HC Deb 13 March 1984 vol 56 cc263-4
1. Dr. David Clark

asked the Secretary of State for Defence what is the latest estimate of the cost of the Trident programme.

The Secretary of State for Defence (Mr. Michael Heseltine)

I have recently submitted a figure of £8,729 million to the Public Accounts Committee and the Select Committee on Defence. This is the estimate prepared by my Department for this year's recosting of the defence programme.

Dr. Clark

Has the Secretary of State seen the report of the National Audit Office that suggests that savings of about £500 million are included in the figure that he has announced? Is that saving at the cost of British jobs, because the missiles are being prepared and refurbished in the United States? Does that not make a mockery of the right hon. Gentleman's claim that it will be an independent nuclear deterrent, because the missiles are entirely dependent on the United States?

Mr. Heseltine

As the House knows, the missiles are being purchased from the United States, but they will be under the operational command of the Royal Navy through the appropriate controls.

I must tell the hon. Gentleman that the savings are those that we identified by taking the decision to go for servicing at King's bay. The savings are of the order of £500 million, but we now think they may be higher. Certainly they have been taken into account.

Mr. Wilkinson

As the period of maximum expenditure on the procurement of Trident will come after 1985–86, when the increase in defence expenditure in real terms will be markedly reduced, will my right hon. Friend examine the possibility of procuring Ohio-class boats from the United States and building them under licence in this country, as the 24-tube SSBN could constitute major savings in expenditure?

Mr. Heseltine

I am grateful to my hon. Friend for his suggestion, but we have taken the decision on procurement of the appropriate boat. It is our view that over the period of procurement the Trident system will absorb 3 per cent. of the total defence budget, and 6 per cent. of the equipment budget.

Dr. Owen

As the dollar-sterling exchange rate has been used in the calculations, does that not increase demonstrate what many of us have been saying—that this will make a big inroad into the improvement of our conventional defence forces?

Mr. Heseltine

I an sure the right hon. Gentleman will realise that the increasing level of defence expenditure takes account of the point that he raised. I have followed precedents in coming to the estimates that I have provided, about which I have informed the House today. The sterling-dollar exchange rate on which the figures were calculated was taken in June 1983 at £1 to $1.53. It has been a precedent for Governments to take updating procedures that are relevant to the preparation of the Estimates—in this instance for 1984–85 and for the 1984 long-term costings. I have followed those precedents.

Mr. Terlezki

How many jobs will the Trident programme create in Britain?

Mr. Heseltine

I do not have the precise figure, but about 55 per cent. of the cost will be incurred in this country. We have the opportunity, which has been negotiated with the United States, for British contractors to tender for work that is available generally in the programme.

Mr. Denzil Davies

Is the Secretary of State aware that even today's figure of almost £9 billion is still hopelessly optimistic, because almost half the costs are wholly outside the right hon. Gentleman's control on the foreign exchange markets and in the hands of American arms manufacturers? Is the right hon. Gentleman aware that most independent analysts put the cost in excess of £10 billion? Why does he not recognise reality and cancel that extravagant and irrevelant status symbol and totem pole?

Mr. Heseltine

The simplest answer to the right hon. Gentleman is that I believe that Britain should have an independent nuclear deterrent. In that policy I am subscribing to the views of all Labour Governments since the war.