§ Mr. CousinsTo ask the Secretary of State for Defence pursuant to his Answer to the hon. Member for Yeovil (Mr. Laws) of 24 March 2002,Official Report, column 299W, on defence finance, what the (a) gross and (b) net costs of DESO are; what the sources of offsetting income are; and if he will make a statement on the financial benefits to the defence budget. [103469]
§ Mr. IngramA table of operating costs for the Defence Export Services Organisation (DESO) for the last two years is as follows:
£ million Financial years Expenditure Receipts Net operating costs 2000–01 55.810 41.430 14.380 2001–02 48.930 37.853 11.077 Main sources of offsetting income for DESO are three Government to Government project offices, where the customer country pays Ministry of Defence costs, and the Disposal Services Agency where costs are met from revenue.
DESO raises other sources of income from charging industry for activities undertaken on their behalf where Government independence from industry is not essential and when costs can be directly identified, calculated and recovered from individual companies. On this basis charges are raised for a proportion of the costs of the following activities: demonstrations of defence equipment overseas, demonstrations of defence equipment in the United Kingdom, Market Research and Publications, DESO Symposium and Seminars, and charging for Inward Visits. Savings to the defence budget come from spreading the fixed overhead cost of equipment over the longer production runs generated by exports, from the sale of surplus military equipment to overseas governments and from Commercial Exploitation Levy receipts on exports of equipment developed using public money.