HC Deb 18 April 1967 vol 745 cc283-4
15. Mr. Bruce-Gardyne

asked the Chancellor of the Exchequer whether it is his intention to agree to the foreign exchange cost of British troops in Germany after the expiry of the current Anglo-German offered agreement being offset in whole or in part by a German commitment to hold medium- or long-dated United Kingdom Government securities in its reserves; and if he will define medium- or long-term borrowing for this purpose.

Mr. Callaghan

No, Sir. The second part of the Question does not arise.

Mr. Bruce-Gardyne

Can the Chancellor of the Exchequer confirm that his recent statement that, in one way or another, the foreign exchange costs of British troops in Germany would be met in full was after all an idle bluff? Can he tell us, further, whether the Government still believe that the offset costs of American troops in the United Kingdom should not be included in this calculation?

Mr. Callaghan

I do not know whether the hon. Gentleman is pleased or disappointed that we have recovered £72 million out of the £82 million. I suspect that it is larger than he thought and that that is the reason for his disappointment. As to the other parts of his supplementary question, the United States, Germany and ourselves have agreed to make statements on the same day. Therefore, I should prefer not to be drawn into details at the moment.

31. Mr. Frank Allaun

asked the Chancellor of the Exchequer what savings in expenditure in foreign exchange are to be secured by the withdrawal of British troops from West Germany in the near future; how the balance is to be covered; and if he will make a statement.

Mr. Callaghan

I would refer my hon. Friend to my statement in my Budget Speech. As I explained then, I cannot give further details till the negotiations are complete.—[Vol. 744, c. 981.]

Mr. Allaun

Yes, but why have the Government retreated from their statement last year that they would require the offset to be in full? Is my right hon. Friend aware that bringing home only one brigade out of nine is not good enough and will leave a large deficit?

Mr. Callaghan

As I have already explained, we are covering £72 million out of the £82 million, approximately, by including the redeployment of some troops. This seems to me to be a satisfactory start to our long-term objective.

Mr. John Hynd

In assessing the financial effects of this withdrawal of troops from Germany, has the Chancellor of the Exchequer taken into account the amount of land which will be required in this country for our troop operations, the compensation for damage to that land, and so on?

Mr. Callaghan

Yes; these calculations have been made in assessing budgetary costs, but we are concerned also with balance of payments costs.

Sir T. Beamish

The Chancellor said in his Budget statement that part of the balance would be covered by American arms purchases in this country. Since all American arms purchases are already being offset against the cost of the F111 and other American aircraft, how can this be done?

Mr. Callaghan

I think that the hon. and gallant Gentleman must wait until I make a full statement when the three parties to the agreement have concluded their total negotiations.