HC Deb 05 August 1965 vol 717 cc1872-4
Q2. Mr. Frank Allaun

asked the Prime Minister if he will set up an inter-departmental committee of Ministers dealing with the social services on one hand, and defence and foreign affairs, on the other, to review the balance of Government expenditure between them.

The Prime Minister

This is a matter for the Cabinet.

Mr. Allaun

Will the Cabinet, particularly in the present financial situation, act on the advice of those who want the balance tilted far less heavily in favour of arms expenditure and more towards industry and social needs? Would it not be better if the 62,000 Service men now in Germany were brought back and were working in British factories producing the goods we need?

The Prime Minister

As I have said in more than one debate recently, we have just undertaken—obviously, this requires the full action of the Cabinet—the most searching review of every item of Government expenditure, including defence and all civil expenditure. As regards a final determination on defence, I made clear that this must await the outcome of the defence review, and all questions of commitment, on some of which, of course, we have serious and solemn international obligations, must wait, first, until we have completed that review and, second, until we have had an opportunity of discussing all these matters with our Allies and Commonwealth partners.

Mr. William Yates

Will the Prime Minister agree that, although we are anxious to cut the cost of the defence programmes, cutting the defence programmes must not be at the cost of re-organising and making more efficient our country's business economy?

The Prime Minister

That is absolutely right. I have said throughout that, in reviewing the defence programme, we have to consider what the country can bear economically, and, whatever is attempted in the matter of defence expenditure, our country is not strong unless its economic base is strong. I would point out, however, as we hear the term "arms expenditure" used at lot, that expenditure on arms is considerably less than 50 per cent. of the total defence expenditure and the rest involves Service pay, as right hon. Gentlemen opposite know. The scope for cutting what can properly be regarded as arms or hardware is very much smaller than one might think looking at a total figure of well over £2,000 million.

Sir E. Boyle

While recognising that decisions on the balance of expenditure must be decisions for the Cabinet, will the Prime Minister take it that a large section of opinion does not understand how a decision to hold back a number of vital technological and technical college projects fits in with either educational and economic priorities or with his own past speeches?

The Prime Minister

This question was discussed in a debate at a rather strange time just over 24 hours ago. I have made plain in two debates why this emergency programme which is required by the exigencies of the economic situation is necessary, but I made equally plain that these cuts, which have been forced upon us by the current balance of payments position, are part of a short-term position very different from the long-term one I was trying to talk about on Monday night.