HC Deb 15 June 1976 vol 913 cc289-303
7. Mr. Ovenden

asked the Secretary of State for Defence what is his latest estimate of the cost in foreign exchange in 1976 of maintaining British troops in West Germany.

Mr. William Rodgers

The estimate given in the 1976 Defence White Paper is £413 million for 1976–77.

Mr. Ovenden

What is the estimated benefit to this country from the offset agreement we have with the West German Government, and what efforts is my right hon. Friend making to increase that contribution which, over recent years, has been derisory compared with the cost of maintaining British forces in Germany?

Mr. Rodgers

I agree that the offset we have been receiving in recent years has fallen short of the figure I should like to see, partly because of changes in exchange rates and partly because of inflation. The German Chancellor and the former Prime Minister, my right hon. Friend the Member for Huyton (Sir H. Wilson), discussed this matter some time ago, and I hope that we shall find a way towards a solution which is satisfactory to both sides.

Mr. Fernyhough

Is my right hon. Friend aware that ever since the signing of the Paris Treaties it is doubtful whether there has been any year in which Germany has met her obligations? Since that time the amount by which the Germans have defaulted must run to nearly £1,000 million. Will my right hon. Friend ask the Germans what is their explanation for that, having regard to the United Kingdom's economic difficulties?

Mr. Rodgers

I think my right hon. Friend is less than fair to refer to default. The fact is that we have received about £220 million under an agreement reached with the German Government in 1971, which it has faithfully honoured. Perhaps I should say that we maintain our forces in BAOR out of self interest, as part of our collective security through NATO, and not just out of kindness. We may get a much higher level of offset, but we should bear that fundamental fact in mind.

8. Mr. Tinn

asked the Secretary of State for Defence what is the present broad assessment of the cost in redundancy payments of the proposed cuts in the strength of BAOR.

Mr. Robert C. Brown

We have no plans to cut the strength of BAOR.

Mr. Tinn

I appreciate that reassurance, but my hon. Friend will be aware that there is talk elsewhere of a further cut of 30,000 men. Can he say what the cost would be if this cut were to be implemented, which I would strongly deplore?

Mr. Brown

The proposal that my hon. Friend referred to does not, of course, reflect Government policy. Clearly there would be redundancies. If the cut were made at a stroke, all involved would be made redundant. This would cost about £90 million over three years in redundancy payments, even after allowing for the savings on pay. The redundancy costs would be £306 millions, against pay savings of £217 millions.

Mr. Ian Gilmour

Why have the Government cut the SACEUR Strategic Reserve?

Mr. Brown

I was not aware that the Government had cut the SACEUR Strategic Reserve. I do not think that that point arises directly out of the Question, but if the right hon. Gentleman wants to table a Question I shall give him an answer.

Mr. Gilmour

The hon. Gentleman should be aware from the Government's last two White Papers that the mobile force contribution of this country has been cut considerably. When will he realise that?

Mr. Brown

That hardly arises out of the Question.

11. Mr. Goodhart

asked the Secretary of State for Defence when he will next visit BAOR.

12. Mr. Tebbit

asked the Secretary of State for Defence if he will pay an official visit to British forces in Germany.

Mr. Robert C. Brown

My right hon. Friend has at present no plans to do so, but I shall be doing so during the Summer Recess.

Mr. Goodhart

As the cost of BAOR has increased by more than £50 million since the publication of the defence White Paper, because of the fall in the value of the pound, will the Minister give a progress report on the offset negotiations? If there is no quick outcome to these negotiations, how does the Minister intend to find the extra cost?

Mr. Brown

All I can say is that the negotiations with the Germans on the offset agreement are proceeding. I cannot say when a result will be reached.

Mr. Ronald Atkins

When he does make a visit to BAOR will the Minister say, as the representative of the Government with the greatest balance of payments deficit to the representative of the country with the greatest balance of payments surplus that it is time that the aspirations of right hon. and hon. Members on both sides of the House were realised, in order to get an equitable agreement for Britain in the negotiations on the offset agreement?

Mr. Brown

I am sure that we shall get an equitable agreement, but when I go to BAOR I shall be visiting soldiers and not German politicians.

Mr. Blaker

Since BAOR will no doubt be somewhat shaken—as we are on the Opposition side of the House—to discover that the Under-Secretary was unaware that we have cut the contribution to SACEUR Strategic Reserve, what does the Under-Secretary propose to do to restore BAOR's confidence?

Mr. Brown

The hon. Gentleman has been to see BAOR often, and he knows well enough that there is no question of a lack of confidence either in BAOR or the Army generally, anywhere in the world.

Mr. Greville Janner

When my hon. Friend visits BAOR, as I have just done briefly, will he take the opportunity to answer questions from the troops at all levels about the effect which the fluctuations in the pound has had on what their money may buy in Germany?

Mr. Brown

Yes. I am quite certain that, just as I got my ears bashed last time in BAOR, I shall get the same battering when I go again, but I shall certainly answer questions.

15. Mr. Roper

asked the Secretary of State for Defence what percentage cut there would need to be in the Army's equipment budget for every percentage point of the proposed cuts in manpower in BAOR; and what loss of jobs this would represent in British industry.

Mr. William Rodgers

Precise calculations are difficult, but between 40 per cent. and 50 per cent. of the Army's equipment programme is attributable to BAOR in the current year. Thus significant reductions in BAOR would clearly lead to cuts in the equipment programme, which in turn would place thousands of jobs at risk.

Mr. Roper

I thank my right hon. Friend for his answer. Can he give an estimate of the initial impact on the British economy of a 40 per cent. cut in BAOR?

Mr. Rodgers

No, I do not think I could give that information. Certainly if it were sudden it would be very drastic, not only in terms of the equipment programme, about which my hon. Friend asked, but in terms of the need to absorb in this country all those returning Service men, with, in our view, very grave consequences in terms of the strain on our social services.

Mr. Newens

But is it not a fact that, over the years that British troops have been stationed in Germany, the German economy has, in effect, received an annual subsidy from the British taxpayer? Does my right hon. Friend think that it is reasonable that we should continue to allow ourselves, in our present economic difficulties, to subsidise one of the strongest economies in the world? Does it make sense?

Mr. Rodgers

If it were thought to be a subsidy it would not make sense at all. But it is quite mistaken—the calculations are extremely complex—to regard the question of offset and foreign exchange as a subsidy. Nevertheless, it is right that we should have a larger amount of offset than we have at present, and I hope very much that we shall get it.

24. Mr. Pattie

asked the Secretary of State for Defence whether he will pay an official visit to British forces in Germany.

Mr. Robert C. Brown

I refer the hon. Member to the answer that I gave earlier today to the hon. Members for Beckenham (Mr. Goodhart), and Chingford (Mr. Tebbit).

Mr. Pattie

Is the Minister satisfied with the amount of training time allocated to BAOR at present, and is he also satisfied that no false economies are being made in that direction?

Mr. Brown

Yes, Sir. Training in Germany has considerably improved in recent times. There is now no shortage of fuel. Obviously we keep our eye on the amount of fuel we use because of the cost involved.

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