HC Deb 17 June 1986 vol 99 c904
13. Dr. Michael Clark

asked the Secretary of State for Defence if he will indicate the proportion of the defence budget that is spent overseas: and if he will make a statement.

Mr. Younger

Direct defence expenditure overseas, net of receipts, is expected to comprise some 14 per cent. of total defence expenditure during 1986–87.

Dr. Clark

I thank my right hon. Friend for that answer. I recognise the need to spend money abroad in order to secure the defence equipment that we require, but will my right hon. Friend give an assurance that we will use our purchasing power as a major buyer of foreign equipment to secure offset agreements with the companies from which we purchase?

Mr. Younger

My hon. Friend is right about that. When we buy overseas equipment, either because it is cheaper or better, or both, we always try, wherever possible, to tie in offset agreements to help British industry.

Mr. McNamara

How much of that money is spent in Gibraltar and, in particular, how much of it has been spent on the Appledore company, which is supposed to be managing the dockyard in Gibraltar? Will the Secretary of State confirm that that private company, which took over the work at the dockyard, put a screw on a frigate back to front, so that instead of going forwards it would have gone backwards, and vice versa, and that it mended the pumps on a private vessel so that when the crew tried to pump water overboard, the water came into the ship and it sank in the harbour?

Mr. Younger

If the hon. Gentleman will table a question about how much of the money is spent in Gibraltar, I shall be glad to give him an answer. However, he may be interested to know that the 14 per cent. spent overseas includes the net cost of our forces overseas and all the foreign equipment that we buy. I hope the hon. Gentleman will feel that that is a fairly encouraging figure.

Mr. Nicholas Winterton

As I have just returned from the annual presentation of the Think British campaign, which was made by the deputy chairman of the Conservative party, may I ask my right hon. Friend to accept from me that spending 14 per cent. of our defence budget abroad is too high a figure? Over the years our Royal Ordnance factories have produced high quality products, and it is nonsense that we should send orders overseas so that we can say that we are providing competition for our Royal Ordnance factories, which already have such an excellent record in this country.

Mr. Younger

My hon. Friend is not quite correct to draw that conclusion. The figure of 14 per cent. relates to all overseas expenditure, net of receipts. If the procurement element is taken alone, between 90 and 95 per cent. of our procurement budget is spent at home.