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his
ority list "the well-being of the Armed Forces and the need
to maintain their confidence in their chosen career". The Serviceman
and the potential recruit will want to know from the Government
exactly where they stand; they will be hoping for firm announcements
in the autumn of Government decisions which will be implemented over
the whole period of the review but which will be firm and complete
decisions operative without modification for at least a decade.
Servicemen will in particular be sensitive to the fact that, whereas
the threats to our security cannot be assessed over a longer period
than 5 years ahead, adjustments to defence policy, particularly
increases to meet any newly developing threat, cannot be completed in
less than a decade.
VI.
50.
LEVELS OF CAPABILITY AND EXPENDITURE, AND OPTIONS
The Working Party has considered a number of options in terms
of commitments, capabilities and expenditure. In the light of the
priorities laid down by Ministers (paragraph 3 above), the Working
Party has first examined the possibility of abandoning our geographical
commitments in whole or in part (Option A); and of reducing our
specialist reinforcement forces to a significantly lower level (Option B).
51. It was agreed that the effects of reducing to the First level
of expenditure would be discretely examined. This has been done in
Option D and Annex M of our Report. It was also agreed at an early
stage in the Working Party's deliberations that in the time available
it would not be possible for the Ministry of Defence to examine each
one of the lower levels of expenditure separately. A "Baseline"
level of expenditure of 41% of GNP by 1978/79 and 4% of GNP by 1983/84
(following the Second level to 1978/79 and coinciding with the Third
level at 1983/84)(see Annexes F and G) was therefore examined in detail.
Capabilities could then be restored to indicate the measures necessary
to reach the Second and Third levels of expenditure; and additional
cuts identified in order to illustrate the effects of reducing to the
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