Defence Expenditure (Hansard, 28 October 1980)

§ 8. Mr. Dubs
asked the Secretary of State for Defence what measures he has introduced to eliminate wasteful or inefficient defence expenditure.

§ Mr. Pym
I am determined to ensure that defence spending is geared directly to the operational capability of the Forces and that administrative overheads are reduced to the absolute minimum. I have taken a number of measures to improve efficiency and to reduce manpower. Civilian numbers have fallen by over 15,000 since April 1979.

§ Mr. Dubs
The Secretary of State said that he does not want to spend a pound more on defence than he has to. Will he explain why his Department is the only one that is not able to control its expenditure?

§ Mr. Pym
Expenditure is under control. The savings that I make in administration, and perhaps by rearranging tasks, is money saved from that use. I switch that to the use of what is described in the jargon as the "sharp end". Expenditure is under control. In the current year we have experienced a situation in which because of the shortage of civil orders, firms are delivering defence equipment more quickly than they have done before which has caused a distortion. In the moratorium I have taken steps to rein back our expenditure so that we can get as near as possible to the cash limits.

§ Mr. Alan Clark
While there may be different views as to what constitutes "wasteful and inefficient", the effect of the moratorium, particularly on certain small businesses, has been disruptive and harmful. I draw to the attention of the Secretary of State the case of Ian Williams and Company, which has had to make a considerable part of its work force redundant, and may have to increase that scale of redundancy unless there is an announcement soon of my right hon. Friend's intentions regarding the moratorium.

§ Mr. Pym
I regretted having to use such a blunt instrument as a moratorium to correct the problem, which was due to a more rapid level of bill-paying than had previously been experienced. I hope to make an announcement during the next few days about the period after the moratorium. I do not think that it can or should continue in its present form, because it is too blunt. I have had discussions with different sections of industry to try to find the least damaging way from their point of view to continue after the moratorium with a strict regime to control expenditure and to bring it nearer to our cash limits.

§ Dr. Gilbert
Is it not becoming clearer every day that the huge increases in Service pay, with which the Conservatives tried to buy votes at the election, are being paid for at the price of cancellation, postponement and reduction of important procurements of new weapons which they need to defend themselves and the country?

§ Mr. Pym
No, Sir. It would be fair to say that the morale of the Services when we took office was not high—they had been through a difficult period—but I am pleased to say that it is now much better. As the right hon. Gentleman knows, it is not simply a question of money. It is also a question of their being appreciated by the nation, by this House and by the Government. I disagree with the right hon. Gentleman's remarks.

§ Mr. Adley
In the interests of useful and efficient expenditure, may I ask whether my right hon. Friend is aware that there is a widespread welcome in my constituency for the order that he announced yesterday to Plessey of Christchurch? For the benefit of those who profess to be interested in creating employment, will he do his best to ensure that that example is spread further and elsewhere?

§ Mr. Pym
Ptarmigan meets a vital requirement as a replacement of the tactical trunk communications system for BAOR. It will provide jobs for many people for many years.