§ Sir David Priceasked the Secretary of State for Defence what effect the falling pound has had on the purchase of defence equipment and weapons from the United States of America; and if he intends re-thinking any of the decisions incorporated in his 1984 statement on defence as a result of the weakness of the pound against the dollar.
§ Mr. ButlerInevitably, any relative weakness of the pound against the dollar at time of payment will have an adverse effect on the cost of the small proportion of the United Kingdom's defence equipment requirement which is purchased in America. Procurement plans are kept under continual review, taking price and all other relevant factors into account.
§ Sir David Priceasked the Secretary of State for Defence if agreements to purchase defence equipment and weapons from the United States of America are made at fixed rates of exchange between the US dollar and the pound at the time of signature or at the prevailing market rate when each progress payment falls due.
§ Mr. ButlerThe vast majority of agreements to purchase defence equipment and weapons from the United States are expressed in dollars, being either procurement from the US Department of Defence under their foreign military sales procedures or direct contracts with US companies placed by our procurement office in Washington. The dollars required are purchased at the rate of exchange prevailing when payments are made. In addition, a few contracts are placed in sterling with United Kingdom agents of US companies.