HC Deb 24 January 1967 vol 739 cc1259-61
30. Mr. Bruce-Gardyne

asked the Chancellor of the Exchequer what progress he has made with his plans for reduction of Government spending across the exchanges by £100 million; and whether this reduction will now be achieved during the current financial year.

31. Mr. Stratton Mills

asked the Chancellor of the Exchequer if he will now give details of the £100 million reduction in Government overseas expenditure for 1966–67 announced by the Prime Minister on 20th July last; and if he will make a statement.

41. Mr. Dickens

asked the Chancellor of the Exchequer what progress has been achieved in effecting the reduction of £100 million in Government overseas expenditure in 1966–67, announced on 20th July last.

The Chancellor of the Exchequer (Mr. James Callaghan)

I would refer the hon. Members to the reply given by my right hon. Friend the Secretary of State for Defence on 18th January.—[Vol. 739, c. 398–400.]

Mr. Bruce-Gardyne

Does the Chancellor recall that these cuts were described six months ago as a firm programme? Why are they still completely in the dark? Can he tell us whether he now anticipates that there will be any increase or any reduction in the rate of current Government expenditure across the exchanges in 1966–67 by comparison with 1965–66?

Mr. Callaghan

No, Sir. I am not ready to give an answer to the second part of the question. As to the first part, my right hon. Friend the Secretary of State for Defence said that it was proposed to give a progress report on this matter when the White Paper is published in a few weeks' time.

Mr. Stratton Mills

Could the Chancellor confirm the Prime Minister's assurance last July that this £100 million cut in overseas expenditure would consist of new cuts and not be related back to last year's Defence Review and other items announced or envisaged before the review of 20th July?

Mr. Callaghan

That is a very detailed question. Broadly, these are new cuts. As in the case of some of the difficult negotiations now going on, there is no doubt that the cuts resulting from the discussions which are taking place and which are made public will have a profound effect on the economy of certain countries and must be carried out with care and the minimum of dislocation.

Mr. Dickens

Does the Chancellor accept the view of Mr. Fred Catherwood that heavy overseas expenditure has been a major cause of the slow economic growth of this country since the war? Will he give the House an assurance that he will work towards a defence budget of not more than £1,750 million at 1964 prices in 1970, as this is in accordance with current Labour Party policy?

Mr. Callaghan

I cannot answer a question about the 1970 defence programme this afternoon, even if it was my responsibility. As to the first part of the question, quite clearly Government expenditure overseas is very heavy and has been growing. This Government have restrained it and in due course will cut it back, and it must have a hampering effect on growth. I would not attribute the—I will not say "total failure", because that would give the wrong impression—I would not attribute the slow rate of growth of this country purely to that.

Mr. Barnett

Is the saving intended to include the saving from United States spending on U.S. Forces transferred from France? If it is, as it was originally intended that by 1969–70 the saving of £100 million would have been there anyway, what is the corresponding increase that there will be in defence expenditure?

Mr. Callaghan

I think that the hon. Gentleman had better put that Question down or wait for the progress report which is coming in about three weeks' time.