HC Deb 12 December 1966 vol 738 cc44-51
The Chancellor of the Duchy of Lancaster (Mr. George Thomson)

With your permission, Mr. Speaker, and that of the House, I wish to make a statement on the cost of British forces in Germany.

Her Majesty's Government agreed in October to take part in tripartite talks with the United States and the Federal Republic of Germany, to consider, in the light of the present strategic situation, questions of common concern to the three Governments arising out of the stationing of American and British forces in Germany and the foreign exchange cost of those forces.

At that time, Her Majesty's Government expressed the hope that the results of the tripartite talks could be ready for consideration at the Ministerial Meeting of the North Atlantic Treaty Organisation on 14th December.

It has not in the event proved possible for the three Governments to adhere to this timetable.

Her Majesty's Government have agreed to continue the tripartite talks in the hope of reaching the earliest possible agreement on the financial and military questions at issue. They have agreed to make no changes in their troop and supply dispositions in Germany meanwhile, apart from the normal rotation of troops or savings in their personal expenditure and other administrative economies not affecting their combat capability.

If, by the end of June, 1967, agreement has not been reached in the tripartite talks, Her Majesty's Government would have to regard themselves as free to take whatever decisions seem necessary to them to cover the foreign exchange costs of their forces in Germany in 1967–68. As they have always said, they would act in concert with their allies and follow the prescribed North Atlantic Treaty Organisation and Western European Union procedures.

The United States Government, recognising the urgency of Her Majesty's Government's need to deal with the foreign exchange cost of their forces in Germany, have offered to make further purchases in the defence field in the United Kingdom to the amount of 35 million dollars during 1967. These purchases would represent expenditures additional to those to which the United States is already committed under existing arrangements and understandings. Her Majesty's Government have accepted this offer.

The next meeting of the tripartite talks is expected to be held in January, 1967.

Sir Alec Douglas-Home

This is becoming an endless matter. Does not the right hon. Gentleman recall hat portion of the Budget speech of the Chancellor of the Exchequer in which he said that the Government would aim to secure relief from the whole of the foreign exchange cost of keeping our forces in Germany"?— [OFFICIAL REPORT, 3rd May, 1966; Vol. 728, c. 1449.] Does not this statement, therefore, in reality represent a complete failure of the Government's policy in this respect?

The right hon. Gentleman has talked about the 35 million dollars which the Americans will use to make increased purchases in this country. He said that it was in addition to what the Americans have already done. Can he tell the House what the Americans have already done to offset the purchase of aircraft? That would be something which the House would like to know.

Mr. Thomson

There has been no change in the Government's policy. The foreign exchange costs of maintaining our forces in Germany must be covered in full by one means or another. As the right hon. Gentleman and the House know, it has been impossible for the German Government, during recent months, to take the necessary decisions in this matter. I think that in the interests of the alliance it was right to have this extension, especially in the light of the offer of the United States Government, which we very much appreciate.

On the right hon. Gentleman's second question, the arrangements for offsetting the aircraft costs are going ahead as agreed. I emphasise that the 35 million dollars which I have announced today are fully additional to the existing arrangements.

Sir Alec Douglas-Home

We are entitled to ask how much the Americans have given towards offsetting the purchase of aircraft. It is not enough for the right hon. Gentleman to say that this is going on peacefully and nicely. What is the figure? Does not the right hon. Gentleman remember that the Chancellor of the Exchequer first set the target date at June, 1966, and then at December, 1966. Now it is July, 1967. Does not that justify my saying that this is an endlessly drawn out affairs?

Mr. Thomson

The arrangements for offsetting the F.111 purchase are going ahead as planned. If the right hon. Gentleman cares to put down a Question about the present figures, he should do so. His final remarks about the extension of the time lead me to wonder whether he and the Opposition feel that it would have been in the best interests of the alliance not to have accepted this offer and extended the time.

Mr. Michael Foot

Does my right hon. Friend appreciate that many of us on this side of the House find the continued stalling of the German Government on this subject, and the utterly feeble response of the British Government to it, totally intolerable? Does not he appreciate that in the very stringent measures proposed on 20th July the Government repeated that part of those measures involved severe cuts in the amount which we spent on our forces in Germany? Does my right hon. Friend appreciate that he will have a first-class row on his hands if we do not get a better statement than this?

Mr. Thomson

I said in my statement that this was limited to June next year. If, by that time, unfortunately, no agreement has been reached, then we shall regard ourselves free to take whatever decisions may be necessary. Meantime, we shall continue to go forward with any necessary plans in this country on a contingency basis to meet that eventuality, which none of us hopes will arise.

Mr. Kershaw

First, would the right hon. Gentleman bear in mind that trying to get into Europe politically and getting out militarily makes no sense? Secondly, is not the extra expenditure by the Americans only what they will spend on squadrons brought home from France? Lastly, would the Government, and the Prime Minister in particular, care to apologise to my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) for the conceited and foolish criticisms which they made of him?

Mr. Thomson

No, certainly not. The present British Government are pursuing this matter of obtaining a full offset of the costs of British troops in Germany with much greater determination than was ever shown by the Conservative Party.

On the hon. Gentleman's first question, the extra offset coming from the changes in the disposition of American squadrons to this country is quite separate from the 35 million dollars which I have announced.

Mr. Shinwell

Is my right hon. Friend aware that this matter has been dragging on not for the two years since this Government came to office, but for many years and that I and many others have raised this question on innumerable occasions? It is not merely a financial matter. It is a question of our having far too many troops on the Rhine. Is my right hon. Friend aware that Field Marshal Montgomery, who certainly knows as much as anybody on either Front Bench about military matters, has asserted that no more than 20,000 troops are required in Germany? Is he further aware that there is far too much waste in Germany by the British Government?

Mr. Thomson

On the question of waste in Germany, we are making very substantial administrative economies, which are going on now. They are quite independent of the announcement which I have just made. I know my right hon. Friend's constant interest in this matter over many years. One of the things which we are discussing in the tripartite talks is precisely whether, given the changed strategic situation in Europe, it is not possible now to make reductions in the number of troops there.

Mr. Hooson

Would the right hon. Gentleman say whether any progress whatsoever has been made with these talks? Is it not true that no offer of any kind has been made by the German Government to meet the exchange costs of our forces?

Mr. Thomson

The Government of Germany made an offer equivalent to £31½ million as a result of the talks which my right hon. Friend the Chancellor of the Exchequer had with them a month or two ago. This was an interim offer and is due to be increased. Owing to the German political situation, and the absence of a Government in Germany able to take these very difficult budgetary decisions, we have come up against that obstacle. This is the main reason for the delay which I have announced. The contribution offered by the United States Government to help to fill this gap gives us, in the interests of the alliance, a breathing space which we hope to use.

Mr. Mayhew

Is it not plain that the paragraph in the White Paper on this subject has, as was predicted, simply led to our causing misgivings among the members of the Common Market, whose good will we need in order to join, without gaining us any financial relief in return? Is it not further clear that such concession as has been made by the Americans, if it is worth anything, only underlines the fact that we cannot maintain our military rôle except with an ever-increasing degree of dependence on the United States?

Finally, should not the Government make up their mind where they want our future defence policy to be aligned, whether east or west of Suez, recognising that we cannot do both? Would my right hon. Friend study what is now the official policy of his party and decide on drastic withdrawals east of Suez?

Mr. Thomson

Her Majesty's Government believe, first, that the defence policy of this country must be within the economic resources of this country. This is why we are making economies both east and west of Suez. But, within our economic resources, we think it is important for the British Government to play a balanced rôle in keeping world peace.

Mr. Iain Macleod

Could the right hon. Gentleman tell us why he has made this statement? Does he agree with the statement of my right hon. Friend the Member for Kinross and West Perthshire (Sir Alec Douglas-Home) that the Chancellor of the Exchequer made this a key part of his Budget, with a promise of a saving of up to £100 million and the hope of a successful conclusion by the autumn? As this is a failure of the Chancellor of the Exchequer, who slipped out of the Chamber immediately before this statement was made, why does not the right hon. Gentleman leave it to the Chancellor to defend this statement in the House?

Mr. Thomson

I do not think that the right hon. Gentleman's last comment is worthy of him. I made the statement for the very simple reason that I have been conducting these negotiations on behalf of the Government.

Mr. Frank Allaun

Is my right hon. Friend aware that the way to satisfy the majority of Members on this side of the House is to withdraw troops in proportion to the extent to which the set-off is not covered—that is to say, by two-thirds? As this is the place where we could save the bulk of the promised £100 million a year, is it not clear that we shall fail very seriously in that respect?

Mr. Thomson

It is important that the British Government continue to play a full and effective part in maintaining the N.A.T.O. Alliance, on which the balance of power and peace in the world depends. But we cannot do that in a way which allows us to have a heavy foreign exchange burden while another of our allies in the same alliance gains more foreign exchange benefits from that burden. It is against that background that I have repeated that there has been no change in the Government's policy, and by one means or another it remains our determination that the foreign exchange costs of our forces in Germany should be fully covered.

Mr. Michael Foot

I beg to ask leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a definite, matter of urgent public importance, namely, the declaration, contrary to previous undertakings by Her Majesty's Government, that no immediate steps are to be taken to cut the insupportable burden of British defence costs in Germany, thereby further curtailing the Government's ability to deal with the recession in production and growing unemployment. As far as I know, there is no immediate or available opportunity for discussing this matter in the House. This is an entirely fresh statement which has been made on behalf of the Government and it is a step which, as I have indicated in my proposed Motion, is entirely contrary to the way in which the House has been led to believe that at last a real effort was to be made to cut the huge financial burden which is preventing this country from dealing with this problem.

Mr. Speaker

The hon. Gentleman the Member for Ebbw Vale (Mr. Michael Foot) seeks to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a definite matter of urgent definite public importance, namely, the declaration, contrary to previous undertakings by Her Majesty's Government, that no immediate steps are to be taken to cut the insupportable burden of British defence costs in Germany, thereby further curtailing the Government's ability to deal with the recession in production and growing unemployment. I cannot rule that this falls within Standing Order No. 9. This is a matter of continuing and future policy which can be debated on some future occasion.

Mr. Shinwell

On a point of order. Could you say, Mr. Speaker, at any time in the foreseeable future, what comes within Standing Order No. 9?

Mr. Speaker

This is a question which has agitated the mind of the House for some time, and I understand that the House is thinking about it and probably will be discussing it on some future occasion.

Mr. C. Pannell

On a point of order. I wonder whether it is always necessary to be guided by every one of the precedents of Mr. Speaker Peel when he gave his famous dictum? In your private moments, do you ever think that it would be a good idea to allow it once, just for the hell of it?

Mr. Speaker

In reply to the right hon. Gentleman, Mr. Speaker has many private moments, but the last thing he dare do is to indicate any of his private thoughts to the House of Commons.

But, seriously, this question, as the House will know, is being discussed by the Committee on Procedure. I understand that a report will shortly be coming from the Committee, which has been grappling with this problem. Indeed, if I am not wrong, I think that there may be some reference to it in Wednesday's debate on procedure. There will be an opportunity, sooner or later, for the House to discuss the very serious question of how right it is to interfere with the day's business for something which some hon. Members think urgent enough to take precedence over the business of the day.

There are arguments both for and against, and in my own evidence to the Committee on Procedure I set out my own thoughts on the matter. I admit that it is a serious one.