Expenditure (Hansard, 17 February 1981)

§ 3. Mr. Churchill
asked the Secretary of State for Defence when, on the basis of the Government's present expenditure plans, the percentage of central and local government expenditure devoted to defence is expected to rise to the average prevailing in the years 1964–65 to 1969–70.

§ Mr. Nott
Although the proportion of total public expenditure devoted to defence is planned to continue to rise it will not reach the average level obtained in 1964–65 to 1969–70 by the end of the current planning period in 1983–84.

§ Mr. Churchill
Is my right hon. Friend aware that under the Labour Government of the right hon. Member for Huyton (Sir H. Wilson) from 1964 to 1970 average defence expenditure expressed as a proportion of overall Government expenditure was approximately 15.5 per cent, and that last year it was only 11.6 per cent.? Would not a one third increase be required for it to rise again to the level of the period between 1964 and 1970? As it is acknowledged that the level of Soviet threat is substantially higher today than in the 1960s, is there not a danger of a credibility gap between the Government's rhetoric and their performance? Will the Government address themselves to the matter before the Prime Minister visits Washington later this month?

§ Mr. Nott
As my hon. Friend knows, the Government are committed to an increase of 3 per cent.., in accordance with the NATO target. I am not sure that defence expenditure as a percentage of total public expenditure is the correct measure to take. By 1983–84 we shall be spending approximately the same proportion of our GDP on defence as we were in the 1950s and 1960s. Defence expenditure now is rising faster than other public expenditure programmes, and we should be satisfied with that. I agree that a massive threat faces us, but in the end we should look to the output of defence expenditure—how we are conducting our tasks—as well as the input of money.

§ Mr. Arthur Lewis
As the 1950s have been referred to, will the Minister accept that some of us remember when the Churchill Government took over and had to cut the armament programme because there was not enough steel? Can we be sure that we have sufficient steel and coal to carry out this increase in armament production?

§ Mr. Nott
The hon. Gentleman need have no fears on that count.

§ Dr. David Clark
Bearing in mind our shrinking industrial base, will the Minister confirm that we already spend a much larger proportion of our GNP on defence than any of our European Allies? Is it true that with the overspend this year we shall be spending the same proportion as our American Allies?

§ Mr. Nott
It is broadly correct that this year we shall be spending more of our GDP on defence than any of our European Allies, although the figures are subject to all sorts of qualifications. We shall not know the final figures for some time, but it may well be that the proportion of our GDP spent on defence will not be much different from that of the United States. Given the threat that faces us, the hon. Gentleman should be pleased about that.