1
SECRET
CELLOR OF THE
EXCHEQUER
CH/EX. REF. NO.
2 leti)
74 57
COPY NO. 3 OF 14 COPIES
Treasury Chambers, Parliament Street, SWIP 3AG
a. 575
AS/M Ennals
Psim Hattersles
1234
Please repeat queebly
Mo Jacken
In Thomson / Defence. Dept
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Ps / dibin Givenus, Robert
DEFENCE SECRETARY
PS/PUJ/ Si G. Arthur. Mi Wilfad / SEAD
SWPD
to coordinate ingent comments. (The Secrelang of slave may wish
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to send a minute viairs in this)
DEFENCE EXPENDITURE 1974-75
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The level of public expenditure will present us with very difficult problems in 1974-75 and, thus, given our commitments in eg the field of social expenditure, other public expenditure programmes must not be increased and in some areas appreciable extra savings must be secured. One programme to which I must look for such savings is Defence, and I am therefore writing to ask for your cooperation in securing a substantial further cut in the Defence Budget in 1974-75.
2. My proposal is that the Defence Budget Estimates for .1974-75 should be cut by a further £72m on top of the reduction of £178m already announced last December, ie a total reduction of £250m (all at 1973 Survey prices). I recognise that this further reduction will not be easy. I also accept that - with one exception we do not want
*
to anticipate the outcome of the review of defence policy
SECRET
/and