§ 5. Mr. Leightonasked the Secretary of State for Defence if he will seek to introduce new bilateral arrangements with the Federal Republic of Germany to offset the foreign exchange costs of the British Army of the Rhine?
§ Mr. GoodhartThe last Anglo-German offset agreement, which was negotiated by the previous Administration, stated that bilateral offset arrangements would cease when the agreement expired on 31 March 1980, and there are no plans to re-open negotiations.
§ Mr. LeightonIs the Minister aware that that answer is unsatisfactory, when we are spending well over £1,200 124 million on our forces in West Germany, £762 million of which is in foreign exchange, which is a direct debit to our balance of payments and a subsidy to West Germany and which is equal to our recent rebate from the EEC? Does he agree that it is intolerable for a country in our straitened circumstances to be subsidising West Germany in that way?
§ Mr. GoodhartI assure the hon. Gentleman that host nations support is being actively considered throughout the Alliance. He referred to a figure of £762 million as the cost across the exchanges. In the coming financial year, for the first time, that figure should fall rather than increase.
§ Mr. WilkinsonAs the main threat which confronts NATO and the central front is an armoured one, will my hon. Friend and his colleagues consider the possibility of using close air support to the greatest possible extent so that aircraft used in this country are mobile and can react quickly to that threat?
§ Mr. GoodhartYes. All methods of dealing with the tank threat are being considered.
Mr. J. Enoch PowellWill not arrangements of this kind be a grotesque anachronism, at a time when we have an embarrassingly large surplus on our balance of payments and are seriously worried about the high exchange rate?
§ Mr. GoodhartThere are no plans to have bilateral talks with the Germans on this matter. However, the cost of host nation support is a matter of concern throughout the Alliance.
§ Dr. David ClarkDoes the Minister appreciate that the cost of BAOR in the 1970s went up sixfold and that the defence budget is under intense pressure? Will he confirm or deny that he is considering bringing home a divisional headquarters from Germany? Is he examining the possibility of withdrawing more troops from Germany and stationing them on hand in this country, so that they can fly out in an emergency?
§ Mr. GoodhartI am not responsible for the story which appeared in The Times this morning. I assure the hon. Gentleman that next year, for the first time in decades, the foreign exchange cost of British forces in Germany will fall rather than increase.