§ 30. Sir Ian Orr-Ewingasked the Secretary of State for Defence whether the £25 million in dollars agreed as a cancellation charge for the F111 will be charged to the defence budget; and whether other defence projects will be cancelled or postponed in order to make the necessary sum available.
§ Mr. HealeyMay I express my gratitude for the very kind words just offered by the hon. Member for Hendon, North (Sir Ian Orr-Ewing). In reward may I tell him the dollar costs arising from the cancellation of the F111 have not yet been finally agreed but as a result of further discussions with the American authorities the estimate of £25 million previously given to the House is now likely to be reduced still further to about £16 million. We had in fact already paid about £20 million in progress payments on the F111 before cancellation which we originally borrowed under the American credit arrangement and repaid in January this year. This sum now exceeds the latest estimate of our total liability. The amount paid in excess of the final settlement will be refunded by the American authorities. The payment made was of course charged to the Defence Budget. In the light of all the foregoing facts, the answer to the second part of the Question is, of course, "No".
§ Sir Ian Orr-EwingIs it not clear that we shall have spent some £16 million without receiving any hardware? Is not this a lamentable waste of defence money?
§ Mr. HealeyI very much regret this waste of defence money, but when I compare it with £100 million wasted by the previous Government on 30 separate cancelled aerospace projects, I feel at least a certain relative superiority to the hon. Gentleman.