(97792)
1.
SECRET
THE F 111K AND THE MAJOR DEFENCE DOLLAR PROGRAMMES
SECRET
Page 99
The Committee had before them a memorandum by the Secretary of State for Defence (OPD (67) 21) on the F 111K and the major defence dollar programmes.
THE DEFENCE SECRETARY said that it was necessary by 1st April to confirm
with the United States Government the order for the balance of 40 F 111K
aircraft. The cost of the programme of United States purchases as a whole remained within the dollar ceiling which had been agreed. There were no
problems with the C 130 purchase or on Polaris and no decision was needed on
the Phantom before July, when he expected to be able to propose that our order for it should be substantially below the 203 planned so far.
A careful examination had been made of the possibility of doing without the F 111 or of reducing the size of the order for it, taking into account
particularly the fact that progress with the defence studies indicated that,
without changes in the assumptions for those studies, we should not achieve the reduction in defence expenditure that we were seeking. On no likely
hypothesis however would we be able to do without an aircraft with the long
ferry range and radius of action of the F 111. Indeed, the most promising
prospect of reducing defence expenditure overall seemed to lie in eliminating
as quickly as possible our commitments to station land forces in bases round the world and to rely instead on the provision of air/sea forces to carry out
our commitments. Such a policy would place a premium on having a high
performance aircraft like the F 111 which did not have to rely on extensive
overflying and staging facilities. The need for such an aircraft would more-
over be greatest during the likely period of withdrawal from bases overseas
in the first half of the 1970s and there was no alternative to the F 111 in
this time scale. If for budgetary reasons economies had to be made in
tactical strike and reconnaissance capability these would have to fall oh
the V force and the Anglo-French variable geometry aircraft. On costs, the
ceiling price of £2.1 million for the basic aircraft was fixed and there was
evidence that we were obtaining this more cheaply than the United States Air
for the supplemental ceiling price. Force; the figure contained a 30 per cent contingency allowance. The total
dollar cost, including our special requirements, was £2.475 million and the
total unit cost, including components produced in this country, was now
estimated at £2.75 million compared with an earlier estimate of £2.57 million.
Nevertheless, the aircraft remained the cheapest means of meeting our needs.
The dollar element was being offset by equipment purchased from us by the
United States and 127 million of firm orders had already been placed with
British firms under these arrangements, in addition to the sales of
£100 million worth of defence equipment to Saudi Arabia which were linked to
it. These American orders were not merely important in themselves, but
might well carry with them longer term benefits also in enabling our industry
Page 99
-1-
SECRET
Page 99