asked the Chancellor of the exchequer what proportion of British costs of the British Army of the Rhine is met by German purchases of arms from Great Britain.

No proportion is specified in the agreement which was recently reached. The Federal German Government state that it is their intention to offset the foreign exchange costs, in so far as possible, by military, civil and offshore expenditure.

Can the right hon. Gentleman say whether the German Federal Government have bought any Bloodhound missiles? If they have, can he say whether any of the £4 million rebate that Her Majesty's Government have received will be passed on to the German Government?

That is an ingenious supplementary question, but I do not know the answer to it.

Why have the Government introduced this crucial difference from the arrangements made last time? I see that no target figure is set for offsetting the cost of British troops in Germany by the purchase of our equipment by the Germans.

We thought that this was a better arrangement. There is no target figure and there is no limit. The German Government will offset the cost to the fullest extent possible.

In view of the fact that the Germans found very great difficulty in meeting the target last time, and met it only at the last moment by way of some arrangement with Nigeria, will the right hen. Gentleman tell the House how it will be possible for us to maintain a target equivalent to last time, even though no figure is set?

As the hon. Gentleman has said, there is no target. The point is that the German Government have agreed with us to offset the cost, without a limiting figure, so far as it is possible for them to do so, and the two Governments are co-operating in getting it done.

asked the Chancellor of the exchequer what is the total annual cost of maintaining British troops in Germany in foreign exchange.

I would refer the hon. Member to the Answer which my right hon. Friend the Chief Secretary gave to the hon. Member for Cardiff, South-East (Mr. Callaghan) on 9th June.

That is unfortunate, because I do not know the answer to that Question. But is it not disgraceful that we, who are maintaining a British Army in Germany for the protection of Germany and the Continent of Europe, should have to pay for it in foreign currency? Should not the Germans accept payment in sterling, and not burden us with the necessity to pay foreign currency, which we have to find?

The acceptance by the Germans of payment in sterling would be the same as payment in foreign currency.

Can the right hon. Gentleman tell the House why he has made such a bad bargain with the Germans? The Americans and the French both get the full cost of their troops in Germany offset by German expenditure, whereas we have only an unspecified agreement whereby the Germans agree to do as much as they can do. Can the right hon. Gentleman tell us why this should be so, in view of the serious effect on our balance of payments this year?

If the hon. Gentleman will study it, I think he will find that our agreement is based on the agreement which the Germans made with the Americans.

Can the right hon. Gentleman say whether this is a permanent agreement or merely one for another 12 months, after which we shall again be going cap-in-hand to the Germans, as we have done over the last 10 years, asking them to honour an obligation which they obviously have no intention of meeting?

There is no question of our going cap-in-hand to the German Government. As to the duration of the agreement, I should need notice of that question. The purpose of the agreement is quite clearly in line with that of the agreement which the Germans have made with the Americans.

in view of the profitable expansion of German trade in South-East Asia, would it not be a good idea if the German Government contributed towards the cost of British forces in Malaysia?