A year ago tomorrow the then Chancellor of the Exchequer announced in the House that he would cut defence expenditure by £178 million. I have listened carefully to all the Opposition speeches but have failed to detect in any of them even a hint that the speakers were conscious of the irony that they are celebrating that anniversary by attacking my right hon. Friend for his much more cautious approach to the matter. I remind the Opposition that the cuts imposed in December last year were not phased over 10 years. They had an immediate impact on the defence programme. They were based not on an analysis of our commitments but purely on financial and economic stringency.
The right hon. Member for Worcester (Mr. Walker) has had great fun at the expense of Government Front Bench spokesmen, on the basis that they cannot provide hard facts and figures to flesh up the defence review which they have announced. I refer the right hon. Gentleman, or, in his absence, the hon. Member for Ayr (Mr. Younger), to the last report of the Defence Sub-Committee of the Expenditure Committee where he will find that as late as June this year the Ministry of Defence still did not know where the cut of £178 million was to fall in the Budget. My right hon. Friend the Secretary of State is to be congratulated on not adopting a similarly irresponsible approach.
Having said that, I am afraid that there I leave him. I have listened carefully on a number of occasions when he has tried to argue that his increase in defence expenditure comes within the scope of the word "savings", but I have not been persuaded. I was in the House last Monday when my right hon. Friend the Secretary of State for Energy announced that he hoped to save 10 per cent. of our energy consumption over the next few years. Is there an hon. Member in the House who was then present who would not be outraged by a sense of deception if it were to turn out that my right hon. Friend the Secretary of State for Energy had meant that there would be an in- crease in energy consumption, because the expected increase would outstrip the 10 per cent. cut proposed? If he did not mean that, we must say that the Government are using the same word, namely, "savings" to describe two very different concepts, and to put it no more strongly that does not lend itself to clarity.
Even if we accept the idea that any reduction of anticipated expenditure is a saving as a working definition, our right hon. and hon. Friends are putting it against the wrong measuring rod. They are comparing the expenditure under their review with the figures announced in the 1973 public expenditure forecast. That forecast was drawn up in the autumn of 1973 in a very different economic climate, before the three-day working week and before the oil crisis—at a time when at least one hon. Gentleman opposite was talking about Britain suffering from the problems of affluence.
We are in a different situation now. I appreciate that the Opposition, in discussing this defence review, have to huff and puff and blow with all their might. Indeed, they have a constitutional duty to do so. But if they were in office now and compiling the public expenditure forecasts for the next five or 10 years, they would be making cuts in defence. Those cuts would probably not be precisely the present cuts—probably they would retain the Gurkhas and the Marines, for which there are powerful lobbies in their party—but there would be cuts.
If my right hon. Friend the Secretary of State is going to insist on measuring his savings against anticipated expenditure, and if he is to be fair, he must measure them not against the expected expenditure in 1973 but from what it would have been in 1974 without his defence review—the expenditure which the Opposition would have embarked on had they still been in office. If we adopt that definition we are faced with savings probably not of hundreds of millions of pounds but only of tens of millions of pounds.
If we turn to the review, it is not surprising that we are getting a gloomy financial picture emerging, because where the cuts fall the savings are largely illusory.
I want to deal with the manpower cuts that have been mentioned a number of times in the debate. The review proposes to cut manpower by 35,000 over the next five years. I took the precaution of arming myself with manpower figures for the past 15 years that I obtained from the Library. Over the past five years manpower has fallen by 30,000 in any event—in other words the projected reduction over the coming five years is almost exactly the same as the actual reduction of the past five years, for most of which the Opposition were in power.