has been much applauded in America, so much that the Americans are to install the Spey engine in their A7 Corsair. The Estimates contain an amount of £100 million for the sale of Spey engines for the A7 Corsair. The amount is included as part of the offset sales against the F111K, but I suspect that the Spey engine sold on its own merits, because it enables the Corsair to take off with a much shorter run than was possible with the American engine.

I come now to the P1127, now named the Harrier. I had the good fortune to go to West Rainham when the Kestrel Evaluation Squadron was working there, and I met the pilots from the United States, Germany and the R.A.F. who were using these machines and evaluating them and who were undoubtedly greatly impressed by this form of aircraft. I was, therefore, not surprised to find that we were to have some form of vertical take off aircraft.

What is surprising is that at this stage we should still not have a fixed price contract for the initial order, and one is always disturbed when one finds that items of this sort are outstanding at such a late stage when it has been understood that these aircraft were well on the way—like so many other aircraft which the R.A.F. is to have.

I also have grave fears about the Americans having had experience in the Kestrel Evaluation Squadron, being allowed to keep several of these aircraft. I am anxious that they may be busy trying to produce something equivalent, or even slightly better, to try to beat us in the export markets. I would have hoped that when we did this deal of letting them have the P1127s from the Kestrel Evaluation Squadron we would have tried to do something about ensuring that we were able to sell the Americans some aircraft, or perhaps allow them to make some under licence, rather than that the techniques which have been developed here should be applied over there and the aircraft sold more cheaply in markets in which we would otherwise be selling ourselves. I shall be interested to hear whether the Government have done anything to arrange for the sale of some of these Harriers to the United States as part of the offset agreement.

We cannot let this Vote go by without saying how concerned we are that no final price has yet been fixed for the F111K. It is extraordinary that it is still outstanding at the moment when we are debating these matters and may be fixed just afterwards. After a few years in the House, one is always anxious, or perhaps even suspicious, when this type of thing happens. I am most anxious that we should not find ourselves paying a much higher price than was originally intended. I spoke about the Anglo-French variable geometry aircraft at some length yesterday, and I would only like to emphasise once more that it is most unfortunate that we should be talking about this aircraft—

The Under-Secretary of State for Defence for the Royal Navy (Mr. Maurice Foley)

I want to point out that the AFVG is not included in this Estimate, and is not in the 1967–68 Estimates.

Mr. Goodhew

I imagine that we are entitled to talk about the aircraft which are being purchased by the Royal Air Force.

Mr. Deputy Speaker (Sir Eric Fletcher)

Order. The hon. Gentleman is only entitled to talk about any purchase covered by this Estimate.

Mr. Powell

Can the Under-Secretary help the House by telling us where in the Estimates the expenditure which will be incurred on the AFVG during the next financial year will be shown?

Mr. Merlyn Rees

All that I know is that they are not on this Estimate, by the very nature of it, because it is the R.A.F. Estimate. I think that I am right in saying that when they appear they will form part of the Ministry of Technology Vote. What happens is that the payment for the aircraft, and other R.A.F. equipment, is made from the Purchasing Repayments Services Vote of the Ministry of Technology. These payments are made during the currency of contracts, and it is only when the aircraft are actually delivered to the R.A.F. that the charges are transferred to the Air Vote

I am certainly not responsible for any expenditure on the AFVG. Last night I attempted to join in the argument about the rôle of the AFVG, and that was quite properly a question which arose on the Estimates yesterday. I do not know if it would be relevant today.

Mr. Goodhew

This makes it absolutely clear how right the right hon. Gentleman the Paymaster-General was 2½ years ago when he complained about these matters, saying that one merely had a word like "airframe" but did not know to which aircraft it referred. I am glad to see him here, and I would be interested to know what he has done about this. He made a great deal of fuss about this previously.

Mr. Emrys Hughes

On a point of order. Is the salary of the Paymaster-General included in these Estimates?

Mr. Deputy Speaker

I doubt whether the Minister could help us on that.

Mr. Goodhew

I find myself in the same difficulty as did the right hon. Gentleman. The only difference is that I am in opposition. He has been in government for 2½ years, yet we find ourselves in exactly the same position today. I should be interested to know whether the right hon. Gentleman has done anything to change the situation, so that in future debates we will have a new form of Vote, so that we may understand what this is all about.

The Paymaster-General (Mr. George Wigg)

I am always anxious to help hon. Gentlemen, even if it includes a lesson in procedure. There was a Select Committee on Procedure set up by the last Administration, rather belatedly. I was a member of it, as was the then Leader of the House. One of the matters discussed was the form of the Service Estimates. I would suggest that the hon. Gentleman, with his well-known Parliamentary skill, should read the Committee's Report, which he obviously has not done and then raise the matter on an appropriate occasion, which is not today.

Mr. Goodhew

That is just the sort of answer that I would have expected from the right hon. Gentleman, having seen him come here day after day, giving stupid and thoroughly uninformed Answers to Questions when he was at the top of the list. If he thought in 1964 that something should be done about this, I am surprised that he cannot tell me that he has done something about it.

Mr. Wigg

The hon. Gentleman does not seem to realise that this is not a matter for the Executive; it is a matter for the House of Commons. There was a Select Committee on Procedure which discussed this, and I would have thought that the hon. Gentleman and his colleagues would be among the first to realise that if one is to alter the form of the Estimates, it has to be on an agreed basis. I earnestly suggest that the hon. Gentleman should read the Select Committee Report, and then he will not talk the nonsense that he has already talked.

Mr. Goodhew

The right hon. Gentleman enjoys being offensive. He has told us before that he loathes our guts, and I suppose that that is why. It would be interesting to know whether the Select Committee has made any proposals. Perhaps the right hon. Gentleman could tell us.

Mr. Wigg

The hon. Gentleman has free access to the Library. The Select Committee, of which hon. Gentlemen opposite were members, made its recommendations to the House. I am as keen as the hon. Gentleman, and as any other hon. Member in any part of the House, to revise the form of the Estimates. I think that more information ought to be given, but it is a matter for the House. The House of Commons governs its own legislation by Resolution. The hon. Gentleman is pushing at an open door over the administration.

Mr. Goodhew

It is a great pity that the right hon. Gentleman did not show a little sympathy for my view instead of being so offensive. We will leave it at that. As it seems that we are unable to discuss the aircraft, which for all we know may appear in here, I hope that the Under-Secretary will tell us what aircraft are contained in this Vote, so that my hon. Friends when they speak will know that they are not going beyond the rules of order.

5.46 p.m.

Mr. Emrys Hughes (South Ayrshire)

I welcome the appearance of the Paymaster-General in this debate, because during the days when we were in opposition, he used to direct some very searching questions at the then Government, a great many of which were not answered. What I am sorry about is that the right hon. Gentleman, who used to render me such excellent service in these debates, has left the back benches, and has become a political or military adviser at Crufts I regret the absence of the right hon. Member from the back benches, and I want to do my best to substitute for him. I was a most assiduous attender of the debates in which he used to take part, and I used to regard myself in some way as his Parliamentary Private Secretary.

Sir Harmar Nicholls (Peterborough)

I did not hear the hon. Gentleman clearly. Did he say that his right hon. Friend was adviser to Krupps or to Crufts.

Mr. Emrys Hughes

The hon. Gentleman can take his own version. I want to continue the process begun by my right hon. Friend. I am not a member of the Government. I am only a humble back bencher seeking information. I cannot understand the point of view of the hon. Member for St. Albans (Mr. Goodhew). If he comes to this side of the House, he has one view and if he goes to the other he has another view.

It is just a question of the pot calling the kettle black. I want further information about these Estimates. For example, I want to know about the armaments, ammunition and the explosives which are itemised in Vote 7 under Stores and Equipment. It seems that this is an amazing sum to be granted by the House with such little information. This was the same when the hon. Gentlemen opposite were in power. If by some chance they shifted over here again, there would be the same formula, and I do not want to see that happen. I should like to know why such very large sums of money are dismissed in such few words.

The R.A.F. is not engaged in a major war. I should have thought that the sum of £26,800,000 for armaments, ammunition and explosives was very considerable when there is no war on. How is it made up? Is the R.A.F. stockpiling and, if so, what is it stockpiling?

A front page article in The Times on 8th March said: The Cabinet have been considering for six months the question whether to stop making hydrogen bombs". I am entitled to know, I think, whether any atomic bombs are included in this large sum of £26 million. Of course, I will not be told; I do not know why. When Mr. Attlee was Prime Minister I remember Sir Winston Churchill coming to the House and attacking the Labour Government because they had hidden the large sum of £100 million in manufacturing the atom bomb. I should like to know whether this £26 million comprises an item for atomic weapons. Surely that is a relevant question.

I can hardly believe that The Times would display on the front page an article on "a new generation of nuclear weapons" and underground tests if there were nothing in it. Surely the defence correspondent of The Times does not produce this sort of thing from his imagination. He said: Last week in the Commons, Mr. Healey, Defence Minister, hinted for the first time at the likely direction of policy when he confirmed that he had not closed his mind to the further development of the Polaris warhead". I understand that the Polaris warhead is not included in this Vote. We shall come to that later when we have the opportunity of discussing Polaris on the Navy Estimates. We are entitled to know why so much ammunition and so many rockets, bombs, guided missiles and torpedoes costing this very substantial sum are included in this Vote.

Last year the sum was approximately the same. Are we to spend £26 million every year? If so, for what purpose? Hon. Members, when they are asked to pass these very large sums of money, should have greater detail. May we be told how much of this sum is for ammunition, how much for rockets, how much for bombs, how much for guided missiles and how much for torpedoes?

I ask these questions knowing that I shall be told that they cannot be answered for security reasons. But before I came to the House and when I was a member of a local authority if I were presented with a sum of money I wanted to know how it was made up. Therefore, I wish to know how much is included in this Vote for hydrogen bombs. Perhaps we can be told something about the question which the Cabinet has been considering for six months—whether to stop making hydrogen bombs. Has it come to the conclusion that hydrogen bombs are too expensive, or that they are ineffective, or that they are likely to be suicidal weapons?

5.56 p.m.

Mr. Tam Dalyell (West Lothian)

This is the sixth day on which I have sat through the defence debates. This is my fourth speech, and it will be easily the briefest.

I passionately agree with the Paymaster-General on one point, namely, that if one has learnt anything over the last six days it is the need for a Select Committee on defence. On previous occasions I have wondered whether there were not great disadvantages in giving authority on defence matters to just a few élite Members on both sides of the House and whether this would be a good idea. That is how I used to think. Now I am clear in my mind that when debates are so sparsely attended and the issues are so huge and often so complex a Select Committee on the Armed Forces or defence—call it what we will—is an urgent necessity. Those of us who have had some experience, albeit small, of the Select Committee on Science and Technology—the hon. Members for Mid-Bedfordshire (Mr. Hastings) and Orpington (Mr. Lubbock) and my hon. Friends—agree, I think, that this kind of Select Committee will work in practice and will he to the benefit of democracy and of the Services.

I have a few specific questions to put. I should like to ask my hon. Friend what is the unit cost of the Phantom. I think that he said yesterday that he was prepared to give it. What value in the Phantom aircraft is represented by British equipment such as the Rolls Royce Spey engine, the Ferranti navigational attack system and the various components in the airframe? I do not see that there is any security involved in this issue. When does my hon. Friend expect to announce his decision on a further final order for the Phantom? Will he estimate how many Phantoms he expects to order in this further final order? How many Phantoms does he expect to deploy in the Middle East and the Far East?

What is the radius of action of the British version of the F111? We are told that it is vast. The reason that I ask this question is obvious. It concerns the complex and important matter of drag, which we are told is up to 35 per cent. When does my hon. Friend expect to complete negotiations on the ceiling price of additions made for the R.A.F. version of the F111? He said something about this yesterday which did not understand; the fault may well be mine.

How many officers and civilians accompanied my hon. Friend on his visit to Texas and St. Louis? What was their rank and what technical qualifications did they have? I think that a number of us on the Public Accounts Committee became extremely worried about the shortage of technical cost officers in the Service. I realise that it is difficult to recruit such men and that they may be precisely the sort of men wanted in industry. Nevertheless, there is a problem here.

I return to the question of drag on the F111. By what percentage does the present figure of drag exceed the estimate given for some convenient date at the beginning of 1966? It seems that the drag estimate has increased considerably since the representatives of General Dynamics were with us.

Finally, what are the estimated annual running costs of the C130 Hercules, and when does my hon. Friend expect to accept delivery of the last of the 66 aircraft which have been ordered from the United States?

All these questions are meaningful and relevant. I should be grateful for answers to them.

6.0 p.m.

Mr. Kershaw

It is astonishing that this Vote about aircraft and stores should not include anything about the AFVG. The Government are buying aircraft and engaging in the development of aircraft abroad, but with the setting up of the Ministry of Technology, apparently the House is deprived of the opportunity of discussing these matters in these debates. As I understood the hon. Gentleman, he said that it is nothing to do with him and that, as far as he knew, it was something to do with the Ministry of Technology. If that is so, it is a new factor which I did not anticipate when I heard about the setting up of that Ministry. It is strange that in this debate, where quite obviously we have come here to talk about military aircraft, we should find that there is no way in which we can talk about all aircraft, but merely those which the Minister says are included in this Vote.

Looking through Vote 7 in is full version, it is hard to imagine that at least some of the expenditure does not include expenditure by the Government overseas on the AFVG project and others. I notice one or two sharp increases For instance, on page 155 of the Defence Estimates, under Subhead H of Vote 7, one sees that repayments of principal and interest on loans for aircraft, etc., purchased overseas have risen from £1.9 million to £9.4 million over last year. It would seem that, concealed in that figure is part of the expense of buying aircraft from abroad and setting up the manufacture of the AFVG.

I know that the House as a whole shares a certain amount of the responsibility for the form of the Estimates. It was Professor Parkinson who explained their form by saying that, originally, it had been devised in the time of Charles II to conceal the fact that money voted for the Navy was devoted by Charles II to his mistresses, and that even in that it was not particularly successful. Now we find that money voted by Parliament is being spent in ways entirely different from what we think we are discussing, and we discover that there is an individual Ministry standing between us and our debate. I suggest that the Government should take the initiative and look at the matter to see if they can devise something else for us before next year.

6.5 p.m.

Mr. Humphrey Atkins

I wish to inquire from the hon. Gentleman about Subheads A and B, dealing with air frames and engines, with particular reference to the number of aircraft that he is buying for Transport Command included in these large sums which we are being asked to vote.

Paragraph 49 of the Statement on Defence refers to the build-up of Transport Command, particularly that of the VC10 and Belfast forces. During yesterday's debate, there was a good deal of reference made to the Seventh Report of the Estimates Committee, which clearly indicates that the increases in Transport Command were a mistake. The hon. Gentleman said that his Department did not agree with the Committee's finding, and what I wish to know is whether he is proposing to take any notice of it.

I appreciate that, if he has ordered certain aeroplanes to build up Transport Command, and they are due for delivery shortly with payment due in the next few months, probably he will not be able to cancel them. We understand and accept that. But I should like him to take the opportunity of telling the House how much of the £91 million and £57¾ million respectively is for Transport Command aircraft and, in view of the Estimates Committee's Report, whether he proposes to re-examine the plans for purchasing transport aircraft, which the Estimates Committee feels should be looked at and probably reconsidered.

6.6 p.m.

Captain Walter Elliot (Carshalton)

I want to ask the Minister one short point which relates to Subhead E, dealing with vehicles and marine craft, against which the figure of £6 million appears. Could the Minister say what proportion of that is for marine craft? I do not want to get out of order, but, if one glances briefly at the Army Estimates, one sees a subhead dealing with aircraft and ships, and I notice that the ships are to cost something over £1 million. It is useful to know that, and I should like to know what marine craft are proposed for the Royal Air Force.

In the rationalisation which is being undertaken by the Ministry of Defence, certain services which previously were provided separately by the individual Services are being co-ordinated into one Service. In the case of marine aircraft, instead of each of the Services having its own expensive maintenance depots as well as its own craft, savings might be made if they all came under one Service, and that would seem to fall naturally within the sphere of the Royal Navy. Can the Minister say if anything is being done along these lines in this case?

6.7 p.m.

Mr. Powell

You will recall, Mr. Deputy Speaker, that because, exceptionally, a Vote on Account for Defence was taken last year due to the dissolution of Parliament, this Estimate was not before the House and a debate such as we are having today did not take place. In fact, it is two years since we last had a debate in this form and, during that time, there have been substantial changes not only in the content, but, to some extent, in the nature of our expenditure upon aircraft and stores.

As the House was rightly reminded by the right hon. Gentleman the Paymaster-General, the Estimates Committee has always exercised a special function in tendering advice on the form in which the Estimates would be acceptable to the House. Nevertheless, I am sure that it is right for the House to be able, when Estimates come before it, to comment upon the convenience or otherwise of the form in which they are presented. To do so implies no derogation of the functions or the importance of the Estimates Committee.

As my right hon. Friend the Member for St. Albans (Mr. Goodhew) reminded us, in years gone by the right hon. Gentleman was critical of the uninformative nature of these Estimates. From the form of Estimate, it is impossible to get any idea of the way in which the movement of expenditure is distributed, for example, over the main types of aircraft which are at present being supplied for the use of the Royal Air Force.

One realises that there are important security and, I imagine, commercial considerations which have to be borne in mind, but it is difficult to suppose that it is impossible for a form of Estimates to be devised which would give the House some indication, at any rate, of which aircraft were covered by the respective sub-heads, even if we cannot, for reasons which might be quite intelligible, have knowledge of the specific and precise sums which are relevant to each aircraft.

I feel that the old objections which were made in the past by the right hon. Gentleman who is now Paymaster-General are still effective, and that they are more effective today in that, as my hon. Friend the Member for St. Albans pointed out yesterday, we have a much greater variety of different combat aircraft in service than was envisaged under the previous Administration. But there is now an entirely new feature, new certainly since the Parliament before last, which makes the problem of the form of these Estimates much more far-reaching and urgent. You will find, Mr. Deputy-Speaker, a trace of this new development in subhead H of the present Vote, concerned with repayments of principal and interest on loans for aircraft purchased overseas ".

It is a notorious fact that during the last two years one of the big developments in the financing of our defence effort has been that a great block of expenditure to be incurred, and which is literally being incurred, in these years upon aircraft is being shifted bodily forward almost entirely into the 1970s. So that while, in these years, we are incurring indefeas- ible liabilities for the future, which will appear in Votes which will be presented to the House, which will be put to the House by yourself, Mr. Deputy Speaker, and by your successors in the Chair in later years, while we are taking the decisions now, little or no trace of those decisions appear when the House comes, as it will be doing presently, to vote the money.

It is true that certain payments are currently made. Those are the payments which we see under Subhead H, and some trace, some cloud no bigger than a man's hand, of the enormous liabilities in future years, is to be seen in the increase under that subhead from £1,900,000 last year to £9,400,000 already. But, as you will appreciate, Mr. Deputy Speaker, this is a tiny fraction even of the cost of the aircraft which have effectively been ordered, and which, I presume, in some sense are ours already under these arrangements.

It seems to me that with this new form of financing, which, whether we like it or not, will be with us for many years to come, it is more urgent than ever for the House to take a look at the form of these Estimates and to consider whether they ought not to be supported by what I might call a kind of commercial statement. Of course, in the case of the Post Office, we have, for some years now, been accustomed to a double presentation of the Estimates in the Parliamentary, strictly annual, strictly cash form, to which this House rightly adheres, and also in a commercial form which shows the way in which liabilities are accruing.

It seems to me that it is now urgent that we should be able to see, year by year, the liabilities which in that year it is proposed to incur. There has been reference—and hon. Members, because of the form of the Estimates, have had great difficulty in knowing how far they were in order in making reference—to the purchase of the F111A or the FMK, as the case may be. We know that last year 10 of these aircraft were ordered, and we know that the option to order another 40 will expire at the end of this month. It is ironical that with the Estimates for the coming financial year before us, we cannot tell—it may be that we cannot even ask—whether those aircraft are to be ordered.

There is a real absurdity here. Here is a Government intention to incur expediture or not in the coming financial year, and yet it is possible that no trace of that intended expenditure appears at all in these Estimates. It may not, so far as I know, even occur under Subhead H. I imagine that the next 40, if there will be a next 40, does not occur under Subhead H. Possibly, the hon. Gentleman will tell us that some trace of the original 10 may be found somewhere in Subhead H.

It cannot in the long run he tolerable for the House to be satisfied with Estimates in this form, given that we are now financing the purchase of our major aircraft in a form so different from that which was customary in former years, and, indeed, from that which to some extent still applies in the other services. We shall find that we shall have a much more rational debate on the corresponding Navy Estimates than we are able to have under these Estimates.

What we shall be looking for is, first, some way in which we can be clear about the classes of equipment, the nature of the equipment, which is comprised in the cash estimate before the House, in the cash Vote which is being made. Secondly, that we shall be able to judge the manner in which it is proposed that the liabilities of this country and those of the taxpayer will be increased during the ensuing 12 months.

Mr. Dalyell

I find the right hon. Gentleman's idea of a prognosis into the 1970s year by year of liabilities very attractive. But would not the right hon. Gentleman agree that it has been the experience of all administrations that these kind of commitments tend to be open-ended? It might be very difficult to give a realistic estimate about this.

Mr. Powell

I think that the hon. Gentleman has mistaken my intention. I gather that from his use of the word "prognosis". I am not asking—that would be a separate matter—for an estimate of the total liability which is incurred by a decision, for example, to go for a new class of aircraft, but I am concerned with, as I call it, the indefeasible liability which is incurred by the orders which the Government will actually place in that year. I can hardly believe that the liabilities involved in those orders in that 12 months cannot be quantified. They ought to be quantified. They ought to be quantified, and if they cannot be quantified the House should know why they cannot be quantified.

It would be a separate matter, and a matter more appropriately debated in our more general defence debates, to see where we are going in total in the 1970s. My reference to the 1970s was in a different context, namely, that if this American loan, if the purchase of aircraft "on tick" were to be a very brief phenomenon, one with which we have to cope for only a year or two, there would not be much point in arguing for a different presentation from the one on which I am speaking.

But we shall have to live with this system for more than a decade, and it is right that here, at the outset of the process, we should make it clear why this type of Estimate does not make it possible for the House to have an intelligent debate.

Seeking to relate my remarks to the detailed questions which have been put to the Parliamentary Under-Secretary during the course of the debate, I would ask him—I am sure that, as usual, he will be as candid as he possibly can—that if the payments, either under Subhead A or under Subhead H, relate either to the F111A or the F111K, or any other aircraft which has been mentioned by hon. Members, he will do his best to satisfy hon. Members.

6.20 p.m.

Mr. Merlyn Rees

We have, quite rightly, been discussing the possibility of changing the form of the Estimates. Yesterday I suggested, albeit briefly, that this matter was being considered by my right hon. Friend the Secretary of State. As I stand here, prepared to reply with a mass of information which I have hastily been collecting and writing, I must say that one great improvement which could be made, whatever the form, is that hon. Members might inform mere Under-Secretaries of the detailed information they require. That would make matters easier.

I do not say this unkindly, because this practice has gone on for a long time. I accept that at the very beginning the right hon. Member for Wolverhampton, South-West (Mr. Powell) said that he would be prepared to receive this information later. From an efficiency point of view I have gathered a great deal of information. It is to some degree in the lap of the gods whether in the course of the next 10 minutes I shall get the right piece of paper at the right time.

Mr. Powell

The Under-Secretary has drawn attention to another embarrassment in our procedure. This year, not for the first time, this debate has been held on the day succeeding a debate on the Air Estimates. It is the general feeling that it is unsatisfactory, before even the whole of HANSARD for yesterday's proceedings has been published, for us to be having this debate. I know that my hon. Friends who had hoped to raise points in yesterday's debate, and who in many cases did raise points, and who again in many cases received answers which they might have wished to carry further, are unable to let the Government know what those points are, because of the time factor.

Mr. Rees

I agree with the right hon. Gentleman. That is a valid criticism. At the end of last night's debate I collected together lots of pieces of paper and put them in my pocket. It was my good fortune to find that my private secretary is a student of calligraphy and he managed to decipher what I said last night, because I could not get it out of HANSARD either.

I will deal straight away with two points that do not fit into the pattern of what I shall say. If I deal with them now there is no chance of my forgetting them later. We shall be studying further the Report of the Select Committee, as I said last night. This year the great change for Transport Command is that the Belfasts and VC1Os will be coming into service. The House will be interested to know in relation to subhead A(1) that the amount of money spent on Transport Command in these Estimates is £30 million, as compared with £33 million in the previous year. This is because of the VC1Os and the Belfasts already coming into service.

The hon. and gallant Member for Carshalton (Captain W. Elliot) asked about vehicles and marine craft under Subhead C. Four hundred thousand pounds of this is on long-range marine craft. The hon. and gallant Gentleman will know the nature of the R.A.F. marine craft which we keep down at Plymouth and which play a part in exercises with Coastal Command.

The question of co-ordination—or, as the "in" word at the Ministry has it, rationalisation—is being actively considered at the moment, because this is an obvious field where rationalisation studies could take place.

I said last night that the form of the Estimates might follow the pattern of the new Ministerial responsibilities in the Ministry of Defence. On the question of timing, it would have been difficult for the form of the Estimates to have been altered in 1964 under a new Government with a majority of three. In 1965 the Estimates did not appear. Therefore, the delay is not nearly as bad as might otherwise have been thought.

I have been asked about the sales of aircraft and also about the A7 Spey. It is most improbable that the Spey would have gone into the A7 if the United States Government had not agreed to modify the import duties, as they did in a significant way as part of the offset arrangements. The restrictions concerned are considerable, both in legislation passed by the American Government in recent years and in other legislation going back to the Roosevelt era. Another improvement has been the close cooperation on sales whereby identification of possible sales is made in the American Department of Defence.

I am not able to give full details of Lightning sales. A small piece of information that I have is that the increase of about £2½ million in this year's Estimates is due mainly to the sales of aircraft and equipment—for example, surplus Hunters—through contractors. This is done rather on a Government to Government basis, the surplus Hunters being sold through Hawker-Siddeleys to the Government of the Saudi Arabian Federation and other overseas Government. I regret that I am not able to give more information on this point at this stage.

I collected together a fair amount of information which I intended to give to my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) last night. However, time was pressing and I did not do so. I have the information, but I do not think that it is appropriate to go through it all now. I will merely relate it to the Phantom. It is right that ours is the "M". We keep the folding wings because it is part of the basic design and to have altered the basic design would have added greatly to the cost. The arresting gear has also been left, but this is not as silly as it might sound. Again, a cost factor was involved in moving this, because obviously from the start of the line at St. Louis a change would have had to have been made and this would have been yet another expense. I do not offer this as the major reason, but I am advised that to have this on certain airfields a wire can be put across and overshoot can be prevented just as on a carrier.

My hon. Friend the Member for West Lothian (Mr. Dalyell) asked about the cost of certain aircraft. We shall pay less than £1 million for the Hercules. I am not able to tell my hon. Friend about the running costs. This is a well tried aircraft. It is very cheap to buy. The Hercules is in the tradition of the old DC3 which used to be flown during the war as a jack-of-all-trades plane. This plane has advantages. I can give an approximate, figure for the Phantom of about £1¼ million.

The figure for the Chinook is about £½ million. Last night I gave the figure for the Chinook as £10 million plus support. I think I am right in saying that the figure includes support.

I cannot give the House the precise number of Phantom aircraft bought. The figure which we have been giving is approximate, including the R.N. Phantoms. There will be about 200, but that is not the precise figure. The Phantom is 46½ per cent. British, and the major aspect, 38 per cent., I think, is the Spey engine. I have a list, having just returned from America, of the parts which are British. This might help my hon. Friend and other hon. Gentlemen who would like to know the names of the firms that made them. Four Hercules have been delivered. The fifth will come at the end of the month and will then go into R.A.F. service. All 66 will be in in about one year.

The situation over the Kestrel—the P1127 is slightly different—is that there were tripartite arrangements among the United Kingdom, the United States and the Federal Republic of Germany to build and evaluate nine. After that, and before the advent of this Government, each country retired to make its own evaluation, which is still taking place. I do not know a great deal about aircraft sales, but while in the United States, I learned that any sales to the United States of this or anything else will be made on merits. There will be no "old boy net" based on the principle that they will buy something because it is British. This is right and should be so wherever we sell in the world.

I cannot obviously, give my hon. Friend the figure which I obtained last week about the radius of action of the F111, nor do I want to give details of the rank of civil servants or air officers who accompanied me. However, the new Chief of the Air Staff, who is to take up his appointment on 1st April, was there.

I was impressed by the firm's evaluations of the aircraft and I spent an interesting time at a meeting at which the F111 was discussed. We have calculated our radius requirements and the performance of the R.A.F. F111 will meet them. The drag has gone down a good deal since the G.D. people were here. I understand that my hon. Friend attended their meeting upstairs.

The radius of action of the aircraft—I think that my hon. Friend wanted details of this under certain configurations—is obviously influenced by the bomb load, the "recce" fit, height and speed. I do not want to go into the rôle too much, because we dealt with it at some length last night.

However, the rôle which we see for the F111 is predominantly reconnaissance. The aircraft is superior in radius and everything else to the AFVG. It is sometimes spoken of as the high-quality part of our variable geometry aircraft, for this reason. I explained yesterday that its long range will make it particularly valuable when the carriers phase out. It is now well known that the first order was for 10 but it should not be thought that these 10 aircraft are for the O.C.U. That is not the case. This may have been one of the reasons why a wrong figure is obtained of the number of unit strength aircraft in the squadrons.

The fixed price for the 10 and the possible 40—the deadline is 1st April, but the final agreement has not been made— is £2.1 million for all 50. That is as it has always been. There is a supplementary ceiling for the British version with the undercarriage, escape capsule and avionics which the Government wanted to put in. We still see a figure of about £2.5 million, which will include the initial lay-in spares, which are important in the early years, and the later spares, which we will get at the same price as the United States Air Force.

I suggested last night that hon. Members were being unnecessarily suspicious about this. The offset agreement does not pay for the aircraft, but it does safeguard the balance of payments, which was the major reason for it. The agreement, which is for the period of the aircraft, is going very well—

Mr. Goodhew

The hon. Gentleman mentioned that the new supplementary ceiling cost would include the strength of undercarriage. I thought he said last night that this was as standard on the FB111 which is the Strategic Air Command nuclear bomber.

Mr. Rees

I do not know the state of play in American naval aircraft, but the question of standardisation in this run of aircraft has still to be fitted into the production line when this comes in. The cost is greater, because the undercarriage is substantially stronger also. These are the reasons for the increase in cost.

On the AFVG, I should make it clear that, although we discussed yesterday the Estimates for which the Air Force Board is responsible, in the Ministry of Defence we are responsible only for delivered aircraft. That is what this amount is about. I will qualify that in a moment, in regard to subhead H. I therefore have no desire to stop any discussion on the AFVG, but, because it will come into use only in the mid-1970s, the aircraft cannot possibly be under the Ministry's or the R.A.F.'s control at the moment. That could possibly have been discussed yesterday: I do not know. Certainly I take the point that there is room for discussion of future types of aircraft in the Estimates debates.

The difficulty is that I know, from having investigated the matter before yesterday's debate, that the amount of information about the state of play on the AFVG—this must have been so in the early days of the TSR2, the Lightning, the F111 or any other type of aircraft—which can be given is not very great. Nevertheless, I take the point raised—

Mr. Goodhew

Am I right in saying, therefore, that this type of aircraft purchases abroad might never appear in subhead A but only at a later stage in subhead H? In other words, would we never have an opportunity in these debates to discuss the cost of the aircraft purchased from abroad until after they have been paid for?

Mr. Rees

I was going to qualify this with regard to the American aircraft. The same thing applies to the AFVG and Anglo-French aircraft as to the Phantoms—the cost of the engine will be in the early part of the Vote and the American section will be under subhead H because that is the American expenditure. In any event, we are jumping a long time ahead in trying to discuss how the AFVG will eventually show itself in the accounts.

Vote 7 subhead H is the repayment of principal and interest on loans for aircraft purchased overseas and this account is very much in respect of purchases from the United States. I will explain how this comes about. The hon. Member for St. Albans (Mr. Goodhew) mentioned that, as a result of the dollar expenditure and arrangements made with the United States, the amount of expenditure which appears in the early days, as it were—that is, at the moment—is very small. It will obviously be greater in future, although it is not quite like buying a house, which was the analogy put to me. I agree that in some respects it is like purchasing a house on a mortgage where the repayments every year are the same. There is some similarity between the two transactions, although I understand that there are certain types of house-purchase agreement by which one pays a larger amount in later years.

The figure contained in Vote 7 subhead H is about £9½ million. It might be helpful to the House if I break down this figure and give some information, although, by the nature of things, my figures will be only very approximate. We have purchased about £76 million worth of American equipment, although we have so far paid, because of the agreement with the United States, about £9½ million. To make the position absolutely clear, in rough figures, we have paid £9½ million for £76 million worth of equipment.

I will give a rough outline of the figures to show how one can break down this figure of £76 million—although I emphasise that my figures are approximate, so much so that they will not even add up. On the Hercules we have so far spent about £35 million. On the Phantom we have so far spent about £15 million and on the Fill we have so far spent about £18 million.

When I was at the Fort Worth plant of General Dynamics I saw, at the beginning of a line, some metal being cut. Someone said to me, "That will be in your version of the F111". I mention that to show that this amount of money is not in respect of completed aircraft but for long leads—the terms generally used to express this stage in an aircraft's production. That is why I cannot give figures which will add up to the £76 million which I mentioned. However, I trust that the information I have given will be of assistance to hon. Members.

It might also help if I explain how the present situation has arisen. On 11th May of last year, just after the General Election, the Military Aircraft Loans Act was passed by Parliament. It was, one might say, a joint effort between the Treasury and the Ministry of Defence. At that time the credits were arranged under that Measure to cover the dollar capital cost of the aircraft. The Act extended the Treasury's borrowing powers so that that Department could take advantage of these credit facilities and make it possible for the Treasury to use borrowed money to relieve the Votes of progress payments for the aircraft and equipment involved. The total cost of the aircraft was £430 million, covering the aircraft, associated weapons, special equipment, initial lay-in spares and dollar expenditure on certain R and D training of air crew and maintenance fitters. When I was at Fort Worth and St. Louis I saw groups of R.A.F. personnel there, as they are in Washington, concerning themselves with these projects.

There will now be periodic instalments until 31st March, 1972—that is, in a seven-year period. The repayments are made on each borrowing and they are spread over the following seven years in each case. There is, therefore, quite a long period over which these payments are spread and each amount of money is paid during a seven-year period. However, this does not include interest on the loans nor the dollar cost of subsequent spares after the initial lay-in spares have been obtained. The total dollar cost is about 660 million dollars, while 430 million dollars represent the capital part of the cost.

These figures bring us to Vote 7 Subhead H, for it was decided at that time by the Government that, rather than work under the loans legislation of the 1930s—by which the Treasury had power to borrow money for the Exchange Equalisation Account, to look after the balance of payments and so on and then to use the money to buy aircraft—the Department should maintain accountability to this House as progress payments were made each year through the Ministry of Defence to the United States contractors. Thus, each year an equivalent sum should be included in the Votes which are presented with the Estimates to Parliament.

I have attempted to break down the figures in Vote 7 Subhead H, although I admit that I have done so in a rough and ready way. It was the Government's intention, in the Military Aircraft Loans Act of last year, to enable this House to keep its eye on the progress payments made because of the new arrangements for the purchase of aircraft from abroad. I hope that the right hon. Member for Wolverhampton, South-West, who raised this question of accountability—and it is right that there should be room to look afresh at these matters in the light of our new responsibilities and for hon. Members to seek information about the figures—will agree that Vote 7 Subhead H appears as a result of the Government's firm intention to arrange business in such a way that the House can ask questions about these American aircraft.

The fact that the AFVG aircraft do not appear in the Vote is because their stage of completion is such that expenditure on them is extremely small. It is, therefore, not possible at this stage for the figures concerning these aircraft to appear in the accounts.

Mr. Powell

Obviously the figure that is missing in the form of the Estimates is that of £76 million. That is missing completely and, of course, a breakdown of it is equally missing.

Mr. Rees

I agree, and that is why I have given a rough and ready breakdown of the figure. I hope that the breakdown I gave enabled the right hon. Gentleman to see what is happening.

Question put and agreed to.

Resolved, That a sum, not exceeding £268,000,000 be granted to Her Majesty out of the Consolidated Fund, to defray the expense of aircraft and stores, which will come in course of payment during the year ending on 31st March, 1968.