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Saudi Arabia (Order For Air Defence System)

Volume 722: debated on Tuesday 21 December 1965

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With your permission, Mr. Speaker, and that of the House, I would like to make a statement.

I have to tell the House that the Government of Saudi Arabia have this morn- ing 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 cooperation from the United States Administration in formulating the joint programme.

The value of the British components in the order, including Lightning and Jet Provost aircraft, radar and data handling equipment, is over £100 million, from which over £75 million will accrue to this country as export earnings.

This is a great achievement for the three British firms concerned, namely, the British Aircraft Corporation Ltd., Associated Electrical Industries, and Airwork Services Ltd. and it demonstrates that our aircraft and electronics industries have really first-class equipment to offer.

The American firm of Raytheon will be supplying the Hawk surface-to-air anti-aircraft missile.

During the past twelve months the British firms have acted in close cooperation with my Department and have received our active support. The success of these negotiations has demonstrated conclusively the results which can be achieved with such co-operation.

A number of other countries have already expressed interest in the Lightning aircraft and the radar equipment and I have great hopes that further orders will be obtained.

May my hon. Friends and I warmly associate ourselves with the welcome given for this order and congratulate the industries concerned? It is a successful culmination of several years of hard negotiations on the part of the Government and industry, and I am sure that, among other things, it will give great pleasure to my right hon. Friend the Member for Preston, North (Mr. J. Amery). I have two questions. First, 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 F.111? Secondly, how can such orders be expected in the future if the Royal Air Force is equipped entirely with American-built aircraft?

There is no question of the agreement with the Americans to cooperate in giving technical and political support in this proposed deal being in any way linked with a commitment concerning the F.111. That subject did not come up in my discussions in the United States. As for the right hon. Member's second point, we are here concerned with the export of equipment that is in modern use with the Royal Air Force and we are satisfied that there are very good export prospects for aircraft with radar equipment that is currently being produced in the United Kingdom.

Can my hon. Friend indicate whether the Lightning fighters will be equipped with British-built and British-designed missiles and, if so, which ones?

This question is confidential with the customer, but I am glad to be able to confirm that they will be equipped with United Kingdom-provided equipment.

May I offer the hon. Gentleman my congratulations for the personal contribution which he has made to pulling off this deal? Having had some part in the early stages, I know some of the difficulties that he had to encounter both from the American side and, sometimes, within the British Government machine. I have heard both from industry and from Saudi quarters that he played a very important part in obtaining this order.

I thank the right hon. Gentleman for his generous remarks, but I ought to point out that we had very close co-operation not only from industry but from all Departments concerned.

Can my hon. Friend say how this order fits in with the Foreign Office's policy of restricting the supply of arms to countries in the Middle East?

This is essentially a defensive system. I am sure that the House will have no objection to any country's obtaining this sort of equipment.

Can the hon. Gentleman say a word about the terms of payment for this very good contract and whether we have had to give a very long-term credit?

My right hon. Friend the President of the Board of Trade has a Question on this matter to which I believe he is replying tomorrow.

Will my hon. Friend accept from this side our congratulations on the personal part that he played in this matter? Will he nevertheless beware the Greeks that bear gifts, especially from the other side?

Is the hon. Gentleman aware that this news has been received very well by hon. Members on this side of the House? Will he also point out to his right hon. Friend that what is good enough for Saudi Arabia ought to be good enough for this Government?

May I join in the congratulations which have been extended to my hon. Friend the Minister? I am sure that this news will be received with a great deal of interest by those Members who have recently visited Saudi Arabia. Can he tell me the nature of the contractual arrangement entered into with the Saudi Arabian Government concerning manning the equipment and its maintenance? Can he say how this compares with the agreement reached by the Americans in that part of the world?

On my hon. Friend's second point, this is a matter for commercial arrangement between the Saudi authorities and Airwork. As for his first point, I am glad to be able to confirm that the Parliamentary mission led by my noble friend Lord Blyton made a very fine contribution to improving relations between Saudi Arabia and this country.

Will the Minister address himself to my second question, which related to the importance of Britain's maintaining her ability to export the next generation of aircraft, which she cannot do unless she makes them?

This is a very wide question concerning the development of further and more sophisticated equipment. We have already announced that we will co-operate with the French, but when that equipment is developed we hope to give it the same sort of support, from the point of view of exports, as we have done on this occasion.