TNAG-0540-FCO40-635-Strength-of-garrison-in-Hong-Kong-1975 — Page 168

MINUTES OF EVIDENCE TAKEN BEFORE THE EXPENDITURE COMMITTEE

60

11 February, 1975.]

[Continued.

Examination of Witnesses

Mr. A. P. HoCKADAY, C.B., C.M.G., Deputy Under Secretary of State (Policy and Programmes), and Rear Admiral A. S. MORTON, Assistant Chief of the Defence Staff (Policy), Mr. T. CULLEN, Assistant Under Secretary of State (Operational Requirements), Mr. D. M. EVANS, Assistant Under Secretary of State (Pro- grammes and Budget), Mr. G. C. B. DODDS, Assistant Under Secretary of State (International and Industrial Policy), Mr. A. R. M. JAFFRAY, Assistant Under Secretary of State (Naval Staff), Mr. J. D. BRYARS, Assistant Under Secretary of State (General Staff) and Mr. T. C. G. JAMES, C.M.G., Assistant Under Secretary of State (Air Staff), Ministry of Defence, called in and examined.

Chairman.

121. First of all, I would like publicly to congratulate the Admiral on his pro- motion. We are delighted to see it. We will continue your paper. We start with the Royal Air Force, first of all we deal with paragraphs 25-31. We do know the likely effects of the Defence Review on the Royal Air Force. The Royal Air Force will suffer a substantial reduction in manpower and the MRCA will now be introduced over a longer period. The transport force is to be cut by half. I would like to ask you first of all what has been the reaction of our partners in NATO to the proposed reduction in the rate of the MRCA deliveries?

(Mr. Hockaday.) They have taken note of it. We have had no reaction further than that. It is something which we shall have to discuss further with them and in greater detail and they realise that we shall be telling them rather more about it. Until more has been put to them through the MRCA consultative machinery they have so far confined themselves to taking note of what we have said in our public state- ment.

122. I suppose it would not be right for me to ask if possibly you are stalling on that answer? It is two months since the Secretary of State made the state- ment in the Commons and the Defence White Paper will be issued in five weeks' time. Might we know more in the Defence White Paper?--I do not think there will be very much more in the White Paper. It is something that does need careful consideration with our allies and it may be that they themselves may have views on the delivery pro- gramme also. We shall have to see how that comes out.

Mr. Roper.

123. I have two questions on the MRCA. First of all, I have seen a

suggestion in one of the Adelphi papers that some of the equipment being built into the MRCA is American equip- ment which the Germans have agreed should go into the MRCA to meet some of their offset obligations. Is that in fact the case? (Mr. James.) Are you say- ing it is going into the MRCA because of their offset obligations?

124. The Germans were honouring their offset obligations by acquiring American equipment which will then be used to equip MRCA and to this extent there was some constraint on the purchasing pattern for the MRCA in that the Germans had obligations to the Americans? No, it is not true at all. The particular major piece of equipment which is American in the MRCA is a very important part of the avionics pack- age which is what is called the map read- ing and terrain following radar. It is quite an expensive piece of kit and it is being made by an American company. But the decision to use that particular equipment was a partnership decision. The effective competitors for this piece of equipment were in fact two American firms. There may be some consequential benefits to the Germans to help solve their offset problem, but the decision to take that piece of American kit was entirely on its own merits.

125. As far as you know the Germans will only be able to allow an offset for the purchases to the German MRCA aircraft, they would not be allowed to use the purchase of this equipment for the British MRCA aircraft as part of their offset-I I cannot answer that question in detail. The cost sharing arrangements on the MRCA are quite complicated. The fact there is this American equipment going into the MRCA is helpful to the Germans, but whether that would apply to the whole of the MRCA buy as distinct from just the German MRCA buy I cannot tell you.