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put forward a much longer one).

The third sent-

ence of paragraph 2 refers to "a decision to reduce defence expenditure as a proportion of GNP from its present level of about 51% to 41% over the next 10 years.

We doubt whether Ministers would

be prepared to say less than this in any public

statement.

iv) ANNEX B (Steering Brief for consultations with the US)

The present version of the Steering Brief is largely the work of the FCO and takes full account of our

views. It has of course been drafted with an eye to its Ministerial audience and therefore pulls some punches. For example, it deliberately avoids making the point that although defence expenditure will decline as a proportion of GNP we still expect it to increase in real terms during the 10 year period covered by the Review. This point will be covered in separate detailed Speaking Notes, on both NATO and non-NATO, which are being prepared in consultation with the other Departments. These will not be

submitted to Ministers.

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