§ 3.6 p.m.
§ THE EARL OF KINNOULLMy Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government whether they can now announce details of the agreed modification costs that have been made with the United States Government for the British order of the F111K aircraft.]
§ THE MINISTER WITHOUT PORTFOLIO (LORD SHACKLETON)No, my Lords, but before placing the order for the balance of 40 F111K aircraft, we had available up-to-date cost information from the United States Government which made it clear that, excluding United States money inflation, our earlier view that the total unit cost of this aircraft, including the special British features, would be about £2,500,000 was still valid. Discussions on the final figure for the supplemental ceiling are, however, still in progress with a view to fixing it at the lowest possible level. I will give the House the figure when it is agreed.
§ THE EARL OF KINNOULLMy Lords, while thanking the noble Lord for his reply, may I ask him whether any further major re-designs or modifications to the aircraft are still being planned by the manufacturers, General Dynamics, particularly with the air intake problem? Secondly, could he comment on the rumour that the cost of spares for this aircraft will have to be considerably increased by the manufacturers in order to recoup their soaring costs of research and development, and will come well above the normal ratio between the value of an aircraft and support costs? Lastly, 1072 could the noble Lord confirm that the modifications which will be agreed by the British Government will completely satisfy the operational requirements of the Royal Air Force?
§ LORD SHACKLETONMy Lords, I hope that I have noted all those questions. I am not aware of any major modifications, other than the ones which at the moment are going on with regard to the engine and the engine intake. On the question of the cost of spares, as I think the noble Earl is aware, we shall be paying the same price as the United States Air Force under the co-operative logistic system. There is no reason to suppose that there will be a great escalation in the cost of these spares as a result of the research and development costs to which he has referred. What the final price of spares will be I cannot say, beyond expressing the view which I expressed earlier, that the support costs are still likely to be lower than they would have been with the TSR.2. I am not sure whether I have answered all the noble Earl's points. If there is one which I missed, I am sorry.
§ THE EARL OF KINNOULLMy Lords, I also asked whether the modifications completely satisfy the requirements of the Royal Air Force.
§ LORD SHACKLETONYes, my Lords. We are still satisfied, and we have had definite assurances that the aircraft will meet the R.A.F.'s minimum requirements.
§ LORD OGMOREMy Lords, may I ask the noble Lord whether the costs of the spares are in any way geared to the cost of the original aircraft? Is there any percentage basis? Otherwise, does it not seem that the Government may be charged a very high price indeed for the spares?
§ LORD SHACKLETONMy Lords, there is obviously a relationship, but I do not think it is very easy to give a direct correlation. In the long term, costing estimates are made on the best information available as to the amount of the cost of the spares. But certainly there is no reason to anticipate any great increase. I imagine that the noble Earl is concerned particularly in relation to the cost of the engine. Although this may be a little higher than was originally estimated, it is not going to be a very significant figure in the spares support.
§ 3.10 p.m.
§ THE EARL OF KINNOULLMy Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government whether the order for the supply of automatic test equipment for the F 111K Aircraft will be placed with British or American firms.]
§ THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR COMMONWEALTH AFFAIRS (LORD BESWICK)My Lords, this matter is still under consideration. It is hoped to reach a decision in the very near future.
§ THE EARL OF KINNOULLMy Lords, while thanking the noble Lord for his reply, may I ask whether he could comment on the strong rumour that the Ministry of Defence endeavoured to place this order with an American firm before consulting any British firm? Also, could he explain why British firms have been consulted so late in the day?
§ LORD BESWICKMy Lords, the rumour is unfounded to the extent that the Supply Department in this country is the Department which places orders for defence equipment. However, this is a highly sophisticated and highly specialised piece of equipment the research on which has already been carried out in the United States, and I think it was only natural that we should originally turn to the system available in the United States. But I assure the noble Earl that British firms have now been given a chance to tender.
§ THE EARL OF KINNOULLMy Lords, could the noble Lord give an estimate of the value of this equipment when the order is placed?
§ LORD BESWICKMy Lords, I would rather not mention any figures.
§ LORD RHODESMy Lords, may I ask whether the Minister is aware that before this order was placed our deficit with America was serious, and that since the order was placed it is now chronic and will get worse? Will he see to it that every endeavour is made to get the work which British firms can do as a part of this order?
§ LORD BESWICKYes, my Lords. Even if the American equipment is 1074 ordered, much of it will be sub-contracted in this country. What I have said is that what is now under consideration is the possibility of the British system, Elliott's, being ordered.
EARL JELLICOEMy Lords, can the noble Lord give any estimate of what the total sterling content of each F111K will be?
§ LORD BESWICKI am not quite sure what the noble Earl is talking about. I am discussing a piece of test equipment for the aircraft, and not the aircraft itself.
EARL JELLICOEI should have thought it was perfectly clear what I was talking about. The Government have often given a figure in the neighbourhood of 50 per cent. as the total British content of the Phantom. I was wondering whether there was any similar percentage figure which the noble Lord could give for the F111K.
§ LORD BESWICKAs I understand it, the question which the noble Earl is now putting is one which should have been asked on the first Question this afternoon. I could not bring myself to believe that the noble Earl was so late in the day.