asked the Secretary of State for Defence what representations he has made this year to the United States Secretary of Defence concerning modifications to the F111 aircraft being insisted upon by Service authorities in the United States of America to meet their specifications; what answers he has received; what is the estimated overall cost of the modifications not required by Her Majesty's Government but required by the United States authorities before their approval of the aircraft as operationally viable is granted; and if he will make a statement.
Before ordering the balance of 40 F111K's on 31st March, I received assurances from the United States Government that the aircraft would meet our performance requirements. I also received up to date cost information from the United States Government which gave a satisfactory assurance that, excluding United States money inflation, the total unit cost of this aircraft, including the special British features, would be about £2½ million as we had assumed. Discussions on the final figure for the supplemental ceiling for the special British features are, however, still in progress with a view to fixing it at the lowest possible level. I will give the House the figure when it is agreed.
As regards spares, I would refer to the answer given to the hon. Member for St. Albans (Mr. Goodhew) by my hon. Friend the Under-Secretary of State for Defence for the Royal Air Force on 23rd March.—[Vol. 743, c. 330–1.]
May I ask the right hon. Gentleman two questions: first, why, despite an undertaking given on 1st March that he would not close with this option until there was a firm agreement on the supplemental ceiling, he has nevertheless done so? Secondly, why has he until the present moment concealed from the House and from the country the fact that the fixed price for the basic aircraft was subject to an escalation clause for American money inflation?
On the second question, I have yet to identify a single defence contract made by the present or previous Governments which does not accept that price increases due to the inflation of the cost of labour and materials must be involved. This applies to the Polaris submarine agreement, and also to the Royal Naval Phantom agreement, both made by the party opposite. No reference was made to the House about this at the time by the previous Administration because this was always understood to be the case.
On the first question about the supplemental ceiling, as I said, I have accepted satisfactory assurances that the supplemental ceiling will not bring the cost of the aircraft above the figure which we originally assumed.
Why has the right hon. Gentleman made these categorical statements to the House insisting that a fixed price agreement had been reached, and, furthermore, that he would not place an order before he knew what the price would be?
Is my right hon. Friend aware that according to the defence correspondent of The Times the F111 programme will total £280 million over a 10-year period, including spares, and that this works out at £5·6 million per aircraft? Does not my right hon. Friend find some difficulty in reconciling this both with his own foreign policy commitment and also with our commitment as a party to the people of Britain?
No, Sir, and I think that my hon. Friend would be wise to recognise that when we are talking about costs over a period of years, we are talking about total programme costs which include the cost of the aircrew who man the aircraft, the people who service it, all spares, and all facilities remotely connected with the aircraft, and that the cost of the F111K programme over 10 years is only 50 per cent. of the cost of a comparable TSR2 programme.
In view of the serious doubt expressed by the McClellan Investigating Committee about this aircraft, would not it have been more prudent of my right hon. Friend to have delayed making further purchases until the Committee had reported? Furthermore, is it not the case that the new Pratt and Whitney engines introduced last January as replacements for the previous unsatisfactory engines are themselves considered in the United States to be not fully adequate?
No, Sir. On the first question, as I understand it the main subject of criticism of the McClellan inquiry is the suitability of the F111B, which we are not buying, for the U.S. Navy. On the question of the engines, as I said, I have received satisfactory assurances from the United States Administration that the aircraft which we are buying will in all respects surpass the operational requirements which we have set for it.
Further to the question asked by the hon. Member for Feltham (Mr. Russell Kerr), does the right hon. Gentleman recall that not only was an overall figure of £280 million over 10 years given by the defence correspondent of The Times, but he also said that out of this £260 million would be in dollars? Will the right hon. Gentleman confirm that that figure is in accordance with the estimates made by his Department?
Will the right hon. Gentleman recall the importance which we on this side of the House have always attached to the cost of spares in relation to the total cost of this programme, and will he confirm or deny that the cost of a new replacement engine will be at least 35 per cent. higher than, and perhaps even double the cost of, the original engine?
I cannot confirm that without notice. What I can tell the House is that we shall be buying spares for this aircraft at the same price as the United States Air Force is paying, and no agreement on an aircraft bought from abroad of such a favourable nature has ever been made by any previous Government in Britain.
With respect, I have not read that article, nor am I expected to comment on such statements, but I can tell the House that the cost of the F111 programme over 10 years will be about half the cost of a comparable TSR2 programme. I can also point out to the hon. and gallant Gentleman that we have a firm ceiling for the cost of the basic aircraft, and now an agreed ceiling for the supplemental features of the British F111K, which at 1965 prices cannot be exceeded.