HC Deb 22 January 1969 vol 776 cc121-2W
63. Mr. Emrys Hughes

asked the Secretary of State for Defence what was the total expenditure on aircraft, naval and military equipment in the United States of America in 1968; and if he will state the main items of this expenditure.

Mr. John Morris

I would refer my hon. Friend to the reply given to the hon. Member for Worcestershire, South (Sir Gerald Nabarro) on 18th December, 1968. The main items in the total are payments for Polaris, Phantom and Hercules, and Fill cancellation costs.—[Vol. 775, c. 1364.]

64 and 65. Sir T. Beamish

asked the Secretary of State for Defence (1) if he will publish in the OFFICIAL REPORT details of loan facilities agreed with the United States of America in respect of defence equipment, including cancellation charges, since October 1964, the sum already borrowed, the amount by which the outstanding debt was increased by devaluation, the total interest payments due over the period of the loans, and the amount by which they were increased by devaluation; and what further borrowing is anticipated under these arrangements;

(2) what is the total debt outstanding to the United States of America for defence equipment and cancellation charges, shown separately; what are the total interest payments remaining due on this debt; and what proportion of the capital and interest payments relate to equipment ordered before and after October 1964, respectively.

Mr. Healey

The only loan facilities agreed with the United States of America in respect of defence equipment are those for the purchase of military aircraft. Details of the latest position of these arrangements were given in reply to a Question from the hon. Member for Luton (Mr. Howie) on 18th July, 1968.

The sum borrowed up to 31st December, 1968, was $615 million which is equivalent to £256 million at the devalued rate of exchange. Of this amount £36 million is the additional sterling cost resulting from devaluation. The total interest payable on the amount so far borrowed is £48 million of which £6½ million arises from devaluation.

The amount still outstanding on the sum borrowed up to 31st December, 1968, is £202 million, and the amount of interest payable on this is £33 million.

The money borrowed includes £20 million for progress payments on the F111 aircraft, the order for which was subsequently cancelled. This borrowing has now been repaid. It is expected that this payment will in fact exceed our total liability for cancellation charges.

About one sixth of the amount borrowed to date is for equipment ordered before October 1964.—[Vol. 768, c. 274–5.]