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An
about £15 million. Provision had been made in the current long-term
costing. On reasonable assumptions about our share in the development and production of Mallard, we should secure a net benefit to the balance of payments, while if we were to adopt a national system the need to purchase interface equipment would require a net outlay of dollars.
early decision on United Kingdom participation in Mallard was necessary so
that we could have a share in the definition of the sub-systems and obtain
our quota of development contracts. The next step would be detailed
negotiations with the United Stated with a view to drawing up a
Memorandum of Understanding; expenditure would be committed gradually
over a number of years.
THE MINISTER OF STATE, MINISTRY OF TECHNOLOGY said that there were no
clear industrial advantages in a purely national system, provided that
British industry secured a fair share of Mallard production. However,
the views of industry were divided: of the four major firms so far consulted, two (including Plessey's) had doubts about obtaining a worthwhile
share of production; the other two firms (including the General Electric Company) preferred opportunities to exploit the American market to the
prospects of trying to export a purely national system. The firms were also
divided on the question of the indirect return from the project into
civil technology. The Head of Defence Sales, Mr. Ray Brom, believed that
United Kingdom firms stood a good chance of obtaining a substantial share of
the production contracts. The negotiation of a collaborative European
system would take some years; there had been no formal approach to our
European allies, although officials had taken informal soundings. Although
Figaro would be available some two years before Mallard, the Services would
not require it by then, nor would the defence budget permit an earlier completion date.
Discussion showed general agreement that the United Kingdom should participate in Project Mallard on the terms outlined in OPD (67) 59.
In view,
however, of the uncertainty about the cost of the project it should be
reviewed periodically as it became necessary to commit funds. Some concern
was expressed lest the United States would seek to apply restrictions on the
use which British firms could make of the information derived from their
participation in the project; this would depend on the detailed arrangements
made by the firms concerned, but American restrictions would probably be
confined to the cryptographic information. We had accepted the need for
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