HC Deb 18 December 1956 vol 562 cc1087-9
31. Mr. Fernyhough

asked the Chancellor of the Exchequer if he is aware that the Bonn Government announced on 12th December that no funds would be available for the payment in the coming financial year of support costs for the North Atlantic Treaty Organisation forces stationed on German soil; and what steps he is taking to avoid, as a consequence of this decision, a substantial increase in the burden of defence expenditure being carried by the British people.

Mr. H. Macmillan

Following discussions with the German Government, negotiations on this subject are to begin in the near future.

Mr. Fernyhough

Can the right hon. Gentleman assure us that we shall come better out of these negotiations than we did out of the negotiations on this matter last year? Can he make it clear to the Germans that, unless they are prepared to make a substantial contribution to the cost of keeping these four divisions in Germany, Her Majesty's Government will take steps to withdraw them, and thus ease our economic position?

Mr. Macmillan

All these questions were made as clear as I was able to make them, both at the meetings of N.A.T.O. and in the discussions with the German Government. I think that they have been broadly accepted as equitable and reasonable.

Lieut.-Colonel Lipton

But we still pay.

Mr. H. Wilson

Since we have warned the Government for some years about the strain on our economic system of this excessive defence expenditure, and since we warned the right hon. Gentleman last April of the ruinous nature of the agreement he made with the Germans on this matter, is he now telling us that it was not until he saw the economic effects of Suez that he realised how improvident the Government have been in this expenditure?

Mr. Macmillan

No, Sir. The right hon. Gentleman had better await the result of the year's outcome before he discusses the effects—ruinous or otherwise —of last year's agreement with Germany.

Mr. Bevan

In view of the very unsatisfactory character of our foreign balance situation, is it not an extraordinary thing that the Prime Minister should ever have made this agreement without considering the financial consequences?

Mr. Macmillan

There are two quite separate problems. There is the question of our contribution to N.A.T.O., in which I hope we shall continue to play a part. There is the other quite separate question, which takes two forms: the short-term problem of local costs across the barrier of the exchanges while the German armies have not really been built up, and the problem—which we also discussed with N.A.T.O.—of the long-term problem which must result if the alliance is maintained—as I hope it may be—where troops of one country are at the demand of the commander-in-chief stationed in the country of another.

Mr. H. Wilson

Further to the point made by my right hon. Friend, may I ask whether the right hon. Gentleman recalls that, when we debated this matter on 18th November, 1954, my right hon. Friend the present Leader of the Opposition took the Government to task for not clarifying the financial position of support costs beyond the financial year then in question, and that on that occasion the Government gave no idea that we should be faced with such heavy costs as we are bearing this year?

Mr. Macmillan

No, Sir, I do not think this arises until next year.