§ The Chancellor of the Exchequer (Mr. Denis Healey)In an exercise of this magnitude, spending in support of our external policies must inevitably play its part. Despite the big cuts which we have already made in defence expenditure, we cannot achieve the necessary reductions in public expenditure and the PSBR without a contribution from the defence budget. We are looking to defence for further savings of £100 million in 1977–78 and £200 million in 1978–79.