Disarmament (Economic Consequences) (Hansard, 2 July 1964)

§ Mr. Maurice Macmillan

The information given in Tables I-IV of the Reply of the United Kingdom Government to the Note Verbale of the Secretary General of the United Nations dated 22nd September, 1961, is shown below. The estimates have been brought up to date where this has proved possible.

The figures given in Tables III and IV and the estimate of indirect employment in Table I must be treated as approximate. The calculations assume that the inter-industry relationships described in "Input-Output tables for the United Kindom 1954", H.M.S.O. 1961, are still valid and that the military products and the total products of an industry require the same inputs from other industries. Neither assumption can be verified.

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TABLE II
COMPONENTS OF TOTAL DEFENCE EXPENDITURE
(£ million)
—	1961–62 Estimated	1964–65 Estimated
Pay, etc., of services personnel	331	392
Pay, etc., of reserve, territorial and auxiliary forces and grants for administration	20	21
Pay, etc., of civilians	246	259
Movements	56	56
Supplies
petrol, oil, lubricants	56	49
food and ration allowances	50	51
fuel and light	21	24
miscellaneous	4	6
Production and research	659	868
Works, Building and land	112	181
Miscellaneous effective services	19	21
Non-effective services, mainly pensions	82	73
Total	1,656	1,999

Sources: Defence White Paper 1961 (Cmnd. 1288). Statement on Defence 1964 (Cmnd. 2270).

TABLE III
INDUSTRIAL COMPOSITION OF DIRECT AND INDIRECT MILITARY PRODUCTION AND PROPORTIONS OF THE TOTAL NET OUTPUTS OF SEPARATE INDUSTRIAL GROUPS USED DIRECTLY OR INDIRECTLY FOR MILITARY PURPOSES 1960–61
Industry Group	Percentage contribution to total production of military goods and services	Percentage of industry groups net output used directly or indirectly for military purposes
1 Agriculture etc.	…	0.1	0.2
2 and 3 Mines and Quarries	…	1.4	3.0
4–10 Chemicals etc.	…	2.1	4.7
11–13 Metal Manufacturing	…	2.7	5.7
14 Motors	…	0.9	3.8
15 Aircraft	…	8.2	46.5
16 Railway Rolling Stock	…	0.2	2.0
17 Shipbuilding and Marine Engineers	…	3.3	20.1
18,21,23 Mechanical Engineering etc.	…	6.4	8.1
19 Electrical Engineering	…	1.1	8.4
20 Radio and Telecommunications	…	3.1	15.2
22 Scientific Instruments etc.	…	1.0	13.8
24–28 Textiles	…	0.3	0.7
29 Leather	…	—	1.0
30–31 Clothing and Footwear	…	—	—
32–34 Food, Drink, Tobacco	…	—	—
35 Timber and Furniture	…	0.3	2.3
36–37 Paper and Printing	…	0.6	1.5
39–40 Glass, Building materials etc.	…	0.7	2.5
41 Miscellaneous Manufactures (including rubber)	…	0.2	1.3
42 Building and Contracting	…	3.9	4.6
43–44 Gas, Water, Electricity	…	1.1	2.8
45 Services	…	9.1	1.8
46 Public Administration and Defence	…	38.1^*	18.0
47 Imports	…	15.2	4.8
^* Including food and clothing of Forces as part of their income.

NOTE.—Individual firms within each industry grouping will contribute markedly different proportions of their output to military purposes.

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TABLE IV
IMPACT OF DISARMAMENT ^* ON VARIOUS INDUSTRIAL SECTORS IN THE UNITED KINGDOM, 1959
Changes in Net Output
As percentage of
Industrial Sector	Value £ million 1959	Gross National Product	Net Output of Sector
				£	Per cent.	Per cent.
1A Agriculture	…	…	…	+ 30	+ 0.2	+ 3.5
1B Food	…	…	…	+ 33	+ 0.2	+ 4.0
2 Coal etc.	…	…	…	+ 38	+ 0.2	+ 4.1
3 Clothing	…	…	…	+ 20	+ 0.1	+ 6.0
4 Engineering	…	…	…	+ 96	+ 0.5	+ 4.6
5 Wood	…	…	…	+ 11	+ 0.1	+ 5.6
6 Textiles	…	…	…	+ 47	+ 0.3	+ 8.7
7 Motors	…	…	…	+ 59	+ 0.3	+ 13.9
8 Other manufacturers	…	…	…	+ 27	+ 0.2	+ 3.5
9 Transport	…	…	…	+ 42	+ 0.2	+ 2.6
10 Building	…	…	…	+ 84	+ 0.4	+ 7.1
11 Services:
(a) Military	…	…	…	-547	- 2.7	-100
(b) All other	…	…	…	+ 24	+ 0.3	+ 0.5
12 Gas, Water, Electricity	…	…	…	+ 19	+ 0.1	+ 3.5
13 Chemicals	…	…	…	+ 33	+ 0.1	+ 5.2
14 Metals	…	…	…	+ 43	+ 0.2	+ 6.4
15 Ships etc.	…	…	…	-124	- 0.6	-19.8
16 Distribution	…	…	…	+ 126	+ 0.3	+ 4.9
17 Imports	…	…	…	-42	—	—
^* Assuming that 1959 armament expenditure is redistributed equally between personal consumption, capital formation and foreign aid.