§ 33. Mr. Hoosonasked the Secretary of State for Defence if he will give an assurance that no further cuts in defence expenditure are contemplated for 1978–79; and whether the projected cuts for the year will affect Great Britain's NATO commitment.
§ Mr. MulleyI am not contemplating any further reduction in planned defence expenditure for 1978–79. The Govern-510W ment will be reviewing plans for all public expenditure in 1978–79 and later years in the 1977 Public Expenditure Survey. We are consulting NATO about the best way of achieving the saving in the 1978–79 defence budget announced last December, but we intend to keep the effect on our front-line contribution and its essential support to a minimum.
37. Mr. loan Evansasked the Secretary of State for Defence if he will make a further statement about the implementation of defence cuts.
§ Mr. MulleyI have nothing to add to the answer I gave earlier today to the hon. Member for Beckenham (Mr. Goodhart).
§ Mr. Frank Allaunasked the Secretary of State for Defence (1) what will be the cost for Great Britain of the additional 3 per cent, per annum in real terms on defence spending in each of the five years from 1978 onwards, as called for by the NATO meeting in 1977; what are the proposed totals for each year based on 1977 prices; and what are the probable totals for each year assuming the current rate of inflation continues through five years up to 1982;
(2) if he will estimate the United Kingdom defence budget in each of the next five financial years on the assumption that the budget will increase in real terms by 3 per cent, per annum as called for by the NATO Defence Planning Committee, first, at constant 1977–78 Estimates prices and secondly at current prices based on the assumption of the current rate of inflation, 17.1 per cent, per annum, continuing over the next five years.
§ Mr. MulleyThe future levels of the defence budget after 1978–79 will be decided during the public expenditure survey, taking into account, amongst other factors, the agreement of NATO Defence Ministers to aim for annual increases in defence expenditure in the region of 3 per cent, in real terms. The figures at 1977 survey prices will be published in a White Paper when the survey is complete. If it were decided to implement 3 per cent, annual growth after 1978–79, the totals would be:
511W
£ Million 78–79 79–80 80–81 81–82 82–83 Defence budget 6,280 6,468 6,662 6,862 7,068 I do not accept the premise that the current rate of inflation will continue until 1982, but in any case the retail price index, to which I take it my hon. Friend's figure of 17.1 per cent, relates, is not necessarily an appropriate measure of increases in the cost of defence goods and services.