§ Mr. Churchillasked the Secretary of State for Defence if, pursuant to his replies dated 3 July to the hon. Member for Stretford, he will state the overall cost, at current prices to the defence budget for the provision of education, medical services, married quarters and Service pensions, together with payments in respect of tax on petroleum, value added tax and rates; and what percentage of the Defence Vote this overall figure represents.
§ Mr. PymAt 1980–81 Estimates prices, which are the latest current ones available, the overall cost of the varied elements listed by my hon. Friend was about £1,500 million or 14 per cent. of Defence Votes.
§ Mr. Churchillasked the Secretary of State for Defence, pursuant to his reply of 3 July to the hon. Member for Stretford. how much of the £518 million of the Defence Vote spent on value added tax is reclaimable and therefore not lost to defence.
§ Mr. PymI must apologise to my honourable Friend that the figure of £518 million should have been £513 million. This is a net figure which is already offset by £43 million of reclaim-able VAT. The defence budget was fully compensated for the introduction of VAT in 1973–74 and for subsequent changes in the rates of VAT payable. There is, therefore, no direct effect on our defence programme.