§ Mr. Cartwrightasked the Secretary of State for Defence (1) if he is satisfied that offset arrangements with the United States of America have provided the anticipated net financial and employment benefits to the United Kingdom;
(2) if he will make a statement on the operation of offset agreements in relation to defence purchases from the United States of America, giving as much detail as possible about the arrangements made for each contract placed with United States suppliers since 1971, specifying the benefits received in employment and financial terms.
§ Mr. PattieIt is not the policy of the United Kingdom Government to seek offset for each defence purchase made from the United States of America. To achieve an equitable balance in defence trade between the two countries, we rely primarily on the arrangements established under the 1975 memorandum of understanding between the two Governments on co-operation in R and D, production and procurement of defence equipment. Subject to any over-riding national considerations, the memorandum of understanding allows British industry to compete on equal terms with its United States counterparts for United States defence orders, whether or not the United Kingdom has a requirement for the equipment in question. Notwithstanding the 1975 memorandum of understanding the United Kingdom reserves the right to seek specific offset arrangements with United States industry where purchase of United States equipment would have a significant effect on the United Kingdom defence 147W industrial base. There are currently offset programmes in operation covering the United Kingdom purchases of Chinook helicopters, and both Sub-Harpoon and TOW missiles. The offsets have covered approximately 30 per cent. of the dollar content of each programme and are to be achieved in defence related work. Progress towards achieving the specified level of offset is proceeding satisfactorily on two of the three programmes but is behind target on the third. We are discussing with this contractor the steps to be taken to increase the volume of work to be placed in the United Kingdom.