§ 18. Mr. Frank Allaunasked the Secretary of State for Defence, in the light of the current balance of payments deficit, what further steps he is taking to prevent the increase in arms expenditure by approximately £100 millions a year.
§ Mr. HealeyEven after absorbing pay and price increases of £124 million, defence estimates for 1966-67 are only £52 million more than those for last year, and indeed at constant prices are £72 million less.
I explained in Part I of February's Statement on the Defence Estimates the steps which we are taking to control defence expenditure in future years.
§ Mr. AllaunEven if achieved, does not this ceiling of £2,000 million at 1964 prices mean at least £2,500 million by 1970? Are there not projects mentioned in the current defence review but not estimated for this year which will swell even this figure in the years ahead?
§ Mr. HealeyThe answer to both parts of that supplementary question is "No, Sir".
§ Mr. PowellWould it not have assisted the balance of payments if the right hon. Gentleman had made a better offset arrangement with the Americans in connection with the purchase of American aircraft?
§ Mr. HealeyI have pointed out that the total value of the increase in dollar expenditure on all forms of equipment from the United States made by the last Government is less than the dollar expenditure by the previous Government, for which no offset agreement whatever was attempted to be negotiated.