§ Mr. GeorgeTo ask the Secretary of State for Defence (1) what is the annual cost to his Department of allowing defence companies to claim the costs of marketing their products abroad as overheads on non-competitive Government contracts; [26184]
(2) what is the annual cost to his Department of allowing the costs of entertainment to be included in the overheads on non-competitive Government contracts by companies claiming the costs of marketing their products abroad. [26185]
§ Mr. ArbuthnotThe financial information requested is not held centrally and could be provided only at disproportionate cost. However, these costs are the subject of detailed negotiations with individual companies, to ensure that they comply with the criteria laid down in Government accounting conventions for the pricing of non-competitive contacts. Briefly, such costs must be necessarily incurred and be fair and reasonable; they must conform to an appropriate classification into "product groups", which must be agreed by my Department and they must not relate directly to a contract, in which case they would be directly charged to that contract and not be attributed to overheads.