§ Mr. John Browne
To ask the Secretary of State for Defence if he proposes to make any changes to the defence cash limits for 1988–89.
§ Mr. Younger
My right hon. Friend the Chief Secretary to the Treasury announced today an increase to the cash limit for Class I, Vote 2 of £322,669,000 under the end year flexibility scheme for central Government expenditure. I can now announce that the cash limit for that Vote will be increased by a further £208.5 million, from £8,613,765,000 to £8,822,265,000. Of this new increase, £206 million comes under the terms of the additional flexibility arrangements I announced to the House on 19 December 1986,Official Report column 778. These arrangements provide for carry forward of underspend resulting from procurement decisions taken to improve contractors' performance and the value for money obtained from our defence procurement contracts during the 1987–88 financial year, including the Department's tauter approach to interim payments. The remaining £2.5 million of the cash limit increase is to compensate the defence budget following a decision to write off part of a debt in respect of loan service and training charges incurred by the Nigerian Government. These sums will be met from within the reserve and will not therefore add to the public expenditure planning total.