§ 3.17 p.m.
§ Lord TordoffMy Lords, I beg leave to ask the Question standing in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government what has been the effect of the recent changes in the sterling-dollar exchange rate on the estimated cost of the Trident project.
383§ The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne)My Lords, my right honourable friend the Secretary of State for Defence is currently reviewing the estimate of the cost of Trident and expects to make an announcement shortly. The exchange rate applicable to the revised estimate will be announced at the same time. However, what chiefly matters is the rate which applies when Trident expenditure peaks around the turn of the decade. At present, it is comparatively small.
§ Lord TordoffMy Lords, while I thank the noble Lord for that Answer, is he aware that it is extremely disappointing that this information is continually withheld from the country? I understand that the last available estimate is for March 1984, when the exchange rate was 1.53 dollars. Is the noble Lord aware that if we do some simple arithmetic on the basis of 1.11 dollars the cost of Trident will now have exceeded £10 billion?
§ Lord TrefgarneMy Lords, I am aware of course of the fluctuations in the exchange rate since the last announcement was made. That is why my right honourable friend thought it right to make another statement and he will be doing so very shortly.
§ Lord MolloyMy Lords, can the noble Minister say whether the Government are paying attention to submissions made in this House on many occasions to the effect that the monies being spent on the Trident system would be much better used on conventional systems for the defence of this nation?
§ Lord TrefgarneMy Lords, I am afraid that the noble Lord is quite mistaken in that view. The cost of Trident is equivalent to three or four armoured divisions and the Soviet preponderance on the central front is about 80 divisions of that kind, so three or four additional divisions are not likely to make much difference.
§ Lord Bruce-GardyneMy Lords, is it true that the period of procurement for this weapons system has now been stretched from 15 to 20 years? Is there any hope that if that has already happened we could stretch it out to 25 years, 30 years or even infinity?
§ Lord TrefgarneNo, my Lords, that is not true. The period of acquisition remains as it always has been. I refer my noble friend to the speech which my right honourable friend made at the party conference last year in which he set out the time-scale involved.
§ Lord BeswickMy Lords, can the noble Lord say whether this is in the nature of a cost-plus contract, and does not the British defence industry require a fixed price?
§ Lord TrefgarneMy Lords, there are of course a number of contracts involved in the Trident procurement process but they are, generally speaking, fixed price contracts.
§ Lord TordoffMy Lords, I am sorry to intervene again, but is the noble Lord aware that the answer that he just gave his noble friend does not square with an 384 Answer that was given in the other place to a Written Question by Mr. David Alton earlier this week?
§ Lord TrefgarneMy Lords, I believe that the answer that I gave does coincide with what has been said before. There has been no change in the acquisition period. I repeat that I invite the noble Lord to refer to earlier remarks on the subject.
§ Lord BeswickMy Lords, can the noble Lord clarify his answer to me? If they are fixed price contracts, how is it that they are continually increasing?
§ Lord TrefgarneMy Lords, the contracts themselves are not increasing. What is changing of course is the dollar-pound exchange rate. About 45 per cent. of the contracts are set in dollars. The number of dollars is remaining the same; the number of pounds necessary to acquire those dollars is changing.
§ Lord Harvey of PrestburyMy Lords, can my noble friend say what percentage of this work is being carried out in the United Kingdom?
§ Lord TrefgarneMy Lords, a large percentage of the project overall is being carried out in the United Kingdom—something like half overall—including of course the submarines themselves. Indeed, United Kingdom firms are being given the chance to tender for some of the other work as well.
§ Lord MolloyMy Lords, with respect, will the noble Lord answer the important part of my question? As I am sure he is aware, it refers to very important submissions made by distinguished service officers who are now in this House. Are the Government at least paying attention to their submissions that the money spent on the Trident system might be better spent on conventional weapon systems?
§ Lord TrefgarneMy Lords, the noble Lord is referring to "service officers" in the plural. As far as I know, there is only one service officer making such submissions.