§ 10. Mr. Ramsdenasked the Secretary of State for Defence what is the resource cost of forces stationed overseas related to the foreign exchange cost.
§ Mr. HealeyAs I explained to the House on 8th April, this depends on the location and composition of the forces. The answer to the Question may not be the same in all circumstances. [Vol. 799, c. 529–30.]
§ Mr. RamsdenIs the right hon. Gentleman aware that he told us in March that, broadly speaking, one could arrive at the resource cost of a force in a theatre by taking the foreign exchange cost and multiplying by a factor of three? Does he uphold that and, if so, how on earth, when the foreign exchange cost of the present east of Suez policy is about 388 £50 million, can he cost Conservative policy at£300 million?
§ Mr. HealeyYes, Sir, and I can answer that very well indeed. In the Middle East and Far East theatres the resource cost is about three times the foreign exchange cost, if one takes the forces as a whole. This is proved by the fact that the total saving to the defence budget of our withdrawal east of Suez will be£300 million in resource cost and£100 million in foreign exchange cost. This, I believe, is welcomed by the taxpayers as well as by hon. Members on both sides of the House.
The cost of the Conservative presence east of Suez I explained in detail in the defence debate on the basis of all the information I was able to derive from such precise statements as had been made—and there have not been many of them—by the Leader of the Opposition and some of his hon. Friends about the composition, rôle and local cost of the forces concerned.
§ Mr. Ronald AtkinsWould my right hon. Friend agree that both the resource cost and the foreign exchange cost of our forces abroad are still too great?
§ Mr. HealeyYes, Sir, and that is why they will be reduced from the present£120 million to£60 million when the withdrawal east of Suez has been completed in 18 months' time.
§ Mr. RipponDo the figures—of£300 million in total and£100 million saving in foreign exchange cost—have full regard not only for the increased costs in Hong Kong as a result of the reinforcements there but also for the costs of Gan and Masirah, the general capability of which the Government think should be maintained? Will he explain the discrepancy between what he told the House on 5th March and 8th April?
§ Mr. HealeyI have already explained what the right hon. and learned Gentleman describes as a discrepancy. I was talking about different things. (Interruption.] In the first case I was talking about the cost of Conservative policy, while in the second I was talking about the current cost of British forces compared with the foreign exchange cost of keeping them there. The fact that we shall still be spending£60 million in foreign exchange 389 outside Europe at the end of 1971 is explained partly by the factors to which the right hon. and learned Gentleman referred; namely, the size of the British garrisons in Hong Kong and the continued staging posts at Gan and Masirah. I would have thought that the right hon. and. learned Gentleman would have been aware of that.