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I beg to move,
That this House regrets that the Minister of Aviation misled the House on 7th March on a material point of fact, namely, by concealing from the House that the value of the Saudi Arabian contract announced on 21st December is included in the dollar offset arranged with the American Government for the cost of the F111A aircraft.
The matter to which this Motion directly relates is in itself narrow and simple, but the issues which it raises are of great importance; indeed, they are perhaps issues than which this House could not debate more important, for they go to the relationship of Her Majesty's Government with the House itself and to the manner in which Ministers deal with hon. Members in this House.
The facts which I shall adduce in support of the Motion are in themselves simple and plain, but their very simplicity and plainness renders the more shocking the deception which has been practised upon the House and to which the Motion draws attention.
It will be convenient to begin with the Defence White Paper, published on 22nd February, which conveyed the information, in paragraph 11, on page 11, that:
that is, the Government—
have taken steps to ensure that the foreign exchange cost of the F111A will be fully offset by sales of British equipment.
That was an announcement which, naturally, attracted great attention and to which much importance was attached. The Defence White Paper had announced at last the Government's decision on the long-debated question whether we should purchase any of these American aircraft, and one important factor which bore upon that decision was its effect upon our, balance of payments.
Consequently, the arrangements which might be made to offset any burden thereby falling upon our balance of payments were of exceptional importance, and there was great public interest in the nature and effectiveness of those arrangements. So one naturally read with great care and attention that part of
the Defence White Paper which referred to those arrangements. It went on, in explanation of the sentence which I have read to the House, to refer to arrangements which had been made
for British firms to compete without discrimination for United States defence contracts".
The whole of that paragraph—indeed, it was the only part of the Defence White Paper which referred to the offset arrangements—was concerned with the sale of equipment by this country to the United States Administration.
Therefore, many hon. Members, and, I think, many without the House, were extremely struck and very surprised by the further details of this arrangement which were given to the House in the course of debate on 7th March by the Minister of Aviation. As this passage is so important, I hope that the House will bear with me if I read the one sentence in quest on in extenso. It runs:
The total dollar cost over the period has been stated as being £260 million over a 10-year period amounting in dollar terms to 725 million dollars, and we have the agreement of the United States"—
there are two parts to this agreement, the first only of which was referred to in the Defence White Paper—namely,
that is, the United States—
will over the period buy directly British equipment to the value of 325 million dollars …
That was the first part of the arrangements as then, on 7th March, expounded to the House by the right hon. Gentleman.
Then followed the second half, relating to the greater part of the total figure of 725 million dollars, which ran as follows:
… and that it"—
the United States—
will co-operate with us in sales to third countries, at least of a kind similar to that we have recently arranged with Saudi Arabia, to the value of 400 million dollars—covering the whole dollar cost of the purchase of these aircraft over the 10 years."—[OFFICIAL REPORT, 7th March. 1966; Vol. 725, c. 1861.]
From that statement, the House and the country learned of the bipartite nature of the agreement which had been made with the United States Government and which was the justification—if justification it
be—for the statement in the Defence White Paper that the Government
… have taken steps to ensure that the foreign exchange cost of the F111A will be fully offset by sales of British equipment.
We learned that the greater part of that offset was to be in the nature of American co-operation with us in sales to third countries. The Minister of Aviation gave an example of the sort of sales to third countries that he had in mind in the words:
… at least of a kind similar to that we have recently arranged with Saudi Arabia …
It could not occur to the mind of anyone hearing or reading that passage that the Saudi Arabian deal itself and the value of it were already included by this arrangement in that 400 million dollars.
If I might give an imaginary parallel—if you and I, Mr. Speaker, were in commercial relations and I were to say to you, "It is my intention to buy from you—I will buy from you—£100 worth of goods of the same sort as I recently purchased from you", it would not, it could not, enter your head that I intended only to buy £100 worth less the value of the goods which I had already purchased. Neither you, Mr. Speaker, nor any other rational human being, I submit, could suppose that that was meant. One was bound to assume—so far as I know, everyone did assume—that the plain meaning was that, in future, there would be sales to the value of 400 million dollars, in obtaining which the United States Administration would co-operate with this country, and that, by way of illustration of the kind of sales meant, a reference was made to a transaction in the recent past in which there had been, so the House was told, such co-operation. I would particularly ask the House to note the clear distinction of time in the right hon. Gentleman's Statement, that the United States
… will co-operate with us"—
future tense, from now onwards—
in sales … to the value of 400 million dollars"—
contrasting with the past tense in the reference to the deal—
… recently arranged with Saudi Arabia …
The reference was, of course, to the deal announced to the House by the
hon. Member for Wednesbury (Mr. Stonehouse) on 21st December last. I will not quote more than the vital sentence of his statement on that occasion, which was:
I have to tell the House that the Government of Saudi Arabia have this morning announced that a consortium of British firms has secured the major part of the order for their new complete air defence system."—[OFFICIAL REPORT, 21st December, 1965; Vol. 722, c. 1873–4.]
That was the known agreement, the known "recent sale", to use the adverb of the Minister of Aviation, to which he referred by way of analogy as the kind of co-operative sale which the United States, so he was telling the House, would organise with us to the value of 400 million dollars, the greater part of the total sum in question.
That was how matters stood when the right hon. Gentleman resumed his seat on 7th March. That was the meaning which had been conveyed by the right hon. Gentleman's statement, and not only to the House but to any reasonable person who read and studied his words. But during the month of March, towards the end of the month, it began to be bruited—I must confess that I received the rumours with incredulity—that the value of the Saudi Arabian deal was already included in the 400 million dollars part of the offset, that £75 million at least, which is the immediate foreign exchange gain to this country of the Saudi deal, as the hon. Member for Wednesbury said on 21st December—that 210 million dollars-worth—had already gone, had already been written off the 400 million dollars offset about which we were told on 7th March.
So, wishing to be clear on this matter, wishing to check these rumours which cast such a slur on the good faith of the Minister of Aviation and of the Government, I raised this point in the debate on the Address on 26th April and I put it to the right hon. Gentleman the Secretary of State for Defence that this was rumoured and had not been denied. He made no reference to this point at all when he replied to the debate, but on the following day, on 27th April, in answer to a supplementary Question after a long series of supplementary Questions, he said:
We agreed when we made the F111A deal that we should include the Saudi purchase arrangements, which had not then been concluded, in that part of the offset arrangements which related to sales to third countries."—[OFFICIAL REPORT, 27th April, 1966; Vol. 727, c. 689.]
Thus, there was eventually dragged out of the Government, almost two months after the Minister of Aviation spoke, the fact that the deal which he had led the House to believe was a past deal—mentioned for the sake of example and not included in the 400 million dollar offset—had already, in fact, been written off against that offset. It is the conflict between the facts about this agreement and the plain meaning of the statement of the Minister of Aviation which is the basis and the justification for this Motion of regret.
But before I come to examine the possible explanations of the Minister's behaviour in thus misleading the House on 7th March, I should like to ask a question. I may not get it answered this afternoon, but we shall, no doubt, learn the truth about this, too, in due course. The question is whether the value of the Saudi Arabian offset, which is being written off this 400 million dollars—written off the total 725 million dollar offset for the F111A—is limited to the initial foreign exchange earnings of £75 million or 210 million dollars, or whether the agreement to include it also includes the value of any future earnings, in terms of the supply of spares, and so on, which might be held to flow from the Saudi Arabian agreement. We might be told that as well. But whether we are told it now or, as is apparently usual with this Administration, a long time afterwards, it will no doubt in due course appear.
Now I come to the Minister of Aviation, who thus, on 7th March, led the House to believe the opposite of what we now know are the facts about the inclusion of the Saudi Arabian arrangement in the 400 million dollar offset by way of sales to third parties. There are three, and so far as I can see only three, explanations for the right hon. Gentleman's behaviour.
The first explanation I reject out of hand. It is that it was his intention, and his deliberate intention, knowing the facts and being conscious of the facts, to mislead the House. I repeat that I do not regard that as an acceptable explanation. I know the right hon. Gentleman well, as the House does. We have served in the House together for 16 years. We both entered it together. I do not entertain the suspicion that he came to the House on 7th March with the intention of deliberately misleading it by what he said. But, if that is so, then we must fall back upon one of two other explanations for his having thus misled the House.
The second possible explanation is that the Minister was guilty of a lapse of tongue, that he meant to tell the House that the Saudi Arabian deal was included, that that was the reason why he mentioned it and that it was only on account of some confusion in speaking, some clumsiness of grammar or diction, that he referred to it in a context which specifically excluded it, which plainly and to any understanding excluded it, from the 400 million dollar offset. That could happen to anyone.
But then, we generally read HANSARD the following day—I dare say that the right hon. Gentleman's officials also read HANSARD the following day, if not sometimes the same night—and it could not have escaped the right hon. Gentleman's attention in this case, or the attention of his officials, that he had given the opposite impression to that which he intended and the opposite impression to the truth. Therefore, if that is the explanation he is greatly at fault for not having come to the House at the earliest possible opportunity—and there are many opportunities for doing so—and put the record straight.
So far as I can see, there is only one remaining hypothesis which could account for the right hon. Gentleman's having misled the House as he did on 7th March. That is that he was not in the secret, that he did not know that the arrangement did include the Saudi deal, that it came as a shock to him afterwards, as it has come to the rest of us, to learn that this was so.
Perhaps I can help the right hon. Gentleman. I accept that I was fully informed on 7th March as to the nature of the arrangement. I would not seek to let the right hon. Gentleman develop that theme. I knew the full arrangement when I spoke to the House that day.
Then in that case I have to say that the gravest censure and blame rests upon the right hon. Gentleman himself and upon all his colleagues who were concerned with this matter for not insisting that the record was brought into agreement with the facts which they knew but which no one else suspected until weeks afterwards.
If so, why did they have to wait week after week? Why did they let it pass by when these rumours and questions were being asked? Why did not the right hon. Gentleman, even in the debate on the Address when I asked this question, confirm what the facts were? Why did he wait until the last moment when the truth could not be withheld, was too blatant to be held back?
The right hon. Gentleman the Minister of Aviation has been greatly at fault. It is a fault which, unfortunately, now can only partly be retrieved. It can be partly retrieved—and I address myself to him personally and ask him to retrieve it to that extent this afternoon. This House can be a very cruel and a very critical place; but this House is always very ready to accept and acknowledge an admission of error, even if that admission is made, as this will be, belatedly. I beg the right hon. Gentleman, when he replies, at least to say now that he recognises that he misled the House on 7th March and that he regrets that he did so. That at least will make some amends to the House and the public for what has happened and I hope that he will do so.
But still there will remain irrevocably censurable the fact that the Treasury Bench opposite knowingly, consciously and deliberately on this material matter, on this point which might well have altered the view of the House and the country on the transaction itself, held out week after week and made no move whatever to correct the misleading knowledge which had been given and to substitute in its place the true facts.
The right hon. Gentleman the Minister of Aviation can do much for himself personally to mend what has been done amiss. I am afraid that, so far as the Government as a whole are concerned, this event will remain a lasting blot upon their reputation.
The right hon. Member for Wolverhampton, South-West (Mr. Powell), on behalf of the Opposition, has taken the unusual course of moving what amounts to a Motion of censure on my conduct as Minister of Aviation. The Motion alleges that I misled the House on 7th March on a material point of fact by concealing from the House that the value of the Saudi Arabian contract is included in the dollar offset arrangement concluded by my right hon. Friend the Secretary of State for Defence in connection with the purchase of the F111A aircraft.
The House will well understand the grave position for a right hon. Member finding himself, as I do, the subject of a rare personal Motion of this character; and after 16 years' membership of the House I much regret that I should be charged with discourtesy to the House for the first time.
I say at once, as my right hon. Friend the Secretary of State for Defence did on 27th April, that there was no intention to mislead the House and that I regret the fact if any words or omissions of mine caused any hon. or right hon. Member to be misled. I say to the right hon. Member for Wolverhampton, South-West that I appreciate that he very kindly acquitted me of any deliberate intent to deceive the House and that I am obliged for what he generally said about the way I have tried to behave in the House during the years we have served in it together.
At the same time, I am bound to say that I consider the Motion to be totally unjustified. Before coming to what I did or did not say in my speech of 7th March, on which the right hon. Gentleman rests most of his case, I think that I should briefly sketch the complicated history of the Saudi Arabian deal.
Since 1962, British firms have been engaged in efforts to sell a new air defence system consisting of aircraft, radar and communications and surface-to-air missiles to the Saudi Arabian Government. There was strong competition from both United States and French firms. Direct Ministerial assistance to British firms began in December, 1964, when my right hon. Friend the Secretary of State for Defence and my predecessor gave them their full support, and this continued throughout the negotiations. I would like, in particular, to pay tribute to the efforts of my former Parliamentary Secretary, my hon. Friend who is now Under Secretary of State for the Colonies.
In October of last year my hon. Friend heard that matters had come to a head and that the Saudi Arabian Government were on the point of deciding to accept the all-American proposal to meet their requirements. At this point it was clear to all concerned that there was no hope of an all-British sale and that the only chance of a substantial sale of British equipment rested on a co-operative arrangement.
As a result of an immediate examination of the situation to determine whether, even at this late date, some British equipment might be accepted, my predecessor decided to approach the Americans with a proposal that a joint United States-United Kingdom programme, consisting of British aircraft, British radar and communications—including some American components—and the American Hawk surface-to-air missiles might be offered as an alternative solution.
The Americans agreed that such a joint proposal should be made with their backing, but pointed out that it would, of course, not be possible to withdraw the all-American proposal which had so far found favour with the Saudi Arabian Government. My hon. Friend visited Saudi Arabia early in November and, with the full support of the American Government, presented the U.S.-U.K. proposal to the Saudi Arabian Government as an additional option for them to consider.
It was made clear that while the American Government gave their support to the joint U.S.-U.K. proposal, the all-American proposal was not being withdrawn and that it was entirely up to the Saudi Arabian Government, as the customer, to make the choice. Thus, while, on the one hand, we had the essential support of the American Government for the joint programme, there was genuine competition between the British and American firms throughout. In December, 1965, the Saudi Arabian Government decided to accept the joint U.S.-U.K. proposal and signed a Letter of Intent with the three main British contractors to this effect.
As my hon. Friend announced on 21st December, the value of the British element of the joint programme is over £100 million, of which about £75 million will accrue as export earnings. I am pleased to tell the House that on Thursday last, 5th May, the detailed negotiations for the major part of the programme were completed and contracts signed. There will, over the next few months, be further negotiations on other elements of the deal, but the House will, I know, appreciate that it is not possible to go into any details.
Since my hon. Friend's statement of 21st December has been referred to, I would draw the attention of the House to his opening words:
I have to tell the House that the Government of Saudi Arabia have this morning announced that a consortium of British firms has secured the major part of the order for their new complete air defence system. The remainder of the system will be provided by American firms and we have had valuable co-operation from the United States Administration in formulating the joint programme.
In reply to a Question from the right hon. Member for Mitcham (Mr. R. Carr) my hon. Friend said:
There is no question of the agreement with the Americans to co-operate in giving technical and political support in this proposed deal being in any way linked with a commitment concerning the F111."—[OFFICIAL REPORT, 21st December. 1965; Vol. 722, c. 1873–5.]
Indeed, there could not have been any connection since no decision about purchasing the F111 had been made and during the previous week, on 13th December, both my predecessor and my right hon. Friend the Secretary of State for Defence had explained to the House that the option to buy this aircraft had been extended by two months, from 31st December to 1st March, because no decision had been or could be made until the conclusion of my right hon. Friend's Defence Review.
At no time during the Parliamentary Secretary's discussions with the Americans was there mention of the F111 or any other further British purchase. Subsequently, it was made absolutely clear to the Americans, in case there was any misunderstanding, that American assistance on the Saudi Arabian deal would have no influence whatever on any F111 purchase by Her Majesty's Government.
The American Government's interest in assisting our sales, as well as their own was due to the fact that we had stressed the need for some reciprocity in respect of our foreign exchange position, which had been affected not only by the purchase of Phantoms for the Royal Air Force and the C130 transport planes, but also by the considerable dollar expenditure we inherited in orders placed by right hon. Gentlemen opposite for Polaris and the Royal Navy Phantoms.
Perhaps it would be of some help if the right hon. Gentleman would say what precisely, in time, is meant by "subsequently" it was made out to the Americans that no influence would be allowed to be taken into account, and on whose initiative. Was this in response to impressions apparently gained on the American side, or was it felt necessary that we should make this clear from our side?
The word "subsequent" means subsequent, in fact, to the actual meeting to which I referred that my hon. Friend had with the American Government. The clarity was introduced in discussions with officials. I do not usually like to bring official discussions into public statements, because Ministers must always be responsible to the House, but between the discussions that took place in which my hon. Friend put forward the idea of the joint proposal, and its being submitted and actually accepted—I have not the dates, but I would say that it would be about between mid-November and mid-December of last year.
When we entered into negotiations with the Americans for the purchase of the Phantom for the Royal Air Force and of the C130, we not only got their active support for the substitution on as large a scale as possible of British equipment and thereby reduced the dollar cost substantially—for example, British equipment and parts in the Phantom aircraft amount to over 45 per cent. in value—but we also got the Americans to examine whether there were items which they could buy from us and whether there could be co-operation in sales to other countries which would assist our industries.
These new and novel arrangements for establishing outlets for our industries, both in the United States and in the third countries, evolved over the past year. Acceptance, however, of the principle was not enough, and after more negotiations my right hon. Friend obtained the targets which I announced on 7th March, in addition to favourable credit terms and a fair price for the aircraft themselves.
In arriving at the target figures we took into account, on the one hand, the purchases of Polaris and the Phantoms by the Royal Navy on which the previous Government had made no attempt to negotiate any reciprocal arrangements, the Phantoms for the Royal Air Force, the C130 transport and the new F111 purchase, and, on the other hand, the expenditure by the United States forces in this country over the same period of time. The specific targets for sales to the United States and to third countries, amounting to 725 million dollars in all, were calculated to offset the dollar cost of the new F111A purchase alone.
It was, therefore, perfectly reasonable to include the Saudi Arabia deal in the overall arrangement which had given us a new market for British equipment that we would not otherwise have had.
With great respect, I am standing here because of a half sentence by which it is claimed I misled the House. I am trying to put facts on record, and hon. Members do not seem to want to hear—[HON. MEMBERS: "Answer".] I have answered quite clearly.
I have already said that a point had been reached when it was agreed by all that there was no prospect of selling any substantial amount of British equipment. The only possibility was a joint arrangement of the kind my hon. Friend arranged with the American Government. Quite clearly, without such a joint arrangement there would not have been a substantial sale, and, therefore, it is absolutely correct, as I have just said, that this arrangement produced a new market for British equipment that we would not otherwise have had.
The complex series of negotiations sought, therefore, to establish firmly the principle of quid pro quo, to work out detailed methods of procedure and to agree targets which, if no more is achieved, will offset the cost of the purchase of the F111A. These arrangements were summarised in the White Paper.
Complaint has been made—and the right hon. Gentleman himself made it again today—that no reference was made to sales to third countries until my speech of 7th March. Certainly, the right hon. Gentleman the Member for Mitcham and his right hon. Friend the Member for Barnet (Mr. Maudling) both behaved on the following day as though this was the first they had heard of it. Indeed, the point was made again by the right hon. Member for Wolverhampton, South-West in a speech, to which he has referred, on 26th April.
In fact, my right hon. Friend the Secretary of State for Defence, on 22nd February, spoke about
… collaborative sales to third countries …"—[OFFICIAL REPORT, 22nd February, 1966; 725, c. 245.]
both in his introductory statement to the House on the Defence White Paper and in reply to questions posed by the Leader of the Opposition—[Interruption.] If hon. Gentlemen opposite will not listen and will not read the text in HANSARD—[Interruption.]—I think that they are in no position to complain. In reply to the first day's debate on the Defence White Paper on 7th March I sought to give the House further information in considerable detail of the offset arrangements my right hon. Friend had made with the United States Government.
In contrast to the criticism for not having given enough information, to which I am now subjected, I was then criticised by the right hon. Member for Barnet in the following day's debate for saying too much. As the right hon. Gentleman put it:
The whole gaff was blown yesterday by the Minister of Aviation. He gave the whole show away."—[OFFICIAL REPORT, 8th March 1966; Vol. 725, c. 2032.]
Indeed, the right hon. Gentleman the Member for Wolverhampton, South-West—and I understand that he is now reproving his right hon. Friend—on 26th April when, he has just told the House, he
was seized of the full circumstances, made exactly the same point but, I must say, in rather more eloquent language.
I have, of course, for the purpose of this debate reread my remarks with great care. I confess that I did not read them on the day following the debate. Perhaps I am at fault there, but I did not read them until the speech was brought at a later stage to my attention. But I have reread my remarks, particularly the section quoted by the right hon. Gentleman in which, in describing co-operative sales to third countries, I said:
… at least of a kind similar to that we have recently arranged with Saudi Arabia …"—[OFFICIAL REPORT, 7th March, 1966; Vol.725, c. 1861.]
In retrospect, I recognise that this may have been an imprecise way of quoting the proposed sale to Saudi Arabia as an example of what was meant by collaborative sales. But it was not intended to mean—and in my view it is stretching language to suggest that it does mean—[HON. MEMBERS: "No."] that this deal was excluded—[HON. MEMBERS: "Nonsense."] I think that I should say, however, that: I was replying to a day's debate from notes taken during the debate, and not making a prepared statement.
I think, that any hon. Member who reads the OFFICIAL REPORT, and certainly those—a number of whom I see here today—who were present on that occasion, will concede that I was frequently interrupted, and was pressed for time. I make no complaint about that—it is part of the cut and thrust of debate, and we were on the eve of an election. [HON. MEMBERS: "Hear, hear."] Indeed, I recollect having difficulty in giving the House the information I did give to it, as it was clear that right hon. and hon. Members opposite were not anxious to have the details of how we had managed to get offset arrangements for dollar expenditure when they had failed to do so.
While I do not seek to excuse any shortcomings on my part, right hon. Members opposite must accept some responsibility if there was misunderstanding. [HON. MEMBERS: "Why?"] I must emphasise that after my speech there was a full day's further debate, in which any doubts might have been posed about what I said or what I did not say, and they could have been cleared up. The fact is that both the right hon. Member for Barnet and the right hon. Member for Mitcham made it abundantly clear in their speeches of 8th March—the evidence is there on the record—that they had not the slightest interest in the arrangements for sales to third countries. They condemned them root and branch and said that they were totally unacceptable.
I agree that their arguments lacked conviction, not merely because they had been members of a Government which had bought first Skybolt, then Polaris and, finally, Phantom aircraft without any offset arrangement whatever, without offsetting one dollar of the substantial foreign exchange involved. In each case they quoted the part of my speech of which complaint is now made, and they could have sought clarification had they deemed it to be material.
I accept that, of course. I am bound to say, however, that in rereading what I am reported to have said on that occasion, I found the final remarks ambiguous myself.
As I understand the Motion, the charge against me, in short, is a sin of omission rather than of commission. It is a charge that I gave the House insufficient information, and not that I gave the wrong information. This Government, unlike their predecessors, have sought to give the House as much information as possible on all aspects of defence, and I am sure that this is right. It will, however, be obvious that there are dangers if, at a later stage, there is to be a Motion of censure because information which was not requested at the time was not included. This could not have happened under a Conservative Government, because they withheld all facts from the House as a matter of policy, including their purchases from the United States.
The right hon. Member for Wolverhampton, South-West will recall being a member of a Government which, in 1963, produced a half-page Defence White Paper—in fact, a foreword followed immediately by a set of annexes. In the last defence debate during the time of
the previous Administration, the then Minister of Defence, Mr. Thorneycroft, on 26th February, 1964, in reply to my right hon. Friend who is now Secretary of State for Defence, put his policy very shortly when he said:
We never have stated the cost of an air-craft in advance. It has never been done in the history of any defence debate, and the hon. Gentleman knows it perfectly well.
It would be interesting if the right hon. Gentleman were to extend his considerable textual analysis experience to some of the speeches of his right hon. Friends. I am glad to be able to point out that at column 453, on the same day, Mr. Thorneycroft made it even clearer in reply to one of his own hon. Friends when he was asked about purchases of the Phantom, the American aircraft which he had ordered for the Royal Navy. Mr. Thorneycroft was asked about its cost, its delivery and its price, and he said:
I am not giving either the cost or the numbers, because such information has never been given in the House of Commons."—[OFFICIAL REPORT, 26th February, 1964; Vol. 690, c. 451, 453.]
The complaint of the Opposition is not that they were not given enough information, because they are in no position to sustain such a complaint. Their attack is on the offset agreement, which they could not themselves achieve. In pursuing this attack, they do untold damage to British industry. They do not believe that British industry can compete on equal terms with its American rivals. We believe that it can, and these arrangements are based on our confidence in British firms and on the support of the United States Government.
I have sought to give the House a full explanation of my conduct about which complaint is made. I hope very much that the House will find it acceptable.
The right hon. Gentleman for Wolverhampton, South-West (Mr. Powell) has explained with his usual clarity the reasons why the Opposition put down their Motion. As the right hon. Member said, everything depends upon the interpretation of the words used by the Minister in his speech on 7th March.
As the Minister knows, we on this bench look at every issue in the House on its merits, and we are not tied to voting with or against the Government for party political reasons. Therefore, my colleagues and I approach this question with an entirely open mind. We have studied the passage in HANSARD on which this debate centres and for my part I cannot understand how that passage could be construed in any other way than that in which the right hon. Member for Wolverhampton, South-West has construed it this afternoon.
There had been no public suggestion that the Saudi Arabian deal should form part of the offset arrangements until 27th April this year. The passage from the announcement by the hon. Member for Wednesbury (Mr. Stonehouse), now Joint Under-Secretary of State for the Colonies, which was quoted by the Minister, makes it clear that at that time, at least, there was no question of linking the Saudi Arabian deal with the subsequent offset arrangements.
The Minister did not quote the part of the question by the right hon. Member for Mitcham (Mr. R. Carr) to which he was giving the answer, and I should like to put this on the record from col. 1874. The right hon. Member for Mitcham asked:
… is there a link of any kind—whether formal or informal—between the United States Administration's co-operation on this order and any possible order from us for the F111?"—[OFFICIAL REPORT, 21st December, 1965; Vol. 722, c. 1874.]
The Minister has already quoted the reply that at that time there was no question of any connection between these two issues.
What the Minister said this afternoon was a little bit ambiguous because he said that there was no question of our selling these Lightnings to Saudi Arabia unless the Americans withdrew. By saying that, he implied that at that time the offset agreements were already under discussion and that we had thrown this into the melting pot to help the Americans to make up their minds to withdraw from Saudi Arabia.
I tried to explain to the House that over the previous year—since the first purchases that were made with the United States—we were seeking improvements in trying to get better foreign exchange arrangements by direct sales and through co-operative sales to third parties. These talks had been going on for a long time, for the general benefit of our foreign exchange policy. They were in no way related to the F111, because in the very week to which the hon. Member is now referring both my right hon. Friends explained to the House why we could not exercise the option—the hon. Member will remember this—on the F111 by the end of the year. So there was no link with the F111. Naturally, however, we were anxious to get an offset or reciprocal arrangement for our dollar expenditure.
I am most grateful to the Minister, because I think that what he has just said is of very great importance. It means that, when his right hon. Friend was talking with the Americans about the offset arrangements relating purely to the Polaris and the Phantom, they decided to throw in the Saudi Arabian deal which had not yet been concluded as part of the price which we were to pay. I remind the Minister that this conflicts with something that his hon. Friend said at his Press conference in announcing the Saudi Arabian deal. I have two quotations here, so I am sure that these must be accurate. The first is from The Guardian of 22nd December:
Mr. Stonehouse emphasised at a Press Conference that the order has been acquired in the teeth of American competition. The United States, which so far has supplied almost all the aircraft to the Saudi Government, at no time withdrew its project for 100 per cent. American systems".
That was not a verbatim quote, but in the Daily Telegraph the hon. Gentleman's remarks are in inverted commas. He is reported as having said:
Until the eleventh hour the Americans were trying every possible means to stop the order and substitute American equipment.
I must point out to the Minister that this is at variance with what the Secretary of State for Defence said in the Answer he gave on 27th April which has already been quoted. He then said that
… the Americans originally undertook to stand aside"—[OFFICIAL REPORT, 27th April, 1966; Vol. 727, c. 689.]
in the Saudi Arabian deal as part of the negotiations which were under way for the offset of our dollar expenditure on weapons as a whole including, as we have heard this afternoon, the Phantom and the Polaris.
If the hon. Member reads what my right hon. Friend said in opening the debate, he will see that it is quite clear. The American Government were involved with us in making a joint effort to the Saudis and they put their official governmental support behind that joint effort; but they said they could not persuade the American firms concerned—particularly Lockheed—to withdraw their alternative offer and they must leave it to the Saudi Government to decide between the joint offer sponsored by the British and American Governments and the other American offer. My hon. Friend the present Under-Secretary of State for the Colonies was absolutely right in saying that competition from Lockheeds persisted to the very last moment and was very stiff indeed.
I am grateful to the right hon. Gentleman for making that clear, because his remarks on 27th April, 1966, caused some offence in the British aircraft industry. [Interruption.] Yes, they did, and particularly in the British Aircraft Corporation, which was upset by the implication that it had a free run to Saudi Arabia and that no American competition was involved. Further, the right hon. Gentleman's remarks have upset the Saudi Arabians, because from their point of view the implication is that they were getting something less than the best, whereas, as everybody will admit, the Lightning fighters which the Saudi Arabians decided to buy were infinitely better for their purposes than any American alternative they might have had.
I return to the main issue in this debate. I plead with the Minister to look even more carefully at the remarks he made on 7th March and to consider whether there is any possibility whatsoever that they could have been interpreted in the way he suggests. In my view, there is no such possibility. In view of what had gone before and some of the arrangements, particularly the Saudi Arabian one and the statements made on it in the House which I have already quoted, there was no doubt in my mind, and certainly not in the minds of any of the national commentators in the aviation scene, about what he meant in that passage of his speech.
Therefore, I am not at all surprised that the right hon. Member for Mitcham did not make any reference to it, as the Minister says, in the last day of the defence debate. I do not see any reason why he should have done. He must have been extremely relieved to hear from the speech of the Minister of Aviation that there was no question of any link between these two deals. It was with great satisfaction that many people concerned with the future of our aircraft industry learned that that was being left on one side and that we still had the whole of the 400 million dollars to be expected in the next 10 years as contracts which would be placed with the British aircraft industry by third countries.
That would have been an extremely satisfactory position for the British aircraft industry. I think that there is some merit in these arrangements for sales to third countries. But now, to their consternation, they learn that this amount of contracts which they might have expected to get is only one half of what it was. This is not at all a satisfactory position for the British aircraft industry to be in.
In conclusion, even though the Minister may have relaxed somewhat on the ridiculous secretiveness of his predecessors, he has not gone nearly far enough yet. If he is trying to give himself a pat on the back and say that he now is giving the House figures of the value of contracts which were not given by his predecessor, Mr. Thorneycroft, I can tell him that neither on this side of the House nor on his own will we accept the present position as being the end of the road. Many of us want to see a Select Committee charged with the responsibility of examining these matters, on similar lines to the committees they have in the United States, so that the House can be fully informed of all that is going on in defence, and particularly where hundreds of millions of £s are involved, as in this case. Until we reach that situation, we on this bench will not be satisfied; and I very much regret to have to tell the Minister that, in spite of the answer he gave this afternoon, we shall have to vote against him at 7 o'clock.
I am very grateful indeed, Mr. Deputy Speaker, to have this first opportunity of addressing the House. I represent a Preston constituency the north end of which has a football team, the team which drew with Manchester United and defeated Cardiff last week by nine goals to nil.
Preston is famous for other reasons, too. Before the 1832 Parliamentary Act, it shared with Westminster the distinction of being just about the only democratic constituency in the whole country. This was at a time when other constituencies were either in the landlords' pockets or had a tiny number of electors who sold their votes at every election.
In any comparison between Preston and Westminster I should say that Preston has the edge on Westminster, because I remember reading that during the election of Charles James Fox towards the end of the eighteenth century Charles bought votes by sending around the Duchess of Devonshire with kisses. There is no evidence of anything like that happening in Preston, no doubt because the men of Preston are so honest and because the women are so beautiful that any charms from any duchess would be quite superfluous.
The democratic tradition of Preston is probably reflected in the fact that this year we are celebrating the one hundredth anniversary of the existence of the Labour and Trades Council. Probably the early growth of this movement was associated with the early industrialisation of Preston. This part of England—Lanacashire—saw man's first great breakthrough in controlling the forces of nature—an event which raised human affluence to heights never dreamed of before. This was the result of great native genius expressing itself at first in the cotton industry, but remaining today in a great complex of industries, including the aircraft industry and its associated interests, an industry on which the future of Britain largely depends because of its ramifications.
This is why I speak in this debate. Unfortunately, it is a controversial subject
for a maiden speech, when one is expected to be neutral. However, the people of Preston are forthright, like most Northerners. I draw courage from the words of another great Northerner, my right hon. Friend the Prime Minister, who not once but twice quoted the authority of Dante:
The hottest places in hell are reserved for those who are neutral in a moral crisis."—[OFFICIAL REPORT, 21st December, 1965; Vol. 722, c. 1924.]
and would any hon. Member have a maiden neutral in a moral crisis?
This is about morality. This is a question whether we were misled on the matter of the offset agreement relating to foreign currency in connection with the F111A. Many thought that the Saudi Arabian agreement was not included in this offset agreement and, although my right hon. Friend was quite genuine in his earlier statements, one wonders whether or not the United States negotiated a change of mind. I am aware that the United States Government are hard bargainers in matters of this kind.
At least one right hon. Member, several hon. Members and even a noble Lord were given credit in my local newspaper for this deal, and I imagine that it was a deal which was concluded in the face of strong competition from America. The final credit was given in the local newspaper to a sales executive. According to this newspaper, the usual commission on the deal would be 1 per cent. which would have given the sales executive £1 million, though it was suggested that under the circumstances the commission might be somewhat less.
Nevertheless there is raised the question, who is to be paid this money? I am wondering whether it should go to President Johnson, if he helped to conclude the deal. We might do better in the future in selling aircraft if we had the kind of power that comes from the United States Administration in aircraft deals throughout the world. I do not think that they are inhibited in using political influence and strength in order to forward the American aircraft industry.
I have little sympathy with the crocodile tears which have been shed by some hon. Members opposite over the loss of foreign currency. They have shown little concern in the past about expenditure in connection either with foreign bases or with the British Army of the Rhine. It is very significant that they would probably increase the loss of foreign currency in defence expenditure in Aden. However, I am more concerned about the future of the aircraft industry and I wish Opposition Members would say more about that, as hon. Members on this side of the House have done. Are we to continue to lose foreign currency over aircraft purchases? It would be very serious if this were to continue.
I have some sympathy with some hon. Members opposite who have been expressing concern about the remarks of Mr. Richard Worcester. Some have asked the Minister publicly to disown the views of Mr. Worcester that the Anglo-French projects to which we are committed—or, at least, to which I thought we were committed—are to be shelved in favour of more co-operation with the United States. This has caused a great deal of alarm among aircraft workers throughout the country. I have received representations both personally and in writing from people, including the managing director of B.A.C., who are worried about Mr. Worcester's statement.
People have put their views to me and I believe they are important views which need to be answered. They believe that the British aircraft industry faces slow extinction if the Government and nationalised airlines place large orders in the United States. Our best designers, engineers and craftsmen—not just the un-skilled men—are departing in their hundreds to our competitors, chief of whom are the United States. We are losing the brains, not the fat.
I have been asked what we are to do with the aircraft of the 1970s which we have on British design boards. My constituents ask: will Britain get the orders with French co-operation, or will the orders go to the United States, or will we just drift so that in the end we shall have to go American? The aircraft workers say that those who talk merely of the economy are penny wise. If the British aircraft industry goes to the wall, British technology goes with it. How can Britain remain in the front of the computer age, if we withdraw aircraft from the main field of computer development? On the other hand, if we build under licence to American designs, what shall we design—fruit machines?
B.E.A.'s great success for over 20 years has been based on British planes. The French know what they want. They want to make the planes that they use, if possible in co-operation with us. This way into Europe is wide open and is the most practical way of getting in. We—not the French—create the difficulties in this case. Dutch, Swedes, Germans and Italians, both inside and outside the Common Market, could be partners and customers in this huge market. This would be a market to match the Americans. Equal with our partners in aircraft and other projects, we could remain an independent industrial Power with high living standards and with some self-respect.
Prestonians ask not for words and plans. They ask for orders now.
It gives me great pleasure to follow the hon. Member for Preston, North (Mr. Ronald Atkins) in his maiden speech. There are many on this side of the House who regret the disappearance of his predecessor, but, after the hon. Gentleman's speech, I am sure we all welcome him very much indeed. He spoke with great fluency and competence. He was not controversial, although I thought he was brave in at least hinting at some criticisms of his own side. But he did it with such charm that I have no doubt they will be heeded. I am sure that the House will look forward very much to hearing the hon. Gentleman again.
The hon. Member touched on one point which concerns me. He mentioned Charles James Fox's custom of winning votes in his constituency by kissing the Duchess of Devonshire. I should tell the House that the present Duchess of Devonshire is a constituent of mine and, however much I should like to follow the example of Charles James Fox, I am afraid that it would not win me any votes today.
I think we were all pleased that the Minister of Aviation expressed regret if he had unintentionally misled the House, and I am sure we accept his expression of regret. On the other hand, I do not believe that anybody, when re-reading what the right hon. Gentleman said, could be in any doubt that unintentionally he did mislead the House. One should remember that we heard the statement from the hon. Member for Wednesbury (Mr. Stonehouse) who, in announcing the Saudi Arabian deal, said categorically that it was in no way linked with the F111, and indeed that this subject had never come up in his conversations with the United States.
On top of that, we then had the Minister of Aviation saying, in regard to sales to third parties, that he hoped that it would lead to co-operation in sales
at least of a kind similar to that recently arranged with Saudi Arabia".—[OFFICIAL REPORT, 7th March, 1966; Vol. 725, c. 1861.]
I do not believe that anyone rereading those words now could conclude anything but that he was excluding the Saudi Arabian deal.
The Minister went on to relate some of the history of the deal. He said that the Saudi Arabian Government were on the point of accepting the across-the-board American offer and there was no chance of Britain getting the contract unless we came to an agreement with the Americans on a joint offer. I wonder exactly how accurate that is. I have no doubt that the Saudi Arabian Government were considering very carefully the across-the-board offer, but did they make no condition when they were considering its acceptance? Is the Minister absolutely sure that, if they did make conditions, the Americans would have agreed to them? Is he sure that there was no chance whatever of Britain getting the contract?
The Secretary of State for Defence then said that the Saudi Arabian Government decided to accept the joint proposals. Again, I wonder whether that is exactly the way to put it. Was not the position rather different? Was not the true position that not only had the American Government not been able to prevent—indeed, they had no powers to do so—the Lockheed group from pressing its claims as hard as it could right up to the last minute, but, towards the end, the Lockheed group had official backing? Was not the true position that the military representatives in Saudi Arabia were accompanying the Lockheed representatives when they were pressing their case, and does not this indicate that, whatever the original intention of the American Government had been, they were not in fact able to carry out their undertaking not to press the deal with the private companies?
If that is so, the truth is that we won this contract against intense competition. The Secretary of State for Defence told us, on 27th April, that
When the original negotiations were undertaken … the Americans originally undertook to stand aside …"—[OFFICIAL REPORT, 27th April, 1966; Vol. 727, c. 689.]
In the end, however, they did not stand aside, and we won this contract against intense competition, the American Government having been unable to fulfil their intended undertaking not to support the deal. It had no connection with the contract for the F111, and there was no reason why it ever should. This is what is so incomprehensible. We won this concession on our merits, the American Government having been unable wholly to stand aside, but, in spite of this, the Secretary of State for Defence agreed, when he came to negotiate the F111 contract, to offset the dollar cost of that against the Saudi Arabian deal.
I wonder why he did this. There was no reason for it. We had the contract. The Americans were glad to get a share of it when we got it, but it was due to our own competition. It was not due to American collaboration. Yet the Minister gave away these dollars.
I suspect that the reason is that he is finding the whole problem of offsetting these dollars far more difficult than he expected. It should be remembered that both he and the Minister of Aviation had said in the Defence White Paper and in their speeches in the House that they had "taken steps to ensure" that these 725 million dollars would be "fully offset" by sales to the American Government and by sales to third parties, and they divided the total—rather surprisingly, I think—into 325 million dollars on the one hand and 400 million dollars in respect of sales to third parties.
If one has taken steps to ensure something, one presumably has in mind fairly clearly how one will ensure it. One must have some direct sales, some contracts, and some sales to third parties in view. In the Defence Review, the Minister mentioned one such sale. He said that we were tendering for auxiliary naval vessels. We now learn that that tender has failed and we have not got the contract. We have some sales of components, but I wonder what other sales are in view. We can carry on tendering, but it will not be easy to earn those 325 mill ion dollars.
What about sales to third parties? I think that the Secretary of State for Defence was much more confident of this. We were told about it in the newspapers, and there was a Parliamentary Answer on 9th May telling us that, since the F111 contract, there had been a sale which we might have expected to take some part in and which we might have expected to be able to set off against the F111. I refer to the sale of aircraft to Jordan. With our long connection with Jordan, one might have expected this country to have some claim to sell aircraft there. But, when the Minister of Aviation was asked on 9th May what representations he had made to the United States in order to get a share of this contract, he replied,
None."—[OFFICIAL. REPORT, 9th May. 1966; Vol. 728, c. 24.]
I wonder why. Were no representations, suggestions or approaches ever made by Jordan to this country? Have we so lost contact there that we are not interested in such a contract?
Or is the reason that the Minister does not need any more foreign sales contracts? We should get a better idea of the true situation—perhaps the right hon. Gentleman will clear this up—if we knew exactly how much of the Saudi Arabian deal is being set off against the F111. Is it just the 200 million dollars, or is there, as there may well be, an additional sum for spares and further expenses to be incurred? If there is an additional sum, it is clear that the right hon. Gentleman is not much worried about any other contracts, because he has pretty well written off the whole of the 400 million dollars due to third party sales already. In other words, he has simply given the Americans something they never for one moment expected to have.
There is not the slightest doubt that the Americans were deeply disappointed at losing this contract and were determined to do what they could to repair the position. I do not believe that they ever thought that the British Government would agree to count the Saudi Arabian contract in against the dollars for the F111, but they thought they would try it on, and they got away with it. They got away with it because the Secretary of State for Defence is a weak man and he simply gave it to them on a plate.
That being the case, what has happened is that we have lost an opportunity to boost British aircraft and British sales in return for the F111 contract. We have dealt another blow at the British aircraft industry, and the Secretary of State for Defence has shown that he is capable of misleading not only the House but the country.
The decision to purchase the F111 and to cancel the TSR2 was a highly controversial one at the time, and many of my hon. and right hon. Friends and hon. Members opposite felt that it was a wrong decision. Apart from the military aspects of the decision, the Government's case rested on three main grounds. First, that it would cost £300 million less to buy these aircraft than to carry on with the TSR2; second, that the cost would be covered by credit which was being extended to us by the American authorities for the whole of the purchase of the American aircraft; third, that the dollar cost would be fully met at least in so far as the F111 went.
It seems to me that the whole transaction has been surrounded in mystery. The House has been given little bits of information on all these three points but never the complete picture. For instance, when we try to discover where the saving of £300 million has been made, the Government have been evasive throughout. It appears in the end that they did not allow in their figures for the effect of the cancellation charges and the abortive work on the TSR2, amounting to £195 million or perhaps more, which reduces the possible saving to barely £100 million. This omission has never been admitted. The Government have never come clean about it, and it takes endless questioning and badgering by my hon. Friends to elicit the truth on a simple matter such as that.
We are now told with regard to the credit arrangements that those parts of the aircraft which are to be made in Britain are not to be given credit coverage by the American authorities.
Why were we were not told this at the beginning? Why was it left to the middle of March this year before this information was given to the House? What we are debating today is the question of the dollar offsets. That is far the greatest consideration, apart from the military and strategic ones, which surrounds the whole controversy. If the House had not thought that the bulk of this £260 million spent in dollars could be got back in the form of export earnings of some other sort, this deal would have been an even more certainly bad one than it appeared on the surface.
I make one small point before coming to the main ground of the Motion of censure. It was obvious from the beginning that we should do everything possible to install in all these aircraft the maximum amount of British-made or British-built equipment. I was surprised, therefore, when visiting Lockheed to discover that the order had been placed for the C130 aircraft before any suggestion was made by the Minister of Aviation that British parts should be incorporated in it. The date when the order was first made public was 2nd February, 1965, and not until 2nd July of that year was any suggestion made to the Lockheed group that British parts should be incorporated.
This extraordinary time lag of four months puzzled me and I put a Question to the right hon. Gentleman on 9th March. He denied this time lag and said that it was in fact in March that the order was first placed for British parts to be incorporated. I shall leave it to him to sort out with the Lockheed company whether it was July or March. I am inclined to believe what I was told on the spot. But I wish to draw the attention of the House to the blind folly of ordering expensive aircraft, worth perhaps £100 million, and after placing the order making the condition that we would like to have British equipment incorporated.
That is the position. I do not know where the error has occurred and I am not making any allegation, but it is puzzling that the decision, whether it was in March or July, should have happened after the date of ordering the aircraft in February in the first place.
The main point is the one which my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) raised so convincingly this afternoon. The first point I wish to dwell on is that raised by my hon. Friend the Member for Derbyshire, West (Mr. Crawley) in a very powerful speech. There was competition for the Saudi-Arabian deal. We have now been told this and we are no longer in any doubt. Therefore, I ask, how can this deal he called:
co-operating with us in sales to third countries."—[OFFICIAL REPORT, 7th March, 1966; Vol. 725, c. 1861]
Those words were used by the Minister of Aviation when he wound up the debate on 7th March. He described the Saudi-Arabian deal as one similar to those which we expected to make and in which the Americans would co-operate with us in sales.
It is abundantly clear already that there was no ca-operation, because there was this independent private company, Lockheed, trying its very utmost to obtain the order against the competition of the joint project. So we must ask the Secretary of State to tell us how on earth he agreed to take this into account when agreeing the target for the offsets. The right hon. Gentleman said earlier this afternoon that his right hon. Friend agreed the target on 725 million dollars for the F111A after weighing up the pluses of the American bases in Great Britain and the minuses of Polaris and Skybolt and other historical events which I can see no justification for bringing into account at this stage.
The figure which the right hon. Gentleman mentioned of £260 million exactly fits the bill for the F111A, so one can only presume that he has cancelled out, on the one hand, the American bases in Britain and, on the other hand, those weapons purchased long before he was responsible. It boils down to trying to get an offset for the value of the F111A alone.
The right hon. Gentleman concluded in his speech that it was perfectly reasonable to include the Saudi Arabian deal. We fought tooth and nail against American competitors to get that deal. The Parliamentary Secretary, who is now Joint Under-Secretary of State for the Colonies, claimed great credit and that this was a triumph for British contractors. Many of my hon. Friends congratulated the Government on this deal. We all, quite rightly, still do. It was a great success, yet the Secretary of State for Defence was all this time in Washington selling down the river this valuable dollar export by counting it against the purchase. It is the most extraordinary story.
Does my hon. Friend recollect that when the hon. Member for Wednesbury (Mr. Stonehouse) announced the signing of this contract, I think on 21st December, he congratulated Lord Blyton and a Parliamentary delegation, which had played a small part in Saudi Arabia a few weeks previously, on the work they had done in getting the contract? I was a member of that delegation and I can fully support my hon. Friend in saying that the contract was being won in the face of fierce American competition.
I think this has been admitted by the Government this afternoon. It raises a new hare which it would be inopportune for us to chase after today, but that hare will run on another occasion. It exposed the Secretary of State to a charge either of innocence or gullibility which none of us would have expected of him. I have often heard him called in my constituency, "The Cardboard McNamara", but I never knew that he was a sucker to boot. I am grateful to my hon. and gallant Friend the Member for Carshalton (Captain W. Elliot) for having confirmed the competition which surrounded this deal.
The question which now must be answered by the Government is how they came to include this deal under American pressure when it had already been won in the teeth of competition from an American firm. If the Secretary of State had come clean and said, "I have done my best; I have not been able to make a good bargain, but I have succeeded in getting a certain amount of offset and the Americans will not agree to leave out of the offset the £75 million we have won in Saudi Arabia", the House would have been critical but not unforgiving. We would have known where we were. This seems a remarkable lapse on the part of the Secretary of State.
I should like to pursue a little further the right hon. Gentleman's position in all this. It was on 21st December, 1965, that the Saudi deal was first announced by the Joint Under-Secretary of State for the Colonies. On 27th April, about four months later, the Secretary of State answered a question by my right hon. Friend and said,
We agreed when we made the F111A deal that we should include the Saudi purchase arrangements, which had not then been concluded, in that part of the offset arrangements which related to sales to third countries."—[OFFICIAL REPORT, 27th April, 1966; Vol. 727, c. 689.]
The bargaining was, therefore, going on before the Saudi deal had been fixed. That must have been before the Parliamentary Secretary made his announcement.
Perhaps I may help the hon. Member. I see that he is trying to get the facts right. On the matter of dates, I made it clear that the main contracts had not been signed. They were not signed until Thursday of last week, and some contracts still remain to be signed.
The point is that at the time the Secretary of State was selling us down the river in America on the question of this £75 million in exchange, the Parliamentary Secretary told the House,
There is no question of the agreement with the Americans to co-operate in giving technical and political support in this proposed deal being in any way linked with a commitment concerning the F111."—[OFFICIAL REPORT, 21st December, 1965; Vol. 722, c. 1875.]
That was 21st December. The Secretary of State was in Washington before this.
On 7th March the right hon. Gentleman repeated this when he said,
at least of a kind similar to that we have recently arranged with Saudi Arabia. …"—[OFFICIAL REPORT, 7th March, 1966; Vol. 725, c. 1861.]
Thus, both the present Minister and the former Parliamentary Secretary repeated with complete assurance and complete certainty what the Secretary of State was busy undoing all this time in Washington.
The Minister has told us that he did not fail to know about this. The question which my right hon. Friend finally pinpointed this afternoon arises from the fact that the Minister did know. We know and respect the Minister personally and we utterly and entirely absolve him from any suggestion of deliberately lying to the House. The question is—how did he come to use those words on 7th March in winding up the debate?
This is a vital matter in support of the Government's whole policy in cancelling the TSR2 and buying the F111A. It is vitally important to our balance of payments at a time when the Government have rested their whole electoral case on stories of the inheritance which they took over from the Conservatives. Yet the Minister treated us in this cavalier manner by pretending that they had won a great victory for the balance of payments when in fact they were double counting and double bluffing on £75 million.
This is something which cannot be treated as a small point which the Opposition should not make too much fuss about and which they should not dig up with too much enthusiasm. I remind the House that we are dealing with £75 million and that the total value of F111A deal is £260 million. This is nearly one-third of the total. As my right hon. Friend said, it is more than half of the value of the offset which is to be placed against selling to third countries.
This is a matter of some gravity. It concerns the trustworthiness of the Government's word and the question of their being honest with the House. That is what disturbs my hon. and right hon. Friends most about this whole matter. Any reasonable man would agree that it is going too far to claim that the words which the right hon. Gentleman used could be interpreted in any other way than the way in which my right hon. and hon. Friends have interpreted them this afternoon. Whichever way we look at them, whether we come from England, Ireland, Scotland or Wales, we cannot believe that the right hon. Gentleman was admitting the Saudi Arabian deal as part of the offset.
The right hon. Gentleman said that any doubts could have been cleared up next day. The point is that there were no doubts and could have been no doubts about the singleness of the meaning of the words which he used. Nobody challenged them the next day and nobody had the lightest inclination to clear up any doubts because the words themselves left no doubts.
I ask the right hon. Gentleman to make a more fulsome apology to the House than that which he has made. I remind him of the example of the noble Lord, Lord Crathorne, who, on an occasion when the fault was not his own but that of some of the civil servants for whom he was responsible, made a very much bigger withdrawal and a very much humbler apology than that which the right hon. Gentleman has offered to the House this afternoon. I am sure that the House will forgive him for the slip which he has made, but I am not convinced with the explanation which he gave in his speech this afternoon, and I feel that he would have far better deserved the forgiveness of the House if he had come cleaner about what happened on the night of 7th March.
I agree very much with the closing words of my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley). We are debating a deception, deliberate or accidental, perpetrated in the House by a Minister of the Crown, and this is a very grave matter. The right hon. Gentleman the Minister of Aviation was right to take it as seriously as he did, but I agree with my hon. Friend that it would have helped our proceedings considerably in this short debate if he had answered this Motion in a more straightforward and open manner. His attempt further to obscure the issue with futile references of a partisan nature merely served to debase his own position and to add to the doubts in our minds. Personally I was inclined sympathetically towards him before this debate began, but I do not feel at all in that position at the moment, having heard his speech.
I will not go over the ground which has been covered by my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), the hon. Member for Orpington (Mr. Lubbock) and others, but it is quite clear that the words which the right hon. Gentleman used in the House and the words used by his hon. Friend the Member for Wednesbury (Mr. Stonehouse) clearly meant to imply that the Saudi deal stood on its own. No other interpretation could be placed on their words. It is also clear that the Secretary of State for Defence clearly intended to indicate that the Government had reached some new and special arrangement to offset in the future the dollar costs incurred in the purchase of the F111A.
It is also clear that the Parliamentary Secretary to the Ministry of Aviation, as he then was, took great pride in the fact that this order had been won in the teeth of competition. We have been helped somewhat this afternoon by his right hon. Friend in his further explanation of what he meant, on the one hand, by competition and of what he apparently now means, on the other hand, by offset arrangements with the Americans.
There are, I think, lessons here for all of us—first of all, that it is absolutely right that the Ministry of Aviation should help our aircraft industry and exporters in securing orders overseas. In so far as any credit goes to anybody, it certainly is right that it should go to the lucky incumbent at the time of the final conclusion of the negotiations. But these were negotiations which had been proceeding for three years or more. Like other hon. Members, I, too, have been to Saudi Arabia. I went there about two years ago. I found myself playing sortie small, minor, and wholly insignificant rôle in the labyrinthine confusion of the negotiations. I know something about it at first hand. I know the sort of thing that goes on. I know the nature of the competition. I also know the need for positive help.
We were right to have secured positive help from the Ministry of Aviation. But if we are now to be told that in future we are always to have some kind of understanding with the United States Administration as to where or how or when we are going to be enabled to secure further orders in third countries, there are lessons here of great importance for the Foreign Office as well, and I hope that the Foreign Office will take note of the need actively to back British export efforts in this and other related deals.
These new offset arrangements mean, apparently, that the United States political offensive will be withdrawn when it suits it, but that tough commercial opposition will continue. Certainly tough commercial opposition continued in this case. It continued in relation to Lockheed, which was pressing its claims on the Saudi Arabian Government until the last moment. It was because we managed to secure this order that there was a general air of satisfaction and self-congratulation.
I do not altogether agree with the record that the Minister of Aviation spelt out to us today. The emphasis which I thought he gave to it was contrary to that which I have heard given to it elsewhere. Perhaps at a later stage in the debate some other Minister may develop the point a little further. The right hon. Gentleman made out that we were getting from the United States some real benefit from this deal, that it was to our advantage that we had initiated the proposals for a package deal. This is not the interpretation that I had put on it.
I may be wrong, but I strongly believe that we should have secured the order anyway, that there was a very real feeling on the part of the Saudi Arabians that they wished to do business with this country. However that may be, we must examine most carefully and most closely the exact nature of the commercial offset arrangements which the Government claim to have entered into with the United States Administration.
Reverting to the prime point of the debate, the Motion of censure on the right hon. Gentleman himself, I am not at all happy, as I have made clear, about the manner in which he replied to the debate. He tried to drag other issues across it and go back over old quarrels and arguments which are irrelevant at the present time. However, although the censure Motion is directed against the Minister of Aviation personally, I believe that the Minister of Defence should not escape. He is every bit as much a guilty party.
Since they came into office, he and other Ministers have developed an arrogance towards the House which I and many other hon. Members on both sides find highly offensive. It is clear that by their slackness and "smart aleck." approach, particularly at Question Time, they are trying to fob off questions to which they do not wish to give the answers. I hope very much that this short debate, if it has done nothing else, will at any rate have caused the right hon. Gentleman and his hon. Friends to have a higher regard for Parliament and for the need always to preserve absolute integrity and honesty in their dealings with it.
I know what happened. I know something about defence. I spoke in the debate on the decision to purchase the F111. I am perfectly entitled to come here and discover that on the Order Paper there is a Motion of censure against my right hon. Friend. I am sure that right hon. and hon. Gentlemen opposite have no doubt at all about my right hon. Friend's integrity and have tabled the Motion merely as a tactical device. My right hon. Friend has been in the House a good many years, a couple of years longer than I have. I have never known anyone question his integrity. I am shocked that the hon. Member for Bournemouth, West (Sir J. Eden) should question his integrity.
I rise to defend, however inefficiently, my right hon. Friend. Let us be clear what we are talking about. [HON. MEMBERS: "Hear, hear."] I am clear what I am talking about. I have been in the House for 15 years. I heard the hon. Member for Bournemouth, West suggest that answers given by my right hon. Friends are too slick and too "smart aleck". In the last two years I have seen on the Order Paper some of the slickest and most "smart aleck" Questions that I have ever seen in my 15 years here. What is happening is that on certain matters we are not given as much information as some hon. Members would like. But over the last two years we have been accused of talking too much and giving too much information.
The hon. Member should get it right when he intervenes. It is a question not of giving too much or too little information but of giving entirely incorrect information. That is what is being debated.
I am coming to the point about incorrect information. Often the value of information is a matter of the interpretation of the person who receives it. Questions are often put on the Order Paper in such a manner that a supplementary question can be put which is out of order. That is part of the technique of politics in the House of Commons. Sometimes hon. Members table Questions which appear to be innocent, but the motive emerges when they put their supplementary questions. So it is not a matter of the Minister giving false information. Indeed, I have heard supplementary questions from right hon. Gentlemen opposite which have had no relevance to the Question on the Order Paper.
The hon. Member for Gillingham (Mr. Burden) has no right to suggest that Ministers—no matter what their party may be—give false information just because they do not give the answer that the questioner wants. We all receive answers that we do not expect, but we have no right to say then that the Minister is not acting honestly and with integrity. We make our own interpretation of the answer. This is a political institution. We are concerned with questioning the Executive. Naturally, one gets this sort of argument. I strongly objected when I heard previous speakers question the integrity of my right hon. Friend, and I felt that I should say something in support of him.
I am surprised that when the Saudi Arabian deal was going through or being negotiated with the Americans hon. Gentlemen opposite should complain about the ruthless and efficient competition of American business. [HON. MEMBERS: "No."] It is no use complaining about that. In other words, what hon. Members opposite are saying is that this was British business and private enterprise being inefficient in salesmanship and in the marketing of products, compared with the Americans. [HON. MEMBERS: "No."] Oh, yes. That is what they are saying. American selling and marketing institutions are powerful, are strong, are efficient, are able. I admit that they offer strong competition to British manufacturers. Of course they do. So do the Japanese. So does everybody else. It is up to our manufacturers to match them in competition.
If one reads the information available about the discussions with the Saudi Arabian authorities over the selling to them of British and American products it is obvious that my right hon. Friend negotiated a reasonably good bargain in supplying them with aircraft components and parts. I think it was a very good deal, in co-operation with American manufacturers and the American Government. This was long before the decision was made to buy the F111—long before.
The hon. Member for Bournemouth, West said very effectively that American marketing and competition were strong and were active everywhere. I presume that in Saudi Arabia the same thing applied. This is how I interpreted it, and I thought it was a very competent and able negotiation, that rather than lose the whole of the order we got some of it. I thought at the time that this was a very successful action on the part of the British Government, on the part of British manufacturers, where before British manufacturers themselves could not break in.
I am glad to have assistance from any part of the House. I am sure that many hon. Members opposite could give me assistance in defending the integrity of a member of the Government who is known to everyone to be of the highest integrity. I am shocked at these aspersions which have been made against him as they have been made. Hon. Gentlemen opposite know very well that in matters of military exchanges, of defence purchases, defence issues, of movements between allies, a Minister at the Dispatch Box in answering a question cannot always go into every detail. This sort of thing has happened time and time again. Obviously, a Minister speaking for the Armed Forces cannot mention every dot and comma in negotiations. Of course he cannot.
Ministers give the maximum information they are entitled to give, and in this case it was given, and hon. Gentlemen opposite know as well as I do that they are putting into juxtaposition two events which did seem superficially to make my right hon. Friend's statement not quite as clear as they would have liked it to have been—[HON. MEMBERS: "Oh."] But that, of course, is what all Ministers have done.
In fact, when they have to answer questions they steer as near as they possibly can. We have all seen it. Some right hon. Members opposite were artists at this when they were in power, real artists. There was a former Prime Minister who was adept at the Dispatch Box, an artist in saying what might come to two paragraphs in HANSARD, but not answering the question. He was most efficient in not giving any information at all. And he was admired by hon. Gentlemen opposite. I refer to Mr. Harold Macmillan
Well, there were Ministers from 1951 to 1964 who were very efficient in giving no information at all. We have had this sort of thing time and time again.
I am shocked that this Motion should have been put down. I am absolutely certain that if hon. Members opposite had been on this side, and the same events had taken place, there would have been an outcry if a Motion against the integrity of a Minister had been put down. I have known my right hon. Friend for many years, apart from his being a member of the Executive. So have other hon. Members. I resent a Motion which implies—not an error in judgment: that would be fair enough—but a challenge to his integrity.
No, but to say that he misled implies that. I heard the words of the hon. Member for Bournemouth, West and of a previous speaker, the hon. Member for Cirencester and Tewkesbury, (Mr. Ridley) and they implied it was a lack of integrity. To say, in a Motion of censure, that a Minister misled the House is to imply that he did it deliberately. [HON. MEMBERS: "No."] Oh, yes. To say that a Minister "misled" is to suggest that he gave an answer, or dealt with a matter, in such a form as—and the intention—to mislead the House.
I do not believe that my right hon. Friend did. I believe that he answered those questions genuinely. He made a statement on 7th March—was it?—and one previously, on 21st December, or about that date—offhand, I cannot remember precisely. What I am concerned about, and what I am defending, is the Minister's integrity. To put down a Motion as this has been put down is challenging his integrity, as I see it. It must be read that way.
If the hon. Gentleman had had the advantage of listening to the debate today he would know that my right hon. Friend quoted from a speech made by the right hon. Gentleman on 7th March, and the Minister then, instead of admitting to the House that he could have been misunderstood—which the House would have accepted—justified what he did. Then, unfortunately, the hon. Gentleman did not hear the Minister.
The point is, of course, that he justified what he did because he takes the view, as he is entitled to take the view, that what he did was quite right and quite in order. I do not see why he should not take that point of view.
I have no objection to people saying that in their estimation my right hon. Friend was wrong. That is fair enough. But I strongly object to hon. Members opposite, who know my right hon. Friend very well indeed. As a man of the highest integrity, imputing, not that that he was wrong, that he made an error of judgment, but that he deliberately set out to mislead the House. That is what I am criticizing. It is on those grounds I am defending my right hon. Friend. I hope that the right hon. Gentleman the Member for Mitcham (Mr. R. Carr) will wipe the slate clean, and will say that the Opposite are not challenging my right hon. Friend's integrity, that they are not asserting that my right hon. Friend made a deliberate and conscious attempt to mislead the House. That is what I am asking, and that is what I should have thought would have come from the Opposition benches.
I do not believe that the right hon. Gentleman or his colleagues have the slightest cause to feel gratitude to the hon. Member for Dunbartonshire, East (Mr. Bence). He has brought an element of low farce, irrelevance and foolery into the debate which does no credit to his side or the Government to which I understand he gives support. If he had been concerned to defend the right hon. Gentleman and could not be here to hear the debate opened, he would have done better not to have been here at all.
I hope that my hon. Friend will forgive me if I do not give way.
I will not say the same for the hon. Member for Preston, North (Mr. Ronald Atkins), who intervened in the debate with considerable courage to make his maiden speech. He went in off the deep end in a debate in which the atmosphere is fairly highly charged with tension and may become more so. We listened to him with attention and agreed, perhaps more than he suspects, with much of what he said. I hope that, as he takes a closer interest in our proceedings, he will find that the tears which are shed for the aviation industry from this side of the House are not crocodile tears, but genuine ones. One of the reasons why that is so is summed up in this afternoon's debate.
The right hon. Gentleman would have won much more sympathy from us if he had sat down after the first five minutes of his speech. It was delivered with modesty and humanity, and I think that it captured the attention of the House. In an intervention, the Minister admitted to my right hon. Friend when he opened that he had knowledge of the state of affairs before he made the statement about which we complain. He apologised to us for such omissions or ambiguities as there might appear to be in what he said.
Then he spoiled it, because he went on to make out that it was a totally unjustified Motion. But I cannot see that anyone who understands the English language as it is commonly spoken in this country can say that the Motion is unjustified in any way. The facts are not seriously in dispute, the meaning of the English language is not in dispute, and the Minister has not prayed in aid any grammatical inadequacies in it.
We have a position where a Motion has been put down quite properly. It is not an attack on the integrity of the right hon. Gentleman. It is an attack on what occurred, and it seeks agreement that we, as a House, regret that it should have occurred. But, as my right hon. Friend made plain in his opening, which the hon. Member for Dunbartonshire, East did not have the advantage of hearing, there was no attack in it on the integrity of the right hon. Gentleman.
Much of the right hon. Gentleman's defence of himself was irrelevant, dragged up from past history, and, as my hon. Friend the Member for Bournemouth, West (Sir J. Eden) said, presented in a very partisan and biased fashion. It did nothing to strengthen his case—in fact, he lost our sympathy. He lost it in making an attack on my right hon. Friends for not having seized upon his statement and questioned him upon it, when anyone can see in the first place that its meaning is transparently obvious, and when everyone concerned with it was aware of the previous statement made by the hon. Member for Wednesbury (Mr. Stonehouse). With that statement in our minds, we took the right hon. Gentleman's statement as confirmation of something that we had already been told and believed, and, therefore, we had not the slightest reason to suppose that we were in any way being misled at that time.
Unless the right hon. Gentleman is putting forward the proposition—and, if he is, we shall have to note it—that we should never believe anything said by the Front Bench opposite, he can have no cause for complaint that, on the following day, my right hon. Friends did not seek to return to a matter upon which they must have thought themselves, justifiably, satisfied. Again, it is a sign of weakness in the Minister that he sought to pray that in his own defence.
Now he tells us that the Saudi Arabian deal had been thrown in, and he describes it as something which is reasonable and which, by implication, any reasonable man taking an interest in matters would have assumed to be the case. That seems to be about the most unreasonable proposition which has been put before us in the whole debate.
To forgo an advantage which had already been gained, to throw it into a deal which we are told was subsequently concluded, is an entirely unreasonable and inexplicable action. I think that we might be told on what interpretation of the word "reasonable" the Minister is here relying. Was it reasonable on the ground that the United States Government were expected to insist that it should occur? We have been told that there was no formal agreement and that, although the United States Government were probably aware of the fact that the TSR2 had been cancelled, since it received much publicity on this side of the Atlantic, it was unreasonable to suppose that they would not have taken that into account.
Was it reasonable subsequently, even? That is the point on which I took up the Minister in his speech. Why was it subsequently necessary to make it clear to the American Government in the negotiations conducted by the Parliamentary Secretary that the co-operation which they gave us on the Saudi deal would not make any difference to our commitment, problematical at that point, we are led to believe, to buy the F111? Why was it not made clear to them at the outset? What terrible second thoughts ran through someone's mind after those discussions? Who said to whom, "The Americans may think that we were offering them a quid pro quo here. We must get this cleared up." Perhaps that happened and, if the Parliamentary Secretary tells us that that is what happened, we shall believe it.
However, it indicates a good deal of naïvety, and I think that naïvety and incompetence in other matters are things of which the right hon. Gentleman will find it difficult to clear himself.
Why should we have assumed it to be reasonable? Was it because a reasonable man would know that to sell large quantities of British arms round the world would offend certain hon. Members opposite who sit below the Gangway? Should we have inferred that the Minister would seek to limit the sale of certain arms under that agreement? Should we have assumed that the Minister had so little faith in the capacity of the British aircraft industry to compete in world markets that he did not believe that it would be able to meet the full offset value unless the Saudi Arabian deal were thrown into it? Ought we to have assumed that, and ought we now? Should we assume that there is something in this which upsets the National Plan? I do not know. For the Minister to use the word "reasonable" to describe this entirely gratuitous and insane action of throwing a deal which had already been concluded into the F111 transaction is astonishing. By no stretch of the imagination can it be described as "reasonable".
That is why I say that the Minister has proved himself to be a very naïve man. Perhaps the House may remember how naïvely he found himself in a situation where he had to come to us on the last day of the last Parliament to tell us that the B.O.A.C. Super VC10s were going to be cancelled. That was a very naïve situation into which to be driven.
I am aware that the VC10 is a very fine aircraft, and that it has been ordered by an independent Thai airline.
I am also aware that, in making the statement that he did, the Minister allowed himself to be put in a situation where many people might have thought that he had deliberately tried to conceal this from the House and the country before a General Election.
This the action of a very naïve man, and he will not wriggle out of the accusation on this ground, whatever the result of the Motion. We know him now as a very naïve man, and he has done one thing by his action in this business. By the inclusion of the Saudi Arabian deal, he has gravely undermined the pride which the aircraft industry and the people of this country took in that deal, because it has been devalued. It has been cast in as part of another deal. [HON. MEMBERS: "No."] Yes, it has. It has been used as a counter in a not particularly creditable manæuvre, and it has been devalued. This is the fact, and it is right that B.A.C. should be very indignant about this. It has done the aircraft industry no good, and the Minister knows it.
I believe that the Minister did mislead the House, but I do not believe that he did it intentionally. I acquit him of that, but I think that he will find hon. Members reluctant to acquit him on the charge that he misled the House unintentionally, and that he is too naïve to know it.
I think that it is perhaps noticeable how few hon. Members on the other side of the House have sprung to the defence of the Minister of Aviation when this very grave charge lies before us, with the exception of the hon. Member for Dunbartonshire. East (Mr. Bence), who dropped from the clouds, so to speak, and made his usual agreeable speech. We always enjoy listening to him, but I am not convinced that he did the case for the right hon. Gentleman much good in the process.
The hon. Gentleman complained that this was an attack on the right hon. Gentleman's personal integrity. I do not believe that any of my right hon. Friends who have spoken in this debate have said anything to indicate that this is so. Indeed, my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), specifically made it clear that this was not so. He said that he did not accept that as an explanation. But what my right hon. Friend said afterwards, and in my submission had every right to say, was that when this mistake was discovered—and I think that the hon. Gentleman referred to a mistake—on reading HANSARD, or it was brought to his attention by his officials, it was then his duty to come straight to the House and explain what went wrong. The burden of our charge is that that never happened for weeks and weeks, and this lies at the root of the accusation of misleading the House.
This has been a rather long debate, and I do not want to detain the House unduly, but there are one or two things only that I want to say. First, I believe that the right hon. Gentleman is the victim of the muddle and confusion which has been brought about by the decision originally to cancel the TSR2. There have been plenty of victims—and who can say the extent to which the country will suffer as a result of this in the future?—but the latest victim is the Minister of Aviation. It is necessary to say that it was clear to me—just as it has been clear to my hon. Friends who have taken part in this debate—from what the hon. Member for Wednesbury (Mr. Stonehouse) said, and from what the Minister subsequently said, that the Saudi deal was won independently.
That was the reason for the congratulations which were offered to the hon. Gentleman by a number of us on this side of the House—and I think that we would be prepared to offer them again today—for the efforts which he and others made to secure this deal. There was an air of euphoria in the House, and quite understandably so.
Anyone connected with the industry knows something of the protracted, bitter struggle which there was to secure these contracts in Saudi Arabia. It ought not to be necessary for anybody to say this to the Minister, but I believe that the American aviation industry—or American aviation interests—does not give up if it thinks that it has a chance. Thus, if it agreed to include this Saudi deal in the offset agreement in some form, it was done after it knew that it was beaten.
This is the burden of the attack made by a number of my hon. Friends on an aspect of this debate, and it is a very important one. As my hon. Friends the Members for Woking (Mr. Onslow), and Bournemouth, West (Sir J. Eden) said this is most discouraging for the sales staff in B.A.C., for the agents in Saudi Arabia who played an extraordinarily valuable part in all this, for the officials of his own Ministry and for the visiting delegation of which my hon. Friend the Member for Bournemouth, West was a member.
All those who took part in the Saudi negotiations have had their achievements belittled and downgraded as a result of this affair. It will not help us to sell our aircraft abroad in future if it is suspected that the only way we can do it is by making some deal to keep the Americans off. This is precisely the opposite of the kind of impression which the right hon. Gentleman should be seeking to create on behalf of the British aviation industry, and I would be surprised if the hon. Member for Wednesbury did not agree wholeheartedly in his heart with what I have said in that connection.
My first point is that there was no need to make this deal as part of the F111 contract, and if it was made in this way, we ought to know a lot more about this contract, because it has the gravest implications for future attempts to sell British aircraft abroad.
My second and last point concerns the Motion of censure itself. This is a question of the confidence of the House of Commons in the right hon. Gentleman. Many compliments have been paid to his character and integrity, and I should like wholeheartedly to associate myself with them. But it is not only a question of the confidence of the House of Commons. It is also a question of the confidence of the British aviation industry in the Minister, and I do not think that his explanation was adequate. I think that my hon. Friend the Member for Woking was right. If the Minister had concluded his speech after the first five minutes of it this afternoon, our feelings would have been vastly different from what they are now. I hope that, for the sake of confidence in this House, for the sake of the future conduct of his affairs so long as he is at the Ministry, and for the sake of the confidence of the industry itself in him—in so far as confidence can be said to exist at all in him as an individual after what has happened over these last two years—he will go further when he replies to this debate and turn back to the spirit of his first remarks and not to the things that he said afterwards.
The first thing that I wish to do is to congratulate the hon. Member for Preston, North (Mr. Ronald Atkins) on his maiden speech. It is unusual to make a maiden speech in a censure debate, and I congratulate the hon. Gentleman on the way in which he achieved the neutrality which is demanded on these occasions by, shall I say, attacking both sides equally. We shall look forward to hearing him again.
In this debate we have, inevitably, heard something about the basic merits of the Saudi Arabian agreement, about the F111, and all the rest of it. These are very interesting and important matters. We have debated them before in this House, and I have little doubt that there will be cause to debate them again, but I want to bring the House back to the precise and rather narrow line of the Motion before us.
It is never pleasant, whichever side are the Government or the Opposition, to move a Motion of censure on the conduct of a fellow Member, and like my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), I acquit the Minister of Aviation absolutely of any deliberate intention to mislead the House. We acquit him absolutely of any charge of that kind. Nevertheless, he misled the House and that is why we had to table the Motion. He has today in his speech expressed regret and said that if, inadvertently, he misled us, he is sorry about it and admits that, in retrospect, his words may have been imprecise.
We welcome that, as far as it goes, but it does not go nearly far enough. I must say at this stage quite definitely that so little does it meet our case that we have no alternative but to divide the House on the Motion, because the charge against the Minister is not the one with which he seemed to be dealing in part of his speech—of giving us insufficient information—and not even one of giving us no information at all. It is a charge of giving us false information.
We feel that it is disgraceful, whatever may have been his intentions and however inadvertently he may have acted, that even at this late stage no full explanation or apology has been made to the House by the right hon. Gentleman. I hope that the Secretary of State for Defence will put right that omission when he winds up the debate. I am sorry to say about the Minister of Aviation that, having made his very limited expression of regret, he lost some respect and sympathy which he might otherwise have had by the bombastic, partisan and superficial nature of the last part of his speech. This was the way of a man who knew that he had a bad case and who could not answer the charge. As I say, it was not a deliberate misleading of the House, but a misleading which could not be denied.
I think that it is noteworthy—even more than noteworthy: remarkable and unique, anyhow in recent years—that, with the exception of one maiden speech, there was only one speech from the Minister's own back benchers in his support. That was from an hon. Member who had heard neither of the opening speeches, either that of my right hon. Friend or the Minister's reply—[HON. MEMBERS: "He is not here now."]—and who is not here now.
As I have said, I want to bring the House back to the precise and narrow terms of the Motion. I ask the Secretary of State to address himself to these points. The other matters of great national interest and importance can be dealt with on another occasion. We are concerned with a Motion of censure on misleading the House and it is on that matter that we want a reply from the Secretary of State. To make sure that he knows what we want, I must recapitulate some of the arguments which have been put forward.
One of the many powerful objections to the purchase of the F111A aircraft was its heavy dollar cost, the great burden which this would place on the British balance of payments. It is because of that that one of the most powerful and important arguments put forward by the Government to justify their decision to purchase the F111A was their claim to have reached an agreement with the United States that the dollar cost would be fully offset by the sale of British equipment.
Therefore, this was a most important matter in judging the F111A issue, a matter on which the House and the country had the right to expect the fullest frankness and an impeccable degree of honesty from the Government. Instead, the Government have been guilty of dishonesty. I am sorry to use that word, but it is dishonesty that we have been given.
I want to refer, first of all, as did my right hon. Friend, to what was said in Part I of the Defence White Paper, in paragraph 11, where we have the assurance that the Government
… have taken steps to ensure that the foreign exchange cost of the F111A will be fully offset by sales of British equipment.
This, in our view, was the first stage of the deception of the House. No mention was made in this White Paper of sales to third countries. The only example given was by the possibility of quoting for naval tugs for the United States Navy. The implication behind this was clearly that the offsetting sales were to be direct sales to the United States.
If there was room to mention naval tugs, surely there was room in this text to mention both the principle of sales to third countries and the particular example of this important sale to Saudi Arabia. Therefore, what was said or not said in that White Paper was the first part of the deception.
However, the Minister of Aviation soon disabused us in his speech in the defence debate on 7th March, of at least the general hope that the offset would be completely met by sales to the United States. He told us not that just a little of it was to be met by sales to third countries but that more than half of the dollar offset was to be in the form of sales to third countries and he gave the recently arranged Saudi Arabian example of what such orders would be.
We must again examine the words that the Minister of Aviation actually used. The use of the future tense—"it will co-operate", not "it has co-operated", "it" being the United States, with us in sales to third countries—referred to something in the future. There could not be any doubt about it. Then the Minister went on to give the Saudi Arabian order which, as he said, had recently been arranged as an example of the sort of sales to third countries which we could expect.
We submit that these words, even standing on their own, with no amplification or background, could have only one meaning, and that is that the deals which were to be offset were future deals—the words used were, "The United States will co-operate": in future—and that the example of this deal which had already been made was merely an example from the past of similar deals which we were to expect in future. That, I believe—as do all of us on this side of the House: the hon. Member for Orpington (Mr. Lubbock) made clear that he, too, felt this way—was the only interpretation which could be put on the Minister's words, even standing on their own.
But the Minister's words did not stand on their own. They stood in the context of what the House was told by the hon. Member for Wednesbury (Mr. Stonehouse), then Parliamentary Secretary to the Ministry of Aviation, on 21st December. Here again, I should like to quote. I particularly asked the Parliamentary Secretary, in a supplementary Question, when he had made his welcome statement about the Saudi Arabian order whether there was a link of any kind, whether formal or informal, between the United States' Administration's co-operation on this order and any possible order from us for the F111A. He replied:
There is no question of the agreement with the Americans to co-operate in giving technical and political support in this proposed deal being in any way linked with a commitment concerning the F111."—[OFFICIAL REPORT, 21st December, 1965; Vol. 722, c. 1875.]
I say quite clearly that we on this side believe that the then Parliamentary Secretary was speaking the truth, the whole truth and nothing but the truth as he saw it at that time. He also went on to say at his Press conference—not in the House—that the order had been achieved in the teeth of American competition.
When one has been told, as the House was told, that there was no link of any kind with the F111A, when the country has been told at a Press conference that the order has been won in the teeth of American competition, it is only natural and reasonable for all of us, in the House and without, to assume that this has nothing to do with the dollar offset for the F111A order when it came two months later. I repeat that the Minister's words of 7th March to us in the House, even standing on their own, could have meant only that. But when we took them in the context of the previous statements it was impossible for them to mean anything else.
If there had been some change after 21st December the onus was clearly on the Government to tell the House so. The onus for clarification was on them, and it is ridiculous—to put it mildly—for the Minister, in trying to defend himself today, to ask, "Why did not you ask for some clarification on the second day of the Defence debate?" The evidence that I have given shows clearly that any reasonable man would be drawn to the conclusion which we came to. If we had had any idea at all that there was any doubt about this I can assure him that both in my speech in opening for the Opposition on the second day of the defence debate and in the speech of my right hon. Friend the Member for Barnet (Mr. Maudling) in closing, clarification would have been sought. The onus for clarification was on the Government.
They had plenty of opportunity to discharge that onus. They had the whole of the second day of the defence debate, and they have had two months since. They have seen rumours about this in the Press. Did they deny them? Of course they could not, because the rumours have turned out to be true. Did they confirm them? No. Why? Perhaps because there was an election. But even after the election—even after 1st April—we still had to wait for another 25 days before the Government finally "came clean".
It is disgraceful. Although our Motion is moved on the basis of the words of the right hon. Gentleman the Minister of Aviation in the Defence debate on 7th March—because he is the one who actually uttered the words which misled the House—our censure is perhaps even more on the Secretary of State for Defence, and on the Government as a whole.
Let us be sure that the House will not be misled any further on this matter. So that there is no misunderstanding on this matter in the future, I therefore ask the Secretary of State for Defence to give the House, here and now, a categorical reply to the question as to the amount which is to be credited to the dollar offset account in respect of the Saudi Arabian order. So that there is no possibility of his charging us with not having sought clarification, let me say what our clear understanding of it is at the moment. It is that the amount to be offset is about £75 million, which is the figure given to the House by the then Parliamentary Secretary concerning the export content of the Saudi Arabian order when he made his statement to the House on 21st December last. If there is any difference from that at all, let the Secretary of State come clean and tell us now. Let us not have to have another Motion of censure in order to extract the truth.
The House has been misled. I hope, for the honour of the House as well as for the honour of the right hon. Gentleman who is being put up in the front of the firing line on this occasion, that the Government will now have the honesty, decency and respect for the House to give a full and complete apology.
I can at least agree with the right hon. Member for Mitcham (Mr. R. Carr) on one matter; I, too, congratulate my hon. Friend the Member for Preston, North (Mr. Ronald Atkins) on an excellent maiden speech. It was a very happy thing that he chose to participate for the first time in a debate on matters concerning the aircraft industry, in respect of which his predecessor played such a lively and sometimes controversial rôle.
I also congratulate my hon. Friend on making a speech which was forthright, agreeable and witty, and which showed a real devotion to his constituency and to the major industry in which his constituents are employed.
I shall be glad to tell the House, in answer to one point raised by my hon. Friend, that I have never met Mr. Richard Worcester. I have never had any contact with him and, so far as I know, he has never had the slightest influence on the Government's policy on aviation matters. But Mr. Worcester's reported views on Anglo-French co-operation in aircraft are diametrically opposed to the views of Her Majesty's Government.
I am glad to tell the House that my right hon. Friend and I had a most successful meeting with M. Messmer and his team in Paris last week, and took a major step forward in the development of both the major projects on which we are engaged. We hope to make further collaborative progress on other projects in the next few months.
I dare say that it would be interesting to hear my comments, but I do not regard Mr. Worcester as a major problem for Her Majesty's Government. He may be a major problem for the hon. Member.
I join the House in congratulating my hon. Friend the Member for Preston, North, but I cannot congratulate the right hon. Member for Wolverhampton, West (Mr. Powell)—and I do not think that he would expect me to—on his opening speech. He spent half an hour on the meticulous construction of a logical edifice based on assertions which had no relation to reality. He spent five minutes—as did his right hon. Friend the Member for Mitcham in asserting that the Government misled the House as to the fact that part of the offset was concerned with third party sales for a fortnight after the publication of the Defence White Paper.
Yet he himself and his right hon. Friend were present on the day when the White Paper was published, when I made a statement in the House on the White Paper, and referred twice—once in my opening statement and once in answer to a question by the Leader of the Opposition—to the fact that collaborative sales to third parties were included in the offset arrangements for the F111A purchase. The Opposition Front Bench must do their homework if they expect to be taken seriously in the House.
There was no reference to third party sales, as there was no reference to many other things; but in my statement to the House that afternoon, and in reply to an intervention, I referred twice to third party sales, and the right hon. Gentleman was so tortured by his suspicions of Her Majesty's Government that he could not have
understood what I was saying. On 22nd February, 1966, a fortnight before my right hon. Friend spoke in the defence debate, I said:
The foreign exchange cost of the F111A purchase will be met by sales of British equipment to the United States and to third countries.
In answer to an intervention by the Leader of the Opposition, I said:
As regards sales of equipment to the United States and collaborative sales to third countries, we have set ceiling totals for sales which together will cover the total cost of the F111A."—[OFFICIAL REPORT, 22nd February, 1966; Vol. 725, c. 241–5.]
How can the House and the country be expected to take seriously accusations based on a total refusal to accept the facts?
Does the right hon. Gentleman admit that in his own quotation he used the word "will", indicating future dealings, and did not refer to the Saudi Arabian deal, which was something in the past?
I shall come to that matter. I shall come to all these matters in a moment. I am merely pointing out that on this matter, in respect of which the Opposition have put down a Motion of censure personally against the conduct of one of my right hon. Friends, they have done their homework in a sloppy fashion, which has affected the whole conduct of the Opposition since the right hon. Member for Bexley (Mr. Heath) took over the party opposite.
There was no question—and both the right hon. Member for Wolverhampton, South-West and the right hon. Member for Mitcham agreed on this—of my right hon. Friend deliberately seeking to mislead the House. There was also no question of his giving false information. As my right hon. Friend himself has pointed out, he knew the facts and did not seek to mislead the House, and if his choice of words was unfortunate—and he has said that it was—he has apologised for that.
The real essence of the Motion, as the right hon. Member for Wolverhampton, South-West rightly said, is the claim to which I shall reply in detail, that, if the House had been told at the time in detail and unequivocally about the inclusion of the Saudi Arabian sale in the offset agreement, the verdict of the House and the country on this aspect of the Defence Review would have been different.
I welcome an opportunity of stating the full facts in detail before the House on this matter, but this time I hope I shall not be interrupted in doing so as I was at the end of the defence debate before the General Election, when I was subjected to 10 minutes organised yelping led by the Leader of the Opposition as I sought to give these facts.
Let me put all the facts in detail and in their context. The story started, as several hon. Members opposite pointed out, when we cancelled the Conservative programme for the TSR2 a year ago. We cancelled it because it would have cost the nation over the next 12 years more than £1,200 million and I do not believe that any Government in their senses—including right hon. Members opposite if the nation had been so unfortunate as to have had them still in power last year—would have taken any other decision.
At the time that we cancelled the TSR2 programme, we took an option on the F111A in case the Defence Review showed that there was a requirement for some aircraft with a performance comparable to that of the TSR2; and, after nine months of continuous and exhaustive study, we concluded that the sort of operations our commitments might involve us in would require the R.A.F. to have 50 F111As for tactical strike and reconnaissance.
We also discovered, in negotiations with the United States and through a prolonged period of negotiation with Mr. McNamara, that we could hope to buy these aircraft at a unit cost of £2½ million each, including the changes required by the R.A.F., as against £9 million for the unit cost for a similar number of TSR2s.
I must make it clear that we did not decide to buy the F111A as a favour to the American Government. Of course we did not. We decided to buy it to meet the operational needs of the R.A.F., and also to help achieve a saving to the British taxpayer of nearly £1,000 million when compared with the defence programme that we inherited from the Conservatives and £300 million compared with a similar number of TSR2s.
In reaching the figure of £300 million, has the right hon. Gentleman or has he not deducted £195 million for abortive work and cancellation charges of the TSR2? I believe that, if he does his arithmetic again, he will find the saving to be £105 million. Will he please stop misleading the House?
That is untrue. The figures I have given make allowance for abortive expenditure on the TSR2 and for the cancellation charges. I explained this in detail in a letter to The Times some months ago, in answer to an absurd letter from Mr. Julian Amery and an hon. Member opposite.
As against this tremendous saving in expenditure, the purchase of the F111A would involve over the next 12 years a foreign exchange cost of 725 million dollars—about £260 million. This includes not only the full capital cost of the aircraft themselves, but also the spares and running costs—and interest payments because, to relieve the burden on the balance of payments during these next few critical years, we obtained credit facilities from the American Government which would ensure that we would not be required to make any substantial dollar payment until well after the first aircraft were delivered in 1968, and we also obtained an exceptionally favourable rate of interest for this credit arrangement of 4¾ per cent.
The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) asked why we did not ask for credit to cover the British components in the Phantom and other aircraft we are buying. The obvious reason was that this credit was intended to relieve the burden on our foreign exchange. We have no desire to borrow money from the Americans in order to pay sterling in this country. Nor, I imagine, would the American Government have agreed to allow us to do so.
Nevertheless, although we had this credit arrangement which saved us a heavy incidence of dollar expenditure as a result of purchases over the next few years, we were concerned, so far as possible, to make sure that, by the end of the whole 12-year period, there would be no net loss of dollars falling on the British Government as a result of the F111A purchase.
One basic objective of the Government's defence policy is to ensure that the British balance of payments does not suffer unfair damage simply because of Britain's contribution to the security of the free world. We believe that it is quite wrong for one ally to benefit at the expense of another in foreign exchange solely as a result of co-operation for their common security. Right hon. Members opposite when in power tried to apply this principle for some years to our defence relations with West Germany; but, until we negotiated this agreement, there had never been any attempt to apply it to our defence relations with the United States.
I must remind the House of the point made by my right hon. Friend. The Conservative Government, some years ago, abandoned British aircraft as a means of delivering the strategic deterrent and cancelled the British P1154 aircraft as a means of providing air defence for the Royal Navy. They went to the United States for alternatives and permitted themselves to spend £410 million worth of dollars for Polaris submarines and naval Phantoms without making any attempt to see that the British defence industry or the British balance of payments received any concessions in return.
We took a different view. I had already, in negotiating the purchase of the C130 and the R.A.F. Phantoms, obtained the commitment from the United States Government to co-operate with us in seeking British equipment for American purchases. When I came to negotiate the F111A purchase, I was determined to obtain something far more concrete and specific. My basic objective was to ensure that the British balance of payments did not suffer as a result of our defence co-operation with the United States in N.A.T.O. and other parts of the world.
When we came to consider this matter in Washington, the first question was to decide how wide a field of defence expenditure in foreign exchange we could cover in our agreement. For example—and this was a critical point—should the United States be able to count on its side of the ledger the dollars spent by its forces in Britain, as we ourselves seek to cover our stationing costs in Germany in our offset agreement with the Federal Republic? I looked into this and found that, to have done so, would more than have covered the whole cost of the F111A agreement if American stationing costs continued at anything like their present level.
On the other hand, it is impossible to forecast precisely how America's expenditure on her forces in Britain will move over the next 12 years. It may go up or it may go down. I therefore thought it better to ask the Americans to count this expenditure against our dollar payments to them on weapons already ordered, like the Polaris programme, the Phantom, and the C130.
Moreover, I was not only concerned with foreign exchange: I also wanted to help Britain's own defence industry and to find markets abroad to compensate for the outlets that it was losing in Britain as a result of our purchases from the United States. As I said earlier today, the Government are determined to ensure that we have a viable industry in our own country based on international as well as national markets.
I must get on. This is a short debate and I have already given way a great deal. The right hon. Gentleman was not present during most of the debate.
As I was saying, this is the reason why we agreed to separate the F111A deal from other purchases of equipment from the United States, and to concentrate on obtaining a direct offset for the F111A purchase by sales of British defence equipment to either the United States or third countries.
With respect to what has been said by hon. Gentlemen opposite, the Americans are by far our most formidable competitors for defence equipment in foreign markets. We have learned this time and again throughout the world, and if we can have their co-operation, rather than competition, it is something which, honestly, every aircraft firm in this country will welcome, and the industry will not ride away on the sort of flagwagging, jelly-belly Chauvinism shown by hon. Gentlement opposite—
I also have a duty to the House to make these points, and I remind hon. Gentlemen opposite that it is no good their complaining that they do not get the facts if they prevent me from giving them by behaving like a lot of schoolboys.
—a target of 325 million dollars for direct sales to the United States and 400 million dollars for collaborative sales to third countries. I should, perhaps, make one or two things clear, because they have been raised by hon. Gentlemen opposite. These are separate targets and they are not ceilings. They cover a 12-year period. There is not, as the hon. Member for Woking (Mr. Onslow) seemed to suggest, any limit to what we can sell, but these are targets which both Governments undertake to achieve. I believe that we will succeed in getting well above both of them, particularly since our sales to the United States, unlike our sales to Western Germany—under the German offset agreement—will be free from all artificial preferences imposed by the American Government under the Buy-American Act and balance of payments restrictions.
The target total of 325 million dollars for direct British sales to the United States is, at first sight, a formidable one, but it is to be achieved over a 12-year period and, indeed, represents little more than an average sale of about £12 million worth of equipment a year. Moreover, since our own payments for the F111A do not become significant under the credit terms until 1969 and 1970, we still have three or four years to make progress before our real need for dollars arises.
I have been asked to give details of concrete progress by way of achievements so far. We have already jointly identified about 50 items of equipment which the Americans think may meet their military needs and which we have, we believe, a good chance of providing on competitive terms. The American Department of Defense has just decided to buy 2 million dollars worth of assault tracking; American tests of our 105 mm. tank ammunition are now nearing completion; the American Navy is testing our 2 in. rockets; a number of invitations to tender are on their way; and the Department of Defense is now considering other items including, I am glad to say, the Hawker Siddeley 125 aircraft, which we are pressing very hard on them.
It is perfectly true that we have had a disappointment over the first small batch of naval tugs, but, contrary to what has been suggested, this small batch represents only £750,000 out of the potential £17 million which we hope to earn through the sale of naval auxiliaries to the United States in the current programme.
We have already learned a good deal from our experience, and I hope that the House will have noted that Brooke Marine Ltd., the British firm which put in the tender, said that it had every assistance from the Americans in making the tender; and are willing to try again. But there will always be difficulties. I do not disguise this fact. [Interruption.] If some hon. Gentlemen opposite had more knowledge and experience of trying to sell equipment abroad, they would snigger a little less when I make these points.
Surely the right hon. Gentleman recognises that on each occasion, both in the case of the Jordan deal and in this latest case, no representations, apparently, were made to the American Government on these matters. Is this the way to achieve co-operation?
The hon. Gentleman is totally wrong. The tender for the naval tugs to which I have been referring arose directly out of co-operation between the British Ministry of Defence, the American Navy Department and the American Department of Defence. Brooke Marine was given every assistance at the Washington end and at the British end at every stage of the negotiations.
There will always be difficulties for British firms producing for the first time a small batch of equipment in competition with American firms which have been producing such equipment for some time. I do not say that it will always be easy to win these tenders, even though there is no preference against us; but we cannot expect the Americans to give us a preference over their own manufacturers.
I am convinced, on the basis of our progress so far—and I know that Mr. McNamara shares this view—that there are many British manufacturers who can compete with the Americans on their own ground, both in terms of cost and performance, provided they are able, as they are under this arrangement, to compete without the artificial discrimination which all other foreign firms, except the Canadians, must face. This is a new challenge to British industry and I hope that our firms will accept it in that spirit. I know that many are already doing so.
I come now to the Saudi deal. Naturally enough, the Americans insisted that if we were to offset the F111A purchase exclusively by sales of British equipment, then the Saudi Arabian deal should be included in the target figure as a contribution towards the 400 million dollars for collaborative sales to third countries.
I will run through some of the points made during the debate. We could not have made the offer to the Saudis without American co-operation. This was made absolutely clear by my hon. Friend who is now the Under-Secretary of State for the Colonies when he spoke in the House on 21st December and gave details of the deal. As I understand it, this was really accepted—not necessarily agreed, but accepted as a fact—by the right hon. Member for Mitcham because he asked a lot of questions about what the Americans were getting from us in return for this type of co-operation.
We could not have made the offer, never mind won the contract, without American co-operation. But, of course, although the Saudis gave a written agreement that they would take up our offer rather than the competing Lockheed offer, the first contract was not signed until last week. The dollars resulting from it will be flowing into Britain during the period when we are paying for the F111A.
We expect—and this answers the question asked by several hon. Gentlemen opposite—that the total of foreign exchange resulting from our sales to Saudi Arabia will be about £100 million in foreign exchange, which is £25 million more than the £75 million which arises from the initial contracts because, as hon. Gentlemen opposite have rightly suggested, we hope to get "follow-up" in the form of spares and other equipment.
I must make it clear—and I hope that the right hon. Gentleman, with his vast experience of these matters, will accept it—that we cannot tell for certain whether it will fall short of £100 million in foreign exchange or go over, because we do not now know precisely how much "follow-up" there will be. The Saudis have so far only placed the first of the main contracts, and there are a very large number of other contracts to be placed in the coming months before we have even the first part of the deal amounting to £75 million of foreign exchange tied up.
The Secretary of State has now indicated that the amount to be written off the 400 million dollars for sales to third countries in respect of the Saudi agreement is at present anticipated to be about 280 million dollars. Do I understand from the last part of the right hon. Gentleman's narrative that although a letter of intent was signed in December, which was the basis of the announcement made by the hon. Member for Wednesbury (Mr. Stonehouse) on 21st December, the American Government gave him to understand that they would prevent that from eventuating in a contract unless it was included in the 400 million dollar offset?
Certainly not—of course not. The Americans gave the undertaking to co-operate with us, I think I am right in saying, as far back as last October. They have never in any way deviated from that. We have always made it clear to them that we did not consider that as imposing any obligation on us to buy the F111A, and they have always made it clear to us that they did not consider it as imposing an obligation, either.
There has never been any question of the American Government defaulting on their undertaking of October last. They have played perfectly fairly throughout, and even if, as I think, the right hon. Gentleman was about to point out, we get £100 million of foreign exchange out of the Saudi sale, it will leave a very substantial amount still to be covered by further collaborative sales to third countries.
I do not disguise from the House the fact that it would have been a great triumph for me if I had been able to persuade the Americans to exclude the Saudi sales from the target, but the whole justification of this operation of trying to balance our foreign exchange expenditure on a bilateral basis was to reach an overall balance between the countries in foreign exchange on defence. I would remind the House that America's foreign exchange problems are as serious as ours, and arise in even greater degree than ours from defence expenditure overseas. So the American Government had a reasonable argument for including the deal. I would very much have preferred to confine the agreement to mutual sales of defence equipment even if it meant including the Saudi sale in the collaborative target rather than open the way to the inclusion of stationing costs in the agreement, which would have left British industry far worse off.
I do not claim that the arrangement with the United States was perfect. What I do say is that it was infinitely better than the previous Government had ever attempted—still less achieved. When they were in power they committed themselves to spend 410 million dollars on American defence equipment to replace British weapons, and they did not even raise the issue of the foreign exchange expenditure involved. We have. This is just one more example of what I think the right hon. Gentleman calls "action, not words."
Quite frankly, looking back at this whole story, I am staggered that the Opposition should have picked on this issue to try to knock the Government about. I am shocked—but, I confess, not surprised—that they should have tried to camouflage the operation with a disgraceful personal attack on my right hon. Friend. But this is typical of the behaviour of the Opposition over the whole range of major issues where they themselves are hopelessly divided—like Rhodesia, economic and social policies, and defence. They can never agree a basis for an attack on what we do, so they confine themselves to pinpricking us on how we do it.
I ask the House to reject the Motion as decisively as the country rejected its sponsors nearly six weeks ago.
I want to deal with the point of this Motion of censure on the right hon. Gentleman the Minister of Aviation. It is that the Saudi deal was made and settled before the F111A deal was completed. We are agreed on that. The then Parliamentary Secretary to the Ministry of Aviation told the House quite clearly that there was no connection with the F111, and we are agreed on that. The Minister of Aviation said that offsets would be of a similar kind. We on this side, including the Liberal Party, believe that there is only one interpretation of that, which is that it does not include the Saudi deal. There can be no other interpretation.
The right hon. Gentleman said just now that, looking back, he thinks that there was some ambiguity about it. I do not believe, in fairness to him, that anyone in the House could see ambiguity in those words. That is why we never questioned them, because we accepted what he said; that this was a good deal—as the Secretary of State would have it—and that the Saudi deal was excluded. As the situation now is the Secretary of State has since said that the Americans insisted that the Saudi deal should be included. This is a recent development. It shows that the Government have changed their policy.
The Minister of Aviation was quite right in the first instance—the Saudi deal was not included—and so was the Parliamentary Secretary to the Ministry of Aviation, but the Secretary of State has now shown that as a result of the Americans insisting—I use his own words, I think—the Saudi deal has now to be included against the offset. That is the situation, and he has said—
On a point of order, Mr. Speaker. May I have a little guidance? I am not quite clear whether the right hon. Gentleman is interrupting before I sit down, or whether he is making a speech. If he is making a speech, I hope that the House will give me the right to reply, because this is an absolutely ludicrous misrepresentation of the facts and what I said. I did not suggest anything of the kind that the right hon. Gentleman is suggesting.
Order. The right hon. Gentleman must not, under the guise of a point of order, start arguing the merits of what has been said. What I gather is that as I was about to put the Question the right hon. Gentleman the Leader of the Opposition sought to speak in the debate. He is doing that at the moment. If the Secretary of State for Defence seeks to reply to him, he can do so if he obtains the leave of the House.
—I believe that the right hon. Gentleman used these words, for I took a note of them; I think that he will find that he did so if he refers to HANSARD—as a result of his discussions with the Americans, he decided that it was to the advantage of the country that the Saudi deal should now be used as an offset, because he did not wish to have the Americans claiming the cost of their forces in this country as an offset against the F111A deal. Therefore, the Government decided—in their own lights, rightly—that this was the best way of handling the situation.
I am sorry if I am intervening in the right hon. Gentleman's speech now. I hope that I am in order. I had the impression that the right hon. Gentleman was trying to suggest that this insistence of the Americans followed the publication of the F111A agreement, and that there had been some change in the situation since my right hon. Friend spoke to the House. Of course, all these discussions took place in January and February.
That makes it even more difficult as regards the Minister of Aviation's speech, because his statement, which cannot be interpreted in any other way, was clear. If that was the position, it was not conveyed to the House. So the situation is either that the wrong information was given to the House by the Minister of Aviation, or that the Government have changed their position, for reasons which the Secretary of State has given to us, since the Minister of Aviation made his statement. Those are the two counts on which we condemn the Government and condemn the Minister of Aviation. That is why we intend to vote on the Motion of censure.
|Division No. 7.]||AYES||[7.9 p.m.|
|Alison, Michael (Barkston Ash)||Balniel, Lord||Bennett, Dr. Reginald (Gos & Fhm)|
|Allason, James (Hemel Hempstead)||Barber, Rt. Hn. Anthony||Berry, Hn. Anthony|
|Astor, John||Batsford, Brian||Bessell, Peter|
|Atkins, Humphrey (M't'n & M'd'n)||Beamish, Col. Sir Tufton||Biffen, John|
|Awdry, Daniel||Bell, Ronald||Biggs-Davison, John|
|Baker, W. H. K.||Bennett, Sir Frederic (Torquay)||Birch, Rt. Hn. Nigel|
|Black, Sir Cyril||Harris, Reader (Heston)||Onslow, Cranley|
|Blaker, Peter||Harrison, Brian (Maldon)||Orr-Ewing, Sir Ian|
|Body, R.||Harrison, Col. Sir Harwood (Eye)||Osborn, John (Hallam)|
|Bossom, Sir Clive||Harvey, Sir Arthur Vere||Osborne, Sir Cyril (Louth)|
|Boyd-Carpenter, Rt. Hn. J.||Harvie Anderson, Miss||Page, R. Graham (Crosby)|
|Boyle, Rt. Hn. Sir Edward||Hastings, Stephen||Pardoe, J. W.|
|Braine, Bernard||Hawkins, Paul||Pearson, Sir Frank (Clitheroe)|
|Brewis, John||Hay, John||Percival, Ian|
|Brinton, Sir Tatton||Heald, Rt. Hn. Sir Lionel||Peyton, John|
|Bromley-Davenport, Lt. Col. Sir Walter||Heath, Rt. Hn. Edward||Pink, R. Bonner|
|Brown, Sir Edward (Bath)||Heseltine, Michael||Pounder, Rafton|
|Bruce-Gardyne, J.||Higgins, Terence L.||Powell, Rt. Hn. J. Enoch|
|Bryan, Paul||Hiley, Joseph||Price, David (Eastleigh)|
|Buchanan-Smith, Alick (Angus, N & M)||Hill, J. E. B.||Prior, J. M. L.|
|Bullus, Sir Eric||Hirst, Geoffrey||Quennell, Miss J. M.|
|Burden, F. A.||Hogg, Rt. Hn. Quintin||Ramsden, Rt. Hn. James|
|Campbell, Gordon||Holland, Philip||Rawlinson, Rt. Hn. Sir Peter|
|Carlisle, Mark||Hordern, Peter||Rees-Davies, W. R.|
|Carr, Rt. Hn. Robert||Hornby, Richard||Renton, Rt. Hn. Sir David|
|Cary, Sir Robert||Howell, David (Guildford)||Ridley, Hn. Nicholas|
|Channon, H. P. G.||Hunt, John||Ridsdale, Julian|
|Chichester-Clark, R.||Hutchison, Michael Clark||Robson Brown, Sir William|
|Clark, Henry||Iremonger, T. L.||Rodgers, Sir John (Sevenoaks)|
|Clegg, Walter||Jenkin, Patrick (Woodford)||Roots, William|
|Cooke, Robert||Jennings, J. C. (Burton)||Rossi, Hugh (Hornsey)|
|Cooper-Key, Sir Neill||Johnson Smith, G. (E. Grinstead)||Royle, Anthony|
|Corfield, F. V.||Johnston, Russell (Inverness)||Russell, Sir Ronald|
|Costain, A. P.||Jones, Arthur (Northants, S.)||St. John-Stevas, Norman|
|Craddock, Sir Beresford (Spelthorne)||Jopling, Michael||Sandys, Rt. Hn. D.|
|Crawley, Aidan||Joseph, Rt. Hn. Sir Keith||Scott, Nicholas|
|Crosthwaite-Eyre, Sir Oliver||Kaberry, Sir Donald||Sharples, Richard|
|Crouch, David||Kerby, Capt. Henry||Shaw, Michael (Sc'b'gh & Whitby)|
|Crowder, F. P.||Kimball, Marcus||Sinclair, Sir George|
|Cunningham, Sir Knox||King, Evelyn (Dorset, S.)||Smith, John|
|Currie, G. B. H.||Kirk, Peter||Stainton, Keith|
|Dalkeith, Earl of||Kitson, Timothy||Steel, David (Roxburgh)|
|Dance, James||Knight, Mrs. Jill||Stodart, Anthony|
|Davidson, James (Aberdeenshire, W.)||Lambton, Viscount||Stoddart-Scott, Col. Sir M. (Ripon)|
|d'Avigdor-Goldsmid, Sir Henry||Lancaster, Col. C. G.||Summers, Sir Spencer|
|Dean, Paul (Somerset, N.)||Langford-Holt, Sir John||Taibot, John E.|
|Deedes, Rt. Hn. W. F. (Ashford)||Legge-Bourke, Sir Harry||Tapsell, Peter|
|Digby, Simon Wingfield||Lewis, Kenneth (Rutland)||Taylor, Sir Charles (Eastbourne)|
|Dodds-Parker, Douglas||Lloyd, Ian (P'tsm'th, Langstone)||Taylor, Edward M. (G'gow, Cathcart)|
|Doughty, Charles||Lloyd, Rt. Hn. Selwyn (Wirral)||Taylor, Frank (Moss Side)|
|Douglas-Home, Rt. Hn. Sir Alec||Longden, Gilbert||Teeling, Sir William|
|Drayson, G. B.||Loveys, W. H.||Temple, John M.|
|du Cann, Rt. Hn. Edward||Lubbock, Eric||Thatcher, Mrs. Margaret|
|Eden, Sir John||McAdden, Sir Stephen||Thorpe, Jeremy|
|Elliot, Capt. Walter (Carshalton)||MacArthur, Ian||Tilney, John|
|Errington, Sir Eric||Mackenzie, Alasdair (Ross & Crom'ty)||Turton, Rt. Hn. R. H.|
|Eyre, Reginald||Macleod, Rt. Hn. Iain||van Straubenzee, W. R.|
|Farr, John||McMaster, Stanley||Vaughan-Morgan, Rt. Hn. Sir John|
|Fisher, Nigel||Macmillan, Maurice (Farnham)||Vickers, Dame Joan|
|Fletcher-Cooke, Charles||Maginnis, John E.||Wainwright, Richard (Colne Valley)|
|Forrest, George||Marples, Rt. Hn. Ernest||Walker, Peter (Worcester)|
|Fortescue, Tim||Marten, Neil||Walker-Smith, Rt. Hn. Sir Derek|
|Foster, Sir John||Maude, Angus||Wall, Patrick|
|Fraser, Rt. Hn. Hugh (St'fford & Stone)||Maudling, Rt. Hn. Reginald||Walters, Denis|
|Galbraith, Hn. T. G.||Mawby, Ray||Ward, Dame Irene|
|Gibson-Watt, David||Maxwell-Hyslop, R. J.||Weatherill, Bernard|
|Gilmour, Ian (Norfolk, C.)||Maydon, Lt.-Cmdr. S. L. C.||Webster, David|
|Glover, Sir Douglas||Mills, Peter (Torrington)||Wells, John (Maidstone)|
|Godber, Rt. Hn. J. B.||Mills, Stratton (Belfast, N.)||Whitelaw, William|
|Gower, Raymond||Miscampbell, Norman||Wilson, Geoffrey (Truro)|
|Grant, Anthony||Mitchell, David (Basingstoke)||Winstanley, Dr. M. P.|
|Grant-Ferris, R.||Monro, Hector||Wolrige-Gordon, Patrick|
|Gresham Cooke, R.||More, Jasper||Wood, Rt. Hn. Richard|
|Grieve, Percy||Morgan, W. G. (Denbigh)||Woodnutt, Mark|
|Griffiths, Eldon (Bury St. Edmunds)||Morrison, Charles (Devizes)||Worsley, W. M.|
|Grimond, Rt. Hn. J.||Mott-Radclyffe, Sir Charles||Wylie, N. R.|
|Gurden, Harold||Munro-Lucas-Tooth, Sir Hugh||Younger, Hn. George|
|Hall, John (Wycombe)||Nabarro, Sir Gerald|
|Hall-Davis, A. G. F.||Neave, Airey||TELLERS FOR THE AYES:|
|Hamilton, Marquess of (Fermanagh)||Nicholls, Sir Harmar||Mr. Francis Pym and|
|Hamilton, M. (Salisbury)||Noble, Rt. Hn. Michael||Mr. R. W. Elliott.|
|Harris, Frederic (Croydon, N. W.)||Nott, John|
|Abse, Leo||Archer, Peter||Bacon, Rt. Hn. Alice|
|Albu, Austen||Armstrong, Ernest||Bagier, Gordon A. T.|
|Allaun, Frank (Salford, E.)||Ashley, Jack||Barnes, Michael|
|Alldritt, Walter||Atkins, Ronald (Preston, N.)||Barnett, Joel|
|Anderson, Donald||Atkinson, Norman (Tottenham)||Baxter, William|
|Beaney, Alan||Foley, Maurice||Luard, Evan|
|Bellenger, Rt. Hn. F. J.||Foot, Sir Dingle (Ipswich)||Lyon, Alexander W. (York)|
|Bence, Cyril||Foot, Michael (Ebbw Vale)||Lyons, Edward (Bradford, E.)|
|Benn, Rt. Hn. Anthony Wedgwood||Ford, Ben||Mabon, Dr. J. Dickson|
|Bennett, James (G'gow, Bridgeton)||Forrester, John||McBride, Neil|
|Bidwell, Sydney||Fowler, Gerry||McCann, John|
|Binns, John||Fraser, J. D. (Norwood)||MacColl, James|
|Bishop, E. S.||Fraser, Rt. Hn. Tom (Hamilton)||MacDermot, Niall|
|Blackburn, F.||Freeson, Reginald||Macdonald, A. H.|
|Blenkinsop, Arthur||Galpern, Sir Myer||McGuire, Michael|
|Boardman, H.||Gardner, A. J.||McKay, Mrs. Margaret|
|Booth, Albert||Garrett, W. E.||Mackenzie, Gregor (Rutherglen)|
|Boston, Terence||Garrow, Alex||Mackie, John|
|Bottomley, Rt. Hn. Arthur||Ginsburg, David||Mackintosh, John P.|
|Bowden, Rt. Hn. Herbert||Gordon Walker, Rt. Hn. P. C.||Maclennan, Robert|
|Boyden, James||Gourlay, Harry||MacMillan, Malcolm (Western Isles)|
|Braddock, Mrs. E. M.||Gray, Dr. Hugh||McMillan, Tom (Glasgow, C.)|
|Bradley, Tom||Greenwood, Rt. Hn. Anthony||McNamara, J. K.|
|Bray, Dr. Jeremy||Gregory, Arnold||MacPherson, Malcolm|
|Brooks, Edwin||Grey, Charles||Mahon, Peter (Preston, S.)|
|Broughton, Dr. A. D. D.||Griffiths, David (Rother Valley)||Mahon, Simon (Bootle)|
|Brown, Hugh D. (G'gow, Provan)||Griffiths, Rt. Hn. James (Llanelly)||Mallalieu, E. L. (Brigg)|
|Brown, Bob (N'c'tle-upon-Tyne, W.)||Griffiths, Will (Exchange)||Mallalieu, J. P. W. (Huddersfield, E.)|
|Buchan, Norman||Gunter, Rt. Hn. R. J.||Manuel, Archie|
|Buchanan, Richard (G'gow, Sp'burn)||Hale, Leslie (Oldham, W.)||Mapp, Charles|
|Butler, Herbert (Hackney, C.)||Hamilton, James (Bothwell)||Marquand, David|
|Butler, Mrs. Joyce (Wood Green)||Hamilton, William (Fife, W.)||Marsh, Rt. Hn. Richard|
|Callaghan, Rt. Hn. James||Hamling, William||Mason, Roy|
|Cant, R. B.||Hannan, William||Mayhew, Christopher|
|Carmichael, Neil||Harper, Joseph||Mellish, Robert|
|Carter-Jones, Lewis||Harrison, Walter (Wakefield)||Mendelson, J. J.|
|Castle, Rt. Hn. Barbara||Hart, Mrs. Judith||Mikardo, Ian|
|Chapman, Donald||Haseldine, Norman||Millan, Bruce|
|Coe, Denis||Hazell, Bert||Miller, Dr. M. S.|
|Coleman, Donald||Healey, Rt. Hn. Denis||Milne, Edward (Blyth)|
|Concannon, J. D.||Heffer, Eric S.||Mitchell, R. C. (S'th'pton, Test)|
|Conlan, Bernard||Henig, Stanley||Moonman, Eric|
|Corbet, Mrs. Freda||Herbison, Rt. Hn. Margaret||Morgan, Elystan (Cardiganshire)|
|Craddock, George (Bradford, S.)||Hilton, W. S.||Morris, Alfred (Wythenshawe)|
|Cronin, John||Hobden, Dennis (Brighton, K'town)||Morris, Charles R. (Openshaw)|
|Crosland, Rt. Hn. Anthony||Hooley, Frank||Morris, John (Aberavon)|
|Crossman, Rt. Hn. Richard||Horner, John||Moyle, Roland|
|Cullen, Mrs. Alice||Houghton, Rt. Hn. Douglas||Mulley, Rt. Hn. Frederick|
|Dalyell, Tam||Howarth, Harry (Wellingborough)||Murray, Albert|
|Darling, George||Howarth, Robert L. (Bolton, E.)||Neal, Harold|
|Davidson, Arthur (Accrington)||Howell, Denis (Small Heath)||Newens, Stan|
|Davies, Dr. Ernest (Stretford)||Howie, W.||Norwood, Christopher|
|Davies, G. Elfed (Rhondda, E.)||Hoy, James||Oakes, Gordon|
|Davies, Ednyfed Hudson (Conway)||Hughes, Rt. Hn. Cledwyn (Anglesey)||Ogden, Eric|
|Davies, Harold (Leek)||Hughes, Emrys (Ayrshire, S.)||O'Malley, Brian|
|Davies, Ifor (Gower)||Hughes, Hector||Oram, Albert E.|
|Davies, Robert (Cambridge)||Hughes, Roy (Newport)||Orbach, Maurice|
|Davies, S. O. (Merthyr)||Hunter, Adam||Orme, Stanley|
|Delargy, Hugh||Hynd, John||Oswald, Thomas|
|Dell, Edmund||Irvine, A. J. (Edge Hill)||Owen, Dr. David (Plymouth, S'tn)|
|Dempsey, James||Jackson, Colin (B'h'se & Spenb'gh)||Padley, Walter|
|Dewar, D. C.||Jackson, Peter M. (High Peak)||Page, Derek (King's Lynn)|
|Diamond, Rt. Hn. John||Janner, Sir Barnett||Paget, R. T.|
|Dickens, James||Jeger, George (Goole)||Palmer, Arthur|
|Dobson, Ray||Jeger, Mrs. Lena (H'b'n & St. P'cras, S.)||Pannell, Rt. Hn. Charles|
|Doig, Peter||Jenkins, Hugh (Putney)||Park, Trevor|
|Donnelly, Desmond||Jenkins, Rt. Hn. Roy (Stechford)||Parker, John (Dagenham)|
|Driberg, Tom||Johnson, James (K'ston-on-Hull, W.)||Parkyn, Brian (Bedford)|
|Dunn, James A.||Jones, Dan (Burnley)||Pavitt, Laurence|
|Dunnett, Jack||Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)||Pearson, Arthur (Pontypridd)|
|Dunwoody, Mrs. Gwyneth (Exeter)||Jones, J. Idwal (Wrexham)||Peart, Rt. Hn. Fred|
|Dunwoody, Dr. John (F'th & C'b'e)||Judd, Frank||Pentland, Norman|
|Eadie, Alex||Kelley, Richard||Perry, Ernest C. (Battersea, S.)|
|Edelman, Maurice||Kenyon, Clifford||Perry, George H. (Nottingham, S.)|
|Edwards, Rt. Hn. Ness (Caerphilly)||Kerr, Mrs. Anne (R'ter & Chatham)||Prentice, Rt. Hn. R. E.|
|Edwards, Robert (Bilston)||Kerr, Dr. David (W'worth, Central)||Price, Christopher (Perry Barr)|
|Edwards, William (Merioneth)||Kerr, Russell (Feltham)||Price, J. T. (Westhoughton)|
|Ellis, John||Leadbitter, Ted||Price, William (Rugby)|
|English, Michael||Ledger, Ron||Probert, Arthur|
|Ennals, David||Lee, Rt. Hn. Frederick (Newton)||Pursey, Cmdr. Harry|
|Ensor, David||Lee, Miss Jennie (Cannock)||Randall, Harry|
|Evans, Albert (Islington, S. W.)||Lee, John (Reading)||Rankin, John|
|Evans, Ioan L. (Birm'h'm, Yardley)||Lestor, Miss Joan||Redhead, Edward|
|Faulds, Andrew||Lever, Harold (Cheetham)||Rees, Merlyn|
|Fernyhough, E.||Lever, L. M. (Ardwick)||Reynolds, G. W.|
|Finch, Harold||Lewis, Arthur (W. Ham, N.)||Rhodes, Geoffrey|
|Fitch, Alan (Wigan)||Lewis, Ron (Carlisle)||Richard, Ivor|
|Fletcher, Raymond (Ilkeston)||Lipton, Marcus||Roberts, Albert (Normanton)|
|Fletcher, Ted (Darlington)||Lomas, Kenneth||Roberts, Goronwy (Caernarvon)|
|Floud, Bernard||Loughlin, Charles||Roberts, Gwilym (Bedfordshire, S.)|
|Robertson, John (Paisley)||Stonehouse, John||White, Mrs. Eirene|
|Robinson, Rt. Hn. Kenneth (St. P'c'as)||Strauss, Rt. Hn. G. R.||Whitlock, William|
|Robinson, W. O. J. (Walth'stow, E.)||Summerskill, Hn. Dr. Shirley||Wigg, Rt. Hn. George|
|Rodgers, William (Stockton)||Swain, Thomas||Wilkins, W. A.|
|Roebuck, Roy||Swingler, Stephen||Willey, Rt. Hn. Frederick|
|Rogers, George||Symonds, J. B.||Williams, Alan (Swansea, W.)|
|Rose, Paul||Taverne, Dick||Williams, Alan Lee (Hornchurch)|
|Ross, Rt. Hn. William||Thomas, George (Cardiff, W.)||Williams, Clifford (Abertillery)|
|Rowland, Christopher (Meriden)||Thomas, Iorwerth (Rhondda, W.)||Williams, Mrs. Shirley (Hitchin)|
|Rowlands, E. (Cardiff, N.)||Tinn, James||Williams, W. T. (Warrington)|
|Ryan, John||Tomney, Frank||Willis, George (Edinburgh, E.)|
|Shaw, Arnold (Ilford, S.)||Tuck, Raphael||Wilson, Rt. Hn. Harold (Huyton)|
|Sheldon, Robert||Urwin, T. W.||Wilson, William (Coventry, S.)|
|Shinwell, Rt. Hn. E.||Varley, Eric G.||Winnick, David|
|Shore, Peter (Stepney)||Wainwright, Edwin (Dearne Valley)||Woodburn, Rt. Hn. A.|
|Short, Rt. Hn. Edward (N'c'tle-u-Tyne)||Walden, Brian (All Saints)||Woof, Robert|
|Short, Mrs. Renée (W'hampton, N. E.)||Walker, Harold (Doncaster)||Wyatt, Woodrow|
|Silkin, S. C. (Dulwich)||Wallace, George||Yates, Victor|
|Silverman, Julius (Aston)||Watkins, David (Consett)||Zilliacus, K.|
|Skeffington, Arthur||Watkins, Tudor (Brecon & Radnor)|
|Small, William||Weitzman, David||TELLERS FOR THE NOES:|
|Snow, Julian||Wellbeloved, James||Mr. John Silkin and|
|Spriggs, Leslie||Wells, William (Walsall, N.)||Mr. George Lawson.|
|Steele, Thomas (Dunbartonshire, W.)||Whitaker, Ben|