TNAG-0540-FCO40-635-Strength-of-garrison-in-Hong-Kong-1975 — Page 182

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MINUTES OF EVIDENCE TAKEN BEFORE THE EXPENDITURE COMMITTEE

11 February, 1975.] Mr. A. P. HOCKADAY, C.B., C.M.G.,

[Continued.

Rear Admiral A. S. MORTON, Mr. T. CULLEN, Mr. D. M. EVANS, Mr. G. C. B. DODDS, Mr. A. R. M. JAFFRAY, Mr. J. D. BRYARS and Mr. T. C. G. James, C.M.G.

210. It would be something like 40 per cent. in all employment in our defence related industries, that is the order of magnitude, which is worth noting?. That is so. (Mr. Hockaday.) Could I ask for clarification on the cost informa- tion for which Mr. Finsberg is asking? We can certainly attempt an estimate of what we envisage the costs might be in the dockyards, what are the implications of the changes in the dockyard pro- grammes that are indicated in paragraph 45. What are the implications of this in terms of what we pay to our dockyard employees; the contrast between cost of work in royal dockyards and private yards. What we would be unable to do —I am not quite sure whether Mr. Fins- berg was asking for this-is to attempt an estimate of the cost of the reduction of 10,000 jobs in outside industry. I do not think you were asking us to do that?

Mr. Finsberg.

211. What I was asking for is slightly wider than that. Mr. Hockaday thinks the manpower reductions both in the ser- vices and in the commercial yards must have a net effect of adding to our unem- ployment. What I am trying to find out is the annual cost to the taxpayer of un- employment and other benefits caused by the review? (Mr. Hockaday.) We will see what we can do on this. We shall obviously have to make certain assumptions, including assumptions upon whether the 10,000 people reduced in outside industry become unemployed or not. As Mr. Dodds has explained, we would hope that if this was phased over a few years the implications for unem- ployment would not be great. We can make some sort of attempt at this, but it would be only fair to warn the Com- mittee it is bound to be a bit speculative and to depend very much upon the assumptions we make.

212. Surely you must take into ac- count the very important point Mr. Roper made, although the 10,000 of themselves may not cost anything you might have 10,000 school leavers unem- ployed as a result? Surely Ministers will be asking for this figure? -Exactly. You have got to speculate. It is very much a guestimate.

Chairman.

213. Are there any more questions on this section? If not we will move to the last section, financial effects. Could I ask you to what extent are the figures be- yond 1975-6 still provisional? Can we expect to see another series of substan- tial changes in the next Public Expendi- ture White Paper?- -They are des- cribed as provisional in the present Pub- lic Expenditure White Paper pending the final outcome of consultations with our allies. In our consultations with our allies we have made clear that the recent decisions taken by Government are firm and that the sorts of changes in our pro- posals that we might consider would have to be those which did not result in significant additional expenditure. But I think one can see why these figures are indicated as provisional if you look at the Public Expenditure White Paper, be- cause on the defence page you have this row of 3,700, 3,800, 3,800, and so on, whereas if you turn to virtually any other page in the Public Expenditure White Paper where there is a row of figures, here we have one, the sort of row of figures you get, this is for police, fire and other protective services, is 731-3, 755-4. Our figures are printed in these round terms but they are obviously dependent upon such factors as the final outcome of our negotiations with the Hong Kong Government on the share of the cost of forces there that they will pay. Therefore these figures, which all have a nice row of noughts on the end, are provisional in the sense that they have not been precisely worked out, but they are not provisional in the sense that they are a quite firm indication of the order of magnitude, and as of today, fol- lowing publication of the recent Public Expenditure White Paper and the deci- sions that Ministers have taken or are taking on the Defence Review, the Gov- ernment's programme is that the defence budget will, give or take a few million, be at constant prices, 3,700, 3,800, 3,800, and so on.

Mr. Roper.

214. Could I ask what is the reason for the discrepancy between the figure in the 1973 White Paper for 1975-76, 1976-77, 1977-78, and so on, and the