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SECRET
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From
To:-
Chancellor of the Exchequer
Secretary of State
Telephone No. & Ext.
Department
Prime Minister
Defence Secretary
Secretary of State for
Industry
Sir J Hunt
DEFENCE EXPENDITURE 1974/75
1. I have seen your minute of 13 March to the
Defence Secretary and his reply. I agree with
him that it would be a mistake to tackle the Defence
Review piecemeal and to prejudge in the Budget
Speech any decisions which might emerge from it.
2. It could be, as you and he both say in different
ways, that the review will lead to a decision to
withdraw our forces in Singapore and to some reduct-
ion of naval and air capabilities elsewhere. But I
sure governments in the area are already very
sensitive to the possibility of changes and I believe
that an announcement in the Budget Speech, before we
had been able to prepare the ground carefully with
our allies, would cause us serious difficulties.
3. In addition to the points which the Defence
Secretary has made, we could not withdraw from
Singapore without reconsidering the Five Power Defence
arrangements as a whole, in particular whether we
could honour the commitment which our predecessors
undertook over the defence of Malaysia and Singapore,
and if so how. We should also need to ensure our
staging facilities at Singapore for use in connection
with Hong Kong. We should then need to make our
/position
SECRET
255) (d.145173 400m 5/73 G.W.B.Ltd. Gp.853
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