Cash Limits (Hansard, 17 February 1981)

§ 13. Mr. Newens
asked the Secretary of State for Defence to what extent he expects cash limits to be exceeded by his Department in 1980–81.

§ 14. Mr. Cryer
asked the Secretary of State for Defence which items he expects to be affected by reductions in expenditure in 1981–82 to offset the anticipated overspend in 1980–81.

§ 17. Mr. Beith
asked the Secretary of State for Defence by what amount his Department expects to overspend its cash limits for 1980–81.

§ Mr. Nott
The current expectation is of an overspend of about £260 million. This will be reflected in a Supplementary Estimate to be presented to the House tomorrow. However, I am continuing to take steps to restrain expenditure.
It is the general practice for any overspend on a particular cash limit to be offset by a corresponding deduction from the cash limit in question in the following year. However, the final outturn on the defence budget in 1980–81 will not be known for some time and the position will then be reviewed.

§ Mr. Newens
Will the right hon. Gentleman apply the same rules to overspending of cash limits in his Department as are applied to the Departments of Health and Social Security, Education, Industry and all the others? If he is not applying the same rules, that is a totally unsatisfactory state of affairs. Should he not be introducing, or seeking to persuade the Government to introduce, Supplementary Estimates for other Departments?

§ Mr. Nott
The hon. Gentleman asked me the question and I gave him the answer. He then asked the question again. I do not think that there is any point in reading out the answer a second time. I have already answered the question in my first reply.

§ Mr. Cryer
Is it not a fact that, in the economic crisis that this country faces, we cannot afford the current level of defence expenditure and there should be some offset arrangement for the cash excesses this year? Should we not follow the example of Japan, which spends less that 1 per cent, of GNP on defence while, at the same time, leading the world in the production of goods and services that people need? Is not that the lesson of Datsun coming here?

§ Mr. Nott
We have to afford the current level of defence expenditure because we are faced with a threat to our freedom and liberty. The hon. Gentleman would not be sitting in the House and putting these questions to me if we were not protecting ourselves and deterring aggression by other countries. I think that the current level of defence expenditure is essential, I entirely support the NATO target:, which the hon. Gentleman and the House know well.

§ Mr. Beith
Since the Secretary of State has said that he does not intend to make apocalyptic choices to deal with the budgetary pressures which he will undoubtedly face—I take it that he includes Trident as one of the apocalyptic choices that he does not want to make— how on earth is the readiness of our Armed Forces to survive the constant cutting of men, equipment, exercises, fuel and training that will go on if he continues in the present way?

Mr. Knott
That is the reverse of the real situation. We are not cutting in the way that the hon. Gentleman suggests. Next year we shall be spending £1,000 million more on defence than this year. Our planned increases are substantial. Since we took office, and including the year to come, defence expenditure has grown by around 8 per cent. It is untrue, as the hon. Gentleman suggests, that we are cutting. We are increasing.