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Expenditure

Volume 885: debated on Tuesday 4 February 1975

The text on this page has been created from Hansard archive content, it may contain typographical errors.

asked the Secretary of State for Defence whether he remains satisfied that his defence review proposals strike the right balance between safeguarding the security of the nation and achieving savings on defence to release resources for other purposes.

Yes. Our policy is to maintain a modern and effective defence system while reducing its cost as a proportion of our resources. The latter will be achieved by releasing for priority economic requirements a total of £4,700 million from planned defence expenditure over the period of the review; the former by retaining forces of sufficient size and capability to safeguard vital defence interests and in particular to maintain the credibility of our contribution to the Western Alliance.

asked the Secretary of State for Defence on what basis the savings on expenditure under his defence review proposals were calculated; and what are the current prospects for their being achieved.

The savings are calculated in the usual way against the projected costs of the defence programme inherited in March 1974. For the years to 1977–78, the cost of that programme was:

£M: Survey Prices
1975–761976–771977–78
4,0004,0704,150

These figures are in line with those published in the Public Expenditure White Paper (Cmnd. 5879), in which they are shown as follows:

1975–76

1976–77

1977–78

(1) Cmnd. 5519 revalued3,928·83,935·63,983·0
(2) Other changes+71·2+134·4+164·0
4,000·04,070·04,150·0
Line (1) above expressly excluded additional costs such as that for peacekeeping operations in Northern Ireland, which could not be accurately quantified when Cmnd. 5519 was published. Line (2) includes these costs, and reflects a reassessment of the cost of the previously planned defence programme, especially for 1977–78, for which only a provisional figure could be published a year ago.
The savings are, therefore, £300 million in 1975–76, £270 million in 1976–77 and £350 million in 1977–78. Over the review period as a whole, the savings will amount to £4,700 million.

asked the Secretary of State for Defence whether, in the light of the forecasts contained in the White Paper on Public Expenditure for 1978–79, he still expects to achieve the savings on defence which he proposed in his statement to the House of Commons on 3rd December 1974.

Yes. In the years covered by Cmnd. 5879 the savings, as previously announced, will be:

£M: 1974 Survey Prices
1975–761976–771977–781978–79
300270350500
These savings for the years to 1977–78 are shown in Table 2.1 of the White Paper on Public Expenditure. The defence budget for 1978–79 is shown as £3,800 million, a saving of £500 million from the previous plan for that year of £4,300 million. For the years from 1979–80 to 1983–84, which are outside the period covered by the public expenditure process, the savings will average £660 million a year. The total saved by 1983–84 will be some £4,700 million.