United States Offset Purchases

Oral Answers to Questions — Ministry of Defence – in the House of Commons at 12:00 am on 1st March 1967.

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Photo of Mr John Cronin Mr John Cronin , Loughborough 12:00 am, 1st March 1967

asked the Secretary of State for Defence if he will give figures indicating to what extent British orders for aircraft and missiles in the United States of America made since October, 1964, have been offset by orders of British equipment by the United States Department of Defence.

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

I have included a statement of the contracts we have won so far in Chapter VII of the Statement on the Defence Estimates, 1967 (Cmnd. 3203).

Photo of Mr John Cronin Mr John Cronin , Loughborough

Has not the time come to renegotiate these offset purchase agreements so as to ensure that British exporters either have a fairer deal or, alternatively, there is a cut in defence expenditure in the United States by the British Government?

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

With respect, I would have thought that we had done very well. In 12 months we have already covered 40 per cent. of the target for direct sales in order to offset costs which we have to pay over a period of 12 years.

Photo of Sir Arthur Harvey Sir Arthur Harvey , Macclesfield

Can the right hon. Gentleman say, apart from the very welcome order placed with Rolls Royce from the United States, what is the value of other orders? Is he aware that the cost of submitting tenders to the United States is very high indeed for many British firms, which are not being successful?

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

I am very well aware of these difficulties, but British firms at the present time, alone in the world, other than some Canadian firms, are now free to tender for American contracts without any artificial discrimination in terms of tariff and surcharge. I believe that British firms could make very good use of this opportunity if they attempted to do so. I hope the hon. Gentleman is not suggesting that they should not make that attempt.