§ Mr. NellistTo ask the Secretary of State for Defence what proportion of the annual and total offset arrangements negotiated by Boeing with the United Kingdom, following the 1986 airborne warning and control system deal, are now being taken up by sales of Rolls-Royce engines to the third parties who have bought Boeing air frames; what proportion of each Rolls-Royce engine counts in this method of accounting; and if he will make a statement.
§ Mr. SainsburyThe AWACS offset agreement allows for 35 per cent. of the value of any sales of Rolls-Royce engines to Boeing for civil aircraft to be counted towards the fulfilment of Boeing's offset obligation, subject to annual and aggregate ceilings. The maximum allowable over the offset period is $800 million. The value of any sales of Rolls-Royce engines to Boeing for military aircraft is allowed in full. Sales of Rolls-Royce engines to third parties would not be eligible for credit under the offset agreement.
§ Mr. NellistTo ask the Secretary of State for Defence (1) how much of the estimated £150 million per year of contracts which Boeing estimated would be initially placed in the United Kingdom following the awarding of the airborne warning and control system deal in 1986, can now be identified; and if he will make a statement;
(2) how much, to the latest available date, Boeing has spent in the United Kingdom in connection with its offset agreement made at the time of the 1986 airborne warning and control system deal;
(3) if he will place in the Library copies of the six-monthly submissions from Boeing listing the work they have placed and with which firms, in relation to the agreed offset deal negotiated following the 1986 airborne warning and control system deal; and if he will publish a regular review of these arrangements.
§ Mr. SainsburyBoeing has to date submitted three progress reports claiming offset for contracts valued at $628.3 million. Of the contract values claimed in the first two reports $147.7 million has been approved and $77.5 million rejected as not complying with the agreement. The balance largely relating to contract values in the third report which has only recently been received is under evaluation. It is not our practice to release details of contracts which are commercially confidential.
§ Mr. NellistTo ask the Secretary of State for Defence how many of the 40,000 new jobs due to be created as a consequence of the Boeing airborne warning and control system deal in 1986 can be identified; and if he will make a statement.
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§ Mr. SainsburyThere is no job content in the AWACS offset agreement. Boeing's offset obligation to the MOD is financial and is measured in terms of the value and quality of contracts placed in the United Kingdom defence industry. We expect that the net effect on job numbers over the life of the offset programme will be very favourable.