SECRET
DRAFT TELEGRAM TO THE GOVERNOR OF HONG KONG
1. As you know, the principles underlying tho Defence Review
delloved holing are are, the Government's/conviction that in Britain's present and
prospective economic situation defence expenditure must be
reduced by several hundred million pounds a year over a period;
decisar
and, their determination to give first priority to the security
of the United Kingdom which in turn rests upon our membership
of the North Atlantic Alliance.
doesn't this go for for!
.2.
Against this background Ministers are giving close
consideration to the concept of a Critical Level of military
capability which in the judgement of the Chiefs of Staff
represents the minimum British contribution of forces to NATO
below which the credibility of NATO's strategy of deterrence,
flexibility in response, and forward defence could no longer be preserved; and which could at the same time be contained within
a defence allocation of 41% of GNP (compared with the present
51%) by the mid-1980.
3. This concept involves, very considerable reductions in the
Armed Forces and their civilian and industrial support, will nob
be easy to present to our NATO allies, and comes close to the
margins of security of the United Kingdom itself. In its strict
form it involves the abandonment of all our military commitments
outside NATO and in the Mediterranean. Ministers have recognized,
however, that relevant political considerations, including
responsibilities for the internal security and external defence
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