Expenditure

HC Deb 21 May 1974 vol 874 cc168-71

8. Mr. Frank Allaun

asked the Secretary of State for Defence if he will state the proportion of the gross national product devoted to arms in the United Kingdom and the average for other European NATO countries on the latest available figures; what the annual saving would be in cash terms if Great Britain's share were cut to that average; and if he will make it his policy to make such a reduction.

Mr. Mason

For the United Kingdom, some 5-1 per cent, of the defence budget on national definition in 1974-5 and some 6 per cent, on NATO definition for 1973, the latest year for which NATO figures are available. For other European NATO countries on NATO definition, the average in 1973 was about 4 per cent. National and NATO definitions do not necessarily coincide. The saving on NATO definition last year would have been about one-third of the defence budget on my hon. Friend's assumption. Percentage GNP is not the sole criterion, and I do not propose to be committed to a specific total for savings until the review is completed.

Mr. Allaun

Would not one-third of our defence budget be£1,200 million a year and, therefore, is not the request of the Labour Party Conference for a saving of£1,000 million a year a reasonable one? Has the Minister noted today that the Dutch Ministry of Defence is proposing a cut in arms spending to 3 per cent? Why cannot we do the same?

Mr. Mason

The NATO definition is a common standard, and in some cases it omits expenditure which some countries think should be included and in other cases it includes expenditure which the countries concerned think should be omitted. The difference in 1973 on our reckoning is that the NATO definition adds at least£120 million to the national definition.

Mr. Kershaw

Is not the best guide to our defence expenditure not what our friends spend but what our enemies spend on defence?

Mr. Mason

If the hon. Gentleman had attended last week's defence debate he would have heard what I said on that occasion, which was quite clear.

Mr. Wellbeloved

Will my right hon. Friend agree that, given the determination to have a defence system for the United Kingdom, the experience of Sweden shows that in terms of defensive contribution collective defence within NATO is a far cheaper defence contribution than neutrality? When we examine the Swedish figures and take into account the fact that Sweden has been at peace for 142 years—and incidentally has had a Socialist Government for 42 of those years—must we not conclude that defence expenditure in Sweden in both GNP and per capita terms is far higher than is the contribution made by the United Kingdom?

Mr. Mason

That was an excellent contribution by my hon. Friend. He rightly says that we believe in collective security. Part of our collective security system is within NATO, in which we play our part. At the end of the defence review I hope it will be shown that we shall still make a positive contribution.

10. Lord Balniel

asked the Secretary of State for Defence what are the principles on which he settles the level of defence expenditure.

35. Mr. loan Evans

asked the Secretary of State for Defence what principle he will be guided by in determining the level of defence expenditure in the review that he is now conducting; and if he will make a statement.

Mr. Mason

I refer the hon. Members to my reply to my hon. Friend the Member for Ilkeston (Mr. Fletcher) on 21st March—[Vol. 870, c. 153-4.]

Lord Balniel

I welcome the statement made earlier this afternoon that to fix the level of defence expenditure to the average paid by our allies is an utterly mistaken principle, but how does this square with the principle set out in Labour's General Election manifesto? Surely the right principle is to ensure that within our economic strength, in conjunction with our allies, we afford what expenditure we can to meet the expenditure of any potential aggressor.

Mr. Mason

I laid down the principle that we intend to maintain a modern and effective defence system while reducing its cost as a proportion of national resources. That is the main principle on which we stand. We also indicated in the manifesto that we would look at the GNP figure compared with NATO and try to bring the figures into line with those of our major European allies. That is still the commitment.

Mr. Evans

In making his review, will my right hon. Friend pay regard to the fact that we have now the highest balance of payments deficit, of over£4,000 million? Will he also have regard to the fact that in Europe there are countries with a balance of payments surplus which spend less on defence than we do?

Mr. Mason

I am sure my hon. Friend will be aware that our NATO allies know our economic circumstances and well understand why a defence review is imminent.

Mr. Wiggin

Does not the right hon. Gentleman agree that since most of our NATO allies have conscripted forces a straight comparison is fraudulent?

Mr. Mason

The hon. Gentleman is quite right, but I have tried to indicate many times in this House that the GNP figure in relation to NATO is only one of the criteria; there are other factors to take into consideration. In absolute terms some NATO countries spend more money than we do on defence; some use conscripted forces as well.