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THIS DOCUMENT I S THE PROPERTY OF HER BRITANNIC MAJESTY'S GOVERNMENT
C(83) 28 ^ ^ ^ V
COPY NO
1983
79
CABINET
A J3EFENCE SUPPRESSION WEAPON FOR THE ROYAL AIR FORCE
I
^Jl^^
Note by t h e S e c r e t a r y o f t h e Cabinet
^
I
The Prime M i n i s f f r Mas i n s t r u c t e d me t o r e v i s e t h e paper a t t a c h e d t o 0(83) 22, on t h e f a c t s and i s s u e s on t h e c h o i c e o f a defence s u p p r e s s i o n weapon f o r t h e Royal A i r F o r c e , i n t h e l i g h t o f t h e r e v i s e d p r o p o s a l s p u t f o r w a r d by B r i t i s h Aerospace and Lucas Aerospace r e f e r r e d t o i n a m i n o E ^ L t h e S e c r e t a r y o f S t a t e f o r Defence (MO.26/7 a t e d 15 J u l y ) . The r e v i s e d n o t e i s c i r c u l a t e d h e r e w i t h f o r c o n s i d e r a t i o n by t h e Cabinet. d
&
I
S i g n ^ V % W B E R T ARMSTRONG
Cabinet
Office
V 5 \
21 J u l y 1983
\ I I
1
S E C R E T ~~|
H
I
SECRET H
H
&
I A DEFENCE SUPPRESSION WEAPON FOR THE ROYAL AIR FORCE
^jj^
Note by Officials
Sl^fL
^
Force have a requirement for a missile capable of suppressing
'he radlrs and eleotronio components of missile defences.
f
l
•
Without
"issile the new Tornado aircraft, which from 1985 will he equipped with the airfield attack wesson JP233. wiU be unable to penetrate the an- defences «ch
the W a r s U L t is expected
attrition rates.
^
MM
to deploy without suffering very .ugh
MM,
missiles, possibly increasing to over 1.000 i f
•
^
2- The requirement U^5
0
funds are available.
»• The United States
el^Jk to deploy
aircraft equipped with modern
•
«efenee suppression weapons. Other NATO countries have expressed interest
Mmt
ta
such weapons, but none has yet taken a decision.
tfV , . Options J- The choice is between two missiles - HAffi is a missile already d e v e l o p •» the United States which win be p r o d u c i a ^ t h e United States Forces by ^xas instruments (Tl) . Proposals have b e e V j j k under which an element of "hal development and a substantial part of vr^Mm to meet a B r i t * , order «u,d be carried out in the United Kinplom ^ ^ i s h firms under the leadership- of Lucas Aerospace, though the high t e e t e r homing-head would ^ su entirely from the United States. The cost of 750 missiles would be "54 s i n 1982/83 prices); of this 53 pnr cent wonld be on a «*ed Price basis, and the final price paid fbr the remaining « « cent wovdd he the same as the United States Forces would pay. T h < « * f o r 1.000 "t^siles would he £309 million. These estimates assume an exchange ra e o " $1.59. Under the original offer which assumed a firm order being place
>» 1 April 1983, sufficient missiles for an initia l operational c a p a W ^ p o u l d P p l i e d
raimon
MU
WMt
WM
MM
( a l l f i g u r e
_ H
U
—
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I
^ Y ^ r e
H
been d e l i v e r e d by September 1986 - t h e I n Service D a t e ( I S D ) - w i t h t h e
1^750
o r d e r b e i n g completed by January
l&now "hi*
1991. T I have advised t h a t these
would mean a n ISD o f January 1987.
««ed p r i c e e l e m e n t o f only "Mil
I t would be possible t o p u r c h a s e
f r o m t h e U m t e d States a t a s l i g h d y
mgl^for 750 missiles
«35
lower c o s t , e s t i m a t e d a t
o r £292 m i l l i o n f o r 1.000 m i s s i l e s , t h o u g h w t t h a
10 p e r e e n t ; b u t s i n c e t h e c o s t s a v i n g would be
a n d t h e r e would be n o i n v o l v e m e n t o f B r i t i s h i n d u s t r y , t h i s o p t i o n i s n o t
considered f u r t h e ^ ^
e r t e dwo
Tl/toas haveVkuy °«
the
necessary
U n i c e s
Navy
^ " ***
approval,
b u t wouid
endorsement o f the I f c k r a t i o n as a whoie. United asse
Kingdom
m b l i e s
w
o
r
t
h
firms ^ t o p e t e about 20
fi\t
also
l
require the
The f i r s t i s a n i n v i t a t i o n t o
f o r the production
o f microwave s u b
by value o f the homing-head; the s e c o n d i s
to set u p a U n i t e d K i n g d o l ^ l Ki
I
have t o be slipped i n s t e p w i t h t h e delay i n s i g n i n g t h e c o n t r a c t ,
HAllHSLly
5
|
homing-head r e p a i r depot a t T P s U m t e d
B
" g d o m subsidary a t B e d f o r d .
«•
ALARM
% n a ^ c 7
is a i
n
missile
conjunction
which
w o u l d ^
developed
with M a r c o n ^
GEO, Thorn-HVlI a n d other
a n d Defence
British
Aerospace
development w o r k has b e e n
*°ne a t b o t h the f i r m s ' a n d G o v e m m e n t ^ | e
a n d B r i t i s h Aerospace have
^tal
H
Systems ( p a r t of
Some e a r l y
very r e c e n t l y
firms.
by
offered a fixed price d e v e l o p m ^ j ^ d production
contract at a
cost o f £291 m i l l i o n f o r 750 missiles a n d J j ^ i l l i o n f o r 1,000 missiles
Compared w i t h t h e i r e a r l i e r o f f e r o f £388 m i l l i o T O ^ 5 0
missiles
* * i o n f o r 1,000 m i s s i l e s ) .
enough missiles t o
The c o n t r a c t would p r o p e r
a n d £426
t h i e v e a n i n i t i a l o p e r a t i o n a l c a p a b i l i t y t o be d e l i v e r e d by August 1987 a n d f o r liveries
t o be complete by September 1989. F a i l u r e t o d e l i v e r t h e f i r s t 100
^ s s i l e s on time would r e n d e r B r i t i s h Aerospace liable t o l i q u i d a t e d damages o f ^
t o £0.4 m i l l i o n
( a s i m i l a r premium
would be payable b ^ V U t o i s t r y
defence f o r early d e l i v e r y ) .
at
M
^ B ^ ^ .
^certainties
7
-
a
I
The choice o f missile i s complicated by a number o f u n c e r t a i n t i e s
^Q|se
«ect d e l i v e r y a n d o p e r a t i o n a l c a p a b i l i t y , f i n a l c o s t a n d e x p o r t p p t e n t i a l ^ ^
|
SECRET
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L_H
SECRET H
1
H
\
X ^Sharing
|f
\
^ ^ ^ ^
^
^
o
f
an.
I the o r d e r between HARM a n d ALARM would be the most expensive
H
H
a n d we have n o t c o n s i d e r e d i t f u r t h e r i n t h i s paper.
Pgllyery a n d n p p r a t i o n a l C a p a b i l i t y ^
V \ e r i c a n s
not n e c e s s a r i l y defences
^ e ^ r a t e d be capable
i n t h e 1990s
developed,
t h a t HARM w o r k s , b u t t h e m i s s i l e w i l l
of dealing with improvements
without
itself
being
improved.
i n Warsaw ALARM
b u t t h e c o n c e p t i s m o r e advanced t h a n HARM:
the l a t e s t t e c h n o * *
pac
H
i s as y e t
i t incorporates
p a r t i c u l a r l y i n s o f t w a r e , a n d would t h e r e f o r e be m o r e
readily capable o f b e i n g e n h a n c e d t o deal w i t h i m p r o v e m e n t s i n Warsaw Pact ^fences ^e
i n the 1990s (although t h e r e must also be some u n c e r t a i n t y as t o how
t h r e a t d e v e l o p s l j f f c a t w i l l be needed t o meet i t ) .
^ v e l o p - i t t o meet
o S * &
requirements
a n d should
We should be able t o n o t be dependent o n
improvements which the A m e r i c a n s might decide t o i n t r o d u c e i n HARM.
10. B u t t h e r e must be a a u e j ^ m a r k «*
i t s sub-contractors
hoth m
t
h
e
development
ed
U n i t
Past e x p e r i e n c e
a n d the I ( t o d
Kingdom
programme
development p l a n
o v e r t h e a b i l i t y o f B r i t i s h Aerospace
t o develop; ALARM t o a n acceptable
*°ur y e a r s which they have allowed.
would
i n the
o f weapon d e v e l o p m e n t s ,
be U V r e a l i s t i c .
The
contractor s
i s based o n o p t i m i s t i c assumptions a n d allows v i r t u a l l y n o
slippage i n d e l i v e r i e s .
This
o p e r a t i o n a l l y f u l l y acceptable weapon. the RAF h a d t o f a c e
arise.
has t o l ^ h e d
^ e e n t i v e o n the f i r m s t o d e l i v e r o n time a n df
b e
standard
S t a t e s , suggest t h a t a s i x - y e a r
t ^ e f o r t h e s o l u t i o n o f any s e r i o u s p r o b l t ^ ^ ^ e
H
A
There is a r i s k o
against
the financial
d t o supply the RAF w i t h
I f n e v e T O t e delays o c c u r r e d a n d
a conflict without an a d e q u a ^ a p o n ,
i t would
take
t w e e n 6 a n d 12 months, assuming f u l l U n i t e d States c o - o p e r a t i o n , t o adapt
H
the R A F T o r n a d o t o o p e r a t e HARM.
On f i n a l c o s t the ALARM p r o g r a m m e o n the face of i t h a s ^ f i ^ e r degree o f
H
c e r t a i n t y t h a n HARM, s i n c e 97 p e r c e n t o f t h e w o r k would b e o n a t i x e d
P^ice basis subject only t o i n c r e a s e s due t o i n f l a t i o n .
As i s u s u a T ^ r s u c h
a r r a n g e m e n t s , i t i s t h e c o n t r a c t o r who would be l i a b l e f o r a l l u i 8 ^ J | u i
c
< * t caused by delays
t^s
could
cost
o r f a i l u r e s o n his p a r t t o meet the agreed programme
h i m u p t o £3 m i l i o n
|
f o r every
SECRET
|
month
overrun.
* V * ^
H
1££^B
)
SECRET H
H
\
I
Va^ospBce could
be expected
t o e x p l o i t every o p p o r t u n i t y t o o v e r t u r n the
feed
c o n t r a c t , but the M i n i s t r y o f Defence would be obliged t o meet a d d i t i o n a l Sflfo.
a n d o n l y i f , delays
orjfiL
f a c i l i t i e s
.
arose from Government f a i l u r e t o provide t r i a l s
The M i n i s t r y o f Defence r e g a r d B r i t i s h Aerospace's new
o f f e r ^ ^ e p t a b l e f r o m a c o n t r a c t u a l p o i n t o f view. absorbing
development a n d p r o d u c t i o n c o s t s
I t i n v o l v e s the company
a t a s a v i n g t o the M i n i s t r y o f
Defence o f £97 m i l l i o n i n r e t u r n f o r a h i g h e r u n i t p r i c e t o t h e D e p a r t m e n t f o r missiles bought b e y o n d the o r i g i n a l 750.
any
reduced by
T h e e f f e c t i s t h a t the c o s t i s
c o m p a * p n w i t h the p r e v i o u s o f f e r i f l e s s t h a n 1.620 missues a r e
bought a n d i n c r e a s e d i f t h e t o t a l p u r c h a s e d i s h i g h e r t h a n 1.620 ( t h o u g h the
taS^commitmentby the
^ f e r does n o t
12. The f i n a l p r i c e o f H A * L i o t
United States, as would be p
a
M
w i t h i n o u r c o n t r o l , s i n c e we should have t o
the same p r i c e f o r t h ^ W g - h e a d , w h i c h would be m a n u f a c t u r e d
^
c
M i n i s t r y o f D e f e n c e t o buy more
•
in the
^ the U n i t e d States Forces themselves.
The
o s t could t h e r e f o r e i n c r e a s e i f i m p r o v e m e n t s w e r e i n t r o d u c e d t o meet t h e
requirements
o f the U f i t e d States F o r c e s ,
Apartment
o f Defense
secure
savings**
between HARM a n d ALARM i s also rate c
o
f
t
h
e
p
D
u
n
d
o r be reduced i f the U n i t e d States
a g a i n s t the d o l l a r .
theprice.
The cost d i f f e r e n t i a l
subjWWtuations
i n the r e a l , exchange
F o f f l g p e r c e n t change i n the r a t e the
°st d i f f e r e n t i a l o n 750 missiles would c h a n g ^ l b o u t £10 m i l l i o n .
1
3 . Export
prospects
I f ^ B f r i t e d Kingdom p u r c h a s e d opportunit^bVq>ort the c o m p o n e n t s
a r e also u n c l e a r .
HARM. Lucas would have an e x c e l l e n t
* * c h they would b e m a k i n g i n B r i t a i n t o t h e U n i t e < # l e s 1 1 1
missiles which
F
orces
c
would
and t o export
°*pete w i t h U n i t e d
sales expected
H
be assembled
there
f o r delivery
c u s t o m e r s f o r HARM. States
for incorporation t o United
States
They would have t h e r i g h t t o
s u p p l i e r s f o r U n i t e d States d o m e s | | and
t o t o t a l 25.000 m i s s i l e s .
•
export
Their share o f t h e M * ^ p r o v i d i n g
t h
e y were c o m p e t i t i v e , has b e e n e s t i m a t e d a t about 10 p e r c e n t , e q u i v a l e n t t o
l
>^0
a
i
i ii . s s
Powerful
S t
S
m
e s
Prospects
rival,
f o r e x p o r t s o f ALARM a r e u n c e r t a i n . T W ^ o U be
particularly
f o r those
c o u n t r i e s who already haVe U n i t e d
ates
a i r c r a f t a n d m i s s i l e s : a n d t h e U n i t e d Kingdom's p a s t success
<*ing
British
weaponry
against
direct
['SECRET
United
|
States
rate m
•
competition
13 ! I ;
SECRET
1
|
H
\
I
Vg^ouraging.
The new p r i c e quoted
by B r i t i s h Aerospace implies
that t h e
f ? % n y a r e e x p e c t i n g t h a t e x p o r t s ( a n d a d d i t i o n a l purchases by the M i n i s t r y ^^Hfence) w i l l d e t e r m i n e the f i n a n c i a l success o f the p r o j e c t . The M i n i s t r y o f
d e f e n c e believe t h a t B r i t i s h Aerospace could a t b e s t hope t o w i n some 25
P ^ ^ i S ^ o f the t h i r d c o u n t r y market, i e some 1,250-1,500 m i s s i l e s . The
3 0
r e a s
^
ui^^^Hge
i t more l i k e l y
that
t h e r e would be n o e x p o r t b u s i n e s s f o r
^ARM, p a r t i c u l a r l y i f i t p r o v e s t o be u n c o m p e t i t i v e o n t i m e a n d p r i c e . j££gct o n B r i t i s h A a r n s p « p . P 4« There i s a wider problem i n r e l a t i o n t o B r i t i s h Aerospace. Point
WW^U
out that,
a
s
t
n
e
additional
costs
c o n t r i b u t i o n t h a t the company w i l l i n e f f e c t be °f ALARM w i l l come a r ^ ^ ^ ^ ,
Cortl
from
The T r e a s u r y
any slippage, t h e
making t o the development c o s t
mainly o v e r the n e x t 3 y e a r s , when t h e i r
cash
will probably be u n d J | j j | n s i d e r a b l e p r e s s u r e f r o m o t h e r p r o j e c t s .
The
p a n y ' s r e v i s e d o f f e r i s ^ B p n l o n t h e i r c o n f i d e n c e t h a t these
°osts will be c o v e r e d by additi^Bfcsales r e v e n u e . 0 r
development
I f , as a r e s u l t o f slippage,
other r e a s o n s , i t becomes a p p a r e n t t h a t these r e c e i p t s w i l l n o t m a t e r i a l i s e ,
^eir e
cash
flow
problems
will
be e x a c e r b a t e d .
I n such
circumstances
G o v e r n m e n t must expect t o r e c e i v e ^ ^ s o m e w h a t lower d i v i d e n d o n i t s 48
6 1
P** c e n t s h a r e h o l d i n g , a n d also t o faQe demands f r o m B r i t i s h Aerospace f o r deviation
i n o t h e r areas
(eg pressing f o r follow-on
o r d e r s f o r ALARM o n
°ther defence c o n t r a c t s o r g r e a t e r l a u n c h ' S j ^ f r ^ r c i v i l p r o j e c t s ) . t l l e
the r i s k ,
the Treasury
feel
that
Brimi|^kerospace
r e a l l y f o r a f i n a n c i a l a p p r a i s a l a n d how p r e c J K | | h e y
I n view o f
should be
asked
expect t o be able t o
c u r e a s u f f i c i e n t r e t u r n t o meet the c o s t o f t h e i r ^ S S ^ r e d u c t i o n .
S e
15
• The D e p a r t m e n t x t
m e
Would be i m p r o p e r f o r t h e G o v e r n m e n t t o r e q u i r e such a n a p p r a i s a l as a
& n s o f d e f e n d i n g i t s i n t e r e s t s as a s h a r e h o l d e r o f B r i t i s h A e j ^ s p a c e .
a
course
^off i g e r
l n t
end
n
°
r e s
I
t e
would
r u n counter
t o assurances
B r i t i s h Aerospace's shares
t o use i t s r i g h t s
commercial n
o f T r a d e a n d I n d u s t r y , o n the o t h e r hand, c o n s i d e r t h a t
decisions.
given
Such
i n t h e 1981 Prospectus
f o r sale) that the Government did n o t
as a s h a r e h o l d e r t o i n t e r v e n e i n t r M ^ ^ ^ p a n y ' s
Furthermore
the Department
of Trade
ancP^L^^try
t h a t t h e a d d i t i o n a l f i n a n c i n g b u r d e n which might f a l l o n the company as a
u l t o f t h e p r i c e
reduction
o r any c o s t o v e r r u n would be r e l a t i v e l y less
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o f
,
I
I
I
SECRET
H
W | n i f i c a n t t h a n t h e calls w h i c h o t h e r p r o j e c t s ( A d v a n c e d Combat A i r c r a f t , A A
and
lifc't
e x i s t i n g p r o g r a m m e s ) might Period.
make o n t h e company's f u n d s
over t h e
The D e p a r t m e n t o f T r a d e a n d I n d u s t r y have n o r e a s o n t o
doubt the f i n a n c i a l p r u d e n c e o f B r i t i s h Aerospace's management: they b e l i e v e it i s ^ S f c i t i s h c
Aerospace i t s e l f
t o judge how f a r ALARM i s e s s e n t i a l t o t h e
H
o m p a n ^ i k u r e and t o balance r i s k against ultimate r e t u r n .
Technological f a c t o r s 16. The d e v e l o p * ^
o f ALARM
would be o n e way t o r e t a i n
Kingdom a c a p a b i l i t y i n homing-head t e c h n o l o g y . «rm
with this
^ssiles
capability.
They
and are M P I f c n t
a^borne
anti-ship m i l f e X a
c o n t i n u i t y and k e e p the
have
t e c h n o l o ^ ^ e
modern
systems
Missiles.
Their
s u c c e s s f u l l y developed a number o f t h e homing-head f o r t h e
The ALARM p r o g r a m m e would p r o v i d e
value
of great
as t h e emphasis was d e m o n s t r a t e d
and increasing importance
switches
to "fire
i n the Falkland
in
a
environment
i n which
NATC^KL
Islands
conflict
have t o f i g h t any f u t u r e b a t t l e
18. There i s n o r e a l r i s k i n the f o r e s e e a b l e > ^ t h a t
a
c e a
such as t h e U n i t e d
Kingdom^**
nevertheless judge i t e s s e n t i a l o n d e f e n c e g r o u n d s t homing-head
c
^pete
the U n i t e d States w i l l
a n d guided
loses
such
^
m i s s i l e t e c h n o l o g i c a l base.
a capability
Ministry of Defence i
n i n this country a
Moreover,
i f British
i t w i l l become p r o g r e s s i v e l y l e s s able t o
i n t h e m a r k e t f o r m o d e r n weapon systems b o t h f o r c « own f o r c e s
for export.
1 9
m a
•
The M i n i s t r y
M
|
of Defence considers
t h a t much t h e most e f f ^ V y
to
H
i n t a i n t h i s c a p a b i l i t y would be t o d e v e l o p a n d m a n u f a c t u r e ALARM. No o t h e r
*°gramme using t h
•
s e d e v e l o p i n g weapons o f t h i s s o r t o r would r e f u s e t o supply them t o
major NATO ally
^ustry
H|
^BJ^.
g a i n s t the Warsaw Pact.
either
•
and forget
< * o o e t i s s u c h a m i s s i l e ) b u t w i l l be ^ e n more v i t a l i n t h e s o p h i s t i c a t e d electronic
WM
present development t e a m t o g e t h e r .
1?. Homing-head weapon
Marconi is the only B r i t i s h
engaged i n c o m p l e t i n g Eagle.
i n the United
*
absence,
a n t i - r a d a r technology
therefore, of an order
i s ready t o go i n t o development: i n f o r ALARM
the expertise i n B ^ * ^
H
^^^^
I
SECRET " 1
I
&
I
V^dustry ftl.
would be e n d a n g e r e d
a n d perhaps l o s t .
The T r e a s u r y , o n the o t h e r
believe t h a t i t would be possible t o p r e s e r v e the c a p a b i l i t y i n B r i t i s h
i S f c y f o r r e l a t i v e l y modest e x p e n d i t u r e , by b r i n g i n g f o r w a r d n a t i o n a l w o r k onJJL missile p r o j e c t s a n d by f i n a n c i n g a s u p p o r t i n g p r o g r a m m e i n f
u
t
u
r
e
of consid^llt
millise
technolgy.
The D e p a r t m e n t
of T r a d e
and Industry
a d e c i s i o n i n f a v o u r o f ALARM would be a n e x c e l l e n t example o f
a public p u r c h a s e r s u p p o r t i n g i m p o r t a n t technology a n d would be c o n s i s t e n t With
t h e Government's
policy
of buying British
when
British
industry
is
WM
competitive i n t e r ^ p f p r i c e , p e r f o r m a n c e a n d t e c h n o l o g y . 20. A n o t h e r p o s s i b i l i t y
would be t o a r r a n g e w i t h t h e A m e r i c a n s
collaboration o n t h > # R ^
a form of
p r o g r a m m e which would give B r i t i s h companies the
necessary
technologicmAfits.
The f u r t h e r
Paragraph
5) which
work
^emty
the U n i t e d K i n g ' o K V e i t a t s i g n i f i c a n t e x t r a c o s t , would n o t add
m
Significantly remains
J d X f e U e
options
o f f e r e d by T I (see
o n t h e homing-head
and a repair
t o the U n i t e d K i ^ f l l m n a t i o n a l technology base.
whether
an
attempt
should
be
made
with
The q u e s t i o n
the United
States
A d m i n i s t r a t i o n t o s e c u r e more e x t e n s i v e collaboration o n the homing-head t o British
^e
relieve t h a t e
*tra
Industry
the high t e c h n o ^ work.
t h e chances
cost would
o f success U
remove most,
W
,
The Ministry
a n d even i f s u c c e s s f u l t h e
i f not « ^ e
r e m a i n i n g cost advantage o f
HARM over ALARM a n d would s e t the i n - s ? ^ | d a t e a t r i s k . Coring
this
possibility
considerations r e f e r r e d
further
would
be
o f Defence
relevant
Nevertheless,
i f t h e operational
t o i n p a r a g r a p h s 9 and 10. r a t h e r t h a n c o s t , were
considered the d e t e r m i n i n g
factor
i n favour
o f \ ^ j h a s e
H
o f HARM r a t h e r
t h a
n ALARM.
%Pi9vment
considerations
2 1
• The ALARM programme would g e n e r a t e some 9.400 man y e a r W
7
Years i n B r i t i s h i n d u s t r y .
a r
w o r k over
The employment would be m a i n M ^ h e L o n d o n
* a . the South of E n g l a n d and L a n c a s h i r e . HARM would g e n e r l T O j n e 3,500
n y e a r s o f w o r k o v e r 8 y e a r s , mainly i n L a n c a s h i r e and t h e W ^ T ^ a n d s .
m a
l
* b o t h cases, t h e value o f e x p o r t p o t e n t i a l i n j o b t e r m s i s assessed as about
5
'°00 man y e a r s , b u t t h e c a l c u l a t i o n i s d i f f i c u l t a n d c a n n o t be s t a t e d w i t h any
^ a t a m
0 f
precision.
The combined e f f e c t o f t h e a d d i t i o n a l TI/Lucas o p t i o n s
VJ.
o u n t t o some 1,150 a d d i t i o n a l man y e a r s ' w o r k i n t h e U n i t e d Kingdom
th
e m
a t T I L t d B e d f o r d ) , a t a n e x t r a cost of some £25.5 m i l l i o n .
H
SECRET
I
|
I
^ ^ d g e t a r y considerations * f t o n
t h e basis o f p r e s e n t e s t i m a t e s t h e ALARM p r o g r a m m e would more t h a n
ft«ic M8
HARM, a m a r g i n
o f some 15 p e r c e n t .
E x p e n d i t u r e Survey CPES) y e a r s
„, ion
more t h a n HARM.
ffl
adjustments.
cost
U7
However, i n t h e
1984-85 t o 1986-87, ALABM would c o s .
T o accommodate these e x t r a c o s t s would r e q u i r e
Nevertheless,
o n t h e basis
o f t h e Government's
existmg
commitment t o 3 p e r c e n t g r o w t h i n d e f e n c e e x p e n d i t u r e up; t o a n d i n c l u d m g 1985-86, t h e M i n i s t r y o f D e f e n c e b e l i e v e t h a t they c a n a b s o r b t h e e x t r a c o s t s averaging o v e r f.30 m i l l i o n a y e a r , w i t h o u t s u b s t a n t i a l d e t r i m e n t t o the r e s t o f
MM
the programme.
international aspecty^^^ 23. We have argued
U f c i t h
^ance
JSL^nent
^ited
of trade i n
between t h e U n i t e d Kingdom a n d t h e
each^H&puld
States - t h a t product
completed,
a n d which
meets Z
success.
Since
research
a n d development
military requirement.
has b e e n
Our e f f o r t s have h a d
1975 d e f e n c e sales t o t h e U n i t e d States have
R u b i e d i n r e a l value a n d the adverse h
be w i l l i n g t o buy f r o m the o t h e r when a
existsTc^ich
competitive
considerable
the Americans - i n the pursuit of a b e t t e r
t r a d e imbalance
has i m p r o v e d f r o m 3.1:1
1976 a n d 4.4:1 i n 1978 a n d t o 1.5,1 i n 1980 a n d about
2:1 i n 1982 ( t h i s
c o n t r a s t s w i t h a balance between the U n ^ f c t a t e s a n d Europe o f about Stable "flUon),
successes combat
during that support
period h a l j ^ n
t h e sale o f Rapier ( £ 5 3
(£20 m m i o ^ g b d i u m
boats
8:1).
girder
b r i d g e (£70
* * i o n ) , head-up: d i s p l a y s f o r combat a i r c r a f t (£113 m i l l i o n ) , ship: s t a b i l i s e r s
(£
16
million)
AV8B ( t h e B r i t i s h A e r o s p a c e / M c D o n « W a s
H a r r i e r - a t l e a s t £500 m i l l i o n ) . t h
development o f
There are g o o d ^ p e c t s of maintaining
* balance a t c u r r e n t l e v e l s a t l e a s t over the n e x t 2 y e a r s o r so.
24
On t h e face o f i t ,
f
ALARM should go a l o n g way towards r e m o v i n g
«
°r
H
t h e s u b s t a n t i a l r e d u c t i o n i n B r i t i s h Aerospace's p r i c e the c r i t i c i s m i n the U n i t e d
S t
* t e s which c o u l d have r e s u l t e d f r o m a d e c i s i o n n o t t o buy HARM.
r e
m a i n s a r i s k t h a t t h e e x t e n t o f t h e p r i c e r e d u c t i o n could i n
a t t
•
But there
t
0
* c k s i n t h e U n i t e d States o n i t s c r e d i b i l i t y , a n d T l a r e k n o w n To be v e r y
^PPy Minute.
about
the
There
way i n which may
therefore
|
this
r e d u c t i o n was
remain
a
SECRET^]
produced a t the l a s t
substantial
risk
of
c o n t ^ ^ L
1 ".£_J L
SECRET
I
^^j^ticism,
particularly
i n the United
|
States
I
Congress,
i n t h e event
of a
#^pion
n o t t o by HARM, t h e consequences o f which could be t o u n d e r m i n e t h e
^jjpkg
which
our friends
i n t h e A d m i n i s t r a t i o n a n d Congress
making t o s e c u r e a change i n A m e r i c a n ^ l ^ ^ ^ r o m
2 5
attitudes
t o purchases
have
been
o f defence j
Britain.
• A d e c i s i o n t o p u r c h a s e HARM would
n o t of course guarantee favourable
t r e a t m e n t f o r o t h e r p r o s p e c t i v e sales o f U n i t e d Kingdom d e f e n c e equipment t o
tll
e United
re
States
; t h e p r o t e c t i o n i s t t i d e s i n Congress a r e s t r o n g .
There
m a i n s t h e p o s s i b i l i t y t h a t c r i t i c i s m o f a d e c i s i o n i n f a v o u r o f ALARM could
affect
other
B r i t i s h sales
interests
although
explicit linkage between
a n d specinV^BBLed Kingdom sales i s perhaps u n l i k e l y .
decision
this
Prospective
B r i t i s h sales t o t h e D % ^ & L S t a t e s i n c l u d e t h e Hawk t r a i n e r (£750 m i l l i o n ) o n
w
h i c h a d e c i s i o n i n p r i n c i p l e has b e e n t a k e n , a d d i t i o n a l Rapier (£50 m i l l i o n ) ,
a d
ditional
S e
archwater
combat s u p p o r t ^ R k ( £ 2 2 r a d a r (£50 m i l H O T i ^ ^ p d
® million)) - figures s
° m e o f these
items
i n brackets
m i l l i o n ) , 81 mm
mortar
(£250 m i l l i o n ) ,
ICS3 ( a naval c o m m u n i c a t i o n s system a r e approximate.
- eg Searchwater
a n d perhaps
Crucial decisions o n
Hawk - could be made
before the e n d o f t h i s y e a r .
^j0^
inclusion 2 6
^ r
e
* The choice t o be made t u r n s o n f o u r H ^ a ^ ^ o r s , a n d a judgement has t o
made
about
t h e weight
t o be a t t a c h e d ^ ^ ^ J t e m
individually
and i n the
°und. They a r e
a
operational capability ( i n the s h o r t and i n
D
f i n a n c i a l aspects;
c
«
importance
a
*
the international
«
«
tne^^f
of indigenous t e c h n o l o g i c a l c a p a b i l i t y ;
dimension.
v
term);
^j^k
^Lm\
\| if
|
SECRET""]
-
;
m
I
^Cw'
®
n
SECRET
|
I
o p e r a t i o n a l c a p a b i l i t y the main q u e s t i o n s a r e
^^^^
i n t h e l o n g t e r m ALARM c a n be more r e a d i l y enhanced
t o deal w i t h
improvements
improvements
o n Warsaw Pact d e f e n c e s : d e c i s i o n s
on
HARM w i l l be i n the hands of the A m e r i c a n s ( p a r a g r a p h 9 ) ;
D
«
i n the short could l e a d
term the risks
i n v o l v e d i n t h e development
t o a p e r i o d when
o f ALARM
t h e RAF's a b i l i t y t o p e n e t r a t e Warsaw
Pact d e f e n c e s would be r e d u c e d ( p a r a g r a p h 1 0 ) .
• The f i n a n c i a l aspects c a n be summarised as f o l l o w s
a
'
a t p r e s e n t p f ^ ^ ^ A H A R M c o s t s £37 m i l l i o n less t h a n ALARM: the f i n a l
c o s t d i f f e r e n c e ^ j p ^ b e less o r more d e p e n d i n g o n r e l a t i v e i n f l a t i o n
in
t h e USA
and United
Kingdom,
exchange
rate
movements a n d
changes i n t h e r e q u f R ^ ^ ^ ( p a r a g r a p h s 11 a n d 12);
D
*
British
Aerospace's
latest
offer
reduces
their
flfl
income
from the
p r o j e c t by some £85 m i l l i o n o v e r 5 y e a r s : t h i s r a i s e s q u e s t i o n s o f t h e
risks
which
the company
cAA^ppropriately
bear
a n d t h e wider
i m p l i c a t i o n s f o r t h e G o v e r n m e n t ( p a r a g r a p h s 14-15);
c
'
p u r c h a s i n g ALARM
would
put s o m e ^ x j g ^ p r e s s u r e on the defence
budget i n t h e PES y e a r s a n d could i n v f f j j ^ d j u s t m e n t s i n o t h e r areas
(paragrph 22).
2 9
r e
*
e i m p o r t a n c e o f i n d i g e n o u s t e c h n o l o g i c a l captufuity, t o g e t h e r w i t h t h e
l a t e d q u e s t i o n whether t h e ALARM p r o g r a m m e i s t h e b e s t way of r e t a i n i n g i t ,
1 8
u e
r n
a
ad
V 6 a
m a t t e r o n which D e p a r t m e n t s a
P°
t a e
n
n
d
guidance
systems.
u
e r
^^ARM
^
^
agree t h a t
dimension,
homing
be o f i n c r e a s i n g i m p o r i a t f ^ i n m o d e r n
They d i s a g r e e o n whether t h e ALARM
international
^ ospace,
-.'.'J ^
Departments
progrOTm^kepresents
only e f f e c t i v e way of p r e s e r v i n g the technology ( p a r a g r a p h s
^ e
U n i
technology w i l l
differ.
following
the revised
l^^MP^
offer
by^^pbjsh
c o n s i s t s p r i m a r i l y i n t h e n e g a t i v e e f f e c t s which a d e c i s i o n to
might have o n p r o s p e c t i v e sales o f B r i t i s h d e f e n c e equipment
buy
tc^th^k
t e d States ( p a r a g r a p h s 23-25).
^
SECRET
i
[.
o
