12 MINUTES OF EVIDENCE TAKEN BEFORE THE EXPENDITURe committee
21 January, 1975.]
Mr. DAVID GREENWOOD.
of timing which followed the 1964 exer- cise, which was completed in early 1965, and then we went into the second phase, as it were, with effect from some time in 1966.
Dr. Miller.
a
7. May I ask Mr. Greenwood question of perhaps more general im- port? If we assume that the necessity for cuts in expenditure of this kind is dictated by two factors, one, economic circumstances, which in themselves are compelling enough reasons for a reduc- tion, and secondly, there may be some ideological feeling with regard to the amount of money which is expended on defence, and if one accepts there are two views on this, and my own view is that we should permit only the economic cir- cumstances to be the valid one, have Mr. Greenwood's views in any way been in- influenced by the second or are they directed entirely to the first one? Is he directing his views only towards the problems that there are in respect of our own economic difficulties, or would he have made any different kind of recommendation had there been any
other
reason for the
the reduction in defence expenditure? This is a perfectly open and serious question. I am not trying to involve him in any kind of political argument. I am just wondering if his views, his recommendations, or his survey here, which is extremely interesting, have been dictated entirely by the first consideration? -Yes, it has. It is a view of the proposals; and, if you are referring here to my summary of the proposals and my reconstruction of Government's thinking, that is a view which arises from asking myself what I regard as a straightforward economic question. Given the economic circum- stances then what scale of revision of the defence budget appeared to me to make sense; and secondly, can one discern in the pattern of the Government's pro- posals a consistent line
consistent line on priorities within defence for the achievement of a scale of this proportion? These are the interesting questions to me from an economic point of view. First, the econo- mic setting for looking at budgeting for defence, and secondly, whether within defence budgeting one appears to have a rational approach to priorities. These are the budgeting questions.
Mr. Conlan.
[Continued.
8. Following on that, if you were in the Secretary of State's position, what would you do? Would you give priority to containing defence expenditure within given limits, or would you give priority to ensuring an adequate defence posture? I would not regard the two as rigid alternatives, i.e. either that amount of defence which the nation can afford on the one hand, or what defence the nation needs on the other, simply because I regard the defence budgeting problem-like any other budgeting prob- lem as the result of the interplay of these two considerations. There are no needs which have to be met regardless of cost, and there is no sum of money which it is uniquely correct to spend on defence regardless of the way in which that money is disposed. So one has to take a view of what is the threat to the nation's security vis-à-vis the threat to the environment, the threat to living standards, the threat to health and so on, and how should we allot public expendi- ture as a whole in relation to the com- peting claims of these various threats. So it is always, as I see it, a balancing exercise and no unique set of defence needs can indeed ever be identified as it were as uniquely correct.
9. So how do we arrive at any figure that would on the one hand ensure the taxpayers who are picking up the bills that they are getting a decent buy as it were, and at the same time ensure those very same people that they are ade- quately defended in the case of need? Who decides the balance? How is the balance decided? Is it done in the arbitrary way that it appears to be done at the moment by the Secretary of State deciding that X will be spent and X will be expended on cruisers and aircraft and the rest of the equipment that is required by the services, or is it done by reducing arbitrarily and unilaterally the expendi- ture that the nation is prepared to expend on this service, and getting the best for what money is available?-I think one has to convince the taxpayer as you put it in the following way: by saying that the business of budgeting, the business of public expenditure plan- ning, is to evaluate what I described in my last answer as the various threats or the various purposes and objectives which Government exists to serve; and to allot the resources available, taking a
Page 120Page 121