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5.
I believe, however, that it would be quite wrong to tackle the "defence review" piecemeal. I intend to make it a principle of my administration of the Ministry of Defence, as it was of yours, that we should look at commitments, capabilities, and resources together; that we should review them carefully and rationally in the light of Britain's economic prospects; and that we should take at the end of the review a series of decisions in which commitments, capabilities, and resources will be properly balanced and tailored to each other. Not only
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do I wish this complex of problems to be properly examined across the board between the Departments concerned; but I regard it as important for the morale of the Armed Services, who undoubtedly recognise that defence policy must be reviewed against the background of our economic circumstances, that they should clearly see that our eventual decisions result from a fresh and comprehensive examination.
6.
There are also our allies. We said in our manifesto that we would, in consultation with our allies, progressively reduce the burden of Britain's defence spending to an equitable level. This was in a NATO context; but I very much doubt whether our allies outside NATO read it as implying a distinction between first-class and second-class allies in respect of a right of consultation. Consultation with the other Four Powers must be a necessary preliminary of a withdrawal from Singapore; and would be much more easily carried out against the background of a comprehensive picture of our intentions regarding defence policy as a whole. The need for such consultation would also, incidentally, affect the timing of implementation of any decisions that we might take; and any net saving that might be secured in 1974/75 would be at best marginal in the context of your other proposals. And the other Four Powers would not be the only allies whom we should have to consult. The Americans welcome contributions by other Western Powers towards the maintenance of stability world-wide; and discussions with them would be much easier in a full knowledge of the effort that we were going to sustain in the North Atlantic area as well as whatever actions we thought necessary outside it. And finally we shall need to consider carefully the impact of any decisions that we may take upon our relationships (and not only defence relationships) with other friendly countries such as Iran.
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To sum up, therefore, I shall reply very soon to your proposal regarding further savings on defence expenditure in 1974/75; but I cannot agree that we should anticipate the outcome of the "defence review" to the extent of announcing in your Budget Speech an intention to withdraw from Singapore.
18.
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