F111K AIRCRAFT CONTRACT

HC Deb 01 May 1967 vol 746 cc99-227

Mr. Speaker

Before I call the right hon. Member for Wolverhampton, Southwest (Mr. Powell) to move the Motion, perhaps I might say that I have not selected the Amendment standing in the name of the hon. Member for Orpington (Mr. Lubbock) and his colleagues.

3.46 p.m.

Mr. Enoch Powell (Wolverhampton, South-West)

I beg to move, That this House deplores the contradictory statements made by Her Majesty's Government about the purchase of the United States F111K aircraft, and calls for a realistic statement of its prospective cost and potentialities. The story of the F111K purchase already goes back a considerable period of time, almost to the beginning of the period of office of the Labour Party, for it was within six months of taking office that it announced to Parliament its decision to cancel the TSR2 aircraft.

That decision immediately opened two major questions to which the Government purported, at any rate, to address themselves in the following months. The first of those questions was whether the capability of the cancelled TSR2 aircraft was needed at all. The second was: supposing that the capabilty was needed, by what aircraft, or combination of aircraft, should it be provided?

It was almost a year later, in the framework of the Defence White Paper of 1966, that the Government came forward with their answers to those two questions. Their answer to the first question was in the affirmative; they believed that there was, and for many years to come would be, a requirement for the capability which the TSR2 aircraft would have fulfilled. Their answer to the second and consequential question was, however, a much more complicated one. It was that the upper end, so to speak, of that capability would be met by the purchase of the American F111 aircraft modified in certain respects to meet special British requirements.

However, they intended to purchase only 50 of these aircraft, and in order to explain and justify that decision they introduced, like a deus ex machina, the assumption of an Anglo-French aircraft which has since become known normally by its initials—the AFVG. This aircraft, should it come into production as intended, would after the mid-'seventies take over some, but apparently not all, of the functions thitherto discharged by the 50111 aircraft. Such was the second and substantive answer which the Government gave the House and the country to the question which they had posed in the first place by their decision to cancel the TSR2 aircraft.

On the A.F.V.G., which we are not debating this afternoon, but on which much of the future prospects of the F111 purchase must turn, I would say only this: all the key decisions are evidently yet to be taken; the aircraft—its character, its practicability, its cost, and everything else about it—remains, I can hardly say in the air, but at any rate, in the realms of assumption. Meanwhile, the story of the F111 has taken some strange turnings.

The picture originally presented to the House when the decision to purchase these 50 aircraft was announced was that Britain was getting, by this decision, all the advantages of buying an aircraft off the peg; that within a massive American production for American purposes, a relatively small number of aircraft, under specially favourable and definite conditions, were to be obtained for the purposes of the United Kingdom.

Since then, almost every statement about the F111K originally made, almost every one of the advantages claimed for it, has become to a greater or lesser degree, doubtful. Right at the outset there was the strange episode, with which I do not propose to embarrass the right hon. Gentleman further by reminding him in detail, of the suppression, in connection with the American off-set of the dollar costs of the F111, of the fact which presently transpired, that most of that offset related not to direct United States purchases, but to purchases of British defence equipment by third parties.

All the salient characteristics of this aircraft, cost, performance and delivery, are now in a state of such doubt and obscurity that it has become urgently necessary that they should be cleared up for the House and the country, by the Government.

Mr. Frank Allaun (Salford, East)

If the right hon. Gentleman is so critical of the F111, will he tell the House and the country whether his party is for or against this purchase? Why is he not honest, like the Liberals? Many of us were against it, and said so. Will the right hon. Gentleman say, "Yes" or "No", whether he is in favour of this purchase?

Mr. Powell

Until some of the questions which I am to ask in the course of this debate have been ventilated and answered, no one can form a reasonable view about what is implicit in the purchase of these aircraft.

I come initially to the cost of the aircraft and, first, to the basic cost, without the additions or the modifications being made for British purposes. Two years ago, when the option was first entered into with the United States, the right hon. Gentleman who is now the Home Secretary describing the option arrangements, said: We have a fixed maximum. We might pay less, but we could not pay more."—[OFFICIAL REPORT, 13th April 1965; Vol. 693, c. 1287.] That statement, that this ceiling price for the basic aircraft represents an absolute maximum, the outer limit of what we might at any time be required to pay, has been repeated consistently ever since then, until the very recent past.

For example, in the 196c Defence White Paper we were told: The ceiling price for the basic aircraft—5.95 million United States dollars or about £2.1 million—covering production costs and a contribution to the United States research and development costs, will apply to the total purchase.… So these expressions, these asseverations, were used repeatedly, month in and month out. Whatever doubt might attach to other elements of this purchase, one thing was certain: we had a fixed ceiling price for the basic aircraft.

Then, on 11th April, in answer to a Written Question from my hon. Friend the Member for Hendon, North (Sir Ian Orr-Ewing), the right hon. Gentleman introduced a new phrase into the hitherto stereotyped description. He said: The unit cost of the 50 F111 Ks we have ordered remains, as hitherto, about £2½ million. This figure"— and here come the novel words— which excludes U.S. money inflation …"—[OFFICIAL REPORT, 11th April 1967; Vol. 744, c. 165.] and then he continued with his description of it. Nothing else was changed, but the insertion of those words. The following day he used the same expression, "excluding United States money inflation", in an Oral Answer to a Question put to him by myself and other hon. Members.

What was the reason for this sudden paroxysm of precision by the right hon. Gentleman? Why were the time-honoured formulae which had done duty for so many months suddenly altered by the insertion of an expression, which, naturally, caught attention and led to questions? I can satisfy the curiosity of the House on that score. In the preceding week, on 6th April, the noble Lord the Minister without Portfolio, answering a Question in another place, had for the first time used that phrase. He was referring in that context to the matter of the supplementary ceiling for the modifications to which I shall come presently. Once the fatal words were said, they had to be used in this House, too. I think that we may be grateful to another place for having introduced an increased degree of candour into the description of the terms of the purchase of the basic aircraft.

The question now arises: what is involved in this qualification to the ceiling price, the maximum price that we have been hearing about for two years? The right hon. Gentleman tried to laugh it off in his usual fashion. He said "Why,every-one knows that; everyone knows that all these contracts are subject to escalation for United States inflation." He had not happened to mention it, nor had any of his colleagues happened to mention it until a week or two ago, when it happened to be mentioned, by chance, in another place.

But, said the Minister, the costs of the Polaris submarine were similarly subject to escalation of the American dollar costs. Perhaps the right hon. Gentleman will tell the House, later on, what has been the degree of escalation in the dollar costs of the Polaris submarine? He referred to the Phantom purchase. I shall come in a moment to a statement which the Minister of State, Ministry of Technology, made on that subject, but the price of the Phantom aircraft was not declared by the then Government to the public or to the House. Still less was it, or the price of the Polaris submarine, made, as the fixed ceiling price of the basic F111 aircraft has been made, part of the Government's own case for purchasing that aircraft, and constantly urged in debate after debate upon those who had argued against the decision to cancel the TSR2 aircraft. It is, therefore, no use the right hon. Gentleman pretending that in this case the small print did not even need to be printed.

The right hon. Gentleman said that to date he had added "something over £100,000 per aircraft" to cover this little item. He said: The ceiling price of £2.1 million for the basic aircraft is, however, subject to adjustment in the light of increases in the cost of labour and materials since April 1965 and to allow for this to date I am adding something over £100,000 per aircraft for purposes of costing forward defence plans at current price levels."—[OFFICIAL REPORT, 12th April, 1967; Vol. 744, c. 188.] We have had some information from the Ministry of Technology on the escalation of the cost of the Phantom aircraft. We have been told that the agreements for the purchase of Spey Phantom aircraft for the Royal Navy are based on cost estimates provided by the United States Government. These include a factor of 3 per cent. per annum for inflation in the United States of America"—[OFFICIAL REPORT, 27th April, 1967; Vol. 744, c. 338.] If that is the figure which is to apply to the F111K, then by the time 1970 is reached there will have been an addition of between £250,000 and £300,000 to the cost of each aircraft. But perhaps this is not the basis in the case of the F111K. If so, may we be told by the Government on what basis the addition for the escalation of United States costs is to be made?

The Secretary of State has referred to increases in the costs of labour and materials. Is the value of those increases to be judged by some general index of United States inflation, as it is called; or is it to be related to some specific index of the materials and labour which enter into this aircraft; or is it to be related to the actual experience of the application of labour and materials to the manufac- ture of this aircraft? Obviously, we must know which, and we must be told realistically and candidly what this will add to the cost of the basic aircraft. Incidentally, we shall want to know over how many years it is calculated. We know that it runs from the date of the first option, April, 1965. Will it run in the case of each aircraft to the date of the delivery of that aircraft?

Before I leave that point, I would draw the Secretary of State's attention to one fallacy—and it is a rather dangerous fallacy—into which he seems to be falling. In the reply of 12th April which I have quoted, he said: … the unit cost of the F111K, in real terms, continues to be about £2½ million, as we have hitherto assumed."—[OFFICIAL REPORT, 12th April, 1967; Vol. 744, c. 187–8.] The right hon. Gentleman is falling into a fallacy. Of course, when there is internal inflation, provided that that inflation proceeds uniformly and the money value of everything is lifted, the cost of any article in real terms remains constant.

But that does not apply when we are subject to the escalation in costs of an article which we are purchasing from abroad. Unless the international rate of exchange is altered, the consequence of any increase in the price of what we buy in dollars from the United States, whatever be the reason for that increase—whether it be United States inflation or any other cause—is to increase the real cost to this country and the amount of work which will have to be done by citizens of this country, which they might be applying to other purposes, in order to purchase these aircraft. Let us hear no more of the escalation of United States prices making no difference to the real costs in this country.

The Secretary of State for Defence (Mr. Denis Healey)

Surely the right hon. Gentleman will agree that the extent to which there is any difference between the cost inflationary effects of American rises and the effects over here depends entirely on the extent to which inflation in the two countries is parallel. If we have to pay more in Britain and the British £ is worth less in real terms, there is no difference at all.

Mr. Powell

The right hon. Gentleman has half seen the point. If the international rate of exchange is adjusted to allow for the relative progress of inflation in the two countries, then the real cost will be the same. But as long as 2.80 dollars is the exchange rate of the American dollar, the more dollars we have to pay, the more we shall have to export in order to pay for those articles.

Mr. Stanley Orme (Salford, West)

Nonsense.

Mr. Eric Lubbock (Orpington)

Would the right hon. Gentleman allow me to intervene? [Interruption.]

Mr. Speaker

Order. Too much mathematical conversation is being conducted.

Mr. Powell

Perhaps right hon. and hon. Members opposite will give themselves the time and opportunity to reflect quietly on the point.

I come to the modifications of the basic F111 aircraft which convert it into the F111K, as we know it—the aircraft required for the purposes of this country. Originally, the idea was that modification would consist only in a difference of avionics. That was what the then Minister of Aviation said two years ago, when the option was entered into.

In July, 1966, however, it became known that the modifications went considerably beyond that and included a strengthened undercarriage. Certain information on that subject was disclosed in July last year. This, in turn, meant that the modifications to the basic aircraft for the F111K might be quite substantial. The right hon. Gentleman described them in November last as changes in configuration. The pressing reasons for these changes—I am talking, not about the avionics, but about the other modifications—have never satisfactorily been explained to the House. But from an early stage we were told—for example, in the Defence White Paper of 1966—that a ceiling price for these modifications was to be agreed with the United States Government. For example, the White Paper stated: A ceiling price for the changes in the basic aircraft required by the Royal Air Force is to be agreed as soon as practicable. That was February, 1966.

In March this year, I asked the right hon. Gentleman, who was then within a month of the final date for taking up the option to purchase the remaining 40 aircraft, whether he would obtain that agreement before he closed with the option. He gave me a firm undertaking on 1st March, when he said: … we shall not place a contract until we have the ceiling price agreed."—[OFFICIAL REPORT, 1st March, 1967; Vol. 742, c. 476–7.] By the end of March we had placed the contract and a ceiling price had not been agreed.

Mr. Healey

indicated dissent.

Mr. Powell

There must be some marked reason why the right hon. Gentleman gave so firm, clear and explicit an understanding with a few weeks of the termination of the option and then found that he was unable to fulfil it. If it was so easy a matter to negotiate a fixed ceiling price for the modifications with the United States Government, it is difficult to account for the fact that, I am certain in good faith, the right hon. Gentleman gave me that reply on 1st March but failed to get the agreement before he closed with the option.

It is true that the right hon. Gentleman told us on 12th April that there had been "cost information from the United States Government which have a satisfactory assurance" that the total unit cost would be as assumed. That, however, is a very different matter. The right hon. Gentleman is no longer saying that he has any assurance from the United States Government, or that he has any agreement with them. All he is saying is that they have given him information on which he feels assured. The Government have felt assurance on many subjects on which subsequently that assurance has proved to be less than well founded.

There are good reasons for our anxieties in the way in which these modifications and their cost are regarded on the other side of the Atlantic. The right hon. Gentleman will, no doubt, have seen what was said by Mr. Henry Kuss and was reported in Aviation Week and Space Technology last month.

Some of the modifications required said Mr. Kuss— are very developmental. Calculation of the British share will be made after total developmental costs have been determined, a process which will take several years. The British will also pay full developmental costs of any non-common components"— that is, not common to the United States and ourselves— which they want incorporated". If that is how it looks on the other side of the Atlantic, it is no wonder that the right hon. Gentleman was unable to agree a ceiling price for the modifications by 1st April this year.

I have touched on the price of basic aircraft, which, we now know, is subject to a major escalation, and on the price of the modifications, which has not yet been quantified except by the assumptions of the Government themselves. We have learned of other items. There was, for example, the discovery that £600 per bomb would have to be spent on the modification of our existing stock of bombs for use in the F111. It would be wise, therefore, that the Government should now state categorically whether there are any other still undisclosed consequential costs, loopholes, or escalations which have to be taken into account in measuring the cost to this country of the F111A aircraft.

So far, of course, one has been talking only about the original aircraft by themselves. We are not even talking about the initial spares, because the initial spares and much that is necessary for this aircraft to fly at all when it arrives is not included in the figures or in the agreements and understandings, such as they are, about which I have been speaking.

There is a rough, normal, general sort of ratio of something like one to one between the basic cost of an aircraft and the spares, initially and over a period of operation. Here, however, we have no guarantee whatever of what the cost of being able to operate these aircraft initially and in subsequent years will be. We are told that we shall obtain spares on the same terms as those on which they will be available to the United States forces; but on what terms and at what cost they are likely to be available, if at all, to the United States forces we have no knowledge whatever.

So much for cost. I come now to performance. Here there has been the opposite of an escalation. There has here been a progressive diminuendo in confidence about the performance of this aircraft.

Mr. John Rankin (Glasgow, Govan)

After that dissertation on probably costs, would the right hon. Gentleman help us by giving the House an estimated figure of what the cost of the aircraft will be?

Mr. Powell

I will not say that that is a function which can be safely left to the Government, but it is a function which is the duty of the Government. I hope that in response to the invitation of the Opposition, they will at last perform that function in the course of this debate.

Mr. Rankin

Surely——

Mr. Powell

I hope that the hon. Member will not take up the time of the House by suggesting that any useful purpose could be served, against the background of the uncertainties which I have displayed, by a necessarily uninformed guess being made as to the total cost of this aircraft. The purpose of this debate is to obtain that information from the Government.

Now, performance. Way back in December, 1965, the right hon. Gentleman said that in many respects the F111A is superior to the TSR2".—[OFFICIAL REPORT, 13th December, 1965; Vol. 722, c. 915.] Then he modified it a little and in November, 1966, he said: In all respects the performance of the F111K is superior to the requirement for the TSR2". Finally, however, the right hon. Gentleman referred to the happy existence of a substantial buffer in case of any drop in the performance of the American aircraft".—[OFFICIAL REPORT, 16th November, 1966; Vol. 736, c. 423.] A still more ominous note has been sounded, and, once again, in another place, for it has not escaped attention that the noble Lord, Lord Shackleton, on 6th April, said simply this: we have had definite assurances that the aircraft will meet the R.A.F.'s minimum requirements".—[OFFICIAL REPORT, House of Lords, 6th April, 1967; Vol. 281, c. 1072.] I wonder how much further it will come down the scale before, if at all, we actually get this aircraft.

At least on delivery, what is sometimes rather unpleasingly described as 'slippage' is already a fact. The White Paper of 1966 said that full delivery of the 50 aircraft was guaranteed not later than January, 1970. In reply to a Question from my hon. Friend the Member for St. Albans (Mr. Goodhew) on 16th November last year, we were told that the first aircraft was scheduled for delivery at the end of 1968 and the rest of the first 10 in the immediately following months.

When, however, the Ministry of Defence announced at the end of March that it had finally closed with the option and ordered the remaining 40 aircraft, we were told only that deliveries were planned to begin "in 1969". That is a rather ominous alteration of the tone when we were previously told six months earlier that deliveries would begin in 1968. How much further, then, will the delivery and the programme of these aircraft slip?

There is a growing sense of mystery and doubt surrounding the provision of these aircraft for other purchasers. I asked the Secretary of State a few days ago whether he expected that the F111K aircraft ordered for Great Britain would be the first production F111 aircraft to be manufactured. "No" was his answer. Evidently, therefore, he is aware that there are other production aircraft in the pipeline ahead of ours.

It would, I am sure, be reassuring if we could be told how many and for whom are those production aircraft in the pipeline ahead of ours so that, presumably, some of the earlier faults and weaknesses may be modified or ironed out before our own production run obtains. It would certainly go far towards reassuring those who still expect to see this aircraft performing what has been held out for it if we were told what is our place in the production line now that we have put in the order.

There is more than a little ground already for the fear that the Fill purchase could prove a fiasco which was costly not only in money. The point has surely been reached when the House and the country are entitled to have an unsparing and realistic appraisal of the facts and the prospects in full, leaving out nothing and extenuating nothing. That will certainly be a novel experience in the story of this purchase.

I have no doubt that, if he decides to face it out and bluff his way through, the right hon. Gentleman will be able to get round a few more corners yet, but the time will come when the facts about the wisdom or unwisdom of the Government's decision will out. He will serve the House and the nation much better by being absolutely frank and candid now, and that is what we ask of him.

4.21 p.m.

The Secretary of State for Defence (Mr. Denis Healey)

The right hon. Member for Wolverhampton, South-West (Mr. Powell) makes two types of contribution to our discussions on defence. On the big issues, he confines himself to an oracular ambiguity which enables him to pose as a profound thinker without ever saying what precisely his policy is. On the small issues, all we get from him is a pedantic nitpicking. He builds up elaborate structures of argument to a dizzy height—but always on false or inadequate foundations and always of staggering irrelevance to the issues which the House should be discussing.

What we had this afternoon was an example of his second style. I shall deal with the points that he made as I go along, but my main purpose—and I am grateful to him for giving me the opportunity to do it—is to explain yet again, and as fully as I can within the limits of national security, what we want this aircraft for, the sort of specification required to meet its rôle, how the F111K measures up to the operational requirement, what it costs, how the dollar cost is being covered, and, finally, though my hon. Friend the Minister of State for Technology will speak at greater length on this, the part played by the F111K in an overall programme of aircraft procurement which is calculated to preserve the British aircraft industry as a technological leader in Europe and the world—[Interruption.] Hon. Gentlemen opposite obviously think that that is a matter at which to snigger, but we on this side of the House believe that the aircraft industry has a future in this country, though only on the basis of the sort of programme which we have given to it. In the course of my speech, I will deal with the points which right hon. and hon. Gentlemen may want to make later.

First, I want to explain what the aircraft is for, its rôle in the Royal Air Force, and indeed in the Government's defence policy as a whole. I want to make it clear to hon. Members on the Liberal benches and others who are under a misapprehension here that the F111K is not being bought to replace the V-bombers as a strategic nuclear delivery system. Britain's contribution to the strategic deterrent will pass from the V-bombers in a few years' time to the Polaris submarines. The F111K, like the TSR2 which it replaces in our programme, is planned as a tactical strike and reconnaissance aircraft delivering conventional weapons in the strike rôle. Of course, it has the capability for carrying nuclear weapons: so has a balloon; but that is not why we are buying it. If we wanted it for dropping nuclear bombs, we would not buy the highly sophisticated electronic equipment which it will carry to permit accurate delivery of conventional weapons on point targets. One does not need that sort of thing with a nuclear bomber. The V-bombers themselves, when they hand over their nuclear rôle to the Polaris submarine force, will supplement the F111K for tactical strike with conventional weapons against targets whose defences can be penetrated by aircraft less sophisticated than the F111K.

The Liberal Party seems to believe that the R.A.F. will not need an aircraft for reconnaissance and tactical strike at all in the 1970s, or at least not one so sophisticated as the F111K. Do let us remember—and I wish that newspapers in the country would remember it—that this is an aircraft which comes into squadron service in two years' time, in 1969; and I will deal with the delivery points which the right hon. Member for Wolverhampton, South-West made in a moment. Therefore, the important question is to decide whether we are likely to need this type of capability in the 10 years following 1969, and not whether we are likely to need it or whether it would be relevant in the 1980s or 1990s.

Hon. Members on the Liberal benches and some other hon. Members believe that such an aircraft is unnecessary in Europe and that Britain will have no military responsibilities whatever outside Europe in 1969 requiring it. If that is what they believe, they are wrong on both points.

As we said in this year's Defence White Paper, the aim of our diplomacy is to produce a situation outside Europe in which the local peoples can live at peace with one another without the continuing presence of external forces. But as I indicated earlier this afternoon, it is not possible, at this moment, to say when this can be achieved, and the right hon. Gentleman particularly asked me not to try to suggest a date for it. I do not know anyone who thinks that it would be possible to produce such a situation and to withdraw all our forces from outside Europe within two years from now. To the extent that we can make progress in reducing our forces outside Europe—we have done much already in this respect and we hope to do more, as again I said earlier—our Commonwealth partners overseas are likely to want us most of all to retain a capability for helping them in case of need with the sophisticated air and naval forces which they themselves cannot now afford. That is a point which was put strongly to me by the two Commonwealth Governments with whom I discussed this type of problem last week in South-East Asia.

This might still be the case even after circumstances had permitted us to leave our bases in the area altogether. My hon. Friend the Member for Woolwich, East (Mr. Mayhew) believes that we should maintain a commitment to help Australia in her defence, even though he believes we should leave Singapore and Malaysia in the immediate future. It is difficult to think of any contribution which we could make to Australia's defence which would not require us to have this type of capability in our armoury.

In my view, that is looking further ahead than we can clearly see at present. But, even in that situation—and still more while we have forces based outside Europe—we shall have to have aircraft with the capability to provide tactical strike and reconnaissance wherever our troops may be. Tactical strike and reconnaissance is the military umbrella which we must have to protect our forces —land, sea, or air—from attack. It would be militarily and morally indefensible to keep forces where they were subject to attack, or to send forces somewhere where they were likely to be subject to attack, unless we could provide them with the protection which they would then need. This protection applies to all stages of a crisis—before as well as after fighting has broken out.

First, and critically important, is the reconnaissance capability of the aircraft. Unless we know what is going on, we cannot make the necessary military dispositions or take the necessary diplomatic action which may, by themselves, nip potential trouble in the bud and prevent fighting from breaking out. In 1964, reconnaissance aircraft provided us with the first information of a developing crisis over Cyprus, without which we might have been unable to prevent general war in the Eastern Mediterranean and perhaps in Europe as a whole. Without reconnaissance aircraft, the Americans could not have obtained the information of Soviet missile sites in Cuba which may have enabled them to prevent a global thermo-nuclear holocaust.

Mr. Lubbock

As the right hon. Gentleman has correctly said, there is a difference between thinking that one does not need a tactical strike and reconnaissance aircraft at all and thinking that one does not need an aircraft of this complexity and sophistication. However, does the right hon. Gentleman think that it would have been of any advantage to this country to have had an aircraft of this type in service at the time of the Cyprus crisis?

Mr. Healey

The hon. Gentleman must understand that the Minister of Defence, like the Air Staff, must calculate what sort of weapons we may be up against in five, 10 or even 15 years' time. We are now talking about a weapon which does not even come into service until 1969, but which must remain an effective weapon for at least 10 years after it has come into service. I recall that the hon. Gentleman suggested the other day that we could do this reconnaissance work with missiles.

Mr. Lubbock

No. I said that it could be done with satellites.

Mr. Healey

But we do not ourselves have any satellites of this nature. In any case, satellites take days to provide the relevant information. They provide long-term reconnaissance information, but they would be of no value when dealing with, for example, the sort of situation in Cyprus.

Mr. Christopher Mayhew (Woolwich, East) rose——

Mr. Healey

I cannot keep giving way. I hope that my hon. Friend will allow me to get on with my speech without having to bob up and down mid-sentence. I must put to the House what is inevitably a long and complex argument, and I must get on.

A reconnaissance capability is necessary to prevent a crisis from developing to the point of war. The capability for tactical strike is equally important for this purpose. Indeed, in this modern age, more and more of our weapons are best fulfilling their primary function if they are never called upon to display their capabilities in action.

Take our experience during confrontation, one of the most successful military campaigns in the history of the Commonwealth. Precisely because the fighting was always kept at the level of guerrilla fighting, we were not required, in three years' jungle fighting in Borneo, to use a combat aircraft once to fire a rocket or to drop a bomb. But if we were not known to have the capability for doing so, our opponents could have shot down the helicopters on which our forces depended for their supply; and, indeed, could have bombed our bases in Singapore and Malaysia.

I believe that our military rôle outside Europe may increasingly be police action conducted at a low level of military conflict. But if we are to keep such actions at that level, all our military and political experience shows that such operations should be embarked upon only if supported by strike forces as a deterrent against escalation by the other side.

This dual capability to deter attack by reconnaissance and the known capacity for strike is as necessary at sea as on land and our possession of the F111K will be particularly important when, with the phasing out of the carrier force in the middle 1970s, the Royal Navy loses its own capacity for strike.

I come to the question asked in the Liberal Amendment: do we really need an advanced aircraft of this type and, if so, how many of them do we need for this particular purpose? This aircraft is as necessary in Europe as outside. Indeed, when the party opposite first defined the specification for the TSR2 it had the European theatre primarily in mind—and it is in the European theatre that we are liable to be up against very sophisticated weapons indeed. If Britain did not have such a capability, then the whole of Western Europe would depend on France and the United States alone for this critical element in its defence, and I cannot believe that that is really what the Liberal Party wants.

The main rôle of the FIIIK is, then, for tactical reconnaissance and strike with conventional weapons. I now turn to its specification—to why we need an advanced aircraft with the particular performance characteristics of the F111K.

Mr. Powell

I think that the right hon. Gentleman inadvertently said that he was describing its main rôle. However, if he said that intentionally, would he indicate what are its other rôles?

Mr. Healey

It has a small interception capability and, as I mentioned earlier, a capability to carry nuclear weapons, though that is not why we are buying it.

Mr. Powell

Not now.

Mr. Healey

Not at all. When I was in Canberra last year I discovered that, when the right hon. Member for Wolverhampton, South-West was teaching Greek at the university there, he had the nickname "textual pervert", the reason being that he was liable to base extraordinarily fantastic conclusions on some very simple use of words.

The main rôle of the F111K is for tactical reconnaissance and strike with conventional weapons and, as I was saying, I turn to the question of its specification. I do not believe that there can be any argument between me and the Opposition at least about this, since the operational requirement for which the Government are buying the F111K is, in almost all respects, the same as that laid down by the former Conservative Administration for the TSR2.

The basic point is that the performance of this aircraft must be such that a potential enemy knows that it can successfully carry out its tasks. Unless agreement can be reached among the great powers to stop the spread of sophisticated conventional weapons—and there is, unfortunately, no sign of this at present—it is likely that a number of comparatively small and poor countries will still be obtaining, in the 1970s as in the 1960s, highly sophisticated advanced weapons at cut prices from the Soviet Union, and, perhaps, from China. If our tactical strike and reconnaissance aircraft is to have its necessary deterrent power against countries so equipped, it must have maximum tactical flexibility, high speed advanced performance, both at high altitude and at very low level, and an accurate means of navigating and aiming its weapons.

Mr. F. A. Burden (Gillingham)

Would not the right hon. Gentleman agree that if this aircraft is to carry out its tactical performance and general requirement properly, it might well have to be equipped with tactical nuclear weapons? If so, why is the right hon. Gentleman apparently attempting to dodge the fact that tactical nuclear weapons might have to be carried, although Polaris might have the job of delivering the strategic missiles?

Mr. Healey

I do not believe that it is likely, necessary or desirable, and to this extent I agree, in part, with the point often made by the right hon. Member for Wolverhampton, South-West on this issue. Certainly outside Europe I cannot conceive of a requirement for the dropping of tactical nuclear weapons. In Europe it is another matter, but we can debate that on another occasion.

Mr. R. T. Paget (Northampton) rose——

Mr. Healey

I hope that my hon. and learned Friend will allow me to continue for a little longer. I will give way every five or 10 minutes, but I cannot conduct a running conversation with every hon. Member in the Chamber.

Mr. Hugh Fraser (Stafford and Stone) rose——

Mr. Healey

I will give way to the right hon. Gentleman later. I know that he helped to lay down the performance characteristics and will not quarrel with me about the need for an aircraft like the F111K.

There is no doubt that variable geometry—a characteristic which the TSR2 did not have—has greatly eased the designer's task of combining all these characteristics in a single aircraft. In addition to the characteristics I have mentioned, we need a substantial range or radius of action, not only in relation to possible operational missions, but because good ferry range greatly adds to the ease and speed with which we can deploy our aircraft anywhere in the world. The mobility of our air forces —and this is critically important—is increasingly important, not only to our strategic flexibility, but also to reduce our need for the base facilities which would otherwise be necessary.

It was this combination of requirements which led the party opposite, when in power, to develop the operational requirement for the TSR2. I have considered whether I could give the House some details of the operational requirement for the TSR2, but I have regretfully come to the conclusion that it would be a mistake to do so, for its own sake and because it might create a precedent which neither the present nor any future Government would wish to follow.

I can give some details of the performance of the Fl11K as it is now developing and I shall do so in a moment. What I want (to say now is that I think that the Opposition were right in requiring the special requirements they laid down for the TSR2, and it is still this requirement against which we must judge the F111K. In fact, on the whole, I think I am right in saying that the official Opposition, as distinct from the Liberal opposition, have contended, not that the requirement is not there, but that we need more than 50 F111Ks to fulfil it effectively.

It is the fact that they themselves planned to buy 158 TSR2s. The Conservative Government had to envisage buying a very large number of TSR2s for industrial reasons and, in the absence of any collaborative programme, they were unable to spread the production economically over a number of years. To have bought only 50 TSR2s would have meant a unit cost of something like £9 million per aircraft. It was only by buying more than they needed that, in fact, they could hope to justify the enormous expenditure on research and development. required.

We take a different view. On the best judgment we can make of the development of the military capability of potential enemies, we believe that the V-bombers will be adequate as tactical strike aircraft during the early years of the 1970s, provided that we have the minimum force of advanced aircraft with the type of specification I have been discussing. But, by the mid-1970s, we shall have to replace the V-bombers in this rôle by an aircraft with comparable perform- ance to the F111, and that is the rôle of the AFVG.

I do not deny that the F111K is an expensive programme—though, as I shall show, it is many hundreds of millions of £s cheaper than the programme we inherited—but I cannot accept the argument that these aircraft are so expensive that we would not be prepared or could not afford to use them. It is a mistake to get carried away here by unit costs. The fact is that the cost of these aircraft, though high, is not nearly so high as that of many other items the loss of which we must be prepared to contemplate—submarines, frigates, army units. Indeed, even allowing for R. and D. expenditure on the AFVG, and including the F111K credit-phased capital repayment, the whole programe will be at most about 4 per cent. of the annual defence budget in the 1970s. This is a premium we must be prepared to pay if we are to have this essential capability in the requisite numbers.

What is far more relevant is that we have satisfied ourselves, as a result of series of detailed scientifically-based studies, that this force, with aircraft of this specification, will be adequate to carry out the tasks which we envisage as potentially realistic for it in the 1970s. We must have equipment of an adequate standard at the right time when the lives of men are at stake. This is the basis of our whole policy.

Mr. Hugh Fraser

Perhaps the right hon. Gentleman will allow me to intervene in his very interesting argument to correct him on two points. He said that the former Conservative Government wanted to build 158 TSR2s, but that the Government agreed to build 110. Secondly, the right hon. Gentleman must remember that there was a need, and is one, for a replacement for the Canberra in Europe, using the smaller type of atomic bomb in the tactical rôle, and that is vital to the argument.

Mr. Healey

With respect, the programme which I inherited in my Ministry included 158 TSR2s. I have no doubt that the right hon. Gentleman will be able to develop his other point if he catches Mr. Speaker's eye.

All I would say in this phase, and I say it as much to my hon. Friends as to the Opposition, is that defence in the present age is appallingly expensive, and it is getting more expensive every year. That is why we in the present Government give such high priority to disarmament—[Interruption.] Hon. Members opposite do their party discredit by sniggering every time disarmament is mentioned. I would remind them that the right hon. Member for Streatham (Mr. Sandys) himself made disarmament the core of his own White Paper in 1957. We think that he was right to do so, even if he was wrong in regard to other aspects of defence policy.

The fact is that, until we can achieve some control of armaments, we must try to restrict our commitments and get maximum value for money in the weapons we need for the commitments which remain. But there is in every field a minimum level of performance which can only be fixed by the most thorough analysis of the potential threat below which a weapon is worse than useless. To provide our forces with equipment which is not sufficient for their tasks is not only to waste all the money thus expended, but also to waste human life; and I do not believe that any responsible Government would ever knowingly condemn its soldiers, sailors or airmen to death by acting in such a way.

I know that the House is interested to know about the current state of the project, how it is progressing, and to what extent it will be likely to meet our requirement. I will try to make my remarks brief. We have already given a great deal of information to the House, and the project has been under the continuous glare of publicity some of it inaccurate and malicious. On the other hand, to hon. Members who are interested in reading a good layman's summary, I would commend the article in "Flight International" of 30th March.

My staff and the Ministry of Technology have kept in constant close touch with the American Department of Defense and the main U.S. contractors—General Dynamics and Pratt and Whitney during the last two years. We have our own project team in the United States alongside the U.S.A.F. Systems Command and the contractor. Royal Air Force aircrew have flown the aircraft. Sir John Grandy, the newlyappointed Chief of the Air Staff, has flown the aircraft, and I hope that he will not mind my breaching the normal rules in this respect by quoting him as saying that flying this aircraft was to him a quantum jump like flying his very first jet, and that variable geometry gives a new capability to the aircraft which is a new dimension in flying. Royal Air Force technical personnel are currently working out detailed servicing arrangements and procedures.

All this may seem obvious, but I make these points because so many people seem to think that the Royal Air Force will be buying a pig in a poke about which it knows nothing. The fact is that we completed a very thorough review before the implementing sales order was signed last month. We satisfied ourselves that the aircraft could be expected to give the range, speed and weapon carrying capacity we require.

On range, even after allowing for the drag problem—on which the United States Air Force is confident it will recover the deficiencies—it will be at least 500 miles above the TSR2 requirement, and extra range is, of course, a great bonus and can always be exchanged for extra pay load. On speed and extra manoeuvrability, although I do not want to play down the problems arising from intake matching, we are confident that it will meet our requirements. I should explain that the problem is more serious in the context of the use of the aircraft as an interceptor; but, even so, American confidence can be seen from the scale of the programme on which they are embarking.

Mr. Victor Goodhew (St. Albans)

The Secretary of State said just now that the range of the aircraft was 500 miles greater than the TSR2 requirement. How does it compare with the TSR2 performance?

Mr. Healey

We never had a fully-developed TSR2, so it is difficult to say. I can say that the ferry range of this aircraft is substantially in excess of that planned even for the TSR2, and 500 miles in excess of the requirement laid down for the TSR2, which is another matter.

But we tend, when concentrating on these two aspects, to overlook the other parts of the whole aircraft system which are equally essential to the effectiveness and survivability of the aircraft, and which are of great importance to us when our numbers are comparatively few. I refer here to terrain following capability, on which the R. and D programme has been highly successful; the navigation-attack system where already on the Mark I avionics, greater accuracies than expected have been achieved, which gives great encouragement for the Mark II system; the ease of servicing and maintainability which is so important to the use of the aircraft from overseas bases, and where it will be vastly superior to the TSR2.

As regards bomb load, comparative capabilities are interesting. With its wings swept back, the F111K can carry a maximum load three times that of the Canberra and only slightly less than that of the Vulcan. With its wings unswept the F11l load is over five times that of the Canberra and more than one-and-half times that of the Vulcan. That, as the right hon. Member for Stafford and Stone (Mr. Hugh Fraser) knows, is a very formidable difference indeed.

We have good reason to be confident that the R.A.F. will get an aircraft which will meet its requirements. Moreover, by 1968—next year—it will be already in service in the United States Air Force and the Royal Australian Air Force. So there is a good chance that its initial teething troubles will be overcome by the time we take it. We currently plan to start delivery at the end of 1968, but we may ask to be allowed to take the aircraft a little later so as to be able to phase it with the introduction of some British systems which it is essential to have operating by the time when we aim to start operating the aircraft themselves. My hon. Friend will say something about one of the systems concerned when he winds up the debate. The delivery of the last aircraft will be as planned in the original schedule.

Mr. Powell

Did I understand the right hon. Gentleman to say, or to imply, that this aircraft would be in squadron service with other countries before it is with us?

Mr. Healey

Yes, certainly. It will be in service with the United States Air Force next year. I do not know what the Australian plans are for squadron service.

Mr. R. J. Maxwell-Hyslop (Tiverton)

If the engineer manufacturers are unable to get rid of the handling troubles which they do not know how to cure at the moment, will we postpone delivery until after the fix, or will we take it without satisfactory handling?

Mr. Healey

I have indicated that we shall not take the aircraft unless it meets our specifications.

Now I turn to the question of costs and the implications for the defence budget of our decision to cancel the TSR2 and to purchase a small number of F111s. Let me make clear what sort of costs we are talking about. I have seen some very misleading comparisons in the Press. The Daily Telegraph today, for example, draws some very weird and wonderful conclusions by comparing the figure for research development and production alone for the TSR2, a figure which was substantially lower than when we cancelled the aircraft, with a 10-year programme cost for the F111, which is nearly three times as high as the R.D. and P. costs. It is essential to compare like with like, although I do not blame any hon. Member for getting confused as this is very difficult. I hope, therefore, that the House will allow me to present as a whole this part of my speech. It is inevitably rather complex. Let me dispose of the point about bombs.

Our bomb stock will have to be modified for any supersonic aircraft. It would have to have been modified for the Royal Navy Phantoms which the previous Government were buying and the TSR2 and the AFVG or almost any combat bomber in the 1970s. Therefore, there is nothing peculiar about the F111 in this respect. I am sure that the right hon. Member for Stafford and Stone will inform the right hon. Member for Wolverhampton, Southwest more closely if he wishes.

As I have done in the past, I shall talk mainly of programme costs since it is not sufficient merely to concentrate on initial capital costs. By programme costs I mean the costs of research and development and production of the aircraft itself and its support equipment, the cost of initial spares and loan interest, together with the recurring costs of spares—petrol, oil and lubricants and squadron personnel—over a period of time. Necessarily at the outset of the programme there must be an element of estimating as regards some at least of the component parts of these programme costs; but this applies to both programmes, though, as I shall mention later, the budgetary risks in the TSR2 programme were considerably greater. Moreover, for reasons of defence budgeting, it may be desirable to vary from time to time the way in which payments are made under the American Credit Agreement.

As I said, we must relate costs to time-scale. I propose to compare the F111 and the TSR2 in three different ways with a different timescale in each. In the first I take the 15 year period from March, 1965—when we cancelled TSR2—to March, 1980. This is a long period but it allows me to take fully into account the changes we made in the forward plans for the tactical strike reconnaissance force—i.e. a small purchase of F111s, the retention of the V-bombers, and our complete planned buy of the Anglo-French VG in the strike rôle to replace the V-bombers and later the Buccaneers. On the TSR2 side of the equation it allows for 158 TSR2s as planned by the Conservative Government, and for the replacement of the RN Buccaneers; however, that might have been done in the TSR2 era. It also means that all the costs pre-1965 on the TSR2 can be excluded from each side, and on the F111 side I allow for all subsequent cancellation charges. Hon. Members will agree that this is a fair comparison, however we take it. I have done my calculations at current price levels and have, therefore, adjusted the early 1965 TSR2 figures by 10 per cent. This is a very moderate figure, in my view, as I shall make clear in the next stage of my speech.

What emerges is that over the 15 years from April, 1965, to March, 1980, the TSR2 programme as planned by the previous Administration and adjusted, as I have explained, would have cost over £700 million more than the cost of the programme we have adopted. [HON. MEMBERS: "Oh!"] I am giving the figures now. Of course, it is not possible to achieve perfect accuracy when looking at costs, but these are the best cost figures we have been able to work out; and the gross figures here are £1,700 million for the TSR2 programme—the programme costs over the whole period —as against £1,000 million of the F111K and the Anglo-French VG programme. This is a very sizeable figure indeed, going far beyond any area of doubt about estimating assumption. Readers of the Sunday Express may be interested to know that it represents 140 hospitals.

Sir Ian Orr-Ewing (Hendon, North) rose——

Mr. Healey

If I may complete this part of my speceh I will give way to the hon. Member later.

My second comparison is simpler. It is over 10 years; and in this I compare the programme costs of 50 F111s and 50 TSR2s to March, 1976, although for many reasons, as I have already said, 50 TSR2s would have been a very unrealistic programme involving a unit cost of some £9 million an aircraft. But I make the comparison nevertheless, because it allows me to establish in absolute terms comparative costs of our alternative solutions. Here over this 10-year period we come out with a saving of just under £300 million or 60 hospitals. Under these parameters the cost of 50 TSR2s comes out at £610 million as against £336 million for 50 F111s.

The figure I have given for programme costs of the 50 Fills is somewhat higher than that I gave a year ago for a number of reasons. First, we now plan to make certain payments within the 10-year period which previously fell outside it. Secondly, the figures include an element for contingencies, and for wage/ material inflation. Thirdly, the estimated cost of support items has increased mainly owing to the closer definition of British support equipment such as simulators and reconnaissance pods; and finally further interest will arise on the credit elements of all these changes. Further, only £10 million of the increase is in dollar expenditure, and the running cost element within this total has come down compared with our estimates a year ago, because we are now able to quantify the advantages of large-scale American production in the price we shall pay for spares. Finally, the new estimate for F111 costs includes a figure for cancellation charges on the TSR2.

My third comparison brings the time scale even closer to the present. Almost £200 million of this £300 million difference over the next 10 years arises in the two-year period from 1968 to 1970, at a time when the R.A.F. programme in other fields—ground attack, transport, maritime—is also very heavily committed and would have been very much more heavily committed still if we had gone on with the P1 154 and the HS681.

In short, however we look at it, whatever period we take, and whatever comparison we take, the solution we have adopted has very significant defence budget advantages.

Now a word about the two items of critical importance to the comparisons—the TSR2 R, D and production costs, and the comparable arrangements for the F111. This is where the guesses made by the right hon. Gentleman go wildly astray. I am puzzled by the emphasis some hon. Members opposite have placed on the wage/material cost inflation in the F111 programme. I am even more puzzled by the suggestion that in some sense this has been a deadly secret, a suggestion made in a melodramatic article by Mr. Chapman Pincher in the Daily Express on 22nd April. This type of provision is normal in contract procedures, and it was referred to in the Daily Express itself as long ago as 19th August last year, in an article from its Washington correspondent, Mr. Ross Mark. I can only assume that Mr. Pincher spends so much time reading other people's writings that he does not have very much time to read his own newspaper. The Tory Government accepted such provision in the case of their own purchase of Phantoms from the United States, although they said nothing to the House about it, and I do not complain about that. It is quite a normal thing.

Now let us see, however, what the Tory Government did on the TSR2. Here I would refer the House to the Report of the Comptroller and Auditor General on the Ministry of Aviation account for 1964–65.The Report reads: The contractor submitted prices based on target costs which, if the targets had been achieved, would have reduced the price for development and production to £650 million but provided no upper limit to the Exchequer's liability. In fact, as I told the House two years ago, the manufacturers were totally unable to offer a fixed price delivery. Any further substantial cost increase, not only for inflation reasons, but also because of developmental difficulties, would have fallen on the British Government alone. I think I am being very generous to the TSR2 programme in accepting the March 1965 estimate of cost for purposes of my comparison, for in 1965 the project had already escalated by £400 million, or 150 per cent., in the previous four years and had at least three more years to go before delivery started. In fact, the original estimate for R and D for the TSR2 made by the Tory Government was £48 million. It had risen to £280 million by the time the project was cancelled, with three years still to go, in March, 1965.

Let us set this total of unlimited liability on the TSR2 programme against the arrangements we have made for the F111. We have a ceiling price of £2.1 million on the basic aircraft, subject to the adjustment for escalation in wage and material costs from April, 1965. The point I was trying to make to the right hon. Gentleman was that if our wage and material costs escalate similarly, as they have broadly ever since the war, then in fact the cost to us in terms of real resources will not change, because we shall be paying with money which buys less in British goods. Although we are paying a higher amount, the two things will balance out. If the right hon. Gentleman tries to think about it for a few moments, he will see that I am right on that.

For the cost of the special British features we obtained up-to-date information in March before proceeding——

Mr. Stephen Hastings (Mid-Bedfordshire) rose——

Mr. Healey

I ask the hon. Gentleman to let me finish the cost part. Then I will give way to the two hon. Members opposite who have sought to interrupt me.

We obtained up-to-date information before proceeding with the order for the balance of 40 aircraft and will soon have agreed a fixed ceiling. When I say "soon", I am not talking about years hence, as the right hon. Gentleman attempted to suggest in a quotation from Aviation Week. I am talking about the next month or so.

The information we obtained in March confirmed our earlier view that, ignoring the inflation adjustment to the basic ceiling, we could be quite satisfied that the unit cost of the F111K with the British equipment continued to be about £2½ million, as we had always said.

The key difference between this position and that which faced us in the TSR2 case lies in the degree of financial risk that lay before us. I cannot believe that anybody who has any experience of cost escalation in real terms in a new aircraft programme—some hon. Members obviously have a lot of experience of this; I have just quoted one example—can deny that our arrangement on the F111 severely restricts our liability and confines the degree of financial risk to the very limited extent of money inflation.

Compare this with the steep increases in the TSR2 programme over the years, which cannot be explained away by changes in either the operational requirement, which stayed very stable, or in money values. Moreover, as I have indicated, there would have been no upper limit to the Exchequer's liability in the face of the likelihood of further development difficulties in such a complex programme. It baffles the imagination to assume, as I have generously assumed in presenting this argument, that over the following two years of the TSR2 programme there would have been none of the sorts of difficulties we had in the first four years. On the other hand, whatever work has to be done to overcome the present F111 difficulties will not affect the ceiling price. I submit that, for such a major project, this represents as good a control over our ultimate liability as we could ever hope to get.

It is no good hon. Members opposite taking refuge in the fact that there is no ceiling price for spares. Here again, our liability is limited, although in a different way, in that we shall be able, as with the other American aircraft we are buying, to take advantage of the American co-operative logistics system under which we pay the same price as the United States Air Force. This provides us with a sound safeguard as regards price and is the straight answer to any critics who, on the one hand, accept that our arrangement on the aircraft is a good one but, on the other, carp at it by suggesting that we are wide open on the spares front.

The fact is that we shall buy at the same price as the American Air Force, with the advantage of lower individual prices because of mass production to meet its requirements. We shall save on stock holding costs, too, because we shall be buying from American Air Force stocks, but we shall not be compelled to accept American Air Force scales for spares: we shall fix our own.

Besides the normal provision for wage/material cost inflation, there is only one other way in which the cost of this aircraft might conceivably increase. The special modifications we require for the Royal Air Force are exceptions to the basic ceiling price. As I have explained, they will be covered in the supplemental ceiling in a few weeks' time, and we are satisfied that they will bring the total figure up to that of £2½ million which was our original target.

It is not unlikely that either the American Air Force or ourselves might decide at some stage in the aircraft's operation or development to introduce some further modification. This would obviously be an extra item for which we should pay if we thought it worthwhile. If the American Air Force made a proposal which we did not think would be of value to us, we could reject it, though for production reasons the aircraft we received might have it installed, even though we were not paying for it.

The 10-year programme cost figures which I have quoted include a contingency to cover this possibility, but there is no evidence available at present to suggest that this contingency is likely to arise. The really important point—I stress this to the House—is that the cost of overcoming the present development difficulties in the United States will not—I repeat, not—affect the basic ceiling price which we have agreed.

Sir Ian Orr-Ewing rose——

Mr. Hastings rose——

Mr. Healey

I now give way.

Mr. Deputy Speaker (Mr. Sydney Irving)

Will the right hon. Gentleman indicate to which hon. Gentleman he gives way?

Mr. Healey

I give way to the first of the two hon. Gentlemen who interrupted me.

Sir Ian Orr-Ewing

These figures are interesting, but it is impossible to make comparisons, because the right hon. Gentleman does not break down the items within each category. In comparing these two sets of figures, how much has the right hon. Gentleman allowed for R and D on the AFVG during this time scale? He told us that he had allowed for this. How much has been allowed?

Mr. Healey

In broad terms, I allowed up to £150 million falling on Britain for research and development on the AFVG, but, as I said—I do not want to mislead the House here—the first com parison, the one which I made on the 15-year cost period, inevitably involves greater degrees of tolerance in cost estimating than the one over the next 10 years when we are dealing much more with quantities of which we have experience and about which we know. The point I make on the 15-year comparison, which is the only one into which the AFVG can sensibly be brought as part of the equation, is that the cost difference there is so enormous that no minor adjustment of the estimating conventions could enable hon. Members opposite to claim that there was not an enormous saving, of many hundreds of millions of £s, on our programme as against the one which we inherited.

Mr. Tam Dalyell (West Lothian)

A factual point: does my right hon. Friend assume £150 million for research and development on the part of the French? We are going 50–50 now, are we not?

Mr. Healey

For heaven's sake—with respect, I do not include in the British programme costs, costs which the French Government or any other Government will carry.

Mr. Dalyell

They carry £150 million, too, do they?

Mr. Healey

I am assuming that there is an equal share——

Mr. Dalyell

Three hundred million?

Mr. Healey

Yes, but I do not believe that it is likely to be anything near as high as that. The figures to which I have given support in the House are something like £100 million to £125 million as the estimated programme costs. I am not prepared to assert this at the moment, but I think that those figures are more in the range of tolerance. However, as I say, looking this far ahead, one inevitably runs into uncertainties on either side of the programme, which can throw the figures out to some extent, though only marginally.

Mr. Hastings

The right hon. Gentleman made quite a point of escalation in research and development costs for the TSR2 and, of course, they did escalate, but, to put the matter in proportion, will he not agree—this is certainly my impression—that the Armed Services Committee of the Congress believed that the escalation for the F111, on a comparable basis, was of the order of 50 per cent.?

Mr. Healey

I do not know what they think, but, if we take 50 per cent. for the estimated difference, we do not contribute towards that because we have a ceiling price on the basic aircraft, and that compares with an escalation of over 500 per cent. on the TSR2. With respect, the hon. Gentleman, who has made such a point of championing the TSR2, can take no comfort from that comparison. I only wish that the TSR2 programme had been subject to the same sort of cost control as the F111 in the United States.

I shall leave my hon. Friend the Minister of State, Ministry of Technology, to deal with questions on the offset, which, I think, the right hon. Gentleman did not raise but on which questions may be raised later in the debate. He will deal also with questions which may arise on the impact of the programme on the aircraft industry. I now summarise what I have said so far by saying that we have been guided by three main considerations: first, to provide the Royal Air Force with the aircraft it needs to deter aggression and to keep the peace; second, to maintain the necessary level of technological expertise in the aircraft industry—my hon. Friend will deal with that when he winds up; third, and critically important, to keep the taxpayer's insurance premium to a minimum.

The present aircraft programme meets all these three requirements. The TSR2 would have been a fine aircraft. We have never denied that cost was the problem there. But the F111 is its equal: militarily there was little to choose between them. The TSR2 priced itself out of existence. This is not surprising. It is a fact of economic life which we have to face that no country of the size of ours can build aircraft of this complexity unless assured of a large market. The review of the place of the aircraft industry in the economy, which we undertook when we came into office, was long overdue. The Plowden Report has now confirmed that future requirements for large and complex weapons systems should be developed collaboratively, built under licence, or bought from the United States. Our country simply cannot afford a purely domestic venture like the TSR2.

This is a difficult fact to face, but face it we must. This Government at least has had the courage to face it when there was still time to save the taxpayer hundreds of millions of £s which otherwise might have gone down the drain. Since we had to replace the Canberra by 1970, there would be no time then to collaborate with anyone. It was fortunate for us that the Americans had under development the F111 designed to a requirement almost identical with that for the Canberra replacement. The purchase of the aircraft met the short-term aim of replacing the Canberras by 1970, at considerable saving to the taxpayer. I believe that the balance of all the military, industrial and financial arguments is firmly on the side of the programme which we have laid down.

I make this point to some hon. Members opposite. I know, personally, that the Royal Air Force, at the highest levels, has every confidence in the F111. They know it well. They have flown it. It is indisputably the finest strike aircraft in the world. Its quality will be seen when it enters R.A.F. service. Meanwhile, let me make one more point, and that strongly.

Ill-informed criticism of this aircraft, criticism which often originates in the vested interest of people with commercial considerations at heart, serves no one's interests but our enemies'. Worse, it erodes the confidence and morale of the young airmen who will be called upon to fly it. They will be operating a revolutionary machine performing on the frontiers of aerodynamic knowledge. They will be entrusted with very expensive apparatus, shouldering great responsibilities. Their morale is at stake.

We, too, have responsibilities, to see that the aircrew are backed by our own confidence and by our best efforts for their safety and success. To attempt to score political points by inaccurate or malicious comments on a fine aircraft harms more than the reputation of the hon. Member who attempts it; it is a blow against the Royal Air Force, our defence interests, and ourselves.

I have covered most of the points of substance raised by the right hon. Gentleman and my hon. Friend will deal with the rest in winding up. In so far as it is possible to distinguish the shape of the wood among all the trees, the right hon. Gentleman's main argument against the Government seemed to be that we were not providing enough information on the costs and performance of the aircraft, and, second, that in buying the aircraft we were imposing an unjustified financial load on the taxpayer.

Both points are without substance, as I have tried to show. I have given a great mass of detailed information on the cost and specification of the F111K, as I have sought to do on all major items of equipment for all three Services since I have been in my present office. Evidently, the appetite grows on what it feeds on, and hon. Members would like more. Whenever I feel I can give more information without damaging our security, I shall do so, but I confess to a feeling of disappointment that, so often, the availability of much more information on these matters encourages some hon. Members to concentrate far too much on minor questions of detail at the expense of the major issues of defence and foreign policy on which I believe it is the duty of the House to comment.

But for a front bench Member of the party opposite to criticise me for not giving more information requires a truly staggering effrontery. Let us take their own behaviour on the TSR2 and compare it with what the Comptroller and Auditor General was able to unearth in his Report on the Civil Appropriation Accounts for 1964–65. Here are some examples.

The 1960 Statement on Defence states that, considerable progress has been made with the detailed design of the TSR2 aircraft for the strike and reconnaissance rôle. That is all. It does not say that the estimated development cost was £80 million to £90 million covering work up to full release in all rôles in 1966. I am not surprised that some hon. Members feel it healthier to leave the Chamber at this point. Neither does it say that the Ministry of Aviation had warned the Treasury that it would be prudent to assume that the estimated cost would rise when more detailed estimates became available. We had to wait five years for this information, and it was produced not by the party opposite, but by the Comptroller and Auditor-General.

The 1961 Defence White Paper was silent on the subject. The 1962 Report on Defence said: the TSR2, which is planned to come into service in the mid-sixties, will make an important contribution in this rôle. —that is, strike and recce. One notices that, this time, there is uncertainty about the date compared with the earlier reference to 1966, and that was just as well since, within a month or so of publication, the cost of development was up to £137 million, and full release had gone back to the latter part of 1967. We did not learn that from hon. and right hon. Gentlemen opposite. We learnt it three years later from the Comptroller and Auditor General.

The 1963 White Paper said nothing about the TSR2 or anything else—it was only 18 lines in all. But paragraph 12 of the R.A.F. memorandum has brave words about the potentialities and the importance of the aircraft. Let us compare these with the Comptroller and Auditor General's Report. By now the Finance and Contracts Monitoring Committee … appeared to have been unable to anticipate or give warning of any of the successive major increases in the contractor's estimated costs. Yet in January, 1963 the estimate of development costs was up to £175-£200 million, with full release at the end of 1968. But we still had to wait two years to get that information from the Comptroller and Auditor General.

The 1964 White Paper, the last the party opposite produced, again had some brave words. It said in paragraph 165: The most notable example of such progress"— in technology— is the TSR2—which will make its first flight shortly. This aircraft promises to be one of the most potent and flexible instruments of military power yet devised …". A month before this the development cost had gone up to £240–£260 million, the higher figure allowing for a further possible 12 to 18 months' delay on the completion of the programme. The year 1966 had become virtually 1970 but there was not a word of that to the House or country from the party opposite when in power.

For the representatives of a party with the TSR2 in its record to accuse the present Government of inadequate care for the taxpayers' money and for the rights of Parliament takes some nerve. When I look at the right hon. Gentleman's record of consistent miscalculation in hospital programmes when he was Minister of Health, I wonder that he has the gall to face the House as he did this afternoon. Of course, the cost of the F111K is high, but, as I have shown, over the next 15 years our programme for tactical strike and reconnaissance will cost £700 million less than that of the party opposite. This is only one example of our concern with cost compared with the profligate extravagance of the party opposite.

As I showed in the defence debate, in our first three years of office we have cut £750 million off the firm programme of the previous Administration, a programme which was costed in detail by Mr. Thorneycroft, and whose costs were checked and accepted by the right hon. Member for Barnet (Mr. Maudling) while he was Chancellor of the Exchequer. But if we were to follow the advice of the right hon. Member for Wolverhampton, South-West—he is, after all, the official defence spokesman of the Opposition—even the extravagance of the previous Administration would pale into insignificance by comparison. On top of opposing every single cut we have made in his party's defence programme, he has told us we must have an Army in being equal in armament, training and philosophy to any other in Europe, and capable of fighting a prolonged conventional war on the continent. Even assuming the other allies played their part—and there is no reason for assuming that—this would mean Britain having to produce well over the four divisions of some 77,000 men promised to N.A.T.O. by the Conservative Government in 1954. It would mean a return to conscription and an increase in the defence budget of at least £30 million a year.

I see that the right hon. Gentleman has now come out in the Sunday Times in favour of pitting ourselves against the whole of the Soviet fleet in a new Battle of the Atlantic. If we took seriously the views he expressed in the Sunday Times only a week ago, we should have to build perhaps another 30 nuclear attack submarines at a cost of close on £1,000 million, not to speak of expanding enormously our fleet of surface submarine hunters to meet the vast Russian fleet of conventional submarines.

If there is any consistent thinking behind these statements, the only possible criticism of the F111K purchase which hon. Members opposite could make, is that we should be buying three or four times as many. This would complete their picture of the future Britain: a nation in arms—bust to the wide. I ask the House to reject their Motion.

5.24 p.m.

Mr. Hugh Fraser (Stafford and Stone)

I do not want to delay the House long, but I should like just to remark on a few points made by the Secretary of State for Defence in the more reasonable part of his speech, before it turned into an acid and vituperative attack on right hon. Members on this side of the House.

It is unfortunate that, having spent so much good time converting those behind him to the need for a tactical strike reconnaissance rôle and heavy expenditure on aircraft, he should have turned on my right hon. Friends in the last moments of his speech. If the Government are determined to buy the F111 now, everyone on both sides of the House wishes to see that aircraft a success. That is not in question. What is in question is some of the things the right hon. Gentleman said this afternoon in the general policy which he laid out.

Everyone who has studied these matters is agreed on the need for a strike reconnaissance aircraft. But there are enormous weaknesses in the right hon. Gentleman's programme between now and 1970–80 which are for the consideration of the House. He said that instead of the TSR2 programme, whether it be of 110 or 158 aircraft, we should now have 50 F111s, plus the vulcan force—what remains of it—plus the AFVG, and that this would give us a tactical strike reconnaissance force suitable to deal with all the Government's various commitments overseas.

I have only two points to make immediately, and I hope that they will be answered by the hon. Gentleman when he replies to the debate. First, there was no mention in the right hon. Gentleman's speech of the Canberra replacement in Europe, which is essential to the support of B.A.O.R., with a tactical nuclear weapon. He talked about the certainty of the AFVG, but over the past few years I have constantly intervened in defence or aircraft debates on that subject and it is clear that the British and French Air Staffs are diametrically opposed. The French want a fighter-interceptor and we want a strike reconnaissance plane continuation of the TSR2 rôle—I hope that the hon. Gentleman will listen to me for a moment. He must know his right hon. Friend's views very well.

It is absolutely essential to state that difference, for otherwise the figures of £700 million between the two programmes are based on non-existent "facts" and aircraft which at the moment are unlikely to fly. That is the main confusion, and the Minister knows it full well. The AFVG is a paper aeroplane.

My other point concerns the costs, whether one takes those for 1965–80, 1965–75, 1968–78. The Minister suggested that the late Government were entered on a commitment beyond reason and absolutely without limit. I believe that that is wrong and a false presentation of the case. I think that the figures which he inherited were for 110 TSR2s, which had been supported by the Cabinet. As the last Secretary of State for Air, I supported a rather higher figure. If he looks at the costs worked out, whether those before the Public Accounts Committee or inside his own Department, he will see that the claims he has made that this Government would save about £1,200 million in aircraft procurement for this country are false and need to be most carefully studied.

The other and much more important point is for this House and the country to review what advantage will be given by the sort of programme the right hon. Gentleman is pursuing. I find myself in accord with him on the question of the aircraft carrier. I believe that he has taken a bold and right decision. I know that many of my right hon. and hon. Friends do not agree with me on this. I fought that battle in my own way in my own day. But that decision having been taken, it surely stands to reason that the country must have the right type of aircraft and in sufficient numbers, and the trouble we find today is that the commitments we have overseas—they have in no way diminished—must stand more and more upon the ability of the R.A.F. to support them.

Whatever the right hon. Gentleman may have done in saving money—and many of these figures are questionable—what we are left with is an Air Force with insufficient numbers in strike and reconnaissance aircraft, with paper aircraft which we are not clear will ever fly, a Phantom aircraft which will only take off from very long runways and in close support is not as good as it should be, and a vertical take off aircraft which, remarkable though it may be, will not have sufficient armament to fly on its own.

This is the heritage that the right hon. Gentleman has given to the defence of Britain. He has done many good things. He is a bold man. But to suggest to the country that 50 F111Ks plus the Vulcan bombers, which are going out anyway, plus an aircraft not yet agreed to by the Chiefs of Staff here or in France, are enough is not justified by our defence needs.

5.32 p.m.

Mr. E. S. Bishop (Newark)

It is a pleasure to address the House again after an enforced silence on the Front Bench. One of the reasons that I returned to the back benches was that I would be able to answer some of the things that I had to tolerate in silence from the Opposition. I suspect that the right hon. Member for Wolverhampton, South-West (Mr. Powell) was more anxious to condemn our decision to get rid of the TSR2 than he was to get elucidation of the F111K situation. We are grateful to him at least for initiating the debate because it has enabled my right hon. Friend the Defence Secretary to give an explanation of many conflicting statements made by the Opposition and the Press.

We would all pay tribute to my right hon. Friend on two scores. The first is the way in which he has tried to relate our commitments and defence policy to the economic situation. The second is the detailed way in which he has answered questions today. I last addressed the House in a major debate on 13th December, 1965. It was on the subject of the F111K and I asked a number of questions. The first was whether the Government needed an aircraft to replace the TSR2.

When one discusses defence projects and rôles, strategy and needs, one has to have some idea of what the commitments are in various parts of the world and one is conscious of the fact that the Opposition were responsible in Government for piling up the commitments and liabilities which the present Government are desperately trying to curtail. In the light of the defence needs of the time and of the period ahead—possibly eight to ten years—my right hon. Friend has shouldered a very great task.

As I have said, I asked in that debate whether it was necessary to replace the TSR2 at all. I asked whether it was not possible to offset some of the rôles and responsibilities for which it was intended and whether the operational requirements were not excessive for the needs of the time. I asked whether the F111K was not too sophisticated and whether the Buccaneer or the Spey/ Mirage would not be able to fulfil the job.

Like many of my hon. Friends, I deplored the situation in which the Government felt obliged to buy American aircraft. I regretted having to spend dollars on them. I thought that we should do our utmost to offset the dollar cost by insisting that the United States purchased some of our products in order to bring about a balance of cost. The Government, then and now, have been faced with the position in which there are many pressing requirements at home in a difficult economic situation. We need to curtail our liabilities and relate them to our economic ability to pay for the things we need. All these points were relevant in 1965 and are relevant today.

Most of us deplored the need to buy American aircraft because this was also an advertisement for American goods as against our own and could have done great harm, even with the substantial offsets which have been brought about. But, having said that, I must say that it is gross impertinence of the Opposition to deplore our decision to buy American aircraft—which is what they are really doing—when it was they who, when in office, committed us to this great liability. Furthermore, one must compare their ordering of the Phantom, the CI30 and other aircraft, which started us on the slippery slope.

Mr. Maxwell-Hyslop

How does the hon. Gentleman allege that we ordered the C130? That was one of the earlier follies of the present Government.

Mr. Bishop

The Conservative Government, either by ordering American aircraft direct or by leaving behind deficiencies in the British aircraft programme, made it essential for the Government who were to succeed—I use that word in the two ways—to order American aircraft. The fact is that the Conservative Government, in office for 13 years, should have reviewed the position long before. I remind the Opposition that their stewardship led Sir Roy Dobson, Chairman of Hawker Siddleley, to say: the Conservatives just wouldn't make up their minds about anything; they just waffled. That is still the situation with the party opposite. They can present no genuine alternative to the Government's policy. It is inconsistent for any party responsible for the cancellation of at least 26 aircraft projects while they were in power, at a cost of at least £300 million, to attempt a minor censure of the present Government's policy. We know the immense problems before my right hon. Friend. He has to estimate our defence rôle and decide the strategy. He must decide on what is needed to fulfil that rôle and anticipate our needs eight or ten years ahead. He must decide on the specifications—whether short range, long range or medium range, high level or low level, subsonic or supersonic—and all these other technical aspects so as to ensure, that, when the time should come, the aircraft are ready for their rôle. The weapons we need and the strategy we employ are of great importance to our country. We shall need advanced aircraft.

When the decision had to be taken on the TSR2, the Government knew very well that the aircraft would have been ready too late and at too great a cost. For good or ill the choice had to fall on the FIIIK on the ground that it would be ready much more quickly and at a considerably lower cost. The figures given by my right hon. Friend today fully confirm that point of view and the forecast made at the time.

At the time, some of my hon. Friends and I suggested that the Government should give serious consideration to the alternatives of the Buccaneer and the Spey/Mirage. It was suggested that the Spey engine could be put into the Mirage. All these matters of "know-how" and experience are important if we are to make the right decision in the long run. We realised, of course, that we could not just take an engine from the Mirage and hope to produce what we wanted in a very short time. It is very important to bear in mind when discussing and assessing aircraft needs that an aircraft designed for one rôle cannot be adapted to fulfil the needs of another rôle in a short time and at no great cost. With the Spey/Mirage, engines would have had to be fitted and the centre of gravity would have been affected as would the centre sections, the nacelles and the aerodynamic features and much else. In the circumstances, deplorable though it was, we were forced to buy American aircraft, and the Government did the only thing possible to guarantee that the operational requirements would be met in the early 1970s.

In deciding on the replacement for the Canberra, the Government had to consider three major factors. There was, first, the Royal Air Force, and I am sure that we all agree that the R.A.F. ought to have the best possible aircraft and weapons at the lowest possible cost to carry out its rôle. Secondly, it is important in future as in the past for the Government at all times to consider the effect of their policies on the British aircraft industry. Those are two basic considerations in matters of this sort. Thirdly, at the same time as we were condemned by the Opposition for cancelling one or two other British projects, we all know that had those projects continued, the sought-after Anglo-French collaboration which is now a reality would not have been possible. The curtailment of the TSR2 programme has resulted, as my right hon. Friend has said, in substantial savings and in ensuring that we get the specification needed and that it is available at the right time.

My right hon. Friend made one or two points which are most important to total costs. The defence correspondent of The Times recently made a useful comment when he said on operating costs that, given the figures for the F111 and the AFVG, the cost of the basic aircraft was about half the cost of keeping it operational for ten years. I am pleased to note that the Government are at last doing something which was not done by their predecessors and which is to pay increasing attention to the reliability and maintenance of the aircraft which they order.

One of the examples is that to change (he engines of the TSR2 would have taken twelve times as long as to change the engines of the F111.

Mr. Maxwell-Hyslop

Is it not one of the most depressing features of the F111 that the engines will need to be changed consistently? Is it not a thoroughly unreliable engine which has not yet been put into a condition which makes the aircraft safe to fly?

Mr. Bishop

The fact that it can be changed much more easily is an added attraction. The hon. Member is falling for the view—if that is so, and I do not suggest that it is—that by the time we get this aircraft, some of the development and research snags will not have been ironed out. Basically, the F1 aircraft will be much more easily kept operational than would have been the TSR2, and that is most important.

The Motion, which appears to be concerned about the Government's alleged inconsistency, is an impertinence. What is more inconsistent than that, having been in power for 13 years, the Conservative Party should have ordered no fewer than 26 aircraft which were later cancelled? What about the inconsistency of the Conservatives in committing us to great expenditure, with commitments running to hundreds of millions of £s a year, at a time when they realised that, because of the economic consequences, the country could not afford to pay for all that? The only consistency of the Opposition in this matter has been their own inconsistency.

5.44 p.m.

Mr. Victor Goodhew (St. Albans)

I was interested to hear the hon. Member for Newark (Mr. Bishop) discussing the possibility of the TSR2 being too late as well as too expensive when the Prime Minister made it clear that this was not so. The Prime Minister said: … the situation which we inherited last October was that the supersonic bomber which they finally put into the programme—the TSR2—could, at the earliest, not be in service until 1968".—[OFFICIAL REPORT, 4th March, 1965; Vol. 707, c. 1557.] If that was the Prime Minister's estimate, it was no doubt intended to be pessimistic, but that would still be a year earlier than we can possibly have the F111. The hon. Gentleman is quite wrong.

The Secretary of State's cynicism knows no bounds in that he has lectured us about upholding the morale of young airmen when he is the man who has put the future of the whole R.A.F. in jeopardy, when it was he who cancelled the TSR2 and then the HS681 and then the P1154, and then left long gaps before making any decision about their replacement. It is hard to imagine anything more cynical than that. During the course of his speech he made some remarks about the purchase of the F111 preserving and strengthening the British aircraft industry. How the right hon. Gentleman can cancel the TSR2 and the other two projects which I have mentioned and then talk of strengthening the aircraft industry by buying American equipment is beyond my comprehension.

The purchase of the F111 was first mooted in a most unorthodox manner. It was mooted first in the course of a Budget statement and not in a defence debate. This surely should have been a warning to all concerned with the defence of the country's security and interests. The purchase of the F111 did not stem from a decision by the Chief of Air Staff, or by the Secretary of State for Defence, or by the Minister of Aviation of the time, but from a decision of the Chancellor of the Exchequer to persuade the Cabinet to cancel and destroy the TSR2 for purely political reasons. This is where it all started. The Chancellor wanted to show what was alleged to be a saving in defence expenditure, an immediate saving, and he did it without thought to the final cost of any replacement and without thought of the devastating implications for the effectiveness of the Royal Air Force. If the Secretary of State had listened to his Service advisers of that time and if he had had the moral courage, he would have resigned in the face of such an irresponsible and catastrophic decision.

The TSR2 was designed to meet the R.A.F.'s requirements. It had been proved in the course of development and it had not merely come up to, but had exceeded expectations. It was flying and it had cleared all the major hurdles in its development programme with unprecedented ease. The R.A.F. was convinced of its supremacy as an advanced tactical/strike and reconnaissance aircraft. A major part of the research and development expenditure had been met and there was no reason to suppose that the aircraft would not be in squadron service on time.

The Secretary of State, the man whose prime duty is to see that the Services are equipped with weapons which will enable them to carry out the various tasks allotted to them, stood idly by while the TSR2 was not just cancelled but destroyed, and himself announced the option for the purchase of the F111 A. What a miserable and disgraceful history! It is no wonder that the right hon. Gentleman now finds it necessary to go travelling round the world trying in vain to convince the Services and our Allies that they should have confidence in him.

I was interested to read an article in the Daily Telegraph today by Air Commodore Donaldson in which he said: To most of the officers I have spoken to recently it seems that although there is great talk of a mammoth re-equipment programme the R.A.F's strength is in fact being whittled down month by month by the Labour Government without regard to the country's global commitments, or the part the R.A.F. is expected to play in safeguarding British interests abroad". I do not suppose that any hon. Member who has visited R.A.F. stations at home or abroad would dissent from that point of view. This is the experience of hon. Members on this side of the House and I have no doubt that the same things would be said to hon. Members opposite if they called on the R.A.F.

Mr. Lubbock

It has not been said to me.

Mr. Goodhew

The hon. Member for Orpington (Mr. Lubbock) dissents. He thinks that the R.A.F. are very happy with everything. I shall be very glad to learn from him in due course what they are so happy about.

Even in his announcement about the F111A option—made, incidentally, in a Budget debate on 6th April, 1965—the Minister of Defence used language which was calculated to mislead the House and the country. As reported in column 331, he said, The nature of the option on the F-111A is such that Her Majesty's Government have until the end of this year to decide whether to take it up. Any initial order would be a very small number for training purposes. It would not be necessary for Her Majesty's Government to place a follow-up order until as late as April, 1967."—[OFFICIAL REPORT. 6th April, 1965; Vol. 710, c. 331.] Hon. Members should note that phrase—only a very small number required for training purposes initially. Should the House consider this so small, ten aircraft at £25 million? Having purchased those ten aircraft for at least £25 million, would it then have been possible not to place a follow-up order? Would there have been any point in buying ten aircraft for training purposes if we did not intend later to order more? All this is the type of verbiage used by the Secretary of State for Defence over and over again carefully calculated to mislead the House and to conceal the size of the likely commitment.

This cunning concealment of the extent of the commitment has continued ever since the first announcement in April, 1965. Statements were made to the effect that the maximum price had been agreed when in fact it had not been agreed. We now know that in fact this is not a ceiling price because it has to take account of American escalation. We had a categorical statement that the order for the 40 F-111K's would not be placed until the supplemental maximum price had been agreed. We now know not only that this would not have been a true maximum supplemental price but also that the aircraft have been ordered without any such agreement.

Furthermore, the Minister has constantly compared the cost of the F-111 programme with the cost of the TSR2 programme. He excelled himself today. He introduced so much. He introduced the Anglo-French variable geometry aircraft and insisted that the figures which he gave included the planned buy of Anglo-French V.G. aircraft. But when I inquired a week or so ago how many we planned to buy, he asked how he could possibly answer that when he did not know what the aeroplane would be and how much it would cost. Yet today he told us that this aircraft is included in some of the figures which he gave. He talked about V-bombers, Buccaneers and all sorts of things which we have not normally considered to be part of this alternative purchase, which is what we are trying to get at. It was clear that he believes that if he gets enough balls into the air, juggling happily, no one will see what he is up to. I am certain that the figures which he has given today, the global sums, all along the line were not calculated to enable us to see what was behind it all but were calculated to mislead us, just as we have been mislead by practically everything else which has been said about this programme in the past.

We shall not know for a long time what is the cost of this change from the TSR2 to the alternative, but no doubt in time we shall learn, and I suspect that we shall find that it was a very extravagant change. We do not even know whether we are to have the Anglo-French variable geometry aircraft. We do not even know what its specifications will be if we have it, and we do not even know what its cost is likely to be. How on earth the right hon. Gentleman can seriously suggest that the figures given as global sums by him can mean anything, I do not know.

He has persistently and deliberately sought to mislead the House and the country on the whole question of costs, and I am sure that he has done so because even he is beginning to realise just what he has done. He is beginning to realise that the Government have made a most catastrophic error in cancelling the TSR2 and having it destroyed, together with the jigs and tools, so that he has placed himself in a position in which no business man would ever place himself—that of having to accept what the Americans offer him. He is now terrified of the financial implications as well as of the operational implications.

What are the operational implications of this change? Here, again, the Minister has done his best to conceal the facts. On 13th December, 1965, as reported in c. 915 of the OFFICIAL REPORT, he said, This does not involve any substantial down-grading of the TSR2's performance, though I must make it clear that in many respects the F111A is superior to the TSR2, particularly in radius of action and flexibility."—[OFFICIAL REPORT, 13th December 1965; Vol. 722, c. 915.] Why did he not tell us how insubstantial was the down grading of the TSR2 performance? Why did he not tell us in which field the F111 is inferior to the TSR2? He has not told us even today. On 16th November, 1966, as reported in c. 423 of the OFFICIAL REPORT, he said, In all respects the performance of the F111K is superior to the requirement for the TSR2."—[OFFICIAL REPORT, 16th November 1966; Vol. 735, c. 423.] This, again, is juggling with words—to compare performance with requirements. He should have been comparing the performance of the F111 with the performance or likely performance of the TSR2. When I tackled him on this point today, he brushed it aside by saying that he could not tell us what the performance of the TSR2 would have been. But he could have told us what it had already achieved in a very successful development and what it could possibly have reached or should have reached in the full time of its development.

This can mean only one thing—that in practice the performance of the TSR2 was superior to the requirements. If this had not been so, the Minister would have told us that the performance of the F111 was superior to the performance of the TSR2. In fact he was careful not to say that. I suspect that it means that the F111 is in fact inferior to the TSR2 in performance, even if there is not a substantial difference. What a juggling of words to conceal the facts.

As my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) pointed out, we had a higher standard of honesty from the other place when we were told by the Minister without Portfolio on 6th April that we have had definite assurances"— for whatever these may be worth— that the aircraft will meet the R.A.F.'s minimum requirements".—[OFFICIAL REPORT, House of Lords, 6th April, 1967; Vol. 281, c. 1072.] This can mean only that there has been a downgrading and that the R.A.F. are being passed off with second-best. I suspect that, having been duped into accepting the cancellation of the TSR2 in the belief that they were to get 110 F111s—that was the basis on which the R.A.F. said goodbye to the TSR2—the R.A.F. now have to accept 50 F111s in the expectation that these will be supplemented by 150 of the Anglo-French variable geometry aircraft, which will bring the bomb load up to about the same. The R.A.F. now find themselves clinging in desperation to the 50 F111s which they hope to get, for if that goes by the board, there is no Anglo-French variable geometry aircraft in existence.

It seems to me that at the moment they are bound to say that it is a splendid aircraft. It is inevitable that the Minister will come to the House and say that senior R.A.F. officers have flown it and think it superb. If I were in the R.A.F., having had the TSR2 taken away and knowing how badly I needed some aircraft to carry out my task, I would grab at anything which was going. It is astonishing that while this is said in the House about that aircraft, the Americans, who are producing it for their own Air Force, do not appear to agree that it is as well nigh perfect as it is supposed to be.

There is also the important point that the Anglo-French variable geometry aircraft is not yet an aircraft on paper let alone in metal, and yet the Government talk about this aeroplane and even advertise it in the newspapers as an attraction for young men wishing to enter the R.A.F. as if it were an aircraft that they were bound to be able to fly in the 'seventies.

Sir Arthur Vere Harvey (Macclesfield)

Disgraceful.

Mr. Goodhew

There is no guarantee that it will ever be built. It seems to me, therefore, that it is no wonder that there should be such concern in the Royal Air Force. The Minister—[Interruption.]—I do not know whether the hon. Member for Harrow, East (Mr. Roebuck) wishes to intervene.

Mr. Roy Roebuck (Harrow, East)

I was remarking—I hoped that it could not be heard—that the hon. Gentleman had got so used to his own side cancelling aircraft that he expected any aircraft to be cancelled whatever it was.

Mr. Goodhew

I do not think that that contributes much to the debate. I am sorry that I even bothered to disturb the hon. Member from his very reclining position.

When I referred to the feelings of the Royal Air Force during the debate on the Air Estimates the Minister scoffed at me and giggled and guffawed, which seems to be his normal method of overcoming or trying to conceal his anxiety and discomfort and avoid admitting the position. I believe that the Minister, for all his long performance today, for all the facts and figures—which I think were put out not to clarify the position but to make it even more difficult to determine it—has failed the Services that he supports, and the sooner he resigns the better.

6.1 p.m.

Mr. Maurice Edelman (Coventry, North)

I was sorry that the hon. Member for St. Albans (Mr. Goodhew) referred to my right hon. Friend the Secretary of State for Defence in such an intemperate and unconstructive way. What should be common ground on both sides in this debate is that we all want to see the Royal Air Force equipped with the very best aircraft and the British aircraft industry flourishing to the extent that it can.

Having said that about the hon. Gentleman, I must say that I was sorry when my right hon. Friend, at the end of his extremely interesting speech, referred to the critics of the F111—to some critics at any rate—as being actuated by malice or commercial interest. I say straight away that my only interest in the matter is the defence of the country and the concerns of my own constituents who are to some extent involved in the matter. I hope, therefore, that in the criticisms I propose to offer my right hon. Friend will not find any occasion for assuming that I am motivated by malice, of which I have none, or by any other interest than those that I have mentioned.

It is obvious that the debate is haunted by the ghost of the TSR2, an aircraft which was buried but which is certainly not dead. It was ploughed into the ground, its jigs and tools were smashed, the prototypes were pulverised—all, I assume, in the interests of security, in order to avoid any possible enemy from getting access to the basic materials and prototypes of the aircraft.

Mr. Burden

The hon. Gentleman is making an interesting point. If it was necessary to carry out such destruction of everything connected with the TSR2 because of the danger of its getting into other hands, does it not imply that it was really a wonderful aircraft?

Mr. Edelman

I assume that the intention of smashing up the aircraft and all that surrounded it was in the interests of security. I think there is little doubt about the quality of the aircraft, but I shall refer to that in a moment if the hon. Gentleman will be patient.

In the context of that time, not only was the aircraft broken but the present Home Secretary, who was then the Minister of Aviation, scared the wits out of the country by saying that the cost would be £10 million per aircraft. In reply to that I would say—my right hon. Friend used the same sort of argument today—that if it cost £2,000 to develop a watch the first watch off the production line costs £2,000.

I feel that in the case of the TSR2 what should have been looked into was the reason for the escalation of the development costs in the first instance. I speak with some hind-sight, of course, because I have in mind the rising costs which were shown in the course of the Ferrantiscandal and the Bristol-Siddeley affair. That illustrates—I say it without any partisan spirit—that what should have been looked into at the time was not simply the project as a whole, but the reason for the escalation of costs in development and ultimately as it proceeded towards production.

Attention was drawn in the first instance, I believe, to the dramatic rise in costs—which was referred to by my right hon. Friend, and which hon. Gentlemen opposite will certainly not dispute—by the Estimates Committee. What is certain is that, in my judgment, there was no real basis for such extraordinary escalation of development costs. The criticism which it will be within the memory of some hon. Gentlemen that I offered towards the Minister of Aviation in 1964–65 was precisely that, instead of slashing the project, he should have slashed the costs. He should have gone into the factories and seen exactly why the aircraft costs were rising. Like other hon. Members on these benches, I saw the prototype in production. It was a prototype that was literally being made by hand. The best that one could have hoped would have been that it would have been a protoype manufactured by batch production.

I am sure that any hon. Gentleman who has had any direct concern with the aircraft industry—I have had such—will question very seriously why the costs of the TSR2 rose to the phenomenal height to which they did. The Minister of Aviation in 1964 and 1965 sheltered, I believe, behind the Plowden Committee when he was asked to investigate the reason for the extraordinary rise in costs. The Plowden Committee was a farcical body which never even visited the factories on which it had to report. There was never any physical inspection by any member of the Plowden Committee, unless one excepts the factories of Shorts in Northern Ireland. So although it had eventually to report on the efficiency of the aircraft industry, it did not have the opportunity, the occasion or the experience of seeing how aircraft are manufactured. But even on the basis——

Mr. Hastings

It is an interesting point that the hon. Gentleman is making, but is he aware that the Committee visited several American aircraft factories?

Mr. Edelman

I think that that is a tribute to its enterprise, though not to its wisdom, in this matter. It was clearly in the Committee's terms of reference to examine the British aircraft industry, and that is where it should have begun.

I am convinced that had the matter been taken in hand under the direction of the Minister of Aviation at the time ways and means could have been found of producing the TSR2 much more efficiently and much more cheaply.

The conclusion to which the Plowden Committee came, that the British aircraft industry was less efficient—I use the word in its technical sense—than the American or the French aircraft industry is a pointer to what could have been achieved if there had been an investigation of the rising costs of the TSR2.

I would say in parenthesis, in case the term "efficient" is misinterpreted, that I have always believed that in terms of quality, experience and skill and ability the technicians and workers in our industry are the equals at least of any in the world. I say this not to flatter my constituents; I believe it to be true, and our tradition and experience have proved it to be so.

The position is that today we are dependent—how dependent I shall try to indicate in a few moments—on an American aircraft which is expensive in its dollar costs, which is unproven and which is still being questioned by a United States Congressional Committee—and that is sustained not only by politicians but by expert aviation opinion as well.

So we have lost, in effect, that which we might have obtained in our own factories from the technological studies of the potentialities of TSR2. We have thrown this away and we are now obliged to expend dollars. At the moment we have long-term credit from the United States, but settling day will have to come. We have to pay those dollars, and we have forfeited the opportunity of having an aircraft built with the self-reliance and skill of our own technicians.

I have referred to the United States Congressional Committee. Perhaps I may quote Senator McClellan, Chairman of the Committee, who described the F111 as a political aircraft. It is perfectly true that in the United States there are many commercial interests which are attacking the aircraft, no doubt with the disgruntlement of disappointed competitors. I have no doubt that this is an element which has entered into the debate. Nevertheless, the fact is that those who have promoted the F111 in the United States have been members of the lobby which was promoting, and still is promoting, the sale of the F111 in Great Britain. If one wanted to look for an aircraft lobby one would not have to look very far. One need only look to those permanent representatives of the United States aircraft lobby who are in this country and who have been plugging the sale of the F111.

When the decision was taken to buy the initial 10, with the option for a further 40, we all ought to bear in mind that the whole question of the F111 was a matter of bitter debate between Mr. McNamara, the United States Secretary of State for Defence, and the McClellan Committee. The criticism was directed to the merits, and the particulars and performance of the aircraft. I must confess that I find it rather curious that when my right hon. Friend has to answer criticism of the aircraft his ultimate source of authority to which he refers is always the United States Secretary of Defence. It is precisely because of this that the debate is going on. Criticisms have been made in open sessions and they were summed up recently by the extremely well informed correspondent of the Economist, who said of the F111: Its weakness throughout has lain in the engines which stalled, or simply blew out like candles, with embarrassing and unexpected regularity. I hasten to say that I quote this, not as my right hon. Friend suggested, in order to cause alarm and despondency among those who have to fly the aircraft. I would have thought that it is much better to offer such criticism before they fly them, rather than to allow them to fly the aircraft, only to find that their engines have stalled, with embarrassing and unexpected regularity.

As my right hon. Friend is very properly concerned with the saving of lives, he will surely welcome these criticisms, which are designed for the protection of those who may have to fly the aircraft. The original engine installed in the F111 has been described as one of the worst, if not the worst, that Pratt and Witney have ever built. That is the aircraft and the engine for which the former Minister of Aviation and the present Minister of Defence discarded the TSR2. That is the measure of the error that we have made. It is proper to recognise the nature of the error and to see what lessons can be drawn from it.

On 12th April, I asked the Minister of Defence whether he would have done better, before taking up the option for the further 40 aircraft to have awaited the outcome of the McClellan Committee. My right hon. Friend replied: No. Sir … The main subject of criticism of the McClellan, inquiry is the suitability of the F111B, which we are not buying, for the U.S. Navy."—[OFFICIAL REPORT, 12th April, 1967; Vol. 744, c. 1181.] On the very next day. Senator McClellan said in the Senate: It is difficult to understand how the Defence Department could justify the production, for combat use, of a plane which is still unacceptable. He was talking of the Air Force version of the F111, which Britain is buying. Therefore I repeat that the whole question of the aircraft is still in doubt, still under inquiry in the United States. Yet my right hon. Friend has persevered with the purchase of these very dubious aircraft.

I can only assume that my right hon. Friend has not read the massive, highly publicised reports of the United States Committee. I have read it in some detail, and I can assure him that the criticisms of the Committee have not been directed simply towards the naval version, which it has been established already is above weight. It weighs far too much for its intended purpose. The whole tenor of those criticisms has been directed to the aircraft and its performance as such. It is important to state that before some sort of myth is established that the only criticism of the Congressional Committee has been directed towards the naval version. That is not so. Criticism has been directed towards the basic aircraft, which we are proposing to buy.

My right hon. Friend is in a series of dilemmas. If the Government needs their east of Suez commitments they will obviously need strike reconnaissance aircraft. That is the assumption, I imagine, on which this debate is taking place. The 50 F111s. will make four squadrons, plus an operational conversion unit, and it is assumed that two of these squadrons would be stationed east of Suez. But if these aircraft fall short in their range and speed, will they be any more than expensive showpieces? My right hon. Friend was talking in somewhat confusing terms about the quality of the performance. One thing is quite obvious, that when he talks about the potential range of the aircraft, it has to be related in some way to the load which it will carry. It is an absurdity for anyone to talk about range without any relevance to the load carried. Therefore, these comparisons, interesting though they may sound, are capable, at any rate, of masking the real truth of the matter.

It seems certain that the F111 will fall short of the original requirements and specifications. My right hon. Friend has indicated that the plane will exceed the R.A.F.'s minimum requirements. That word "minimum" is very interesting. It reminds me of the old farmer who during discussion on the payment of minimum wages to farm labourers was asked if he paid the minimum. He replied, "I always pay it." It seems that the word "minimum" is a word begging description. We have to assure ourselves that the performance of the aircraft will have some correlation with the original specifications.

I want to deal with a most important point. We have looked back at the TSR2, but I want to look forward to the AFVG, because unless we clear our minds of the situation about this we shall not be able to see that my right hon. Friend is potentially hooked on the F111, and the 50 that have been bought will not be the end of the story.

I assure the House that while my right hon. Friend has made a good case for containing the fixed price within reasonable limits, we can be quite certain that if we have to go back to the U.S. and make further purchases of F111s the price will not be £2½ million. It probably will not be £3 million, but substantially in excess of that. I welcome most enthusiastically Anglo-French co-operation in the air. I hope that I will not betray a private communication when I say that when my right hon. Friend concluded his agreement with M. Messmer I sent him a telegram of congratulation. But I believe that I was somewhat premature, because difficulties have arisen which deserve a very brief analysis.

The basic fact is that there is as yet no agreed specification for the aircraft. What we want is a strike reconnaissance aircraft—and I do not dissent from the value which my right hon. Friend attaches to the rôle of reconnaissance in keeping the peace. The French want an interceptor which will be much faster than the aircraft which we envisage and which, accordingly, will be more costly. The main reason why there has been this escalation of development costs is the two different rôles which the two sides of Anglo French co-operation have been trying to promote. What is emerging seems to be a hybrid, and I am not sure whether it will be the sort of aircraft which we want.

The decision to proceed has been delayed until 1st January, 1969. This coming year will be what some Frenchmen have been calling the social year of France in which President de Gaulle, having seen the value at the last election which Frenchmen attach to economic and social reform, will spend a large proportion of the budget on social and economic progress and development. If the French do that, I can declare quite categorically that they will be in a position in which, apart from any other consideration, they have to make a choice between the airbus and the AFVG.

They are not happy about the AFVG. It is very likely that, having proposed to spend up to £250 million on development costs between our two countries, the time will come when the French decide that they cannot proceed with the AFVG. What will then be the situation? What does that leave my right hon. Friend with—at best, the prospect of 50 United States aircraft already described as doubtful in performance and uncertain in their rôle. This is a very high price to pay for Anglo-French co-operation in a situation from which the French may readily withdraw.

I do not think that we should make snap decisions. We must recognise that we are faced by a major difficulty and that what is probably necessary above all is for the Government to make the basic decision for recasting the whole of the aircraft industry in order to make a reorientation if these schemes fall through. Failing that, we shall find ourselves hooked on the F111. So far from there being an expansion in Anglo-French cooperation unfolding before us, we shall see ourselves constrained and limited and orientated towards the United States. That would be an ill day for this country.

6.23 p.m.

Sir Arthur Vere Harvey (Macclesfield)

I congratulate the hon. Member for Coventry, North (Mr. Edelman). He has always been consistent in his speeches in the House on this great industry. He has shown much courage in what he has written. I only wish that the Secretary of State had been present to hear his speech. Soon after he made his speech, the right hon. Gentleman left the Chamber and we have not seen him since. This is treating the House with great discourtesy. The right hon. Gentleman, in his speeches, is always ready to take it out of other people, but he does not like people taking it out of him. He can dish it out, but he cannot take it. The House will not tolerate this sort of arrogance from a Minister.

The right hon. Gentleman complained about the questions asked of my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell). In a speech of nearly an hour, he hardly answered any of my right hon. Friend's questions. My right hon. Friend showed great restraint in the way in which he put his questions.

May I refer to what the hon. Member for Coventry, North said about costs. I am sure that he put his finger on the point. For years, the contracts branch—I do not say this against the individuals of the various Ministries—is just not up to those in industry. There are not enough of them. They are not clever enough, and they do not know their way round. I have implored the Ministers in successive Governments to bring in outside cost accountants who might be a match for some of those in the industry who try to take the taxpayers for a ride in getting excess profits. I am sure that if something like this had been done with the TSR2, much would have been saved.

The first quarter of an hour of the Secretary of State's speech was directed to members of his Left Wing, very few of whom are here. His peroration also was directed to them. I suppose that, in anticipation of the time when they read HANSARD, he said all the nice things to keep them quiet about British commitments in the Far East, which he hardly touched on at all as far as this aircraft is concerned. [Interruption.] If the hon. Member for Derbyshire, North-East (Mr. Swain) wishes to intervene, I will give way, but I ask him not to whisper.

Mr. Thomas Swain (Derbyshire, North-East)

I suggested that the hon. Gentleman might be leaving school at the end of this term.

Sir A. V. Harvey

I do not follow the hon. Gentleman. He has been here for little of the debate. If he had heard what we heard, he would not feel very pleased about it.

The Secretary of State talked about the economy and gave figures for the aircraft industry up to 1980. Very few of us will be in the House when we reach that year. The Government had a National Plan which they blazed on the television and in the Press. Within 18 months it was in the wastepaper basket. A Government which cannot get out a National Plan which lasts for more than 18 months and which talks about what will happen in 1980 to aircraft not yet designed is asking a lot of the House and the taxpayer. The Government said at the election that they would not increase taxation. Now they are trying to tell us what an aircraft will cost in 1980.

It is wrong for the Minister to talk about the Anglo-French variable geometry aircaft as being an aircraft which is coming along. It is not coming along. The two sides are diametrically opposed in their requirements. The right hon. Gentleman talked about development costs of £300 million for the two countries. He cannot estimate what the cost will be ten years hence. It is very wrong of the right hon. Gentleman to bring this aircraft into the argument.

If the Secretary of State wants to bring it into the argument, I should like to quote some figures which appeared in Flight International on 6th April this year. On the left hand side there is shown: Total cost of TSR2. 130 delivered to R.A.F. Government estimate—£690 million. On the right hand side is shown the cost of the alternative: Total spent on TSR2 at date of cancellation—£195 million. Contractors' compensation—£70 million. Total cost of F111K, 50 delivered to R.A.F. (dollar currency)—£138 million. Cost of at least 100 AFVGs to achieve with 50 F111Ks. the same air power (nearly ten years later) as 130 TSR2s—£287 million. The total cost of the items on the right hand side is £690 million, and the cost of the TSR2 on the left hand side is, strangely enough, £690 million. This does not take into account escalation in the United States. It does not take into account the possibility—and it could happen if we go into Europe—of devaluation of the £. Where would we stand with the Americans, with such a big order, if we were to devalue by 25 or 30 per cent.? Not one Member would want to pay that price to get into Europe.

Therefore, I do not think that the figures which the right hon. Gentleman gave today are very relevant. I only wish that he had told us, when talking about the TSR2, what Wing Commander Beamont said to myself and a number of other people. He was the test pilot of the TSR2. He said that in the flying which he did in this aircraft—he did practically all of it—it gave less trouble in tests than the Canberra ten or 15 years ago. In fact, he said that the aircraft gave no trouble at all; it was magnificent. It flew supersonic and had tremendous performance and did all that the Chiefs of Staff required of it.

The right hon. Gentleman went out of his way deliberately to denigate the British effort. It was bad enough that the Home Secretary, when Minister of Aviation, should have a steamroller go over the jigs and tools. The hon. Member for Coventry, North was generous enough to say that he thought that that was for secrecy purposes. That is a bit far-fetched. They could have been stored in a hangar and sealed and nobody would have known any different. I know why the Government destroyed the jigs and tools. At that time they had a majority of three. They wondered what might have happened if the Tories had reversed that decision. It seems an extraordinary thing to do when an aircraft is in doubt to destroy the jigs and tools. It was an unforgivable act on the part of the Labour Government. It has never been explained.

The order for 50 F111Ks is not the end of the road. If the Anglo-French aircraft is not built, 50 aircraft will not suffice. There are bound to be accidents. Every new type which comes into service either lands with its undercarriage up or overshoots or undershoots. They are not always fatal accidents, but aircraft will be written off. With our forces divided between Europe and other theatres, there will not be enough aircraft and more F111Ks must be ordered from the United States.

Some of us have had dealings with the United States aircraft industry. I competed with it in the firm for which I used to work for a number of years. While the American Government may take one view of what they say and what are their intentions, the view of the aircraft industry in the United States is quite another thing. It is a well-known fact that in Australia and New Zealand, where B.A.C. has been trying to sell B.A.C. 1–11s, the Americans have been there saying that it is no good their buying a British aircraft because in four or five years' time there will not be an industry in Britain to supply them with spares.

That is the sort of competition which is going on in the Middle East and in the Far East. It is public knowledge that the American aircraft industry is out to destroy the aircraft industry, not only of Britain, but of Western Europe. The American aircraft industry does not want an aircraft industry or an electronics industry in Western Europe. It wants it all for itself. I have had personal experience of all this.

The fact is that if we go into Europe, we stand a better chance on that score by getting together with our friends in Europe. The Labour Government, however, did not start off very well. The first thing they did when they came into power two years ago was to send a Minister to Paris to try to cancel the Concord. They then found that they could not do it. Had they done it or tried to do it, General de Gaulle would have gone to the International Court at The Hague and there would have been large damages to pay. So the Government have got the Concord, and I am pleased that they have. It is a venture which, even with the American supersonic aircraft now in train, is likely to pay off as a complementary type.

When the Home Secretary was Minister of Aviation, he said that we might pay less but that we could not pay more for these aeroplanes. I found that very difficult to follow. Then, on 13th December, 1965, the Secretary of State said that there was a guaranteed full delivery date not later than January, 1970, that the ceiling price would be about £2.1 million and that there would be credit terms up to 1977.

If I understood correctly, the Minister this afternoon said that we are now to pay rather more in the first 10 years. Can we be told in the winding-up speech tonight how much we are to pay in the first 10 years? Let the public and hon. Members below the Gangway opposite realise that the cost of these aircraft is not included in the present Estimates. We are getting them "on tick" from America. This is a legacy with which the next Conservative Government will have to deal. The present Government will not have to pay the bill because they will be out of office years before that happens. It is for these vast sums that we are pledging the taxpayers' credit.

What worries me is that with the Phantoms and the C130s, the total cost at the moment, without spares, is about £660 million, and in dollars. We never hear it mentioned by the Government that we are parting with foreign exchange. Even if the TSR2 had cost a bit more, at least we would have kept our men employed in this important industry. We would have prevented them leaving this country to go to North America and elsewhere to work and we would have saved foreign exchange, which would have meant a great deal to this country.

The noble Lord, Lord Shackleton, in the House of Lords, has been far franker than anybody on the Government Front Bench in this House. He revealed that the ceiling price had not been agreed although the contract had been signed. He said that a figure of about 2½ million per aircraft was still valid.

I would like to be told whether the Government have taken the advice of the Australian Government, who placed an order quite a long time ago for these aircraft, and what their terms were. Do the Australians have an escalation clause? Had the Labour Party when in opposition not gone out of their way to denigrate the TSR2, as they did publicly, Britain might have landed an order in Australia for TSR2s.

Mr. Russell Kerr (Feltham)

Rubbish.

Sir A. V. Harvey

The hon. Member sits there muttering to himself. Does he wish to intervene? I wish that he had the courage to stand up and say what he wanted to say. He was not in the House at that time. If he looks up the newspapers, he will find that the Labour Party said everything they could against the TSR2. When the Australian mission came to London, it went on to America and placed an order there.

Mr. Hugh Fraser

As the Minister who tried to sell the TSR2 to the Australians and who was there three weeks, I confirm what my hon. Friend has said. It was said by every Australian Minister that the Labour Party might win the next election and that they were against the TSR2.

Sir A. V. Harvey

I hope that the hon. Member for Feltam (Mr. Russell Kerr) is now satisfied. If he is not satisfied with that, nothing will satisfy him. That was the fact.

My right hon. Friend the Member for Wolverhampton, South-West referred this afternoon to the Polaris submarines. Mr. Thorneycroft, when Minister of Defence, said that the cost, including all weapons, would be about £70 million each. On 24th February this year, the Minister of State, Board of Trade, said in reply to a Question that the original cost and the present cost were £50 million and £52 million, respectively. Can we be told a little more about the Polaris figures? It is important to know what the escalation has been since that order was placed.

I am all for having the F111Ks, because if we do not have them we will not have anything. I want the Royal Air Force to be strong, but it will not be strong in the right way, because I do not think that the numbers of these aircraft are nearly sufficient. Further aircraft will have to be ordered.

When the Secretary of State for Defence referred today to the additional 500 miles range of the F111K, he did not refer to the load of the aircraft. It is important to know what the load was. Was the aircraft flying in a reconnaissance rôle or was it carrying high-explosive bombs?

The right hon. Gentleman was particularly coy about the nuclear rôle of the F111K. He knows perfectly well that this aircraft has a nuclear rôle, although nobody hopes that it will be used. It has a dual rôle with high-explosive weapons also. The right hon. Gentleman must be completely honest with the House about this so that we know what the aircraft can do and what its rôle will be.

I would like also to be told in the winding-up speech how long the Canberras have to last. These aircraft are now nearly 20 years old and many of them have given trouble in maintenance in the squadrons in the Far East. We are entitled to know, and the aircrews are entitled to know, when the Canberra will be phased out completely.

Sir Ian Orr-Ewing

They are very popular in Vietnam.

Sir A. V. Harvey

My hon. Friend says that they are very popular in Vietnam. He means when they are being flown by the Australians. They are still doing a good job. Nevertheless, I do not want to see military aircraft approaching 25 years of age in our Air Force.

The morale in the Air Force is particularly high. I do not think that the Service has ever been in better shape. It is under good leadership. I can, however, see a steady rundown in that great Service by integration of commands and undoubtedly, when forces are brought home from other countries, there will be a surplus of personnel.

Mr. Robert Howarth (Bolton, East)

Does not the hon. Member realise that that last statement of his rather contradicts what was said by one of his hon. Friends a little earlier? The hon. Member has just said that the morale of the Royal Air Force is particularly high. Not long before, his hon. Friend told us that it was particularly low. I wonder who is right?

Sir A. V. Harvey

My hon. Friend said nothing of the kind. What he said was that when he talked to the personnel they were anxious about the future. The answer is that people in the Royal Air Force are a very intelligent lot. They can see ahead and see what the form will be. They are apprehensive. Their morale is good, but they want backing up. I hope that we shall be told more about the future of the Royal Air Force.

In connection with the F111K, we should be told what is the rôle of that aircraft in the Far East. Will there be a rôle for it? The Secretary of State merely touched upon it today when he said that it might go to various theatres very quickly in the event of an emergency. However, it is well known that we had V-bombers out in Singapore during the confrontation with Indonesia, although we did not hear whether they had nuclear weapons available.

We must know how these 50 aircraft are to be used, because I do not think there are enough to split them up between Europe, the Middle East and possibly the Far East. The Secretary of State cannot go on giving driblets of information. He has been less than frank on every occasion, and this afternoon he was even less frank than usual.

6.40 p.m.

Mr. Christopher Mayhew (Woolwich, East)

The last two speakers have given us very well-informed and persuasive defences of the TSR2, and that fact gives me the opportunity of beginning my own speech by defending the Secretary of State on this point. The case which he makes as between the F111 and the TSR2 is overwhelmingly strong, and today he put forward a most convincing case. I have always thought that the TSR2 was a good plane but that the smallness of the market made it far too expensive a proposition. Accordingly, one had to have a long-range reconnaissance plan to go before the F111.

On the benches opposite there has been a tendency to deal in too great and finnicky detail with matters long past and to ignore the very much more important issues which my right hon. Friend's statement raised. I feel that particularly about the Opposition Front Bench, because whenever right hon. and hon. Gentlemen opposite speak in debates on defence, constantly one asks oneself what is their policy, what would they do? We do not even know whether it is Official Opposition policy to buy the F111, the TSR2, or neither, and what commitments they think that these planes should carry out.

I want, if I may, to deal instead with what I believe to be the much more urgent and important part of what my right hon. Friend said today, which was about the rôle of the F111. What is the point of arguing about different types of long-range strike reconnaissance planes if we are not sure whether we shall need a strike reconnaissance, for what purpose, for how many years and in what parts of the world? I am sorry that the Opposition have not addressed themselves to that more, because that is what matters.

When I think back on this afternoon, the most significant point which my right hon. Friend made was when I asked him whether the Prime Minister's statement last June about our continuing commitments in Asia throughout the 1970s still represents Government policy. He did not answer in a direct way at all, and it is plain from that, from other hints and other information which I have received—from some well-informed quarters I have even received congratulations on the ground of having contributed something to the sanity of our defence policy—I have come to the conclusion that the Prime Minister's statement about our world rôle in the 1970s no longer represents Government policy. It was a clear and bold statement, but events have shown it to have been mistaken. Very wisely, it has now been abandoned.

It is plain from my right hon. Friend's statement today that the question now is how early in the 1970s are we proposing to withdraw from our commitments in Singapore, Malaysia and the Gulf. That is the only uncertainty left about Government policy—that and precisely what commitments we shall have to cover when those are withdrawn.

I should like, if I may, to ask this question, with special reference to our need for the F111 aircraft. I beg the Government as soon as possible to make clear where we stand on this issue. It is not fair to our allies, to our Service men or to the aircraft industry to continue the obscurity on the vital question of what our commitments will be in the 1970s.

Plainly, if the major statement of our overseas policy which the Prime Minister made last year still represented Government policy, there would be an inescapable need not only for the F111 aircraft but for more than 50 of them. If that statement still represents Government policy, in addition to a larger number of F111s, there is a continuing need for powerful maritime air power. There is no question that under the circumstances which the Prime Minister outlined we would need that, too. If his statement still stands, we need more troops in the Far East today, instead of the Secretary of State going to the Far East and bringing back thousands and thousands of troops. If it were true that his job was, as the Prime Minister stated, to prevent the eyeball to eyeball confrontation of the United States and China in Asia, the Secretary of State should have gone to Asia to reinforce the troops there and not take them out.

It is as well that the Government have thought again about the major rôle in the 1970s. If we are to stay there, as the Prime Minister outlined, the defence structure is inadequate and inappropriate. The Ministry of Defence planners are very able people, who are not responsible for the high level planning on which our policy is founded. Suppose they were given the task of assuming that we have to maintain this world peace-keeping rôle in the 1970s and we were asked to devise the most expensive and inappropriate defence structure to carry it out. How would they begin? They would begin by buying a highly sophisticated, extremely expensive long-range bomber with a nuclear capacity. They would buy it from the United States, and they would keep it as far from any area of peace-keeping as possible so that it was totally invisible and unrealised until it was used.

Their second step would be to phase out the carriers, which have proved to be the most cost-efficient peace-keeping system which we have had. Finally, they would bring back our troops and station them in Hampshire and Wiltshire. That is how the M.O.D. would go about it if asked to create the most expensive and inappropriate structure. That is what we have now, and that is the defence policy of Her Majesty's Government. Given the assumptions of the Prime Minister's statement last year, this defence structure is pure lunacy. Fortunately, there is no reason to suppose that the assumptions laid down by the Prime Minister last year still stand. Certainly they make no sense at all. I cannot believe that my right hon. Friend would keep all those commitments and then weaken our forces, simply trusting to luck that nothing unpleasant happens. I cannot believe that that is seriously the intention for the 1970s.

Today, my right hon. Friend indicated a different attitude towards our commitments. He said that we would go, but not within two years. He was sure that no one would think that we should go within two years, and I cordially endorse that. He hinted about a fall-back posi- tion in Australia. He referred to me at that point, and I regret that he did not allow me to intervene to ask him a little more about what he had in mind. It was clear from what he said, however, that the Government are no longer committed to this Asian rôle throughout the 1970s. They are not prepared to say when we are going, but it is plain that we are going some time in the early 1970s.

Thus, I come to the point that we are buying these F111s and we shall buy, apparently, the AFVGs not to maintain our east of Suez rôle throughout the 1970s, but simply to maintain the option of staying there if things work out that way. It is worthwhile making this distinction. It may be that the Government now accept that we shall be clear of these commitments in the early 1970s, but, because they have refused to take a firm decision there, they are now forced to go on buying the F111, the AFVGs and a whole lot of other defence equipment which I will enumerate because they might not leave in the early 1970s and might go through to the late 1970s.

Thus, though it would seem churlish to criticise the move of the Government away from a firm commitment to remain east of Suez throughout the 1970s and into their new position of going earlier, but not saying when, one must accept the terrible defect in that policy in that it does not enable one to make any effective defence economies, so that one must go on spending as though one were staying in the area indefinitely. This means that, following this policy, one must continue to buy a long-range reconnaissance plane and many other things, and it is worth considering those other things. Unless we know that we shall be clear of these commitments by the early 1970s, we must buy the F111, the AFVG, 164 Phantoms and build naval vessels now on the assumption of having an escort fleet in the 1970s. All these things must result from this commitment.

On the other hand, if the Government had the courage to say plainly that they will be out by the early 1970s, then automatically such an escort fleet becomes too big—it could be cut by a substantial number without danger—and many other economies would follow—if only the Government would say, "We are going by the early 'seventies" instead of "We are perhaps going by the early seventies". Despite this, scores of millions of £s could be saved. For example, the "Leander" frigates being built for the Royal Navy——

Mr. Speaker

Order. The hon. Gentleman must link his speech to the Motion.

Mr. Mayhew

I was tempted away from the F111 buy, which is the subject of this debate, into giving other instances of the same economic principles which should oblige the Government to firm-up on their new attitude towards commitments.

It has been suggested that the naming of a date is irrelevant. The right hon. Member for Wolverhampton, South-West (Mr. Powell) asked for an assurance, in connection with the purchase of the F111, that my right hon. Friend would never name a set date for withdrawing from this commitment. I suggest that we must distinguish between two things; between setting a date which is too early—as was perhaps done in the case of Aden and, to begin with, in respect of Malta—and not setting any date at all. We all agree on the first, but does the right hon. Member for Wolverhampton, South-West really mean that it is always wrong to set a term to our commitments, even though the date announced may be some years ahead?

If so, I warn him that if we are not prepared to do that, then he must be prepared to work out the economic and planning consequences. If a date is not set, we will find that we are unable, for example, to plan a withdrawal to avoid unemployment. We would find ourselves in the position of having bought more F111s than it would be possible to use. And when the time came to leave—which would not be a time we had chosen but an arbitrary time laid down by circumstances or a political change; it would be a time which would be the least convenient to us—it would probably be a time most humiliating to ourselves. I would like to go into this matter in detail, but I would not be in order in doing so.

I am sure that, while we should welcome the indication that we will not maintain this rôle through the 'seventies, if our policy is to make sense for defence and political planning, and if we are to make economies and get the right air- craft to buy, we must make it clear that we will be out of this commitment by the early 'seventies. This would enable economies to be made in our aircraft buy, and also in other parts of our defence budget.

My right hon. Friend said that we needed the F111 because we might have a fall-back position in Australia. I gathered him to indicate that we may be clear of Singapore and Malaysia and may wish to fall back to Australia. I gathered that my right hon. Friend was saying to myself that I was in favour of a presence in Australia and therefore I would want the F111s. I suggest that everything depends on what sort of presence my right hon. Friend has in mind in these conditions. The House and the country would be extremely interested to know more about his thinking on this issue.

I believe that if we are clear of Singapore, Malaysia and the Gulf by the early 'seventies, we will still need some sort of presence in Australia. We would still need to perform three functions. First, a small presence there—perhaps £30 million to £40 million defence cost would be involved—would reinforce the capability there in the unlikely event of the territory of Australia or New Zealand being attacked. In such circumstances the British people would want to make a contribution to the defence of those countries. The second function would be to make a possible contribution to any United Nations peace-keeping force that might be there. The third function would be to look after the internal security of our remaining colonial possessions.

Whether one needs the F111 for such functions is a question to be decided. Whether one needs, in addition to the F111s, some other capability—for example, if the Australians had the F111 function and we produced the naval element or could deal with our part of the commitment with fewer planes of this type—is also a matter to be considered. But if one got into this posture of withdrawing and falling back to have a residual presence in Australia, one would certainly not need 51 F111s, 100 to 150 AFVGs and 154 Phantoms, for such quantities would be not only grossly expensive but ineffective.

Mr. Lubbock

Is the hon. Gentleman leaving the Harriers out of consideration?

Mr. Mayhew

I have mentioned the circumstances. I will not go into the type of aircraft but that would be necessary.

My right hon. Friend made a convincing case for the F111 as against the TSR2, and I hope and believe that the great majority of my hon. Friends will support him in this matter. I equally believe that he would have the same support if he were to indicate a new attitude towards our east of Suez rôle in the 'seventies. I therefore urge him to recognise that, if be wishes to make real economies in defence expenditure and to have a defence and overseas policy which makes sense for the future, he must make up his mind about when we will be clear of these commitments and impose British interests and a British view on events east of Suez in the years ahead.

6.57 p.m.

Mr. Eric Lubbock (Orpington)

The hon. Member for Woolwich, East (Mr. Mayhew) brought a note of reality back into the debate. Such a note had been lacking in the speeches which preceded his, notably because one gathered from their remarks that this was a debate about the TSR2 and not about the F111. I agree with the hon. Gentleman that it is a waste of time raking over the ashes of this question, particularly since the matter was resolved about two years ago.

We should address our minds to the question the hon. Member for Woolwich, East asked: namely, what is the purpose of the F111, what rôle do we expect it to have in the Far East, as well as in Europe, and whether there is any necessity for such an aircraft at all? This question is asked in the Liberal Amendment.

There is a difference of attitude between the Government Front Bench and the whole of the Tory Party, on the one hand, and the Liberal Party and some enlightened hon. Gentlemen opposite, on the other, about whether such an aircraft is really necessary. I was grateful to the Minister for having addressed his remarks to this question with such thoroughness, although I could not accept his arguments, for reasons which I shall give later.

I claim that we in the Liberal Party have been absolutely consistent on this issue. We voted with the Government on the cancellation of the TSR2 and my hon. Friends and I have made it clear that we supported that policy only on the assumption that it did not imply the subsequent purchase of American aircraft. In debates since then I have voted and spoken against the purchase of the F111. It is to be regretted, as the Liberal Amendment makes clear, that such large sums of the taxpayers' money is to be squandered on this aircraft. The fact that the F111 will be purchased on H.P. instead of by cash only means that we shall feel the burden in precisely the same way, but spread over a period of years—perhaps after this Parliament has expired and perhaps because the Minister does not think that it will have any effect on the electoral prospects of his party. I hope that the taxpayers will bear this in mind and will appreciate that the purchase of an expensive aircraft like this will make it very much more difficult to secure the reductions in taxation that we would all like to see.

The Secretary of State gave a figure of £336 million as the total cost of the Fl11 programme over ten years. This is already a very substantial increase on any figure I have heard quoted hitherto. The figure given in The Times, which no one has yet disputed, was £280 million, so in a very short time we already have an increase of £56 million on the F111 programme. I should like to know how that difference is made up. One can see only £5 million arising from the inflationary increases of raw material and labour in the United States, if that amounts to £100,000 per aircraft, as has been stated. The figure does not, presumably, include the cost of modifying the bombs, because the Secretary of State said that the modification would have been necessary for the Phantom and other supersonic aircraft which are to come into service, Presumably, there are other additions which need to be identified.

The right hon. Gentleman played down very much the possibility of increases in the cost of spares, but I understand that the initial contracts will cover only the first two years, and that after that the manufacturers may ask whatever they like—provided, of course, they are getting the same price from the United States Air Force. That is not an adequate protection. I believe that there will be very substantial escalation in the cost of spares and, in fact, General Dynamics admitted this to a meeting of hon. Members a year or 18 months ago.

The other very substantial sum with which we might be faced—and I am glad that the hon. Member for Coventry, North (Mr. Edelman) mentioned this—is for additional orders beyond the 50 aircraft which we have already contracted to purchase. If the Anglo-French variable geometry programme were to slip, or even if it were not to come off at all—and that I would very much regret—we would, according to the Government's present policies, have to place further orders for the F111 to make up the short fall. I am very anxious lest we should be entering into a continuing dollar commitment that will extend into the late 'seventies. This is a very good reason for considering carefully whether we want such aircraft.

We have had references to the unwisdom of purchasing the aircraft before the technical snags have been ironed out, and the Minister himself referred to an article in Flight of 30th March which, he said gave a very good summary of the difficulties that have been encountered. He did not give the House any quotation from the article and, having looked it up meantime, can see why. Of the development programme the article says: The F111 programme has encountered several serious snags. The empty weight of both F111 A and F111B is up on estimates; a drag problem exists (partly due to excess weight); and engine inlet and exhaust troubles have arisen. According to General Dynamics, an increase of 16 per cent. in the empty weight over original estimates has occurred … The article then goes on to describe how that increase is made up: I do not propose to read the whole article, but I think the right hon. Gentleman will agree that what I read is typical of the difficulties that have arisen in the development programme. I am not certain that we can be confident that these can be overcome before delivery——

Mr. Robert Howarth

I do not have that article in front of me, but, speaking from memory, I believe that there is a concluding paragraph which gives a rather different impression from that given by the hon. Gentleman. Am I right?

Mr. Lubbock

The hon. Member is welcome to have the article and can then make his own speech later on. As the Secretary of State suggested that we should look up the article I did so while other hon. Members were speaking, and I have given what I think is a fair summary of it.

I would also refer to a recent article in The Times, where, referring to the Secretary of State for Defence, the author said: His haste in buying the aircraft before it is cleared might have been justified if there had been a vital military need for the F111, but the prospect of a further rundown east of Suez has made the military arguments even less convincing than they were. Here we come to the important questions raised by the hon. Member for Woolwich, East. Is the aircraft, whatever the Secretary of State says, primarily needed for an east of Suez rôle? Or, on the assumption that there was a fixed time-scale for our withdrawal, as he suggests and which I endorse, would it still be necessary to have this aircraft for the European rôle? Or could we so rearrange our procurement before the beginning of the 'seventies that the aircraft would become unnecessary?

The primary characteristics of the Fill which have always been stated as important in this context are its range and its ability to operate from short, unprepared airfields, which arises from its variable geometry wings. Its range would be of primary importance if we were to operate in the Far East, because it is becoming increasingly difficult to find staging posts between here and Singapore at which to halt, and we have lost many of the overflying rights we used to enjoy in the Middle East and which made it possible for aircraft of comparatively short range to get out there by easy stages.

Further, if we were to have this policy of bases in the Indian Ocean, of which we have heard nothing today, we would need aircraft of very long range, because those bases are thousands of miles away from any theatre of action in which British forces might be involved. The aircraft would require at least a long ferry range, if not an actual service potential when carrying a bomb load. I would therefore like to be told whether it is the Government's intention to pursue this expensive policy of building bases in the Indian Ocean. If that is the case, all the figures we have had today of comparison between the TSR2 and the F111 must be modified accordingly.

I am open to correction, but I do not believe that it was ever suggested that the TSR2 should operate in the Far East. If that were the case, the cost of the construction of the bases would have to be added to both sides of the equation, but one becomes very suspicious when, in a fairly long speech, not a word is said by the Secretary of State of whether the Government intend to proceed with this policy.

Returning to the European rôle, I think that I am right in saying that the Secretary of State claims that such an aircraft would be as necessary inside Europe as outside it, and his reason was that in Europe we would be likely to be up against a very sophisticated opposition, but this is not the only aircraft we have in our procurement programme with a strike and reconnaissance capability. We have the Phantom, which I would have thought one could use in the European rôle as a Canberra replacement, and we have the P1 127 vertical take-off and landing aircraft which would be suitable for areas in which prepared airfields did not exist. Again, it is difficult to see what its rôle would be in the European context, but I understand that this is partly intended as a replacement for the Hunter GA9.

It is almost impossible to believe that one would purchase an aircraft of this complexity if one had been thinking entirely in terms of Europe. I do not think that that argument will stand up. Among the examples given by the Secretary of State was Cyprus. It is ludicrous to think of reconnaissance by the F111 in such a situation as that. Helicopters were needed there. Our Armed Forces were not at all well supplied with helicopters at the time of the Cyprus emergency. To say that we need a variable geometry aircraft costing £2.6 million to cope with a civil emergency such as that really is ludicrous.

The other example given by the right hon. Gentleman was the confrontation, where he said that the fighting had been keep at guerilla level in the jungle because the enemy knew that we had this strike potential and so did not use their own aircraft against the helicopters and ground forces that were operating there. That probably is a much better argument for the F111, but I suggest that we should never again be involved in a situation of that type.

I think that was the Government's policy. I seem to recall a passage in the White Paper saying that it was the policy of the Government never again to be involved in a policy of the type we had in Indonesia. I sincerely hope that that is the policy, but if so, surely it is wrong for the Secretary of State to quote in support of the contention that we need the F111 what happened in Malaysia. We believe that Britain should not have any rôle in the Far East but should withdraw from that area as soon as we can, consistent with our obligations. We do not believe that an aircraft of this specification is necessary in Europe. We do know that vast burdens will be laid on the British people by this policy perhaps even beyond those laid by the original purchase of 50 of these aircraft. For all these reasons we shall vote against the Government tonight.

7.11 p.m.

Mr. Peter Mahon (Preston, South)

In commenting on the important matter before the House today one must ask oneself whether the Government are endeavouring to hold an even keel between necessary defence expenditure and the tremendous expenditure in the social field which this Administration must be prepared to accept.

It is fair to say—I put it no higher—that in this fearful war-torn world none of those in a position of authority can afford the luxury of donning the mantle of delightful irresponsibility and accepting the belief that a refusal to participate in the sort of expenditure envisaged today will of necessity provide the open sesame to the economic salvation of our country. We must be careful to guard against such dangerous illusions. Having in my lifetime lived through two devastating wars, I can well see that to eschew expenditure on military projects because of our laudable desire to build homes, schools and hospitals and to improve our social services could sadly in the long run result in placing our country not only in a dangerous situation, but in a contemptible position in the eyes of the world.

I am aware that we are, of course, desirous, in view of our tremendous sacrifices in two catastrophic wars, of adopting a moral posture and of resisting as far as is humanly possible any involvement in future. I cannot erase the memory of the desire of the late Pope Pius XII to assist in bringing about the peace of the world and the outlandish reaction of Stalin, the Russian leader, who inquired how many divisions he had. It is indeed a hard world and, therefore, with the realism which we have always endeavoured to reveal, we must accept it as we find it and not as we would wish it to be.

With my background it would be impossible to quarrel with colleagues who are anxious to compel a substantial reduction in defence expenditure, but it must not be overlooked that implicit in this desire is the danger of the exposure of our people to the greatest possible trials and tribulations. If we have gained anything at all in our experience of the past we must agree that nothing is so devastating to the morale of our people as not to be able to cope with a state of emergency. There are times when we must tell the truth, and shame the devil. Why are we pursuing this course today? Far be it from my desire to deprive hon. Members opposite of their brief moments of glory. We are buying American planes because in 1965 we cancelled the TSR2. We cancelled the TSR2 because maybe at that particular time we were imbibing too much "Worcester Sauce". Today it would appear to have lost its flavour. I disagree with an hon. Member who said earlier that the Labour Government were responsible for the abandonment of the TSR2 or for the cost of the TSR2 being abandoned. One does not wish to be so sadly nostalgic but I wonder, if we could put the clock back, whether we would make the same decision. I await with interest my hon. Friend's comments on this aspect of the situation.

My constituents played a tremendous part in producing the Canberra jet bomber. It was technically ahead of its day and it sold in thirteen countries. Then followed the Lightning and then the TSR2, which again was technologically ahead of anything else in the world, particularly in what the Royal Air Force at that time wanted it to do. However, the orders, lamentably, were far too few for the research and development costs involved. This meant that each aircraft became too expensive. It is true that the Government achieved some of their objectives by cancellation of the TSR2. First, there was the reduction in Government expenditure. Secondly, there was reduction in the aircraft industry labour force. The third stated objective was to maintain a viable aircraft industry.

Those aims were accomplished with varying degrees of success, but cancellation left a big gap; never let there be any dubiety about that. Once again there is a high level of unemployment in Lancashire. Without wishing to be churlish or wise after the event, one is perhaps entitled to ask if it would have been better to produce this magnificent plane—this veritable box of tricks—and to have endeavoured to weather the financial storm. Most certainly there was an impasse, a dilemma, then as there is now. At that time my sympathies were in the first place accorded to my constituents, the aircraft workers. My sympathies were also with myself as a newly-elected Member, as I was in the pillory which I thought rather unjustified at that time. Lastly my sympathies were with the Government because I believed at the time that they had been left too little room for compromise.

I was a new Member and the Prime Minister, too, was new. Today he is, if he will forgive the metaphor, and as they say in Lancashire, an old dog for a hard road. Acting on the principle that half a loaf is better than no bread. I asked the Prime Minister for 75 TSR2s. He said, as indeed the Secretary of State said today, that this would not ease the position and that regrettably the decision was irrevocable.

I am not the sort of individual who believes that democracy is good and wholesome only when I am getting my own way. I accepted the position with some semblance of grace, heartburning, heartrending, unbearable as it was for myself and those whom I represent. Even in retrospect, and even though it is easy to be wise after the event, I would not agree that it is wise this evening to indulge in recrimination to the extent that some right hon. and hon. Gentlemen opposite have done today. There are so many factors which have militated for so long a period against the production of this wonder plane. The mammoth and most tragic error is that it was considered from the start that for this particular project a bottomless reservoir of wealth was available.

Also prejudicial to progress was the rapid change of Ministers of Aviation—12 Ministers in as many years. There was no statesmanship and, if that was not bad enough, no salesmanship. There was a confession of failure on the part of one hon. Gentleman who said that he, along with some colleagues, spent three weeks in Australia to no avail. That was a very honest expression of the position at that time.

Viewing the position dispassionately—and in Preston it must be conceded that I was very close to events—I could not dismiss the thought that, whoever formed the Government following the October, 1964 Election, the TSR2 would not have a long existence. Regrettably, the purchase of American planes is a movement far removed in my estimation from bolstering up the strength and prestige of our own aircraft industry. The cancellation of innumerable projects, with constant unemployment, redundancy payments and mobility of labour, with all its detrimental effects on the stability of family life, is also instrumental in sapping the dignity, initiative and morale of our working people.

If we have the slightest knowledge of industrial life, we must be aware that the cancellation of large projects brings in its trail tremendous disillusionment—not Only unemployment, not only the loss of a man's skill and craft, but also the unhappy thought that industrial "know-how" is being scattered to the four winds. How long can the successful existence of this country continue on this basis? Recession, retrogression, changing horses whilst crossing the stream, are sapping the initiative and morale of our working people and undermining the strength, confidence and great resilience which we know they possess.

I shall not by any stretch of the imagination join in the strictures indulged in by right hon. and hon. Members opposite. They were entitled, if they thought fit, to do that. I could say much about the sufferings of those in my constituency, through one cancellation and industrial upset after another, continuing all along the line, but I shall not do so, because I should be in great danger of incurring your displeasure, Mr. Speaker; and this I am not anxious to do.

There may be compensations in pursuing this policy today. The Secretary of State was eloquent and sincere. He was in no doubt that we were traversing the right path. I can only hope that this is the answer for the future. I believe that the key to the future is, above all things, to rekindle the fire of faith in our own people and to eradicate from our own Labour Party philosophy the thought that there is a tolerable level of unemployment. This is new jargon. I have been a long time in public life, as you have, Mr. Speaker, but never have we spoken along these lines.

My advice to the Government and to my colleagues is to perish the thought and remove it from our Government thinking. What we require for the benefit of the country is no looking back, but a continuation of such projects as we have been discussing today. What we require at all times is the highest level of employment and a fully expansionist policy with regard to aircraft, as with regard to shipping and other developments. We want a carefully thought out system of planning, with no cancellations envisaged at any time in the future, and a determined policy to keep Britain and its people at work, and, in so doing, to enhance the security and dignity of the good honest, decent, and upright people of our country.

7.27 p.m.

Sir Ian Orr-Ewing (Hendon, North)

I am very glad to follow the hon. Member for Preston, South (Mr. Peter Mahon). We knew his predecessor and we know how deeply involved his constituents are and have been in the aircraft programme.

The Secretary of State did himself less than justice when he sought to say that those of us who criticised the F111 or any aircraft did it—I quote his words—out of malice or commercial interest. That was a very unworthy viewpoint for the Front Bench to put forward in all seriousness. We have had three speeches from the Labour back benches, of which the last was one, which were obviously completely devoid of malice or commercial interest. As the hon. Members for Coventry, North (Mr. Edelman) and Woolwich, East (Mr. Mayhew) said, we all speak sometimes for our constituents but always with the interests of the defence of the nation in our hearts. It was particularly unwise for the Secretary of State to make such a statement, because, if such accusations are to be made, people in glass houses should not throw stones.

The right hon. Gentleman referred to Mr. Richard Worcester, who is an aircraft consultant and who is adviser to the Labour Party. [HON. MEMBERS: "No."] I am sorry. I quote The Times of 26th June, 1965, which said that Mr. Worcester told The Times last night that he had written a report in March, 1964, which was presented to the Labour leadership and read by them in March and April. On June 20 he attended a meeting with the party leaders who appeared to be well satisfied with the report and to accept it. [HON. MEMBERS: "Oh."] Mr. Worcester went on to claim in an opening meeting that he knew the right hon. Member for Dudley (Mr. Wigg) extremely well and had done so for many years.

I have here, for greater clarification, a copy of the Worcester plan. This is what he said; this is what the Government did—cancel TSR2, HS681 and P1154. All three were cancelled. Then, put Concord into abeyance. The Government tried to do this but were foiled by the contract terms and the French. Then, order F111 and C141 with possible interaction on ordering Phantom and C130. Both the Phantom and the C130 were ordered.

I could go on to show what Mr. Worcester himself said and what has happened. What he put in his plan clearly shows that he was justified in claiming that his policy was accepted by the Labour leadership. As the hon. Member for Preston, South said, perhaps we were suffering from too much "Worcester sauce" at that time.

The right hon. Gentleman began in avuncular mood, rather like "Uncle Mac" used to talk to listeners in the old days on the B.B.C. He was talking, first, to try to convert those below the Gangway opposite, very few of whom are here today, trying to persuade his Left wing to go into the Lobby in support of the Government tonight. Perhaps, if we have the hon. Members for Woolwich, East and for Coventry, North with us tonight, we may not know how many hon. Members opposite abstain because, although we have a three-line Whip on our side, the Government side has only a two-line Whip. This is a cunning way of obscuring the number of people who, for reasons of conscience, abstain.

Mr. Maxwell-Hyslop

Even if we cannot expect to have the right hon. Gentleman with us in the Lobby, it would be nice if we could have him with us in the Chamber for the debate.

Sir Ian Orr-Ewing

My hon. Friend expresses a feeling which we all have. The Secretary of State, who began in an avuncular way and later made some very vicious comments which cannot be borne out, has been with us very little. He came in for a moment or two when the hon. Member for Woolwich, East was speaking, but that was all. It is a pity, as this is in many ways a censure debate directed at the right hon. Gentleman, that he should leave his place and be so little with us.

The Secretary of State put before the House a fog of obscurity on the figures. He began by saying that he would put a 15-year plan before us. He dealt in global figures, saying that he had allowed for this factor and that, for X, Y and Z, but he never said for how much they were in the account. When we questioned him on this issue, he confessed that in the 15-year plan the joker in the pack—all hon. Members who play poker will know that one can make a good hand if one has the joker—was the Anglo-French VG, and he told us that he had allowed £150 million for this project, which is still a paper aeroplane. As I understand it, about £350 million will be needed to buy 150 of these aircraft, if we can agree with the French on the operational requirement and the type of aircraft to be produced, and if or when we know anything about the cost.

Strangely enough, when we came to the 10-year programme in the right hon. Gentleman's speech, the Anglo-French VG was left out altogether. In the Defence White Paper last year, at the top of page 11, the Government said: By the mid-1970s, we intend that the Anglo-French variable-geometry aircraft should begin to take over this and other rôles. Both operationally and industrially, this aircraft is the core of our long-term aircraft programme". The House will remember that it was the Anglo-French VG and a small number of F111 which were to form the basis of a viable Royal Air Force force, and there was also to be a contribution to the Navy from the Anglo-French VG because, it was said, it could operate from carriers, or some future carriers. It is surprising that, in the right hon. Gentleman's 10-year programme, this particular joker, of which we know so little was not included. In only eight years, so the White Paper tells us, it is to be the core of the programme.

There was a slight difference of opinion about the number of TSR2s planned. On our side, we thought the 110 had been the project when we left office—I was not a member of the Government in the latter months—and the right hon. Gentleman said that the figure was 158. These were to be replaced with a small number of F111s, 10 of which were to be trained aircraft and 40 to be operational, the F111K.

The Under-Secretary of State for Defence for the Royal Air Force (Mr. Merlyn Rees)

As a Minister with responsibility for the Royal Air Force, I must say, for the record, that no one has said that 10 aircraft will form the O.C.U. and will be used for training purposes.

Sir Ian Orr-Ewing

I can give the facts, but I shall not delay the House by doing so. When we first heard about the F111 and the purchase of 10, we were told that these were training aircraft, that they would be taken in the Mark I form, not suitable for operations, they would not have the avionics, and so on. I doubt that one can manage with many fewer than 10 aircraft for an operational conversion unit and do all that is necessary. Perhaps it may not be the full 10 for that purpose, but we were certainly told that only 40 would be the F111K, modified to suit the R.A.F. requirement.

On the question of cost, when the option was first taken up, we learned about this not from the right hon. Gentleman, because he did not announce it, but from The Times of 7th April, 1965, which had a headline, Uproar in Commons over scrapping of TSR2. £357 million option on American F111A aircraft. It was said that the option was £357 million, but there has been an enormous cut-back. We have not taken anything like that number of aircraft, and neither have we met the capital cost of that sum. The right hon. Gentleman told us today that he thought that the basic cost would be £2.1 million. There were lots of hedges on that, for escalation of wages and prices, an extra £0.1 million for that making £2.2 million, an extra £0.5 million taking us up to the point when the aircraft is modified to meet British requirements, and so on. In answer to a question from me, the right hon. Gentleman confessed that the initial spares, not the continuing spares, and the test equipment would cost just over £1 million per aircraft, £55 million for 50 aircraft.

On that basis, therefore, it is £3.6 million per aircraft. If we are to buy 50, the cost will be about £180 million. So the original option of £357 million has been cut by half. In the absence of other edification, the House can only assume the remainder is to be made up with spending on the Anglo-French VG, the only other aircraft which can meet the operational requirements.

We have been told that it is expected that the 40 F111Ks should be in squadron service and in operation for 10 years. With the need for aircraft to be modified, with the risk of landing accidents, errors of judgment, and so on, can it be thought that a force of 40 aircraft will last us for operational purposes for 10 years? It seems to me that a force of this sort, particularly if it is to be deployed some in this country, some east of Suez, as we were told today, is not a viable force, and certainly will not give us a good cost evaluation.

We have heard a great deal from this Government about getting value for money. This is probably the poorest value for money that has ever been bought. Whenever one produces small numbers of highly sophisticated aircraft, the cost of the simulators, of the training programme, of the spares programme and the rest, is very much larger—one has to have one set of spares for the Phantom, one set for the Anglo-French VG, and one set for the F111—and there can be nothing more uneconomical than having small numbers of highly sophisticated aircraft. One gets poor serviceability and very high costs.

The right hon. Gentleman dodged all our questions, questions put very penetratingly by my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell). Why does he always castigate the British aircraft industry? It is said that the British aircraft industry is the one in which price escalates. The right hon. Gentleman said this again today. If he looks at the figures, he will find that the United States F111 has escalated from an original estimate of 2.9 million dollars each to 8 million dollars each, a two-and-a-half-times escalation during its development. These figures ought to be brought to the notice of the House. The right hon. Gentleman would put his case more fairly if he said that, when one is operating near the bounds of knowledge, when one's research and development effort is breaking new ground, it is almost impossible to predict all the problems which one will meet or how much it will cost to solve them.

That is why TSR2 escalated and why the Concord will escalate. Can the right hon. Gentleman say that the Anglo-French variable geometry aircraft will not escalate in cost? Can he say with his hand on his heart that the £150 million for research and development is all we shall contribute to the development of that aircraft, and not a penny more? Of course, he cannot. It will be breaking new grounds with its variable geometry layout, and of course the costs will escalate during its development. We should acknowledge that. We are fair in the House and know that this always happens when one is pioneering in a scientific sphere. It happened with atomic power stations, the cost of which escalated in the same way; in many instances they cost double what was expected.

We were told the operational date earlier, when the option was taken up and a statement was issued by the Ministry of Defence that all 50 of the aircraft would be delivered by January, 1970. Today we were told—and this is another slight slant—that they would be in squadron service by 1969. I hope that the right hon. Gentleman is right. I am very glad to see that he has just been able to return to the Chamber and give use the privilege of seeing him here and perhaps answering some of the points. If that is the date when they will be in service, and other nations are to get operational aircraft first, which are they? Is it the U.S.A. ——

Mr. Healey

I said so during the debate. If the hon. Gentleman had listened more carefully to what I said when I was here, he would not have found it necessary to make the remarks which I gather he has been making in the last few minutes.

Sir Ian Orr-Ewing

I said earlier that I thought that the right hon. Gentleman had lectured us in an avuncular manner. If he is only to come here from time to time to pick up remarks and abuse hon. Members he will be even less welcome, and had better leave the House again. He cannot go on in this arrogant manner of teaching the House. I hope he will apologise. Would he now please withdraw his statement that people who have spoken in the debate or criticised the F111 do it—I took down his words—through malice or commercial interest?

Mr. Healey

I did not say anything of the sort. With respect, if the hon. Gentleman would listen more carefully to what I say, he would not make these absurd allegations. I said that a great deal of the criticism is malicious and ill-founded, and a great deal stems from origins which have a commercial interest at stake. If the hon. Gentleman does not know that to be the case, he is much less well aware of the nature of the aircraft lobbies around the world than I think he is.

Sir Ian Orr-Ewing

Of course, the aircraft lobbies are very powerful. The hon. Member for Coventry, North (Mr. Edelman) made exactly the same points and drew the same implication as I did, that it was malice or commercial interest and I am delighted to have the right hon. Gentleman's slight gloss on his statement, which makes it more acceptable to the House.

If only the right hon. Gentleman would not give grist to the opposition lobby mills, the British aircraft industry would succeed in selling its aircraft more successfully. He is always saying that British aircraft escalate in cost and are late, but American aircraft never escalate and will be produced on time. Those words are quoted around the world by American spokesmen.

Mr. Healey

The hon. Gentleman was here when I spoke at the beginning of the debate and when one of his hon. Friends pointed out that there have been accusations of a 50 per cent. escalation in the research and development cost of the F111. I pointed out that according to the earlier figures concealed from the House at the time by the previous Government, there had been an escalation of 500 per cent. in the research and development cost of the TSR2. Those are facts which are well known throughout the world, and it does no credit to the hon. Gentleman to suggest that anybody who refers to them in argument is knocking the British aircraft industry.

Sir Ian Orr-Ewing

It would perhaps have been better if the right hon. Gentleman had said that the F111 had escalated by 250 per cent. [Interruption.] That is true. I can give the figures. It has escalated from 2.8 million dollars to 8 million dollars. The right hon. Gentleman is always quoting figures against the British aircraft industry, but never against the American. There are some things wrong with the British aircraft industry, but there are also many things wrong with the American aircraft industry.

I am sorry to have taken up the time of the House, but I had made those points in debate and as the right hon. Gentleman had not heard them I wished to make them again. Perhaps the Minister winding up will tell us whether there are penalty clauses on the F111 contract. British contractors have very strict penalty clauses both on delivery dates and on short-fall in performance. If those demands can be made on British contractors, the Government could make the same demands on American contractors.

I am sorry that the right hon. Gentleman has so failed to answer the penetrating arguments put forward by my right hon. Friend. He shelved them off with a lecture to the school children below the gangway, many of whom were not here. I hope that the House will defeat him tonight and make sure that he is no longer able to mislead us and conceal figures from the House.

7.45 p.m.

Mr. Russell Kerr (Feltham)

I do not know what kind of poker school the hon.

Member for Hendon, North (Sir Ian Orr-Ewing) habitually inhabits, but no game of poker that I have ever played in allows the use of jokers in the pack.

Be that as it may, I thought that the hon. Member was a little less than generous to my right hon. Friend who, gave us a speech which was exhaustively, even exhaustingly, thorough. As I presume the hon. Gentleman knows, my right hon. Friend has only recently returned from a very long and no doubt exhausting trip to the Far East and other places, including, I believe, my own native land.

I speak not only as one who has been very critical of the escalation in the cost of the F111, on which I thought my right hon. Friend's remarks today were only partly reassuring, but also as one who, wanting to see a strong British aircraft industry, has observed with considerable fascination the attempts of hon. Members opposite, both inside and outside the Chamber, to rewrite the history of the TSR2, so that it has become in retrospect the brightest jewel in the crown of British technology and an elequent testimonial to the sagacity, foresight and financial acumen of successive Conservative Ministers of Aviation. In fact, it was nothing of the sort. Whatever its technical attributes, which were very considerable, and which reflected great credit on the designers and those who carried out their plans, the TSR2 project, at least in its financial aspects, was a monmument to confused thinking and was almost criminal in its disregard of the taxpayers' interests in the matter.

If hon. Members opposite doubt that, let them recall, as the Minister did earlier today, the Civil Appropriation Accounts of 1964–65, in which Sir Edmund Compton, a fearless, independent-minded and highly efficient Comptroller and Auditor-General, who has very properly been elevated to be the nation's first Ombudsman, gave a detailed analysis of the rising costs of the TSR2, a story which blows a very loud raspberry at the idea that our Conservative predecessors in government were in any way businesslike in the way they conducted the nation's affairs.

I am sorry that the hon. Member for Macclesfield (Sir A. V. Harvey) has just left the Chamber. With the loyal help of the right hon. Member for Stafford and Stone (Mr. Hugh Fraser), he claimed that the TSR2 contract had been lost to Australia because of fear of the arrival of a Labour Government in Britain. That is the most arrant nonsense. I had the great pleasure of pointing out what nonsense it was to the then Minister of Aviation, my former opponent, Mr. Julian Amery, and all I had to do was to quote the remarks of the then Australian Minister of Defence several days after that ridiculous canard first appeared. The Minister, Mr. Athol Townley, indignantly denied that there was any truth in that schoolboy assertion by Mr. Amery and his supporters. I hope that we are not going to have this ridiculous and childish nonsense making a reappearance in this or any future debate.

On the civilised precept—and I hope that the right hon. Member for Wolverhampton, South-West (Mr. Powell) will forgive my Latin, de mortuis nil nisi bonum, I forbear from elaborating on the rôle of the most recent Conservative Minister of Aviation, Mr. Julian Amery. Likewise I shall not mention the Ferranti scandal, which happened in his time at the Ministry and which so nearly cost the nation and the taxpayers millions of £s. Instead, I shall confine myself to what Sir Edmund Compton had to say in his report: The TSR2 project began with an estimated development cost of £80–£90 million in 1959"— my right hon. Friend gave even more interesting figures today— and rose steadily until in January, 1964, it had reached £240–£260 million. That is roughly a threefold increase in just over four years.

As an aside, perhaps one should say that, even by reference to the inflation which was so distinctive a feature of successive Conservative Governments, this is good going, though hardly from the taxpayers' point of view. Sir Edmund went on to point out that in May, 1964, The Ministry of Aviation informed the Ministry of Defence that, while technical problems on the TSR2 project had been underestimated by all concerned"— that was the understatement of 1964— they had had occasion over a number of years to make representations to the contractor about the quality of the technical and financial management of the project, within the main firm and in relation to its sub-contractors. I shall content myself with one observation only on this. If the then Minister of Aviation had made louder and longer representations on the financial side, the Ferranti scandal would probably have been avoided and so, too, would quite a number of other less-publicised "rackets", each of which played its part in this astronomical escalation of the cost of the TSR2.

From my personal experience in Preston, I can give one example. According to my information, a number of items of heavy capital equipment, with years of usefulness to the manufacturers still in them, were happily charged in full to the Ministry's account for the TSR2—all, of course, on the "cost-plus" basis—without anyone being so indelicate as to mention that an offset of some kind appeared to be indicated, assuming that the firm was to retain them for its own use. My informant, a responsible employee of the company, claims that, for one item alone in this category, some £50,000 was involved.

I mention these matters not to reopen old wounds, and certainly not to disturb the former right hon. Members for Preston, North and Bromley in their well-merited retirement, but merely to remind the House that hon. Members opposite are the last people entitled to castigate my right hon. Friend for the difficulties he faces over the F111K—difficulties which arose not only because of the bungling incompetence of the last Government—my right hon. Friend is an able administrator although perhaps reading a bad brief—but also because he has taken over far too many of the outdated and dangerous policy assumptions of that Government.

Not the least of these is the assumption that it is possible for this country— which is in rather desperate financial straits now, as it was during most of the time the Conservatives were in power—to maintain itself as a major world imperial power able and willing to shoulder burdens and so-called peacekeeping operations—but which so frequently have turned into a modern variant of the old imperialist game of "bashing the wogs".

This bears directly on the current argument about the F111K because, as has been freely acknowledged, the principal rôle envisaged for the F111K by the Minister and, presumably, the Government, is east of Suez, as a long range strike reconnaissance aircraft. If ever there was a contradiction between stated aims and the means with which it is hoped to carry them out, this is it.

According to this year's White Paper, as I read it, the Government's policy is that never again should Britain have to undertake operations, even on the scale of the recent Indonesian confrontation, outside Europe. One is bound to ask: what rôle could a bomber force of this kind possibly play in small scale policing operations or internal security situations? At 1,500 m.p.h., even the point bombing my right hon. Friend referred to is bound to hit civilians, and plenty of them.

Without going into further detail, I hope that my right hon. Friend even at this late hour—perhaps it is about five minutes past 12 o'clock already—will take a day or two off, go in solitude perhaps to Chequers, and rethink most carefully the assumptions on which his present highly expensive and fundamentally mistaken defence policies are based. I am sure that the Patronage Secretary would view his absence with tolerance and I am sure that the new policy he would produce after such cerebration would not only confound his and my political enemies—who have no real place in this argument—but would make possible those other social objectives which all of us on this side of the House want for the people of Britain, and want soon.

7.56 p.m.

Mr. R. J. Maxwell-Hyslop (Tiverton)

I want to ask the right hon. Gentleman two specific questions to which I hope to receive specific answers. I have asked them both before but to neither has a specific answer been given. When I asked earlier whether the F111K contract had specified in it the price at which replacement aircraft could be purchased, either to make up losses in training accidents or, indeed, through operations, his reply then was that it had not yet reached that stage of contract negotiation.

Presumably, now that the final contract has been signed, we can have a straight answer as to whether or not the price for follow-up replacement aircraft is larger than for the initial buy. Obviously, if we are to do as the right hon. Gentleman has done and give, five, ten and 15-year forecasts realistically, we must assume a certain rate of attrition in the aircraft which will have to be replaced. That is a reasonable assumption. If they are used in action, the attrition may be very great.

I warn the right hon. Gentleman against the danger of believing that, because an aircraft is expensive and sophisticated, it is in the same measure invulnerable. The Americans have had heavy losses of aircraft in Vietnam against a primitive form of anti-aircraft fire. Incidentally, those losses include Phantoms. The rate of loss emphasises the point. If we only had 40 aircraft operational and lost even 10 per cent. presumably replacements would be needed.

I am extremely worried about spares prices and the agreement that we should pay the same price for spares as the United States Air Force. My recollection of the all-party meeting upstairs, at which the Vice-President of General Dynamics and a senior executive of United Aircraft, which makes the engines, were present, when we asked where the money would come from if they hit unexpected development costs, the answer was that it would come from Government spares.

In other words, we do not contract out of the very great elasticity of development costs merely by having a fixed unit cost for the aircraft. In the renegotiation procedures which, apparently, the American Air Force has for its spares, this works both ways. If the company makes an excessive profit, the renegotiation knocks the price down for spares, but if the profit is below normal then in renegotiation the load is usually put on spares prices rather than on to unit cost prices. This is not just me having a suspicious mind. Anyone who looks at the history of the N.A.T.O. orders for the Lockheed F104 after the two-year umbrella over spare prices will know that in many cases those prices went up by more than 200 per cent.

The Secretary of State endeavoured to discourage hon. Members from criticising the F111 by imputing extremely unworthy motives, if not to all, at least to many of those who presume to criticise him. He also intimated that it might be bad for the morale of the R.A.F. in some way if the aircraft were criticised. I suspect that in Western Germany there are many people who wish that there had been more criticism of the F104.

We are now in the position of having ordered an aircraft which is in terrible technical trouble. It is in such bad technical trouble with its engines that, instead of trying to cure each problem by modification action, the designers are having to undertake simultaneous modifications to deal with different problems at both ends of the engine, and the results of those modifications therefore cannot be read clearly. This is the sort of panic measure which has to be taken when one is up against a firm commitment date-wise, and that is the position in which United Aircraft finds itself with this engine.

It is fair to say that however high the technical competence of a firm of engine-builders every now and again it produces a "pup", and that is what has happened with this aircraft. It happens to be our misfortune as well as theirs, in the sense that we have ordered it, and that is why I ask the Secretary of State the specific question. If the handling characteristics of the engine are still bad, for instance, if it gets severe surge when the aircraft has to be yawed for one reason or another, if the reheat system blows out even when reheat is selected, as on the Lockheed F104 it is still doing after four years in service, do we take the aircraft, or wait until the trouble has been sorted out, if it can be?

When I put that question before, the Secretary of State answered a different question. He said that if the aircraft did not meet its performance specification we would not take it, but he did not say what the performance specification was. In writing a performance specification it is not usual to cover matters of this kind. There are certain things which can be covered definitively—what is known as the re-light envelope, the conditions of altitude, attitude, speed, temperature at which to re-light an engine which has had a flame-out. There are certain things like that which can be specified. One can even get a guaranteed surge line curve, but it would normally be assumed that an aircraft could be flown in normal operating conditions without losing engines from compressor surge. I think that the aircraft is suffering from surge rather than stall, although it has been said to be suffering from stall rather than surge. Perhaps it does that as well.

I hope that the Secretary of State will tell us quite definitely—not the answer which he gave me and which I am sure was true and which I was delighted to hear, when he said that if it did not meet performance specifications it would not be accepted, and I should hope not—but whether, if it still has these very severe handling defects, which, incidentally, will mean that we shall be very likely to lose both pilots and extremely expensive aircraft, we will delay accepting these aircraft and, incidentally, paying for them, too.

The Secretary of State remarked that there was no time to collaborate with anyone on an alternative project. There was time to collaborate with the French on the Spey/Mirage. The Government decided against that project. They may have been right or wrong, but, personally, I think that they were absolutely wrong. That aircraft would have done what we wanted at no greater expense, but without having to use dollars which we did not have, and it would have greatly strengthened our technical and political collaboration with France. I think that the day will come when we shall rue the day when we turned down this opportunity of technical collaboration with the French.

Whether it flies acceptably or not, the destructive capacity of this aircraft in one direction is assured. It is guaranteed as an effective destructor of the equilibrium of our balance of payments. That has been built into a future date. When our great Prime Minister claims that we have balanced our payments, what he has done is to postpone the imbalance, probably hoping that by then he will be out of office, as happened in 1951.

Mr. Healey

The hon. Gentleman is making a very interesting speech. He will be aware of the offset agreement and the fact that already in the first 12 years' payments we have drawn up contracts covering half the total dollar cost. I should be interested to hear his explanation of how he maintains that that is a drain on our balance of payments.

Mr. Maxwell-Hyslop

I am not aware that what the right hon. Gentleman has just said is accurate. I suspect that he is including Saudi Arabia in that and that, as is well known, has nothing to do with it. That was a complete smokescreen. What happened was that the Saudis wanted to buy an aircraft which the Americans were not prepared to sell them. They wanted to buy the Lockheed F104 and the Americans were in enough trouble having them sticking into the ground all over Europe without wanting to have them sticking into the ground all over the Arabian Peninsula as well. That is what happened in that negotiation. The Saudis wanted a different aircraft from the Americans, but the Americans at that time were not willing to sell them. All that ended with the purchase of the Lightnings, but it had nothing to do with Britain taking the F1ll, and that contention is a complete smokescreen.

We are now at the stage when we are committed to very heavy dollar payments, and the fact that those payments recede into the future does not mean that they do not have to be met. It means only that they have to be met later, and, presumably, with interest, because this is not an interest-free loan. When I put a Question to the present Foreign Secretary, who was then Secretary of State for Economic Affairs, asking what plans the Government had to increase exports to cover the extra cost, I got the fatuous reply that since trade was multilateral the question did not arise, as though hundreds of millions of dollars' worth of debts could be accumulated which in some mysterious way we did not have to pay because trade was multilateral. If that was the right hon. Gentleman's theory of economics, perhaps it explains why he is no longer Secretary of State for Economic Affairs.

I am extremely worried about when the rooks come home to roost for the payment of this aircraft. I made the point earlier that it is in some ways improbable that we will ever see both the airbus and the variable geometry aircraft. We must therefore decide which of those two to go for, lest we get neither, or lest we get one too late, by which time the world market will have gone. Unless we express our priorities in this, we shall be in grave danger of getting neither, in which case all the Government's talk about the morale of the Royal Air Force will be revealed as complete clap-trap without the aircraft for the men to fly, for the career structure will not be there.

I want answers to my two specific questions about the cost of replacement. aircraft and about whether we will refuse delivery unless the handling characteristics of the aircraft are safe—and I mean safe, because I do not want the condition of the F104 when it was delivered to the Western German Air Force to be regarded as the condition of a safe aeroplane; it was not. We shall eventually find, having taken delivery of these aircraft that we will have taken delivery of an aircraft at far too high a price for the job it is likely to do and without having given our own economy any offsetting advantage from so doing. It may well be that had we had the TSR2 we should have still have paid more than we needed to pay per unit for the job done. That is quite possible, depending in the type of war in which we found ourselves. But at least the benefit from that expenditure would have gone into our economy instead of going out of it, and at least part of the overheads of that programme would have been shared by the civil aircraft which as a nation we are trying to export.

The conclusions of this matter have not yet been reached, but I regard it certainly with no relish and with very little confidence.

8.11 p.m.

Mr. Robert Howarth (Bolton, East)

I understood that the purpose of a censure debate arising on Supply was to be an exercise by the Opposition in probing the Government's policy, finding the weak spots and then exploiting them. The two most recent examples—today and that on child poverty not long ago— were from the Opposition's point of view particularly unfortunate choices. I thought that on both occasions the leading spokesmen for the Opposition were completely obliterated by the answers given by the Government spokesmen. The performance by my right hon. Friend today was masterful. It completely revealed the spurious nature of the charges made by the right hon. Member for Wolverhampton South-West (Mr. Powell).

Before I come to the main point of my speech, may I take up a number of points made by the hon. Member for Tiverton (Mr. Maxwell-Hyslop) and take issue with him on the theme which he repeated throughout his speech in making a comparison between the ordering by Germany and other Western European nations of the F104 and our ordering of the F111. There is an important difference. It should be pointed out that the F104 has not been ordered by the United States Air Force whereas the F111 has been ordered by the United States Air Force in large numbers. In spite of what the hon. Member suggested were serious problems in the development of the F111—I will come to that point later—I put it to him that the United States Air Force, who do not usually buy a pig in a poke, have shown their confidence in the success of this aeroplane by ordering it in large quantities.

Mr. Maxwell-Hyslop

To give the picture its full outline, will the hon. Member agree that in fact they have shown their reduced confidence by reducing the number of their orders, not by increasing them?

Mr. Howarth

As I understand it, the orders are being phased over a longer period. Until such time as they have resolved the argument about the development of the FB1 11 and the future of a supersonic strategic bomber, the numbers needed in the future are as yet unknown. But the numbers involved in the United States Air Force order for the F1ll are very considerable. I think that it is reasonable to suggest that they have confidence in the development of the aircraft. If it were as bad as the hon. Member suggests, presumably they would even have considered cancelling the project. Like us, the Americans have quite a record of cancelled aircraft projects, and there is no reason why the F111 should be sacrosanct.

In coming to the debate we need to look at the background of the Government's decision to order the F111, and to do this we need to look at the position when the Government took over in October 1964, when it was found that a most alarming situation faced the R.A.F. because of the failure of the Conservative Government to lay plans for the replacement of aircraft which were of a considerable age. The Canberra has been mentioned. About 20 years total life had been given by that aircraft. The Hunter was a very old plane and urgently in need of replacement. The Shackleton, which has not been mentioned today, was another aircraft in respect of which the procrastination of Conservative Governments had left the R.A.F. with a very old plane. That situation has been put right by the present Government, and it is no wonder—and I confirm what was said by the hon. Member for Macclesfield (Sir A. V. Harvey)—that the morale of the R.A.F. is very high at present. They are getting the aircraft, and the prospect is that they will continue to receive very fine aircraft to undertake the tasks being allotted to them.

But we need to understand how that situation arose and why the Government, when they came into power in 1964, found the R.A.F. in this position, operating very old aircraft with the prospect of replacement many years away. It was all based on the infamous Defence White Paper of 1957 which postulated the end of manned aircraft for the R.A.F. From this wholly disastrous basis arose all the problems about which we are still arguing. This should not surprise us, because from conception right through to operation of an aircraft we are talking of a span of from five to 15 years, so that the errors of the 1957 White Paper are still unfortunately with us.

The many decisions, tough as they were, by the present Government to hive off the uneconomic and ultra-expensive projects bequeathed to them in a last-minute ordering spree by the Conservatives in the early 1960's have received widespread support. One could have had—as I have had—a slight difference of opinion as to which projects might have been continued, but, generally speaking, the overall decision of the Government to recognise that we could not maintain the type of irresponsible programme initiated in the last few years of the Tory Government has certainly been supported by the great majority of hon. Members.

We inherited an impossible financial obligation. We followed this by instituting the Plowden Committee to look at the whole question of British aviation. We accepted that Committee's Report and have acted on many of the recommendations. One recommendation was the need in future, at least in the very advanced projects, to go in for collaborative projects with other European countries. It is much to the credit of the present Government that a number of these are coming along at an encouraging pace. The Jaguar is a firm project which is under way. We hope that the AFVG will materialise at an early date and will be the basis for a major project for the aircraft industry both of this country and of France.

For my part, I accept that the F111K is an interim purchase until such time as the AFVG is produced. I do not think that we can place too much emphasis on the importance of the AFVG, not only for the R.A.F. and the other air forces which are likely to be purchasers of it, but also for our own aviation industry It would be exceedingly unfortunate for the British aviation industry if the AFVG did not go ahead, and I very much hope that very shortly we shall have an encouraging further report from the Government about this project. I noticed with pleasure the welcome assurance by the Minister of State for Defence that one of his principal objectives is to try to ensure that we have a viable, economic and competitive British aviation industry.

This is the policy on which we base our actions and upon which I believe this industry can certainly make a very important contribution in both technological and export terms to our economy. But the AFVG is due to come into service only from 1973 onwards, and we need an interim type from 1969 to 1973–74. So this four or five year gap is particularly important. Is anyone suggesting that we can cover the period by the continued use of the Canberras and other aircraft which are already at the end of their useful life? We need the F111 to tide us over this period. The need has been shown. I must admit that I do not like the prospect of these large orders of American aircraft, but I am prepared to accept that this is necessary provided that the AFVG is firm and comes along from 1973 and onwards.

I find the grounds for the Opposition attack typically unreal. The opening speech was quite removed from reality, and I am sure that the great majority of people outside would not be particularly interested in the arguments that the right hon. Gentleman was deploying. At least there are those—some in this House—who question the overall defence decisions taken by the Government, and I think that their position has been made clear, but not in this case the position of the Opposition. All we had was a niggling exercise on minor points on which the Opposition spokesman did his best with an exceedingly bad brief. The reply by my right hon. Friend will, I think, prove the justice of the Government's case.

I believe that the Opposition have tried to puff up a great debate about a sum which, on the figures of the right hon. Member for Wolverhampton, Southwest, will be only about £12 million to £13 million. I know that this is a lot of money, but I have to admit that in aircraft terms it is not a great deal. One wonders why the Opposition have not initiated debates on their Supply Days on the Ferranti affair and the Bristol-Siddeley affair. From those two items alone the total cost to the taxpayer in excess profits is about £8 million, not far short of the sum that was being questioned by the Opposition spokesmen.

What of the Concord, a project which I happen to support, but one has to admit that its costs have escalated from £175 million to £500 million in research and development? Why no Supply Day debate on the escalation of those costs? One can only assure that the hypocrisy of the Opposition in looking round for some very weak stick with which to beat the Government knows no bounds.

Mr. Cranley Onslow (Woking)

Debates on the Concord have twice been initiated by the Opposition on the Consolidated Fund. We should welcome opportunities to debate it again, and at greater length.

Mr. Howarth

That makes the point that I was trying to put, that one would have thought that, considering the amount of money involved in the escalation of the costs of the Concord, a Supply Day would have been devoted to it by the Opposition. The Opposition are complaining about a possible rise in the costs of the F111 amounting to about £12 million over the 50 aircraft. Yet they seem to be rather coy in coming forward in a debate for £325 million. I think that somehow they have got their priorities wrong.

I wish to comment on the complaint of the right hon. Member for Wolverhampton, South-West about the alleged development problems of the F111. One has to admit that these are real. But it is not unusual for an advanced military aircraft to have development problems. Speaking from memory, I remind the right hon. Gentleman that the Hunter had severe problems. I also understand that the Lightning had a severe problem with its engine. In the case of one of those aircraft, the firing of its guns at altitude was likely to put its engine out. All these things were eventually solved. It should not be surprising to anyone with any knowledge of the aviation industry to know that advanced military projects are bound to have problems. The F111, I have to admit, is going into completely new ground in having variable geometry. There is no comparable aircraft. That development is bound to introduce problems which could not have been foreseen.

Mr. Maxwell-Hyslop rose——

Mr. Howarth

I have to sit down at 8.30, and I should like to finish within the next few minutes.

On the question of development problems, I understand that even such an aircraft as the Belfast has had very severe drag problems, which have reduced its progress accordingly. One could go through a whole range of military aircraft and indicate that they have had severe development problems. It would be unusual if they did not have them.

I should like to reinforce that point by quoting from the article from which the hon. Member for Orpington (Mr. Lubbock) rather selectively gave us a paragraph. It is an article in Flight International of 30th March, 1967. It referred to the serious problems that had been encountered with the F111. At the end of the article, it seems to be saying that the engine manufacturers were confident that they could overcome these problems, that even with the excess weight and drag—which, I understand, have very largely been offset by aerodynamic improvements and weight reduction exercises—the F111K would satisfy Royal Air Force requirements. The article states: Even with excess weight and drag, the F111K will satisfy R.A.F. requirements and although it would naturally like the aeroplane improved as much as possible in this respect, the British Government will not press for improvements over and above the minimum required by the R.A.F., on the grounds that Britain would certainly be invited to share the necessary development costs. The engine and intake problems are, in any case, expected to be solved by the time the aircraft enters service. While the intake troubles could worry the U.S.A.F., which wants high-altitude manoeuvreability in the FlllA's secondary role, this is not likely to worry the R.A.F. unduly, since this part of the flight envelope will be little used. So the indications are that the problems will be cured, and that, even at worst, if there were still problems remaining when the aircraft came to be delivered to the Royal Air Force they would, in effect, meet the minimum R.A.F. requirements.

My right hon. Friend commented upon the reconnaissance role of the F111. It is in this role that we would expect to see the F111 primarily used. I regard this as an expensive but very necessary insurance policy. While we may like to think that the world is inhabited by people who are always peaceful in intent, unfortunately, as we well know to our cost, this is not the case. This is where I differ from some of my hon. Friends who are pacifists and who oppose the whole idea of defence expenditure. There are unfortunately those in this world who seem hell-bent on involving themselves and others in warlike adventures.

I recall that I was watching a television programme a month ago which showed the warlike preparations in Syria, where they are beginning to prepare in a military and psychological sense for a war which the present leaders of Syria are suggesting would be waged against the raiders. One was shown pictures of the equipment, unfortunately supplied by the Soviet Union. In these circumstances the need for such an insurance policy as a very sophisticated and long-range reconnaissance aircraft is obvious.

I recognise that it is very difficult to be able to exchange across the Floor of the House full facts and figures. It is difficult, on the grounds of security, for my right hon. Friend to be able to give all the figures which would prove his case even more successfully than he has done. This debate has once again proved the need for a specialist, or Select Committee, which could go into the problem of what we are discussing. I am sorry that the Select Committee for Science and Technology, of which I am a member, did not decide to investigate one of these aviation projects.

If we could discuss this in Committee, in a non-partisan way, taking evidence from independent witnesses, we might be able to arrive at a more objective decision than is possible today. I hope that in the not too distant future we shall have a Committee investigating this sort of problem. In the meantime I would like to emphasise my confidence in the decisions which the Government have already taken, which I believe to be in the best interests of the nation.

8.37 p.m.

Mr. Robert Carr (Mitcham)

When the Secretary of State opened his speech he began by saying some things about the styles of speaking of my right hon. Friend the Member for Wolverhampton, Southwest (Mr. Powell). I notice that he did not attempt any self-analysis of his own styles of speaking. It seems to us that he has three—he goes one better than my right hon. Friend. He has what we call his "laughing-it-off" style, and we are at least grateful that he spared us that, anyhow for most of the day. Secondly, he has his dignified, intellectually elevated, senatorial style, and I am glad to say that for much of his speech today that was the style which he adopted. Thirdly, he has his knockabout political circus style, appealing to the Left-wing to which he devoted the last part of his speech.

It seemed to us, and I think to many other hon. Members, that it was rather a Pity that he should accuse people who question or attack the F111 of doing so for malicious or commercial motives. This is not true and, if it were, it certainly applies in no mean measure to what he and his other right hon. and hon. Friends did when they criticised the TSR2, in Opposition. The truth is that it is the job of the Opposition to probe and criticise, and it does not lie in the mouths of Ministers to make accusations of that kind.

Whatever style the Secretary of State uses, he is certainly, as we saw today, adept at dodging the point under debate. He certainly did not answer the questions and arguments, either implicit in the Motion or put forward by my right hon. Friend, which were closely related to the terms of the Motion. He took a long time about not answering them. He was very generous in giving way, for which we are always grateful, but we could not help having the rather base thought that perhaps he did not want to give his own back benchers too much time in the debate, with the probable exception of the hon. Member for Bolton, East (Mr. Robert Howarth), who will certainly be licensed next time.

There is some truth in the fear that, as my hon. Friend the Member for St. Albans (Mr. Goodhew) said, the Secretary of State has been trying to put many balls in the air in order to distract the House and the country from the real trick. But he has not deceived or diverted us from the purpose of the Motion; and it is to the Motion that I want to return. I ask the Minister of State to reply directly to the terms of the Motion. It is a narrow Motion, and deliberately a narrow Motion. It does not attack the F111K as such. It attacks the Government for giving contradictory statements about the aircraft and asks for realistic statements now so that we know the full truth, or as much as security allows.

May I run over some of the points to which we want an answer and perhaps make a few new points. One question raised in the debate by more than one hon. Member is the basic question of whether we need this plane at all in the context of what now seems likely to be the Government's defence policy in the 1970s—not of what that policy seemed to be a year ago, but of what it seems likely to be now.

Although the Government have always maintained—and we do not dispute this—that the F111 could be used in European and other theatres, it is clear that the Government have been thinking about it principally in a Far Eastern context. This was made explicit by the Secretary of State for Defence and the then Foreign Secretary in last year's defence debate on 7th and 8th March. The Secretary of State said: Essentially, most of these aircraft will be based in Singapore."—[OFFICIAL REPORT, 8th March, 1966; Vol. 725, c. 2041.] But, in view of the apparent recent trend in Government policy, shall we have such a role in the Far East in the 1970s? Shall we by then even have a Singapore base on which Essentially, most of these aircraft will be based"? Is not this another example of the Government's actions and policy thinking being mutually contradictory? Is not this one of the contradictions which we seek in the Motion to have cleared up?

If the Government intend to surrender our present role in the Far East, does not the F111 become redundant or at least unnecessary? It is not that it is unusable in the European role, but, as my right hon. Friend the Member for Stafford and Stone (Mr. Hugh Fraser) said, unless we are to have it in much larger numbers for nuclear purposes, we cannot believe that it is necessary in the European role, and none of the other European countries seems to want the F111 for a European role. Therefore, why should we want this plane unless we are to maintain our present Far Eastern role? Will the Government make their policy clear?

The Secretary of State today seemed to bring in a new thought about this matter. I think that he was suggesting that we should want the F111 in the Far East, even if we no longer had the Singapore base and similar bases, in order to support our allies in that area, particularly Australia and New Zealand. But if the real purpose of our F111s is to work in co-operation with the Australian Air Force, which will also have some F111s, should not the version of the F111 which we buy be the same as instead of different from the Australian version? Does it make sense for the Australian Air Force to have 24 F111s of one type and for us to have 50 F111s of another type if the main purpose of ours is to work with theirs? We cannot help wondering, therefore, whether this is not a bit of afterthought, of post hoc rationalisation.

I pass now to another subject, the expected performance of the F111K. Here again there have been contradictory statements. At first, we were told in paragraph 10, page 11, of the 1966 Defence Review that The arrangements made by the United States Government with their manufacturers for their own aircraft will apply also to the aircraft we shall order and therefore will provide us with the same assurances as to specification and performance as will be insisted upon by the United States Government. Was not that seriously misleading the House in the light of the present position?

As my right hon. Friend has reminded the House, on 16th November—about nine months after the Defence White Paper of last year—the Secretary of State said: On the question of the operational requirement for the F111K, in all respects it is lower than the requirement for the aircraft ordered for the United States Government."—[OFFICIAL REPORT, 16th November, 1966; Vol. 736, c. 423.] What is it to be? Unless one is to do extraordinary gymnastics, the words of those two statements are contradictory to any reasonable outsider listening to them.

Then we have the recent speech in the United States Senate by Senator McClellan, in which he said, amongst other things: The air force version"— please note, the Air Force version— is, by admission of the Department of Defence, not militarily acceptable at this time. How does that square with the assurance which I have just quoted from last year's Defence White Paper? In view of this, how do the Government justify their action in so recently placing the order for the remaining 40 aircraft without waiting for clarification, as, for instance, the hon. Member for Coventry, North (Mr. Edelman) said that they should have done?

There is another aspect of the same matter. Hitherto, the Secretary of State for Defence in defending his decision to buy the F111 has always stoutly maintained that the troubles with the aircraft were with the naval and strategic bomber version and not with the Air Force version and has gone on to say that since we were buying what was essentially the Air Force version, we had no reason to worry about those troubles.

The Secretary of State will, no doubt, remember that he took that view strongly in, for example, a television programme last August in which he and I participated along with Senator McClellan from the United States. Is it not now clear that he misled us on that point, too? How do we square what he has always said with the statement from Senator McClellan which I have just quoted?

Another aspect of the Fill's performance about which we have had contradictory statements is the way in which it compares with the performance of the TSR2. My hon. Friend the Member for St. Albans and others have given chapter and verse for some of these contradictory statements. I should like again to ask some specific questions. Can we, if possible, have specific answers? Perhaps, if we are to have specific answers, it would be as well if the Minister of State were to listen to my questions.

First, what are both the ferry and operational ranges now expected to be? If the Minister cannot give actual figures, can he give them as percentage figures of what the requirement was originally expected to be? Secondly, is it, or is it not, true that even with the present modifications, the F111 is still liable to stall or, if my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) is right, to surge when turning at high speed and high altitude?

Thirdly, does the Nav-attack system really provide the same accuracy for the delivery of conventional weapons as did the TSR2's? Not simply does it give the basic minimum requirements, but does it give the same accuracy for the delivery of conventional weapons as the TSR2?

Fourthly, can we be assured that the latest avionic systems in the F111K really provide the TSR2 standard of terrain following—again not just the minimum requirements, but is it as good in this respect as the TSR2?

Another point which has come out today, is that of the unit cost. Here we have these two aspects, the ceiling price for the basic plane and the ceiling price for the R.A.F. modification of it. This is a point on which we have not yet received a satisfactory answer, because it has always been emphasised by the Government that the figure of £2.1 million was a maximum. We have been told that we might get it for less but that on no account should we have to pay more. At no point has any mention been made, until it slipped out in another place a few weeks ago, that there was any question of having to take into account United States money inflation. We now know that that is so. What we still do not know is the nature of the formula which has been used. My right hon. Friend specifically asked that question and, presumably, the Secretary of State specifically ignored it. May we press it again?

What is the nature of the clause in the contract which provides for the automatic changes in price according to the figure of inflation? Is it a standard 3 per cent. per year, as is the case with the Phantom, or is it an amount which is to be decided at periodic intervals by reference to some economic index in the United States? Is the price of the modification also subject to automatic uplift according to United States money inflation? Can we please be told that as well? Can we also be told the answer to another question which we have asked but which so far has been ignored, namely, why it was that the Secretary of State placed the final order for the remaining 40 of these planes without first having obtained an agreement about the ceiling price?

May I remind the Government once again that, as late as 1st March, the Secretary of State told the House categorically that no contract would be placed until such a ceiling price had been agreed. What happened between 1st March and 1st April, and why did he not keep his promise?

I turn quickly to another point about costs, namely the total programme costs. The Secretary of State gave us lots of figures about the total programme costs, many of them, conveniently for him, on quite a new basis which makes comparison impossible, at least at short notice. However, my hon. Friend the Member for Hendon, North (Sir Ian Orr-Ewing) and others of my hon. Friends pointed out that the basis seemed to be a pretty funny one, at least on first hearing.

One thing which I understood from it is that the dollar cost of the 10-year programme had risen by some £10 million. I understood that the overall cost of the 10-year programme had gone up from £280 million to £336 million but that, within that increase of £56 million, only £10 million was dollar cost. If I have that right, we are faced with a dollar cost of £270 million compared with £260 million originally given to the House; that is, about 750 million dollars instead of 725 million dollars. We should like to know to what extent the estimated total programme costs which we have now been given make allowance for the substantial modifications to the F111 which are now known to be necessary.

The Secretary of State told us that it contained a contingency allowance. We should like to know the sort of order of contingency allowance and if we can be reasonably sure that it will be adequate. To take one example, is it or is it not a fact that the original engines with which the planes will be supplied will cost about 450,000 dollars each, while the spare engines which will have to be bought as replacements during the 10-year period are likely to cost at least 610,000 dollars or possibly as much as 790,000 dollars each? If we get much escalation of that kind, there will have to be a big contingency allowance in the 10-year dollar costs programme to take account of it.

I come to another important aspect, namely, the terms of the basic contract. The House was told that one of the critical factors in favour of the F111 was the date when we could receive delivery. This was clearly one of the reasons given for the cancellation of the TSR2—perhaps not the main reason, but certainly one of them. On 4th March, 1965, the Prime Minister told the House that the TSR2 could not be in service until 1968 at the earliest, and in this year's Defence White Paper we were informed: We plan to have formed the first squadron of F111Ks in 1969. That will be a year later than the TSR2 would have come into service, and apparently that was thought to be too late.

The Secretary of State told us this afternoon that he expects the delivery schedule for the first 10 to be kept, except for the first one which, we understand, will be somewhat delayed at our request. But what about the delivery schedule for the remaining 40? If there are such major modifications to be made as we hear about, some set-back in delivery is, to say the least, not impossible. One must, therefore, ask whether the Government insisted on the inclusion in the contract for the purchase of these planes of a penalty clause for late delivery. If they did not, why not?

Did the Government also insist on the insertion of a penalty clause if the planes as delivered fail to match up to their original specification? If not, why not? As we know, the Government are being extremely tough in insisting on penalty clauses applying to British sub-contractors for this and other planes which we are buying from the United States. If—and we agree that this should be done—they are insisting on penalty clauses for British sub-contractors, we must demand that the Government include similar penalty clauses in their contracts with the American Government and American companies. We must be told whether the Government have done this.

My hon. Friend the Member for Tiverton raised the question of the terms of the original contract in respect of any replacement aircraft that may be needed. I am not referring to any possible future large buy but to the aircraft we might have to buy because some of our original 50 may unfortunately go out of service through crashes or other reasons. Will such replacement aircraft be subject to the same ceiling?

Another important matter which arose in the course of an exchange between the Secretary of State and my right hon. Friend the Member for Wolverhampton, South-West was where exactly we stand on the production line with this aircraft; in other words, whether we are to be the guinea-pigs. If we are, then with a plane of this kind it seems likely that it will be an expensive process. If we are not, and if we are buying the planes off the peg, can we be given an idea of how many production planes there will be and which countries will be getting them coming off the line ahead of us?

I will make two points in conclusion. The first is about payment for these planes. We have understood from the beginning of this affair that the payment of the dollar content is to be by credit and the House has already passed legislation in that connection. We want to know whether that line of credit will be increased to take account of the increase in dollar costs which we already know or which may subsequently arise. Will the line of credit be increased or will we have to pay any extra dollar cost in cash, as it were?

Secondly, closely linked with the payment for these planes and the economic burden on our balance of payments was the claim by the Government that the total dollar cost would be fully covered by their much vaunted dollar offset agreement. We were told in the defence debate last year by the then Minister of Aviation that 325 million dollars would be provided by direct sales of equipment to the United States and another four hundred million dollars by sales to third parties. Will that total dollar offset be increased in line with American money inflation? Does the dollar offset agreement make that sort of allowance? If it does, how much is in the direct category and how much in the third-country category?

As to the third-country category, I would ask particularly about the Saudi Arabian deal. The Minister of State must be very conscious of that deal. Never has a Minister been so blatantly carted by a senior colleague as the Minister of State was carted over the Saudi Arabian deal. He played a prominent part in obtaining the Saudi Arabian order before the F111 decision was taken, and in December, 1965 he assured the House that there was no connection of any kind between the Saudi Arabian order of which he was telling us and the F1ll deal. We subsequently discovered to the contrary.

What is the position now? In May, 1966, the Secretary of State told us that the Saudi Arabian deal will be worth about £100 million, or 280 million dollars, out of the third-country section of the offset agreement. On that occasion he said: … it will leave a very substantial amount still to be covered by further collaborative sales to third countries."—[OFFICIAL REPORT, 11th May, 1966; Vol. 728, c. 477.] Is that still really the case, or has the Saudi Arabian deal now absorbed all the third-country element in the dollar offset agreement? This order, which we got long before we ever placed the F111 order and which the Minister of State told us had no connection with it—was that statement another piece of deception of the House and of the country?

It is interesting to see hon. Members opposite laughing at these questions. I suppose that, in a sense, the Secretary of State and others of his right hon. and hon. Friends can laugh at the moment, because they have bought all these planes on the never-never system, and it will not be they individually, or their Government, who will have to pick up the bill, but us. I suppose, therefore, that they can laugh at the moment.

For the last two and a half years we have lived in an Alice-in-Wonderland world of defence policy. We have had all the up-to-date jargon—yes, that is there all right. Ministers clearly took time off to go to one-day schools of management studies and tried to blind us all with science. But what have we had in practice? As my right hon. Friend the Member for Wolverhampton, South-West has rightly pointed out in a series of debates, we have had a lot of decisions taken ad hoc without reference to any comprehensive framework of policy. In fact, as the hon. Member for Woolwich, East (Mr. Mayhew) said earlier, we have had the Prime Minister's favourite game of keeping all the options open, under a smokescreen of scientific jargon.

Nowhere is that more clear than in the Government's aircraft programme. They cancelled the TSR2, and they are now seeking to replace it with two planes—the F111 and the AFVG. As was said by the hon. Member for Coventry, North, the F111 is doubtful as to performance and uncertain as to role. The AFVG is, alas, still very much in doubt. We hope that these doubts can be removed, but we cannot burke the fact that the doubts are still very much there.

In spite of the specious figure given by the Secretary of State earlier, I agree with my hon. Friend the Member for Macclesfield (Sir A. V. Harvey) that even if both of these planes come off, the combined cost of the F111 purchase and programme and the AFVG development and purchase programme, plus the frustrated expenditure on the TSR2, will at the end of the day be at least as great as, if not greater than, the cost had the Government gone ahead with the TSR2.

If either the F111 or the AFVG do not come off, what then? What do the Government think will happen then in cost and defence capability? Do we buy more F111s? If so, at what price? That is a pretty gloomy prospect on the horizon. Let us hope that it is not one of those small clouds that grow into a big cloud. If not that, and if anything happens to the AFVG, do We make an entirely British variable geometry plane and, if we do, at what cost?

This debate has exposed, as it was meant to expose, a spoof by the Government. The right hon. Gentleman can laugh now, but I fear that it will eventually be exposed as a spoof which has been attempted to cover up a monstrous folly.

9.0 p.m.

The Minister of State, Ministry of Technology (Mr. John Stonehouse)

At the end of this debate I am very surprised indeed that the Opposition should have wasted one of their Supply Days to put down a Motion of this character. It reveals what a very weak case they have against the Government and how little of a case they have against my right hon. Friend the Secretary of State for Defence, if it is only on this very narrow point that they set up this great attack on my right hon. Friend. As the right hon. Member for Stafford and Stone (Mr. Hugh Fraser) said in his excellent and short intervention, my right hon. Friend has been bold and has done many good things. He has done excellent service to the House and to the country today by his devastatingly brilliant speech in which he absolutely demolished the right hon. Member for Wolverhampton, South-West (Mr. Powell).

The right hon. Member for Wolverhampton, South-West is a specialist in pedantic hair-splitting. He combines this with a singular love of simple English. He will never call a spade a spade if he can call it a manually operated excavator. Today he has added to his skill a profound grasp of faulty economics. We should be grateful to him for one thing. At least he has reduced the level of his attack on the F111 target. In an attack on 26th April last year he called the F111 deal "hollow". He said: It is hollow in its financial arrangements. It is hollow in its military reasoning."—[OFFICIAL REPORT, 26th April, 1966; Vol. 727, c. 657.] It is significant that the right hon. Gentleman did not repeat those allegations today because, of course, such allegations cannot possibly be justified and the speech of my right hon. Friend has shown beyond any doubt what an ex- cellent arrangement the F111 contract is and how it meets the requirements of the R.A.F.

The right hon. Gentleman confined his attack to quibbling about details. He did not attempt to spell out any alternative policies. Perhaps he is intelligent enough to realise that his right hon. Friends— he was not in a Department directly responsible—left some very sinister skeletons in the cupboard for us to find. As my right hon. Friend has pointed out only too clearly the escalation in the TSR2 costs was never revealed by hon. Members opposite. It was left for my right hon. Friend to pick out all the sinister facts.

There have been a number of questions raised during the debate and I shall do my best to reply to them. First, the right hon. Member for Mitcham (Mr. R. Carr) asked about the Saudi Arabian deal and the offset arrangements. I am grateful to him for what he said about the part I played in that particular deal. The right hon. Gentleman is absolutely right. In my talks in the United States with Mr. Henry Kuss, when I secured the agreement of the Americans to a joint proposal being made to the Saudis, there was no reference to, or any discussion on, any proposed F111 buy. But it was reasonable, bearing in mind the other expenditure of the United States in this country for its forces, for the Saudi Arabian deal to be included in the offset arrangement for third party sales.

The right hon. Gentleman asked specifically whether there was allowance for other sales to take place. Of course there is. We hope to have several more of these collaborative deals. The Saudi deal is just an example of what we can achieve in co-operation with our American friends. A deal of this character can open up wider opportunities which are not subject to the offset arrangements. We can have, and we have already had, deals in Saudi Arabia which are additional to the offset arrangement but which we would never have got if we had not had this joint Anglo-American proposal to the Saudis. They are not included in the offset arrangement.

Mr. R. Carr

Does the hon. Gentleman mean that these additions to our original contract are specifically excluded from the dollar offset calculations?

Mr. Stonehouse

There are additions. I am not authorised to give the details of these today, but I can assure the House that there are additions, and very substantial ones indeed, which are not included in the offset arrangements.

I am sure that the House will agree that when we achieve a substantial order of this character, the biggest single order which we have achieved in our history, it provides an umbrella for other of our manufacturers and exporters to get into this market and sell other products. This is exactly what we are doing. It has also established in the Middle East a better climate for our exporters generally, and I believe that in other countries substantial successes will be achieved as a result of this better climate being established.

Mr. Edelman

My right hon. Friend the Secretary of State for Defence made a great show earlier in the day of the fact that all his policies were tending towards disarmament. How does my hon. Friend square that with his vigorous attempts to expand the sales of arms to the Middle East?

Mr. Storehouse

There is no doubt that these countries are buying arms from somewhere. It is only right that we should give opportunities to our industrialists to sell in this part of the world as well. [Laughter.] I cannot understand why right hon. Members opposite laugh at this, as so many of them have applauded such attempts to secure these sales. We are not considering only military sales here. Opportunities have been opened up for exports of civil products as well.

The right hon. Member for Wolverhampton, South-West asked whether the wage/material escalation clause in the agreement with the United States related to the F111 was calculated by a general formula or whether it was specifically related to the contractor's expenditure on the F111 programme itself. The escalation clause applies to the expenditure of the contractor. This is also a clear answer to the right hon. Member for Mitcham. It would be a mistake, though, for right hon. Members opposite to overestimate the importance and effect of the escalation clause. This is an inescapable condition in a long-term contract of this character. Wages and materials price increases are bound to have applied in any such contract, but any calculations of this character could be only marginal.

Mr. Powell

Does the hon. Gentleman man estimate that this will result in a higher or a lower escalation than the 3 per cent. per annum agreement applying to the Phantom?

Mr. Stonehouse

I estimate that it will be about the same.

The right hon. Gentleman referred also to the strengthened undercarriage and asked why we had done this. The fact that we have adopted this undercarriage has been known to the House for a long time. The United States Strategic Air Command wants the strengthened undercarriage for its version of the aircraft, the FB1 11, and it was given to us last year as an option. We decided to take advantage of the possibility because it enables the Royal Air Force to make the maximum use of the aircraft's capabilities from semi-prepared airfields to take off with bigger bomb loads.

Several questions were raised by the right hon. Member for Mitcham in comparing the performance of the F111 with the proposed performance of the TSR2. First, the ferry range is 20 per cent, better than the ferry range of the TSR2. Second, the question of engine surging: as my right hon. Friend has said, there are still engine matching problems which, we believe, will be solved in the United States because of the tremendous resources being put behind the programme there, but we are assured that the achievement of the F111 development so far meets the basic and minimum requirements of the Royal Air Force.

The right hon. Gentleman asked about the Nav-attack system. This is fully equivalent to that specified for the TSR2. Next, he asked about the terrain-following capability. This equipment has already been functioning very successfully throughout the development programme, and its performance is equivalent to, and in some respects better than, that specified for the TSR2.

There is no doubt that in the F111 we are obtaining an aircraft for the R.A.F. which meets its needs and requirements in all major respects. A further advantage which the House will recognise is that, as this aircraft is to go into squadron service in both America and Australia before the first deliveries to the R.A.F. take place, we shall be more than satisfied that the development problems of the aircraft are solved before the Royal Air Force is flying it.

Furthermore, the great advantage of this agreement as against the TSR2 arrangement is that we have here a ceiling price, subject, of course, to an escalation clause, which will give us a final basic cost of £2½ million per aircraft. The arrangement for the TSR2 was quite dissimilar because the commitment was unlimited. Although we have estimated what the cost of developing and producing the TSR2 might have been, it could have been very much more even than that. For the F111, however, we have a unique agreement with the United States, the best type of agreement for purchasing equipment from the United States that this country has ever achieved. If right hon. Gentlemen opposite, when they started negotiating for buying equipment from the United States, had concentrated their attention on obtaining this type of agreement, perhaps the Exchequer would have been saved a great deal of money and should have saved a great deal of time as well.

Mr. Lubbock

Whatever may be said now, the Under-Secretary of State for Defence for the Royal Air Force, who is sitting on the Front Bench beside the hon. Gentleman, said on 14th March: The cost of the F111 is a fixed-cost price of £2.1 million".—[OFFICIAL REPORT, 14th March, 1967; Vol. 743, c. 245.] Does not that give the impression that there was no adjustment to be made for increasing costs of wages and materials and the rest?

Mr. Stonehouse

The right hon. Member for Mitcham made play of that point, but all the references here were to the basic unit cost, and it has been made quite clear that there were additions to the basic unit price. I do not think that the House can deny that the position has been made absolutely clear to it, and that we were aiming to obtain an aircraft at £2½ million at 1965 prices which will entirely meet the points that have been made by my right hon. Friend in past months. The third point about the agreement which I am sure the House will applaud is that it is cost effective. Whereas the TSR2 was an extraordinarily expensive programme, in this one we have, as my right hon. Friend said, a saving over 15 years of £700 million.

Those three points demonstrate the value of the F111 contract. Of course, hon. Members may suggest that there are disadvantages in the arrangement. They may suggest that it may adversely affect the United Kingdom aircraft industry, which is one of the points the right hon. Member for Mitcham put forward in a speech in December, 1965, to which I shall refer in a few minutes.

Sir Ian Orr-Ewing

Could the Minister tell us just how much he has put in the figure of £700 million for 15 years for the AFVG production cost and unit cost?

Mr. Stonehouse

I think that it would be unwise to be drawn on specific figures. But, as my right hon. Friend said, the total research and development cost will be about £150 million, and there will be an addition to that of an amount for the production of these aircraft. [HON. MEMBERS: "How much?"] I am not in a position to reveal that, as the hon. Gentleman knows only too well. He asked for a specific figure, but when he was one of the Ministers responsible when his party were in power his Government never provided figures of that character, and so hon. Members opposite are not entitled to ask for them now.

The aircraft industry in Britain is in a stronger position now than it has been in for many years.

Mr. R. Carr

Before the hon. Gentleman leaves the question of contracts, could he tell us about the penalty clauses in the United States contract, about which I particularly asked, and also explain why, contrary to what was said on 1st March, the order was made before the ceiling price had been agreed?

Mr. Stonehouse

There is no question of Her Majesty's Government accepting the delivery of these aircraft unless they are up to our requirements. My right hon. Friend has made that clear. We still have to negotiate the details of the supplemental ceiling price, but I am sure that it will provide for a figure that will be fully consistent with the assurances that have been provided to the House. [HON. MEMBERS: "What about the penalty clauses?"] The question of penalty clauses does not arise, because the assurances we have had on the delivery of these aircraft fully assure us that our requirements will be met. [HON. MEMBERS: "Oh."]

The questions of doubt about the buying of the F111 and the cancellation of the TSR2 are related to their effect on the British aircraft industry, but the British aircraft industry is now in a stronger state than it has been in for many years. If we look at any of the vital statistics, the House will agree that that is true. As hon. Members who are in contact with the aircraft industry are only too well aware, even the leaders in the industry are recognising the great strength it has achieved in the past year or so. The total export figure has increased from £107 million in 1964 to £153 million in 1965, and to no less than £229 million in 1966, a figure of which we can really be proud. One of the most significant facts in the total output figures of the industry in 1966 is that our production of home military aircraft has reduced from the figure of £330 million in 1965 to £315 million in 1966, but our production of civil and export aircraft has increased from £233 million in 1965 to £275 million in 1966. This is the direction we want the British aircraft industry to go in meeting civil demand and export demand, and not to chase after the vain glorious objective of right hon. and hon. Members opposite of having an independent military aircraft production.

Sir A. V. Harvey

The hon. Gentleman has referred to the exports of over £200 million achieved by the industry in 1966. What percentage of those orders were placed after the present Government came to power?

Mr. Stonehouse

I cannot give the figures off the cuff. But right hon. and hon. Members opposite, including the hon. Gentleman himself, know very well that many of the orders for aircraft exported in 1966 were obtained in 1965, including exports to the Middle East and the United States. They know also that the part that the Government have been playing in assisting the development of the aircraft industry's export programme has been extremely substantial. Hon. Members in touch with the industry know it only too well because they have applauded what we have done.

I will give two examples. We have increased the credit terms for jet aircraft to ten years. This has assisted the export of the BAC111, which is doing extremely well, and the British Aircraft Corporation itself has acknowledged the assistance the Government have given.

We have made a new decision which my right hon. Friend the President of the Board of Trade has authorised me to announce tonight. It is in relation to the turbo-prop aircraft of the Hawker Siddeley 748 and the Handley Page Herald type. Credit terms are being extended from five to eight years, which will open up a wonderful opportunity for the producers of this type of aircraft. We estimate that the market for these aircraft is about 700 with a total value of about £200 million. So the potential here is very considerable for our aircraft producers. These are only two examples of the assistance the Government are giving to our aircraft exports in helping to achieve the sort of figures I have given.

Furthermore, from right hon. and hon. Members opposite, when the TSR2 was cancelled, we had allegations that the industry was being truncated and undermined. In fact, the number employed in the industry on average in 1966 was 257,000 as against 268,000 in 1964, and the latest available figure—the February figure—is 262,000. This does not sound to me like a truncated and debilitated industry. The industry is strong. It is successful. It is making a very substantial contribution to the British export drive, but if we had carried on with the TSR2 we would not have been able to achieve the same figures in export performance.

It is significant to note that the work load of the industry, according to the confidential returns at our disposal, shows that there is now more work available than there was at the end of 1964. All these statistics show that the industry is not undermined and is not unsuccessful. With the guidance of the Government, it is doing an extremely good job for Britain.

Several Hon. Members rose——

Mr. Stonehouse

I have very little time.

Several Hon. Members rose——

Mr. Speaker

Order. There is too much noise from the Opposition and too much noise from the Government side.

Mr. Stanley R. McMaster (Belfast, East)

On a point of order. Will the hon. Gentleman say what relation this has to the Motion? I have been here throughout the debate and the hon. Gentleman is not answering the questions which have been put to him.

Mr. Speaker

That is not a point of order.

Mr. Stonehouse

The relevance to the Motion is very important. When the right hon. Member for Mitcham spoke on 13th December, 1965, he said that if the Government decided to choose the F1ll there would be a number of more or less opposite disadvantages. He went on: First, it would leave a gaping void in the order load of the British industry. The right hon. Gentleman was absolutely wrong about that.

Secondly, it would, in our view, strike a serious blow to confidence in Europe in the fruitfulness of co-operation with this country in aircraft …". That, of course, was absolute rubbish. We have a very successful agreement for producing the Jaguar with the French, and the helicopter programme is going extremely well. We are also discussing with them in detail the AFVG programme, which we are confident will be a great success. Despite the escalation in costs compared with the estimates which right hon. Gentlemen opposite gave to the House, Concord is going extremely well. Furthermore, Europeans have come to us with proposals for collaboration, for instance, with the airbus, which show that they have confidence about co-operating with us, and we hope to make that confidence a reality in practical co-operation.

The right hon. Gentleman also said: Thirdly … it would obviously add enormously to our balance of payments problems

…".—[OFFICIAL REPORT, 13th December, 1965; Vol. 722, c. 980.]

That, of course, was utterly incorrect. The balance of payments cost of the F111 is being covered by the offset agreement. We have the offset on third country sales and we have the offset on sales to the United States which right hon. Gentlemen opposite, for instance, the right hon. Member for Wolverhampton, South-West on 7th March, dismiss. The offset arrangements for sales to the United States are going extremely well. We have already achieved orders to the value of 130 million dollars in sales to the United States.

But it is not only a matter of meeting the Fl11 offset costs, because for the first time our manufacturers are, for instance, on the head-up display equipment, getting a foot in the door in the United States. They are working out collaborative programmes with American producers to meet the requirements of the Department of Defence and they are confident that even after the F111 offset agreement has been completely finalised and concluded, these arrangements will stand the test of time. This entry into the American industry could have very substantial and beneficial effects for producers of components in Britain.

We have therefore already achieved a substantial part of the offset arrangements in direct sales to the United States and we are currently considering with the United States Department of Defense several other proposals, including the BAC111, the HS125 and the Handley-Page Jet Stream and we hope that one or two of these will be acceptable to the United States.

I hope that the House will agree that this is a very ill-advised Motion. My right hon. Friend has completely abolished any case which the Opposition may have had and so we throw back into their faces their false argument, their false facts and their false philosophy on which the Motion was based, and with confidence I ask the House to reject it.

Question put:—

The House divided: Ayes 234, Noes 292.

Division No. 329.]	AYES	[9.30 p.m.
Alison, Michael (Barkston Ash)	Baker, W. H. K.	Bell, Ronald
Allason, James (Hemel Hempstead)	Balniel, Lord	Bennett, Sir Frederic (Torquay)
Astor, John	Barber, Rt. Hn. Anthony	Bennett, Dr. Reginald (Gos. & Fhm)
Atkins, Humphrey (M't'n & M'd'n)	Batsford, Brian	Berry, Hn. Anthony
Awdry, Daniel	Beamish, Col. Sir Tufton	Biffen, John
Biggs-Davison, John	Grimond, Rt. Hn. J.	Murton, Oscar
Birch, Rt. Hn. Nigel	Gurden, Harold	Nabarro, Sir Gerald
Black, Sir Cyril	Hall, John (Wycombe)	Neave, Airey
Blaker, Peter	Hall-Davis, A. G. F.	Nicholls, Sir Harmar
Body, Richard	Hamilton, Marquess of (Fermanagh)	Noble, Rt. Hn. Michael
Bossom, Sir Clive	Hamilton, Michael (Salisbury)	Nott, John
Boyd-Carpenter, Rt. Hn. John	Harris, Frederic (Croydon, N.W.)	Onslow, Cranley
Boyle, Rt. Hn. Sir Edward	Harris, Reader (Heston)	Orr, Capt. L. P. S.
Braine, Bernard	Harrison, Brian (Maldon)	Orr-Ewing, Sir Ian
Brewis, John	Harrison, Col. Sir Harwood (Eye)	Osborn, John (Hallam)
Brinton, Sir Tatton	Harvey, Sir Arthur Vere	Osborne, Sir Cyril (Louth)
Bromley-Davenport, Lt. -Col. Sir Walter	Hastings, Stephen	Page, Graham (Crosby)
Brown, Sir Edward (Bath)	Hawkins, Paul	Page, John (Harrow, W.)
Bruce-Gardyne, J.	Hay, John	Pardoe, John
Bryan, Paul	Heald, Rt. Hn. Sir Lionel	Pearson, Sir Frank (Clitheroe)
Buchanan Smith, Alick (Angus, N&M)	Heath, Rt. Hn. Edward	Peel, John
Buck, Antony (Colchester)	Heseltine, Michael	Percival, Ian
Bullus, Sir Eric	Hill, J. E. B.	Peyton, John
Burden, F. A.	Hirst, Geoffrey	Pike, Miss Mervyn
Campbell, Gordon	Hobson, Rt. Hn. Sir John	Pink, R. Bonner
Carlisle, Mark	Hogg, Rt. Hn. Quintin	Pounder, Rafton
Carr, Rt. Hn. Robert	Holland, Philip	Powell, Rt. Hn, J. Enoch
Cary, Sir Robert	Hooson, Emlyn	Price, David (Eastleigh)
Channon, H. P. G.	Hordern, Peter	Prior, J. M. L.
Chichester-Clark, R.	Hunt, John	Pym, Francis
Clark, Henry	Hutchison, Michael Clark	Quennell, Miss J. M.
Clegg, Walter	Iremonger, T. L.	Ramsden, Rt. Hn. James
Cooke, Robert	Irvine, Bryant Godman (Rye)	Rawlinson, Rt. Hn. Sir Peter
Cooper-Key, Sir Neill	Jenkin, Patrick (Woodford)	Ridley, Hn. Nicholas
Cordle, John	Jennings, J. C. (Burton)	Ridsdale, Julian
Corfield, F. V.	Johnson Smith, G. (E. Grinstead)	Rippon, Rt. Hn. Geoffrey
Costain, A. P.	Jones, Arthur (Northants, S.)	Robson Brown, Sir William
Craddock, Sir Beresford (Spelthorne)	Joseph, Rt. Hn. Sir Keith	Rodgers, Sir John (Sevenoaks)
Crawley, Aidan	Kaberry, Sir Donald	Rossi, Hugh (Hornsey)
Crouch, David	Kerby, Capt. Henry	Royle, Anthony
Crowder, F. P.	Kershaw, Anthony	Russell, Sir Ronald
Cunningham, Sir Knox	Kimball, Marcus	St. John-Stevas, Norman
Currie, G. B. H.	King, Evelyn (Dorset, S.)	Sandys, Rt. Hn. D.
Dalkeith, Earl of	Kirk, Peter	Scott, Nicholas
Dance, James	Kitson, Timothy	Sharpies, Richard
d'Avigdor-Goldsmid, Sir Henry	Knight, Mrs. Jill	Shaw, Michael (Sc'b'gh & Whitby)
Dean, Paul (Somerset, N.)	Lambton, Viscount	Sinclair, Sir George
Deedes, Rt. Hn. W. F. (Ashford)	Lancaster, Col. C. G.	Smith, John
Digby, Simon Wingfield	Langford-Holt, Sir John	Stainton, Keith
Dodds-Parker, Douglas	Legge-Bourke, Sir Harry	Stodart, Anthony
Doughty, Charles	Lewis, Kenneth (Rutland)	Stoddart-Scott, Col. Sir M. (Ripon)
Douglas-Home, Rt. Hn. Sir Alec	Lloyd, Rt. Hn. Geoff rey (Sut'nC'dfield)	Summers, Sir Spencer
Drayson, G. B.	Lloyd, Ian (P'tsm'th, Langstone)	Tapsell, Peter
du Cann, Rt, Hn. Edward	Lloyd, Rt. Hn. Selwyn (Wirral)	Taylor, Sir Charles (Eastbourne)
Eden, Sir John	Longden, Gilbert	Taylor, Frank (Moss Side)
Elliot, Capt. Walter (Carshalton)	Loveys, W. H.	Teeling, Sir William
Errington, Sir Eric	Lubbock, Eric	Temple, John M.
Eyre, Reginald	McAdden, Sir Stephen	Thatcher, Mrs. Margaret
Farr, John	Maclean, Sir Fitzroy	Tilney, John
Fisher, Nigel	Macleod, Rt. Hn. Iain	van Straubenzee, W. R.
Fletcher-Cooke, Charles	McMaster, Stanley	Vaughan-Morgan, Rt. Hn. Sir John
Fortescue, Tim	Macmillan, Maurice (Farnham)	Vickers, Dame Joan
Foster, Sir John	Maddan, Martin	Wainwright, Richard (Colne Valley)
Fraser, Rt. Hn. Hugh (St'fford & Stone)	Maginnis, John E.	Walker, Peter (Worcester)
Galbraith, Hn. T. G.	Marples, Rt. Hn. Ernest	Walker-Smith, Rt. Hn. Sir Derek
Gibson-Watt, David	Marten, Neil	Walters, Dennis
Gilmour, Ian (Norfolk, C.)	Maude, Angus	Ward, Dame Irene
Gilmour, Sir John (Fife, E.)	Maudling, Rt. Hn. Reginald	Webster, David
Glover, Sir Douglas	Mawby, Ray	Wells, John (Maidstone)
Glyn, Sir Richard	Maxwell-Hyslop, R. J.	Whitelaw, Rt. Hn. William
Godber, Rt. Hn. J. B.	Maydon, Lt.-Cmdr. S. L. C.	Wills, Sir Gerald (Bridgwater)
Goodhart, Philip	Mills, Peter (Torrington)	Wilson, Geoffrey (Truro)
Goodhew, Victor	Miscampbell, Norman	Wolrige-Gordon, Patrick
Gower, Raymond	Mitchell, David (Basingstoke)	Woodnutt, Mark
Grant, Anthony	Monro, Hector	Wylie, N. R.
Grant-Ferris, R.	Morgan, Geraint (Denbigh)	Younger, Hn. George
Gresham Cooke, R.	Morrison, Charles (Devizes)
Grieve, Percy	Mott-Radclyffe, Sir Charles	TELLERS FOR THE AYES:
Griffiths, Eldon (Bury St. Edmunds)	Munro-Lucas-Tooth, Sir Hugh	Mr. R. W. Elliott and Mr. More.
NOES
Albu, Austen	Atkins, Ronald (Preston, N.)	Bellenger, Rt. Hn. F. J.
Allaun, Frank (Salford, E.)	Atkinson, Norman (Tottenham)	Bence, Cyril
Alldritt, Walter	Bacon, Rt. Hn. Alice	Benn, Rt. Hn. Anthony Wedgwood
Anderson, Donald	Bagler, Gordon A. T.	Bennett, James (G'gow, Bridgeton)
Archer, Peter	Barnes, Michael	Binns, John
Armstrong, Ernest	Barnett, Joel	Bishop, E. S.
Ashley, Jack	Beaney, Alan	Blackburn, F.
Blenkinsop, Arthur	Harper, Joseph	Mulley, Rt. Hn. Frederick
Booth, Albert	Harrison, Walter (Wakefield)	Murray, Albert
Boston, Terence	Haseldine, Norman	Newens, Stan
Bowden, Rt. Hn. Herbert	Hattersley, Roy	Noel-Baker, Francis (Swindon)
Boyden, James	Hazell, Bert	Noel-Baker, Rt. Hn. Philip(Derby, S.)
Braddock, Mrs. E. M.	Healey, Rt. Hn. Denis	Oakes, Gordon
Bradley, Tom	Heffer, Eric S.	Ogden, Eric
Bray, Dr. Jeremy	Henig, Stanley	O'Malley, Brian
Broughton, Dr. A. D. D.	Herbison, Rt. Hn. Margaret	Oram, Albert E.
Brown, Rt. Hn. George (Belper)	Hilton, W. S.	Orbach, Maurice
Brown, Bob (N'c'tle-upon-Tyne, W)	Hobden, Dennis (Brighton, K'town)	Orme, Stanley
Brown, R. w. (Shoreditch & F'bury)	Hooley, Frank	Oswald, Thomas
Buchan, Norman	Horner, John	Owen, Will (Morpeth)
Buchanan, Richard (G'gow, Sp'burn)	Houghton, Rt. Hn. Douglas	Paget, R. T.
Butler, Herbert (Hackney, C.)	Howarth, Harry (Wellingborough)	Palmer, Arthur
Butler, Mrs. Joyce (Wood Green)	Howarth, Robert (Bolton, E.)	Pannell, Rt. Hn. Charles
Cant, R. B.	Howell, Denis (Small Heath)	Park, Trevor
Carter-Jones, Lewis	Howie, W.	Parker, John (Dagenham)
Castle, Rt. Hn. Barbara	Huckfield, L.	Parkyn, Brian (Bedford)
Chapman, Donald	Hughes, Rt. Hn. Cledwyn (Anglesey)	Pavitt, Laurence
Coe, Denis	Hughes, Hector (Aberdeen, N.)	Pearson, Arthur (Pontypridd)
Coleman, Donald	Hughes, Roy (Newport)	Peart, Rt. Hn. Fred
Concannon, J. D.	Hunter, Adam	Pentland, Norman
Conlan, Bernard	Hynd, John	Perry, Ernest G. (Battersea, S.)
Corbet, Mrs. Freda	Irvine, A. J. (Edge Hill)	Perry, George H. (Nottingham, S.)
Crawshaw, Richard	Jackson, Peter M. (High Peak)	Prentice, Rt. Hn. R. E.
Cronin, John	Janner, Sir Barnett	Price, Christopher (Perry Barr)
Crosland, Rt. Hn. Anthony	Jay, Rt. Hn. Douglas	Price, William (Rugby)
Crossman, Rt. Hn. Richard	Jeger, Mrs. Lena (H'b'n&St.P'cras, S.)	Pursey, Cmdr. Harry
Cullen, Mrs. Alice	Jenkins, Hugh (Putney)	Randall, Harry
Dalyell, Tam	Jenkins, Rt. Hn. Roy (Stechford)	Rankin, John
Darling, Rt. Hn. George	Johnson, Carol (Lewisham, S.)	Rees, Merlyn
Davidson, Arthur (Accrington)	Jones, Dan (Burnley)	Reynolds, G. W.
Davies, Dr. Ernest (Stretford)	Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)	Rhodes, Geoffrey
Davies, Ednyfed Hudson (Conway)	Jones, J. Idwal (Wrexham)	Richard, Ivor
Davies, Harold (Leek)	Jones, T. A. (Rhondda West)	Roberts, Albert (Normanton)
Davies, Robert (Cambridge)	Kelley, Richard	Roberts, Goronwy (Caernarvon)
Davies, S. O. (Merthyr)	Kenyon, Clifford	Roberts, Gwilym (Bedfordshire, S.)
de Freitas, Rt. Hon. Sir Geoffrey	Kerr, Dr. David (W'worth, Central)	Robertson, John (Paisley)
Delargy, Hugh	Kerr, Russell (Feltham)	Robinson, Rt. Hn. Kenneth(St.P'c'as)
Dell, Edmund	Lawson, George	Robinson, W. O. J. (Walth'stow, E.)
Dempsey, James	Leadbitter, Ted	Rodgers, William (Stockton)
Diamond, Rt. Hn. John	Ledger, Ron	Roebuck, Roy
Dobson, Ray	Lee, Rt. Hn. Jennie (Cannock)	Rogers, George (Kensington, N.)
Doig, Peter	Lee, John (Reading)	Rose, Paul
Driberg, Tom	Lever, Harold (Cheetham)	Ross, Rt. Hn. William
Dunnett, Jack	Lewis, Arthur (W. Ham, N.)	Rowlands, E. (Cardiff, N.)
Dunwoody, Mrs. Gwyneth (Exeter)	Lipton, Marcus	Ryan, John
Eadie, Alex	Lomas, Kenneth	Shaw, Arnold (Ilford, S.)
Edelman, Maurice	Lyon, Alexander W. (York)	Sheldon, Robert
Edwards, Robert (Bilston)	Lyons, Edward (Bradford. E.)	Shore, Peter (Stepney)
Edwards, William (Merioneth)	Mabon, Dr. J. Dickson	Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Ellis, John	McBride, Neil	Short, Mrs. Renée(W'hampton, N. E.)
English, Michael	MacColl, James	Silkin, Rt. Hn. John (Deptford)
Ennals, David	MacDermot, Niall	Silkin, Hn. S. C. (Dulwich)
Ensor, David	Macdonald, A. H.	Silverman, Julius (Aston)
Evans, Albert (Islington, S. w.)	McGuire, Michael	Skeffington, Arthur
Evans, Ioan L. (Birm'h'm, Yardley)	McKay, Mrs. Margaret	Slater, Joseph
Faulds, Andrew	Mackenzie, Gregor (Rutherglen)	Snow, Julian
Finch, Harold	Mackintosh, John P.	Spriggs, Leslie
Fletcher, Raymond (Ilkeston)	MacMillan, Malcolm (Western Isles)	Stewart, Rt. Hn. Michael
Fletcher, Ted (Darlington)	McMillan, Tom (Glasgow, C.)	Stonehouse, John
Floud, Bernard	McNamara, J. Kevin	Summerskill, Hn. Dr. Shirley
Foot, Sir Dingle (Ipswich)	Macpherson, Malcolm	Swain, Thomas
Foot, Michael (Ebbw Vale)	Mahon, Peter (Preston, S.)	Swingler, Stephen
Ford, Ben	Mahon, Simon (Bootle)	Symonds, J. B.
Forrester, John	Mallalieu, E. L. (Brigg)	Taverne, Dick
Fowler, Gerry	Mallalieu, J. P. W. (Huddersfield, E.)	Thomas, George (Cardiff, W.)
Freeson, Reginald	Manuel, Archie	Thomson, Rt. Hn. George
Galpern, Sir Myer	Mapp, Charles	Thornton, Ernest
Gardner, Tony	Marquand, David	Tinn, James
Garrett, W. E.	Marsh, Rt. Hn. Richard	Tomney, Frank
Ginsburg, David	Mason, Roy	Tuck, Raphael
Gordon Walker, Rt. Hn. P. C.	Mayhew, Christopher	Urwin, T. W.
Gourlay, Harry	Mellish, Robert	Vartey, Eric G.
Greenwood, Rt. Hn. Anthony	Mendelson, J. J.	Wainwright, Edwin (Dearne Valley)
Gregory, Arnold	Mikardo, Ian	Walker, Harold (Doncaster)
Griffiths, David (Rother Valley)	Millan, Bruce	Wallace, George
Griffiths, Rt. Hn. James (Llanelly)	Molloy, William	Watkins, David (Consett)
Griffiths, Will (Exchange)	Moonman, Eric	Watkins, Tudor (Brecon & Radnor)
Gunter, Rt. Hn. R. J.	Morgan, Elystan (Cardiganshire)	Wellbeloved, James
Hamilton, James (Bothwell)	Morris, Alfred (Wythenshawe)	Wells, William (Walsall, N.)
Hamilton, William (Fife, W.)	Morris, Charles R. (Openshaw)	Whitaker, Ben
Hamling, William	Morris, John (Aberavon)	White, Mrs. Eirene
Hannan, William	Moyle, Roland	Whitlock, William
Wigg, Rt. Hn. George	Williams, W. T. (Warrington)	Woof, Robert
Wilkins, w. A.	Willis, George (Edinburgh, E.)	Wyatt, Woodrow
Willey, Rt. Hn. Frederick	Wilson, Rt. Hn. Harold (Huyton)	Yates, Victor
Williams, Alan (Swansea, W.)	Wilson, William (Coventry, S.)
Williams, Alan Lee (Hornchurch)	Winnick, David	TELLERS FOR THE NOES:
Williams, Mrs. Shirley (Hitchin)	Woodburn, Rt. Hn. A.	Mr. Grey and Mr. Fitch.