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39. The following table summarises the estimated costs of retaining
commitments at the levels indicated in this section of the paper.
Reductions at the Four, Levels
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40. The cost of forces at the Critical Level is assessed at £M3,800 in 1978/79 and £3,750 in 1983/4 (a saving compared with LTC 74 of £80 and £M750 respectively). The savings involved would be less by sone £M200 in 1978/79 and am150 in 1983/4 than required by the First Level (42 per cent of GNP by 1983/4). The Critical Level of
forces could however be sustained within a defence allocation of
4 per cent GNP, allowing for the Relative Price Effect, by the
mid-1980s. If it were decided that provision should be made for the
retention of the non-NATO and Mediterranean commitments indicated
above in addition to the Chitinal Level of forces for NATO the total
cost of the defence programme would be higher by some £M70-80 and the difference in savings by comparison with those required at the First Level would be similarly increased.
41. We have assumed throughout that we should continue to rely on volunteer forces. A return to conscription would not necessarily produce overall savings and would involve serious practical, as well as political, difficulties. If Ministers decided that this option should be considered, a detailed study of the implications would be required.
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42. At the First Level the savings required in 1983/4 by comparison with LTC 74 are some £M900 a year, The Critical Level involves major economies, consistent with preserving teeth arm units necessary to meet our basic force commitments to NATO. Further outs would necessarily fall heavily on teeth arm units with disproportionately severe military effects. Illustrative summaries of the Toroe levels which would
result from the application of the First Level are shown at Annexes D, E and F.
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