asked the Secretary of State for Defence what has been the total cost to date to his Department of the Fire Service dispute.

It will take some time to compile the total extra costs incurred by the Ministry of Defence during the firemen's strike, and I am not yet in a position to give the House a firm figure.

Will the Minister, even at this stage, give an estimate of the total cost and say what part of that total cost may fall on other bodies, including local authorities? Will he tell the House what contingency plans his Department may have, including the replacement of "green goddesses"?

I think it would be premature of me to try to give my hon. Friend an estimate of total costs at this stage. Several legal claims are involved, and it is far too early to make an assessment of their outcome. As to where the ultimate burden of the cost would fall, we would expect to be able to reclaim our extra costs from the civil Depart- ments where it is reasonable and fair to do so.

Should not the whole of the cost be recovered by the Defence Department from the Home Office or the local authorities, as it is an extra burden on the Defence Vote?

I can assure the hon. and learned Gentleman that we shall not be backward in trying to see that no undue burden falls on the Defence Vote. I take his point.

Does not the right hon. Gentleman—to whom I offer my congratulations on his appointment as a Privy Councillor—agree that this would be an appropriate occasion for the House to express its gratitude to the Armed Forces for the way in which they carried out their duties during the strike?

I am much obliged to the right hon. Gentleman for his kind remark.

Has the Minister made any attempt yet to assess the cost of the serious dislocation of training caused by Service men of all three Services having to be engaged in fire service duties?

I am obliged to the hon. Gentleman for raising the question. It is a matter which has given us concern because of the impact on the individual men involved. We are taking steps as far as possible to ensure that, where training courses are interrupted and are then subsequently completed, increases in pay which result from completion of training will be back-dated, so that men do not suffer as a result of their participation in this activity.

asked the Secretary of State for Defence what steps he proposes to take to reduce the proportion of Great Britain's resources devoted to arms to the proportion of the other European NATO Governments.

asked the Secretary of State for Defence how the proposal to increase arms spending annually by 3 per cent. for five years relates to the Government's promise to reduce the proportion of the gross national product devoted to arms to the proportion of the other European NATO Governments.

asked the Secretary of State for Defence what steps he proposes to take to reduce the proportion of Great Britain's resources devoted to arms expenditure to the level of the other European NATO Governments.

asked the Secretary of State for Defence how the proposal to increase arms spending annually by 3 per cent. for five years relates to the Government's promise to reduce the proportion of the gross national product devoted to arms to the proportion of the other European NATO Governments.

asked the Secretary of State for Defence how the proposal to increase arms spending annually by 3 per cent. for five years relates to the Government's promise to reduce the proportion of the gross national product devoted to arms to the proportion of the other European NATO Governments.

asked the Secretary of State for Defence how the proposal to increase arms spending annually by 3 per cent. for five years relates to the Government's promise to reduce the proportion of the gross national product devoted to arms to the proportion of the other European NATO Governments.

asked the Secretary of State for Defence what is his Department's estimate of the magnitude of United Kingdom defence expenditure as a percentage of gross national product in the financial year 1978–79.

The defence budget estimates for 1978–79 which will shortly be presented to the House will represent about 4¾ per cent. of estimated gross domestic product at market prices, compared with the 5 per cent. in last year's Statement on the Defence Estimates for 1977–78.

On a point of order, Mr. Speaker. Is not the grouping of Questions justifiable only if it is not used as a means of not answering some of the Questions? I wish to protest about that.

We shall see how we get along.

Is my right hon. Friend really saying that we are encouraging multilateral disarmament by moving in the opposite direction and spending more of our resources on arms?

Unlike 1938.

I do not know that one can say that by increasing defence expenditure one assists the tremendous efforts that we and others are making to achieve multilateral decisions, but I am absolutely certain that if we were making unilateral reductions in defence there would be no incentive for others to seek a multilateral agreement.

rose—

Order. Although seven Questions are being answered together, I propose to call first those whose Questions are being answered. Mr. James Lamond.

My right hon. Friend is to be congratulated on the reduction to 4·75 per cent. which he has announced today. Does not the increase of 3 per cent. per annum again raise the percentage of our gross national product which we are spending? If that is so, are we not moving in a direction exactly opposite to that which we promised in our manifesto at the last General Election?

No. It should not be thought that 3 per cent. on total defence expenditure in real terms is 3 per cent. on the share of the gross domestic product. Of course, one has to make estimates of the growth of the economy because the percentage of defence expenditure of GDP depends on two factors—on defence expenditure on the one hand and on the economic state of the nation on the other. On the estimates that we have, the increased 3 per cent. will leave the figure roughly at 4¾ per cent.

Does my right hon. Friend accept that, if we were to have exactly cur equal proportion in relation to defence expenditure, it would release £1·8 billion, which could be far better used on the health, education and social services of the nation?

It would not be practicable to reduce the amount by the size that my hon. Friend suggests. It is worth pointing out that over the last five years defence expenditure in real terms has fallen by 4 per cent. while civil programmes have increased by 6½ per cent.

Instead of showing utter contempt for the British people and the Labour movement by flouting the election pledge to reduce arms spending and actually increasing it, will the Secretary of State tell Dr. Luns, the ever-demanding and propagandising head of NATO, to get stuffed?

With respect, I do not think that my hon. Friend would really wish a message of that sort to be conveyed.

Will my right hon. Friend now answer my Question, which is No. 11? Is he aware that in not carrying out the party's election pledge he is driving a wedge between the party and the Government and that some of us on this side will not feel able to support the Government in this course?

The fact is that substantial reductions in defence have been made, as I have indicated. Some quarters have argued that too great a reduction has been made. My hon. Friend will know that from the long-term defence expenditure plans which we inherited very substantial reductions have been made. We have already moved from the position of around 5¼ per cent. of GDP to 4¾ per cent., and, as I have indicated, the other side of the equation was that in 1974 we perhaps did not anticipate the extent of the economic crisis that we inherited or the length and depth of the world recession which has been a continuing problem since then.

Does my right hon. Friend recollect that both the Foreign Secretary and the Prime Minister have said publicly that the Government intend to play a positive rôle coming United Nations deliberations on disarmament? Does he not realise that few people in the country will accept either the logic or the morality of piling armaments on armaments prior to such a conference in a world which is already over-armed?

I confirm that it is our intention to play a positive rôle in the United Nations defence and disarmament discussions, but I think that my hon. Friend is exaggerating when he talks about piling armaments on armaments. In fact, in real terms the defence budget that I shall be presenting later this year is the lowest to be presented by this Government.

Why is the Secretary of State so deferential to his hon. Friends? Will he not tell them that it is his duty to match our defence expenditure not with the expenditure of our allies but rather with the expenditure of our potential enemies?

I do not entirely accept what the hon. Gentleman has said. In an alliance, it is only right that all allies should play a proportionate part depending on their economic circumstances. I do not accept that it is necessary that we should bear a disproportionately large share.

Will the Secretary of State explain to some of his hon. Friends below the Gangway that if the Soviet Union, for example, were to reduce its huge nuclear submarine fleet—which seems to have no defensive rôle whatever—there would be a chance of the NATO countries taking the very desirable step of reducing their own defence expenditure?

No one would be more happy than I to be able to reduce defence expenditure as a result of a multilateral agreement which would lead to a reduction by the Warsaw Pact as well as by NATO and, indeed, in all parts of the world.

To what extent does the 4¾ per cent. for 1979–80 compare with the known plans of our principal European allies, and to what extent does our decision to increase expenditure by 3 per cent. a year relate to a similar decision announced by the American Secretary for Defence?

As we announced our decision before the announcement by President Carter yesterday, obviously they cannot be directly related. But, as I have explained, the House will be familiar with the communiqué which the Defence Ministers made that all countries during 1979 should aim to increase their contributions by about 3 per cent. in real terms.

making his forecast for next year, has the Secretary of State allowed for the wages review for all our Services? He should tell that to his hon. Friends.

We agree with that.

But hon. Members opposite are not saying it at the moment. The right hon. Gentleman might say to his hon. Friends that there is a big pay review to come and that he must allow for it.

As I think the hon. and gallant Gentleman knows, the practice of the House under successive Governments, not only in defence but in all aspects of public expenditure, is to allow for pay and price increases additional to the Estimates. The comparative figures that I have given are, in real terms, trying to take full account of pay and inflation increases. It is absolutely in no sense due to defence economy that restrictions have had to be placed in previous years on pay increases for the Forces. They have come directly from pay policy decisions.

Is it not the case that the balance of payments costs of our defence expenditure over the past couple of years have been almost equal to the amount loaned to us by the IMF which we had to crawl on our bellies to get and to make drastic cuts in public expenditure in order to achieve? What was the balance of payments cost of our defence expenditure in 1977?

I cannot give a precise figure without notice. But it is not the case that our overseas defence expenditure was equal to the loan made available to us by the IMF.

Will not the Secretary of State explain to his anti-Western hon. Friends that the Russians are spending at least 13 per cent. of their gross national product on defence? Is it the case that what he said this afternoon, which is welcomed, entails the formal burial of at least the defence aspects of Labour's absurd programme for 1976?

I do not think it appropriate to go into all these matters this afternoon. As the right hon. Gentleman knows, the election manifesto, whenever that election may come, will be published after due deliberation at that time.

asked the Secretary of State for Defence what are his recruiting targets for each of the three Services for 1978; and if he will make a statement.

Recruiting targets are set at the level necessary to meet the overall manpower requirements of the Services. They are frequently revised during the year to take account of changes in these requirements and other factors, such as recruiting performance and projected rates of outflow. It is not, therefore, our practice to publish detailed statements of manpower requirements, but in the present financial year the Services are expecting to recruit some 40,000 men and women from civilian life.

I thank the Minister for that non-answer. Is he aware of the importance of offering comparable pay to Service men? Now that we have reached the voluntary stage of the Government's pay policy, will he say how many of the existing Service men are volunteers for stage 3 and how many are conscripts?

The whole population, taking a sensible, realistic and patriotic view of the economic circumstances of the country, are volunteers in support of the very successful policy put forward by the Government. It is a great shame that the hon. Gentleman did not join us as a volunteer in the Lobby last night to put forward our general policy but instead pursued a policy that will lead to a further increase in the cost of living.

Will the Minister quote to the House again the high cost of recruiting individual members of the Armed Forces? Does he not agree that part of those high costs can be laid at the door of the prestige recruiting centres to be found in the middle of towns and that it would be far better to use such places as jobcentres to initiate recruiting?

I have told the House on a number of occasions that I am not satisfied with the level of costs in recruiting people to the Armed forces. Extensive reviews have taken place which have resulted in substantial savings in the current financial year. I am about to review again certain aspects of the recruiting service to see whether yet further improvements in efficiency and economies in costs can be brought about.

Is the Minister satisfied with the recruitment of junior officers into the Army? If not, what does he intend to do about the situation?

We are reasonably satisfied with recruitment to the Army, but I have some concern about recruitment of aircrew into the Royal Air Force.

asked the Secretary of State for Defence if he will seek the opportunity of personally giving evidence to the Armed Forces Pay Review Body prior to the preparation of its report for the year 1978.

No, Sir. My Department has presented to the Armed Forces Pay Review Body a number of papers on all aspects of Armed Forces pay and allowances. I am satisfied that this evidence is full and comprehensive, and that all the relevant information will be available to the Review Body.

In the Secretary of State aware of the unprecedented crisis of morale in all three Armed Forces at present, particularly the crisis in recruitment on which his hon. Friend touched a moment ago, which will mean that the Royal Air Force strength will fall substantially below recruiting levels? Does the right hon. Gentleman appreciate that pilots who have applied for premature voluntary retirement have been told that they cannot take that step for five years because there are so many other personnel behind them in the queue to leave? Will he personally represent these matters to the Chairman of the Armed Forces Pay Review Body?

All the relevant factors have been sent to the Review Body and have been dealt with informally at meetings with senior personnel officers of all three Services and in visits to Service establishments in discussions with all ranks. Therefore, I am satisfied that the Review Body has been made aware of the feelings of the Forces on this matter. The Review Body takes note of what my ministerial colleagues and I say and also of observations made in the House.

Is it not the case that the level of labour turnover in all three Armed Services compares favourably with the level of labour turnover in the civilian economy?

They cannot get out.

With friends such as that, who needs enemies? I was about to ask whether this indicates that the assertion by the hon. Member for Stretford (Mr. Churchill) about a crisis in morale in the Armed Services is ill-founded.

The exceptional ability of the hon. Member for Stretford (Mr. Churchill) to exaggerate tends to cause him to use language which perhaps overstates the case. The main reason why pilots cannot be allowed premature release when they wish it arises from the extensive nature of pilot training. There is an understanding that they must complete a certain length of service before they can leave following the enormous amount of investment made on their behalf.

Is the Secretary of State aware that my hon. Friend the Member for Stretford (Mr. Churchill) is in no way wrong in his contention, because even at a relatively low level of pay a senior Army sergeant is paid approximately £690 less than a sub-officer on the top rate for whose job he has been standing in while undertaking duties during the firemen's strike?

I do not for one moment wish to suggest that there is not great concern in the three Armed Services about all levels of pay and conditions. All the facts concerning this matter have been put to the Review Body. We must now await its report.

asked the Secretary of State for Defence what percentage change he anticipates in the level of arms expenditure over the next five years.

asked the Secretary of State for Defence what is the estimated additional expenditure on arms in each of the next five years involved in the proposal of a 15 per cent. increase over this period.

asked the Secretary of State for Defence if he will make a statement on the expected trends in United Kingdom defence expenditure over the forthcoming five years.

The Government have decided to increase the defence budget by 3 per cent. in real terms in 1979–80 over the revalued Cmnd. 6721 figure for 1978–79 and by a further 3 per cent. in 1980–81, subject in the latter case to review in the light of our economic circumstances. No decisions have yet been taken about subsequent years, and the figure for 1981–82 which is shown in Cmnd. 7049 is, at this stage, simply a repeat of that for 1980–81.

I thank my right hon. Friend for that answer. In drawing up the Estimates, what account was taken of the possible success of the multilateral disarmament talks? It would be helpful if my right hon. Friend could publish possible savings in the Defence Estimates as a result of the multilateral talks in order to increase enthusiasm for the success of those talks.

I think that there is great enthusiasm, at least on our part, for the successful outcome of those talks. In the hope that there may be substantial progress in that direction, the Government have thought fit not to go firm beyond next year and to leave the defence budgets for subsequent years for consideration in the light of this and the other economic factors which may arise.

Will my right hon. Friend tell the House what percentage of GNP is contributed towards defence by each NATO member? Will he confirm that we pay more in that form of expenditure than any other European NATO member?

I can confirm, on last year's figures—the current NATO figures are not yet available—that there is only one European country with a higher percentage than ours and that, after the United States of America and Greece, we are third in the list on the basis of GDP.

Is it not clear from the exchanges at Question Time that the "utter contempt" referred to by the hon. Member for Salford, East (Mr. Allaun) is the view taken by the Tribune Group of the Secretary of State and particularly of his views on defence expenditure? Can the right hon. Gentleman tell us whether, if this question comes to a vote in the House, it will be regarded by the Government as a matter of confidence?

Such decisions are not matters for me, but the hon. Gentleman can be assured that my ministerial colleagues and I shall vote for the proposals that we have put to the House.

Is it not true that the increase posited for defence expenditure for the next two years, as shown in the White Paper, is proportionally greater than the increase posited for the National Health Service? How can my right hon. Friend justify that discrepancy?

Unusually, my hon. Friend has got his facts wrong. No increase is postulated for the next year, 1978–79. My hon. Friend will know that, as a result of the economic cut-back last year, there was a substantial reduction. The increase takes effect in 1979–80. I do not have the exact figures for the NHS, but over the period defence expenditure increases are substantially less than those for the civil programmes.

Does the right hon. Gentleman agree with the Minister of State that it is wrong to determine defence spending by an arbitrary mathematical formula based on a proportion of GNP?

It is wholly wrong to have any arbitrary criteria. The right hon. Gentleman will know from his experience that the figures on which we have to settle are the outcome of a balance of a number of considerations. The Tribune Group did not pay the right hon. Gentleman a compliment for his substantial contribution to the reduction that I mentioned in the period from 1972–73 to 1978–79.

asked the Secretary of State for Defence if he has any plans to relieve local education authorities of the cost of providing boarding education for Service personnel.

Through the boarding school allowance, the Ministry of Defence already makes available financial assistance towards the cost of residential education of children of Service personnel.

Does my right hon. Friend still not agree that a good deal of expenditure is borne by local education authorities and, therefore, by ratepayers? Should not this fall wholly on the defence budget?

I cannot accept what my hon. Friend says. Grants made by local authorities are discretionary and are in the nature of topping-up grants to cover the gap between the boarding school allowance and the actual cost of board ing school education. Quite a lot of local authorities make no such grants.

Will the right hon. Gentleman remind his hon. Friend that boarding school education is available to the children of all ranks and is a necessary part of Service life?

I quite agree.

asked the Secretary of State for Defence if, in view of increasing concern over the low levels of Service men's pay, he will take steps to increase Service pay.

Service pay will be increased from 1st April next, after consideration of whatever recommendations the Review Body on Armed Forces Pay makes.

Is the right hon. Gentleman aware that the recent firemen's strike brought home to everyone the disgracefully low rates of pay of Service men, especially bearing in mind their technical ability, their long hours of work and their importance not only to the Government but to the country as a whole?

Awareness of the fact that the Services have slipped behind in comparability terms was underlined by recent events, although it was reported on by the Armed Forces Pay Review Body in its report covering the previous two years. We cannot depart from the anniversary of the last pay award without breaching the 12-month rule, and, therefore, no pay increase is possible before 1st April.

Does my right hon. Friend agree that there is considerable dissatisfaction about pay in far wider groups than merely the Services and that the method of setting this right is usually trade unions? Would he not agree, therefore, that it is time that the Armed Forces had trade unions and free collective bargaining?

As I have explained before, I do not think that trade union organisation of the Armed Forces would assist us in these problems. There are, of course, special circumstances in the Services which would lead to additional problems. My hon. Friend should understand that one of the reasons why the Services do not want trade unions is that many of those who advocate unions also advocate substantial reductions in defence expenditure, which would lead to redundancies in the Armed Forces.

Is the right hon. Gentleman aware that some of us who have a good deal of respect and affection for him regret his unwillingness to give evidence to the Armed Forces Pay Review Body? Is he aware that there are difficulties in the Services, as some of my hon. Friends and I have found out, and that large numbers of young married men who have served our country well are contemplating leaving the Services unless the Review Body's report gives them a fair deal? Will he put his personal authority, which I respect, behind the demand that our Armed Forces should be paid very much more than they are getting at present?

I am obliged to the hon. Gentleman for his kind personal references. I know from the correspondence that we have had of the difficult financial circumstances of some of his Service constituents, but it would be wrong for me to seek an invitation from the Pay Review Body because it is an independent body. It was unfairly criticised in some quarters last year, and I do not wish to take any step which might make it appear that we are trying to interfere with its independence. The right time for ministerial intervention is when the Review Body has made its report.

Is the right hon. Gentleman aware that the Armed Forces and the whole country will warmly welcome the fact that he has completely changed his previous mistaken position in regard to the desirability of trade unions in the Armed Forces? Will he give a personal undertaking that the Armed Forces will be treated no less favourably than the firemen for whom they stood in so courageously?

On the hon. Gentleman's first point, I have in no way changed my views about trade unions or trade union organisation of the Armed Forces. If he cares to compare my answer with that which I gave last time, he will see no substantial difference. On his second point, it would be unwise and certainly improper to anticipate the report of a body which has not yet formulated any recommendations.

asked the Secretary of State for Defence by how much the pay of Service men and women has increased since February 1974; and how this compares with the average pay of people employed in civilian life.

Average earnings statistics are not a suitable basis for comparing Service and civilian pay. I did, nevertheless, provide information relating the pay of representative Service ranks to average earnings of full-time male workers for a reply to the hon. Member for Stretford (Mr. Churchill) on 1st December last and to which I would refer the hon. Lady.

In the absence of actual figures this afternoon, may I impress upon the Secretary of State that the Services feel strongly that they are dropping far behind their civilian counterparts and are rapidly losing faith in the Armed Forces Pay Review Body?

I think that it would be unfair for them to criticise the Review Body, because it was not possible, in its view, to give detailed figures last year. I am sure the hon. Lady appreciates that the discrepancies will vary quite substantially as between different ranks and different trades. It is only by a comparison of the civil earnings of counterparts of Service men that we can learn the extent to which they have fallen behind. For that reason, average earnings could give a misleading picture.

When my right hon. Friend is reviewing Service men's pay, will he consider giving a higher rise to the lower ranks, a lower rise to the higher ranks and no rise at all to the top ranks?

I think my hon. Friend will be aware that the top ranks in the Services, together with top civil servants and others, have been severely restricted. An indication is that the pay of Members of Parliament and Ministers has been restricted. It will be for the Review Body to consider that aspect along with the others.

The Secretary of State has referred to the Armed Forces Pay Review Body. As both he and his right hon. Friend the Minister of State have made it clear that the Review Body is bound by the Government's guidelines, will he say in what respect the Review Body is independent?

The Review Body is free to publish a report giving all the considerations that it deems relevant. It has been asked by my right hon. Friend the Prime Minister to pay regard to the Government's pay policy. It must be expected that any ministerial outcome must be within the pay guidelines.

asked the Secretary of State for Defence what inspection procedures his Department follows with respect to foreign suppliers of defence equipment.

Where delegation of quality assurance is not practicable, as in the circumstances set out in my reply to the hon. Member of 6th December 1977, the Department's quality assurance staff make direct arrangements. If practicable, the goods are inspected on receipt. The procedures used are the same as those for home-produced supplies.

Will not the right hon. Gentleman admit that several British manufacturers of defence equipment have suggested that overseas inspection procedures are not adequate and have so complained to his Department? Does he not regret that his departmental policy, apart from possibly endangering the lives of British soldiers, is leading to increased unemployment in British industry?

We see no reason to send teams abroad unless we are dissatisfied with the arrangements already being made. If the arrangements abroad were not satisfactory, we would inspect the goods in our own country. If the hon. Gentleman knows of any case, other than the self-seeking of firms which want contracts and have not got them, where these arrangements are unsatisfactory, I should be obliged if he would bring them to my attention.

May I revert to imports and exports and congratulate the Government on the reversal of their decision to supply arms to E1 Salvador? I ask the Government to make it a rule not to sell arms to any of the poorest countries of the world.

I do not think that that really arises from the Question, but I take note of what the hon. Gentleman says.