HC Deb 18 December 1956 vol 562 cc1086-7
30. Mr. Chetwynd

asked the Chancellor of the Exchequer whether he will make a statement on his discussions at the North Atlantic Treaty Organisation Council on the subject of defence expenditure.

Mr. H. Macmillan

In the discussions in Paris last week, I drew attention to the review of the United Kingdom defence effort which Her Majesty's Government were making in the light of the economic position of the United Kingdom and of the changes which should be possible on the introduction of new weapons. I stated that the United Kingdom could not continue to accept the adverse effects on productive investment in the United Kingdom and on the balance of payments of the defence effort on the present scale. The review which we are making will, of course, take account of the new directive for future military planning which the Council approved last week.

I also had discussions with representatives of the German Federal Republic arising out of the costs of stationing United Kingdom forces in Germany. It was agreed that negotiations with the Federal Government on this subject would begin early in the New Year with a view to finding an equitable solution.

Mr. Chetwynd

Was there any prospect of having this solution? Is it not a fact that the German coffers are bulging with surplus dollars while we are scraping the barrel to find enough to keep our troops there? Can the Chancellor give some idea of the percentage deduction in defence costs of which he is thinking?

Mr. Macmillan

I should like notice of that. With regard to negotiations with the German Government, we made representations, an agreed arrangement was made, and the negotiations are just about to start.