HC Deb 22 March 1977 vol 928 cc1069-70
15. Mr. Gwilym Roberts

asked the Secretary of State for Defence what are the latest figures available for the balance of payments costs of British forces in Germany; and what progress has been made in obtaining adequate offset arrangements.

Mr. Mulley

The foreign exchange cost of British Forces Germany for 1977–78 is currently estimated at £544 million. As for the second part of the Question, I have nothing to add to my right hon. Friend the Prime Minister's statement to the House on 25th January last.

Mr. Roberts

Is not the delay by the German Government in this matter deplorable? Has not the time come to give the German Government a date by which we shall expect a satisfactory agreement and indicating that unless we obtain agreement we shall commence systematic withdrawals?

Mr. Mulley

In the past my hon. Friend has been kind enough to offer negotiating advice. I am not sure that the course of action that he proposes will be either satisfactory or successful. As I have explained many times, although I have a great interest in the outcome of the negotiations their conduct lies with my right hon. Friend the Foreign Secretary.

Mr. Maurice Macmillan

Will the right hon. Gentleman say whether that figure is gross or net? Does it include the entire pay of the Armed Services, on the assumption that it is all spent abroad and none is remitted home, and does it make any allowance for the normal import content of ordinary people's expenditure when in the United Kingdom?

Mr. Mulley

It is a forecast of actual expenditure in foreign currency based on exchange rates of October 1976. It is less than the total budgetary cost, which is £699 million, because part of the cost of pay and part of the cost of weapons, and so forth, will fall to be paid in sterling and not in deutschemarks.

Mr. Ron Thomas

Does my right hon. Friend agree that the cost of our military commitment overseas last year amounted to almost £1,000 million, and that over the last three years the total we have paid out in military expenditure overseas is equal to the amount we have to borrow from the IMF? Is it not time that we made considerable cuts in these overseas commitments?

Mr. Mulley

I am afraid that I cannot agree with my hon. Friend's figures. The figures of expenditure are in the White Paper. I do not have them exactly in mind, but they are much lower than the sums we have had to borrow, and certainly less than £1,000 million. The sales of arms and equipment have equalled in foreign exchange terms the amounts that we have expended on the Rhine Army and in other ways.

Mr. Forman

Will the Secretary of State resist firmly the suggestion put forward by his hon. Friends below the Gangway, since the West Germans already spend on defence 25 per cent. more per head than we do? We have no good reason to lecture them on these matters.

Mr. Mulley

I have already said that although I am anxious that there should be some movement in the matter of offset costs the kind of enthusiasm shown by my hon. Friend is perhaps not the most successful way in which to approach these matters.