Mr Stewart, HKIOD Mr Hickman, SWPD
Mr Wright, MED Mr Goodison, SED
SECRET
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UKEB
Mr Preston, Caribbean Department
Mr Cox, WIAD
Munti
444
Caringal with
M Mall & M Hicken) P.A. Lish
(separate copy to each)
Mr Squire, SEAD
Mr Tonkin, PUSD
Mr Tickell, WOD
Cc:
Sir G Arthur Mr Thomson Mr Masefield Mr Westbrook Mr Elliott
DEFENCE REVIEW
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RECEIVED IN REGISTRY Nr.
- 8 JUL 1974
HKK 10/9.
1. The MOD have costed at £72m in 1978/79 and £66m in 1983/84 the military implications of the reduced overseas "non-NATO" commitments (in the sense of the MOD's proposed Critical Level of UK forces) which we have proposed retaining. Details are in DSWP(P)55, copy attached. This figure will probably be increased to about £80m in 1978/79 and £74m in 1983/84 when support costs and additional transport costs have been identified and included. Other Departments, notably the Treasury, may press in the Steering Committee for any expenditure on these commitments to be reduced to a lower figure, eg about £60m in 1978/79 and £54m in 1983/84.
2. As a contingency measure Mr Thomson has asked to know by the close of play today which of these commitments we would be least unwilling to modify or give up in order to achieve additional savings of £15-£20m. This information would be used only in the last resort, in the face of intense pressure on us from other Departments to help reduce still further expenditure on our "non-NATO" commitments. You have already kindly given a lot of time to this question on our "non-NATO" commitments but I should be very grateful to have by tonight any comments you can provide in answer to Mr Thomson's request. I have set out below a few thoughts of my own on the line which, subject very much to your own comments, the PUS might be advised to take.
3. It seems clear from the table on page 15 of the attached paper that we could not, either in the short term or the long term, achieve savings of the kind mentioned by tinkering with the problem at the edges, eg by eliminating our commit- ments in the Indian Ocean, Oman/the Gulf, the FPDA, and the Caribbean and South Atlantic, even if we were willing to forego them. A significant reduction in Malta in the short
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