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of reductions in our commitments* consistent with our political objectives and sought to show how far in fact such reduced commitments could be met with
smaller forces.
6.
Because the studies were formulated on the basis of our existing ains of policy, Ministers set no definite target for the savings they wished to secure in the Defence Budget, nor did they stipulate any target figure for a reduction in oversea expenditure on defence account. This was to avoid being committed to a specific financial target as in the original Defence Review, since the studies might show either that our essential interests required expenditure above a hypothetical figure or possibly that our ains could be net at substantially less cost. However, savings within a range of £200-£300 million, applicable to the year 1970-71, were envisaged. It was clear that savings of that order in the fields contemplated would be bound by themselves to produce also substantial savings in oversea expendi- ture. We have assumed that if savings could not be achieved in budgetary terms, but could be achieved in foreign exchange, such a course ought not to be neglected.
7. In envisaging savings within this range, no account was taken of the additional costs which a redeployment of the order envisaged in the studies would bring in other fields. These offsetting costs would include the once for all terminal payments to redundant servicemen and civilian employees both at home and abroad and also additional capital works in the United Kingdom. Also savings on defence expenditure might well produce a need to increase economic and, in some cases, military aid to some countries affected by withdrawals. The savings that count in the first instance, whother in budgetary or in foreign exchange terms, are the net savings after these new costs have been subtracted from the gross defence savings; but some of the offsetting costs will disappear, and others, such as additional economic and military aid, as specific offsets, will no doubt diminish, though possibly only over a long period.
*Note:
In this paper the following definitions apply:
"obligations"
"commitments"
"moral obligations"
"responsibilities"
entered into between states with treaty
backing;
specific things under the obligations, possibly entered into voluntarily;
understandings between states, but with
no legal or treaty force;
no undertaking to any other state, but a generally accepted duty, e.s. security in dependent territories.
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