§ Mr. Barnettasked the Chancellor of the Exchequer if he will give an analysis by currencies and countries of the £300 million defence expenditure spent across the exchanges.
§ Mr. DiamondIn 1964, United Kingdom military expenditure overseas was estimated at £275 million and defence aid at £26 million. The following table shows the main countries and regions to which this expenditure relates, divided into sterling area countries and non-sterling countries. Part of the defence aid was gifts of military equipment. A detailed analysis of payments by the currencies in which they were made is not available. Broadly speaking, payments to non-sterling countries are in foreign currencies and impose a direct burden on the U.K. reserves, whilst those to overseas sterling countries are made in sterling. The burden on our economic resources and the balance of payments is the same, whether they are made initially in sterling or in other currencies, since all such transfers either increase our external liabilities or decrease our external assets.
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UNITED KINGDOM OVERSEAS MILITARY EXPENDITURE AND DEFENCE AID IN 1964 £ million Military* expenditure Defence† aid Total Non-Sterling Countries North America 15 — 15 Latin America 1 — 1 Federal Republic of Germany 85 — 85 Other Europe 15 — 15 Africa, Middle East and Far East 6 — 6 122 — 122 Overseas Sterling Countries Caribbean Area 1 — 1 Gibraltar 7 — 7 Malta 15 — 15 Cyprus 17 1 18 Libya 3 — 3 East Africa 6 3 9 Middle East 21 6 27 India — 7 7 Malaysia 63 8 71 Hong Kong 10 — 10 Australia 8 — 8 Other countries 2 1 3 153 26 179 TOTAL 275 26 301 * Expenditure on military services in the invisibles account of the U.K. balance of payments. † Part of "other grants" in the invisibles account.