HC Deb 02 May 1967 vol 746 cc332-7
The Minister of State, Foreign Affairs (Mr. George Thomson)

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

I apologise to the House for taking up its time with a second statement this afternoon, but there are simultaneous announcements being made in Washington and Bonn, and I felt that hon. and right hon. Members would wish to have this information given directly to them at the earliest opportunity.

My right hon. Friend the Chancellor of the Exchequer informed the House on 11th April that the tripartite discussions with the United States and the Federal Republic of Germany had made satisfactory progress, and that we were confident that it would be possible to cover by far the greater part of the foreign exchange costs of our forces in Germany during the current year.

At the tripartite meeting held in London last week agreement was reached on proposals that would be put to our allies in respect of some redeployment of forces in Germany. We were also able to confirm the associated financial arrangements. I am now able to inform the House of these, and of the proposals that have been put to our partners in the North Atlantic Treaty Organisation and the Western European Union.

As regards our forces in Germany, we propose to redeploy to the United Kingdom one brigade group and to make economies in the expenditure on the Second Tactical Air Force, including the redeployment of one squadron. These forces would remain earmarked for assignment to Supreme Allied Commander Europe. The movement of these forces to the United Kingdom would be completed during the last quarter of the current financial year.

The United Kingdom Permanent Representative to the North Atlantic Treaty Organisation has informed our allies of these proposals, which will be taken into account in the North Atlantic Treaty Organisation defence planning process.

These proposals have also been put to the Western European Union Council, in accordance with the Brussels Treaty.

The new Anglo-German offset agreement will provide for off-setting payments in the defence and civil sectors, amounting to nearly £50 million. The arrangements are very similar to those under the current agreement, with this difference that separate target figures are specified for the defence and civil sectors.

The United States Government are also taking certain measures which will have the effect of relieving our balance of payments in 1967–68. They have moved certain air force units to this country and have undertaken to make further purchases in the defence field in addition to those which they promised to make last November. Half of the latter can be attributed to the year 1967–68. In all, the advantage which will accrue to the balance of payments will amount to a little over £20 million.

Finally, the proposed redeployment of forces would result in foreign exchange savings of about £5½ million in a full year, but, of course, much less in 1967–68.

At their present strength, the deutsch-mark costs of our forces in Germany would have been £82 million. The arrangements which are described will, as my right hon. Friend the Chancellor of the Exchequer informed the House in his Budget speech, enable us to cover roughly £72 million of this total.

The House will, I am sure, welcome the overall agreement which has been reached in these discussions with our allies. The net foreign exchange burden of our forces in Germany will this year be less than it has been for many years.

It is moreover, recognised by the three Governments concerned that the balance of payments consequences resulting from stationing of forces abroad for the common defence continue to pose a problem for joint attention.

Lord Balniel

The Minister says that he is sure that the House will welcome the overall agreement which has been reached. Am I not right in thinking that in so far as troop levels are concerned, this statement is no more than an announcement of the proposals which will be put before N.A.T.O. and W.E.U., and that the decision will rest in their hands, not in ours?

Secondly, may I ask, when these discussions have been taking place, involving a reduction of troops in N.A.T.O., have there also been similar discussions involving a balanced and verified reduction of troops, not only in N.A.T.O. but in Eastern Europe as well?

Mr. Thomson

We have always made it clear that we would go through the normal procedures of N.A.T.O. and W.E.U. These are reasonable proposals, and we have every confidence that our allies will feel that they are acceptable and meet the requirements of the common defence efforts.

On the second point, we very much hope that these reductions will provide an opportunity to explore with the Soviet Union and its allies the possibility of mutual reductions on both sides of the Iron Curtain. There again, this is a matter, in the first instance, for discussion with our allies in N.A.T.O.

Mr. Emrys Hughes

Can the Minister tell us exactly what the soldiers remaining in Germany will do there? Does he not realise that in view of the biggest gold robbery in London they would be better employed in the police force?

Mr. Thomson

I thought that my hon. Friend would welcome the arrangements that I have mentioned in so far as they make some reduction in the force levels. The decision that has been taken about the force levels to be maintained in Germany for the present is a recognition of the need to maintain collective security arrangements in Europe.

Mr. Powell

May I ask the Minister of State two questions? First, when does he expect that these proposals will be considered by N.A.T.O. and W.E.U. respectively? Secondly, as these financial arrangements apply, I understand, to this year only, are the Government envisaging further and larger withdrawals to meet foreign exchange costs in subsequent years?

Mr. Thomson

On the second point, I said in my main statement that this is a problem that will require continuing attention from our allies and ourselves. We shall be discussing with the Federal Republic of Germany and the United States exactly how to proceed with studying the long-term aspects of this problem.

Mr. Dalyell

Can my right hon. Friend say rather more about the aspects of this from the point of view of the civil sector? What are the targets in the civil sector? Are there any concrete plans?

Mr. Thomson

On the civil side, there is a target of around £22½ million for civil purchases by public authorities in the Federal German Republic. In addition, there is a target of about £9 million for civil private purchases of various kinds that will be promoted by the joint efforts of the two Governments.

Mr. Blaker

In calculating the figure of £72 million, to what extent has account been taken of the foreign exchange contributions to this country, as a result of the presence of American forces here? If account has been taken, is this not a new practice?

Mr. Thomson

The American contributions, which are described in my main statement, including the contribution made by moving certain Air Force units to this country, are all entirely additional to any of those contemplated in any previous arrangements we have had with the United States.

Mr. Frank Allaun

Will my right hon. Friend confirm that, apart from the £82 million foreign exchange costs, we are spending £195 million a year in all in Germany? What is the purpose of this, in view of the fact that the Defence Minister says that there is no threat to Europe or Britain?

Mr. Thomson

The purpose of our defence expenditure in Germany is to make a contribution to the collective defence arrangements through N.A.T.O., which has always been part of the policy of the Labour Party and of the Government. These tripartite discussions have been devoted to the narrow but extremely important point of offsetting the foreign exchange element in that expenditure. As I have said, we have succeeded in doing better than any other British Government for a long time.

Mr. James Davidson

I welcome the fact that agreement has been reached, but there are certain reservations. Is this a step in a proposed withdrawal from Europe? Secondly, what intentions does the right hon. Gentleman have regarding our rôle within N.A.T.O. after 1969?

Mr. Thomson

Those are very much wider questions. I have made it clear that what we have discussed over many months in these talks was how to meet the foreign exchange burden of our defence expenditure in Germany on a basis of mutual agreement with our allies principally concerned. There is no question, or any implications of any sort, of withdrawing from Europe. In view of the statement on the Common Market, I should have thought that this would have been self-evident.

Mr. Leadbitter

Is my right hon. Friend aware that this is a long-continuing problem and that disappointment in the past can be followed by disappointment in the future? I understand from what he said to the right hon. Member for Wolverhampton, South-West (Mr. Powell) that this is an arrangement for one year and that there have to be continuing discussions. In the event of failure to meet this offset arrangement—these are only proposals at this stage—has my right hon. Friend in mind any contingency plans either to reduce the forces or to have a longer-term arrangement with the tripartite countries?

Mr. Thomson

The arrangements which I have just announced take us up until March next year, until the end of the current financial year. That is why I said that there would need to be continuing study by the three Governments mainly concerned of the longer-term implications. Nevertheless, we have succeeded in making an arrangement which reduces last year's foreign exchange gap between outgoings and receipts by £20 million, and that is certainly something worth going on with.

Sir Alec Douglas-Home

The right hon. Gentleman said that a simultaneous statement was being made in Washington. Is this the only withdrawal of troops which is contemplated, or are the Americans making some withdrawal, too?

Mr. Thomson

No, Sir. As part of the tripartite arrangement there is to be on the American side a rotation of some of their troops at present in Germany. As I understand, one American division will be rotated in a way which will leave one-third of it in Germany at any particular time.