HC Deb 26 January 1978 vol 942 cc1586-7
10. Mr. Ioan Evans

asked the Chancellor of the Exchequer what increase he anticipates in the gross national product over the next five years; and what percentage increase he estimates in defence expenditure and what percentage increase in other public expenditure.

16. Mr. Thorne

asked the Chancellor of the Exchequer what increase he anticipates in the gross national product over the next five years; and what percentage increase he estimates in arms expenditure and what increase in non-military spending.

19. Mr. Frank Allaun

asked the Chancellor of the Exchequer what increase he anticipates in the gross national product over the next five years; and what percentage increase he estimates in arms expenditure and what increase in non-military spending.

Mr. Joel Barnett

The recent public expenditure White Paper does not make a forecast of increase in gross national product. It provides for volume increases between expenditure plans for 1977–78 and 1981–82 of 6.6 per cent. for total civil programmes and 5.3 per cent. for defence. Programmes for 1980–81 and 1981–82 will be reviewed in the 1978 Public Expenditure Survey.

Mr. Evans

Will my right hon. Friend resist the constant demands from the Opposition that the Government should greatly increase defence spending while reducing other public expenditure? Does he agree that one of the problems that we have faced as a nation since 1945 is that we have been spending too high a proportion of our gross national product on defence compared with our competitors in Germany and Japan, who have given priority to manufacturing industry? Will the Government now give priority to improving investment in the manufacturing sector?

Mr. Barnett

As my hon. Friend knows, that is our top priority. It remains our intention to bring defence expenditure down as a proportion of GDP, in line with our major NATO allies.

Mr. Allaun

Will my right hon. Friend respond to the proposals of the Vickers, BAC and Lucas Aerospace engineers that they should be employed on the expensive plant and machine tools that we are at present importing and on other non-military goods? Would not that be better for the British economy?

Mr. Barnett

I agree with my hon. Friend to the extent that I would rather see the workers to whom he refers working on something other than defence. But we also have a priority. We have to spend money on defence as well. Our commitment as a party and a Government is to reduce our defence expenditure as a percentage on GDP in due course, in line with that of our major NATO allies.

Mr. Lawson

Is the Chief Secretary aware that the public expenditure White Paper shows planned public expenditure for the coming year to be 8.2 per cent. above the outturn for public expenditure in the current year? How does he reconcile that with the 2.2 per cent. increase of which he told the Press? He would need a £3,000 million shortfall to reconcile it. Is that £3,000 million shortfall to be achieved deliberately, or is the 2.2 per cent. figure eyewash?

Mr. Barnett

No, it is true. I am sure that the hon. Gentleman has read the White Paper. The 2.2 per cent. related to the plans in the last White Paper. What the hon. Gentleman is seeking to do is to compare like with unlike. He does not know any more than anybody else does what the outturn for 1978–79 will be. We made a comparison of the plans for 1978–79 with the previous plans, and the percentage that I gave then was absolutely correct.