asked the Secretary of State for Defence what is the total deficit to date under the offset agreement between the Federal Republic of Germany and the United Kingdom since the agreement came into effect.
The current offset arrangements between the Federal Republic of Germany and the United Kingdom entered into force in March 1971 and will expire in March 1976. The sterling equivalent of local defence expenditure in Germany since then amounts to about £950 million. Under the terms of the offset agreement Her Majesty's Government have so far received a total of DM440 million in annual instalments of DM1I0 million, equivalent to £18 million per annum at the present rate of exchange. We also benefit from the Federal Government's agreement to make and promote purchases of British civil and military services. Military purchases by Germany amounted to about DM681 million over the period of the agreement up to the end of June 1974.