HC Deb 11 May 1976 vol 911 cc212-4
9. Mr. Sandelson

asked the Secretary of State for Defence what is the latest estimate of defence sales arising from exports in the calendar year 1976; what types of defence equipment are being sold; which areas are likely to benefit; and what is the estimate of the employment involved

Mr. Mason

It is expected that a wide range of naval, Army and aerospace equipment will be exported by United Kingdom industry and by the Royal ordnance factories during 1976–77 and that this will be worth approximately £700 million. It is estimated that this amount directly creates 70,000–80,000 jobs in the United Kingdom, although many more jobs in supporting industry are dependent on them.

Mr. Sandelson

I welcome that information, but will the Secretary of State explain the Government's policy on the acceptance and implementation of foreign orders for military equipment designed and capable of use only for defensive purposes?

Mr. Mason

When examining individual export orders there are always some hair-line cases, and my hon. Friend has one or two examples in his constituency that may have suffered because of it. We have to consider all relevant political, military, security and finance implications when considering sales of equipment to any country.

Mr. Geoffrey Finsberg

Does the Secretary of State agree that overseas defence sales are often hindered because firm orders have not been placed for the same merchandise for our own defence purposes? Will he take that into account and make some changes, so that the pump-priming operation has this export spin-off?

Mr. Mason

I recognise that, but the hon. Gentleman must also recognise that the defence equipment manufacturers would always like to see the Army, Navy and Air Force buy their equipment first, because that gives them added impetus when they try to sell abroad. But I hope that they will not rely too much on that. They should be able to sell good equipment to foreign Services.

Mr. Palmer

Does my right hon. Friend agree that if the multi-rôle combat aircraft project were cancelled, as has been suggested in some quarters, the effect on employment in the aero-defence industries both at BAC and Rolls-Royce would be disasterous?

Mr. Mason

If the MRCA contract were cancelled and no further British military aircraft were developed, 24,000 jobs would go immediately in the airframe industry, and with consequent reductions in Rolls-Royce, leaving it to private enterprise, there would be hardly an aircraft industry left.

Mr. Ian Gilmour

Has the Secretary of State seen recent reports which suggest that this country has lost, and France has gained, important arms sales orders to Egypt and other places because of our failure to offer equivalent credit terms? Can the right hon. Gentleman deny those reports?

Mr. Mason

I can neither confirm nor deny such reports; it depends on the equipment to which the right hon. Gentleman is referring. We have established a working relationship with Egypt. Egypt is keen to take British equipment, and a number of our firms have orders from the Egyptians. There is a problem involving credit, but it would be folly to start a credit race on arms sales.