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Volume 654: debated on Monday 19 February 1962

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asked the Minister of Aviation why the estimated cost of developing the Blue Steel nuclear missile increased fivefold to £60 millions by September, 1960; what is now his estimate of the ultimate cost; and how much it is estimated will be spent in addition on production, training, installation and other costs.

Blue Steel was an entirely novel development of a new type of very advanced weapon. It flies at high supersonic speed and, after release from a V-bomber, automatically navigates itself to its prearranged target carrying a warhead in the megaton range. The original figure underestimated both the complexity of these problems and the time required to solve them. The Accounting Officer of my Department will shortly be giving detailed evidence upon this matter to the Public Accounts Committee.

Is the Minister aware that £150 million was spent on the similar American missile Rascal before it was cancelled, and does he not agree with the expert estimates in this country that Blue Steel will cost roughly the same here? With this money, could not the Government have provided 12s. 6d. a week on the pensions or built 100,000 houses for families?

It is always possible to compare one form of expenditure with another, but this is an extremely important weapon and is extremely relevant to the deterrent in this country.

To get the matter clear, is it not a fact that the £60 million referred to covers many overheads and other charges of establishments, and that they would have been charged in any case, so that it is rather misleading to give this overall figure for this one object?

A great number of these figures tend to be misleading. It is, however, true, and must be fairly faced, that this weapon was underestimated when the original estimate was put forward. I would not attempt to conceal that. It will be considered fully by the Public Accounts Committee.

Will the House be fully informed in the future about what the actual cost will be?

No. I believe it is not usual to disclose the actual cost, but this will be brought up before the Public Accounts Committee, so that there will be every opportunity of discussing it.

Does that mean that mistakes in estimating are disclosed but that the full facts of actual cost are not disclosed? Is this in the name of security? If so, what about the security of the taxpayers?

The security of the taxpayers is fully dealt with by the procedures in this House, which include detailed reports to the Estimates Committee, full analysis in front of the Public Accounts Committee, and publication of the facts so far as research and development are concerned. What we do not publish, of course, is the precise figures of production, because these would disclose to anyone who wished to know the number of weapons which we were in fact fitting.

Is it not the case, though, that Sea Slug, Thunderbird and Fire Streak were estimated to cost £9 million and ultimately cost £140 million, and that the Ministry of Aviation then promised to amend its ways in the matter of costing? Furthermore, is it not the case that Blue Steel has a range of only 100 miles and will only come into service very shortly before Skybolt, which has a range of 1,000 miles and is much more efficient?


asked the Minister of Aviation if he will state the approximate expenditure from 1955 to date on missiles which have since been cancelled.

Are not all these cost-plus contracts in which the greater the expense to the company the greater its profits? If such a scandalous overspending of public money had taken place, 1st us say, on the building of houses or on pensions, would there not have been real trouble, whereas with armaments apparently anything goes?

No. These are all extremely complex missiles systems. There is no doubt that since, say, 1955, when Blue Steel was first estimated, the methods of costing these estimates have improved. I think it has to be remembered that over the same period £50 million worth of export orders have been placed for missiles of this character.

Is my right hon. Friend not overcome by the overwhelming support for all matters of national defence indicated by some hon. Members opposite?

Is it not the case that the system of accountancy for these weapons is even more complex than the weapons system itself?

It is necessary to have a fairly complex system of accountancy. Indeed, I share the view of hon. Members that they should be fully informed of the cost of these matters. They have been carefully examined by the Estimates Committee. Our procedures for estimating have been improved, but I cannot yet guarantee that even with all improvements absolute accuracy in these extremely complex estimates is possible, but I think it will be better.

Does the right hon. Gentleman now conform to the recommendations of the Zuckerman Committee which were submitted in July, 1961, to the Minister for Science?

Yes, indeed, I think that virtually all the recommendations of the Zuckerman Committee were in operation in my Ministry even before I arrived there.